James Forsyth

David Cameron’s decision, in the wee hours of Friday morning, to make clear that he would veto the proposed treaty change will have many far-reaching effects. One is that other European leaders know that Cameron is prepared to follow through on a threat to veto. As Charles Moore says in The Telegraph today, the dynamic that has existed throughout this country’s participation in the European project — that “Britain huffs and puffs, but always agrees in the end” — has now changed. This morning, those close to the Tory leadership were pointing out that a Cameron threat to, for example, veto the budget next year will be taken far more seriously than it would have been previously.

In a sign that David Cameron does not expect the European Council to go late into Friday night, he has asked a group of Tory MPs to supper at Chequers on Friday evening. It is hard to imagine that a full deal between both the 17 and the 27 could be thrashed out in time for Cameron to return to England for supper. Tellingly, the invitations to this event went out just last week.   This supper is part of a continuing attempt by Cameron to reach out to the parliamentary party. Interestingly, the guest list is not comprised solely of loyalists. Andrew Rosindell, who was part of the 81 strong rebellion on the EU referendum motion, is one of those who have been invited.

It is becoming increasingly clear what the Conservative party expects of its Prime Minister. If he is going to agree to 17 eurozone countries pushing ahead with the Franco-German plan for fiscal union, he needs to secure a new deal for Britain in exchange.   Just what this new deal should look like is a matter of intense debate in Conservative circles. If France and Germany turn the eurozone into a ‘fiscal union’, what does that mean for Britain’s standing in the European Union? At the weekend, Iain Duncan Smith suggested that the nature of the EU would change so much that a referendum would be necessary. No. 10 quickly ruled that out. Cameron confided to Cabinet colleagues on Monday that he feared another referendum would bring down the coalition.

One of the advantages the governing party has during an election campaign is the ability to set the baseline. It is your plans which every other parties’ are measured against. So, if they plan extra spending you can accuse them of a ‘tax bombshell’ or if they want to spend less than you, then you can say they want ‘savage cuts.’ After Tuesday’s autumn statement, Treasury sources were adamant that there would be a spending review before the end of this parliament setting out the cuts the coalition would make to meet its fiscal mandate. Danny Alexander confirmed on Newsnight that these would be jointly-agreed coalition cuts.

In this week's Spectator – which hits newsstands today – James Forsyth reveals the political calculations behind the Chancellor's announcements on Tuesday. Here, for CoffeeHousers, is a taster of James' column: The government wants to be seen as on the side of necessary but fair reform; facing down opponents who believe in ‘something for nothing economics’. Public sector unions, with their desire to protect pensions that are far more generous than those on offer in the private sector, are ideal opponents in the eyes of coalition strategists. On Tuesday, George Osborne chose to raise the stakes in this battle.

Today was always going to be a difficult day for the Chancellor. The figures from the OBR were always going to dominate the headlines and the restrictions of coalition meant that there couldn’t be as much as the Tories would have liked on the supply side. It was striking that the loudest Tory cheer of Osborne’s statement came when he reiterated his opposition to an EU-imposed financial transactions tax. But the silver lining for Osborne and co is that Labour still lack economic credibility. It is hard for Labour to savage Osborne for borrowing more than he said he would — which he is to the tune of £158 billion — and then say that they would borrow even more than that.

In some ways, George Osborne will always be haunted by his 2007 Tory conference speech. That speech and the reaction to his commitment to raise all estates worth less than £1 million out of inheritance tax contributed to Gordon Brown not calling an early election. It has a claim to be one of the most important speeches in modern British politics — it is certainly the one that saved the Cameron project. But it has also created an expectation that Osborne has a set of aces up his sleeve every time he stands up to give a big speech. Tomorrow’s speech won’t see the Chancellor pull out any unexpected trumps.

Nick Clegg’s interview in The Observer today highlights what is fast becoming one of the biggest tensions in the coalition: the Lib Dem desire to show that they are the governing party who cares. Allies of Iain Duncan Smith have been infuriated by Lib Dem suggestions that the government would be doing little about youth unemployment if it was not for them. But Clegg repeats the claim to The Observer: ‘Whether it's on youth unemployment, whether it's on youngsters, whether it's on getting behind advanced manufacturing and not putting all our eggs into the City of London basket, I don't think that would have happened without the coalition.