James Forsyth

It is hard to overstate how serious the crisis in the eurozone is or what it might do to the politics of Europe. The European project is putting in danger the very political stability in Europe that its supporters have always claimed to be its strategic and moral justification. I understand that American banks are now so nervous about the situation on the continent that they have effectively stopped new lending to European banks. The view in Westminster today is that the Greeks will avoid default for a little longer. But few can see them making it to Christmas. Indeed, the expectation seems to be a default sometime in October.

I understand that Number 10 will lean on Cabinet ministers not to object to what the boundary review does to their seats. This is an intriguing development because at least three Tory Secretaries of State are deeply unhappy with the proposed changes to their constituencies. It’ll be fascinating to see whether Downing Street can persuade them to hold their peace on the matter. Their disquiet reflects broader grumbling throughout the Tory parliamentary party. All sorts of conspiracy theories are doing the rounds. Number 10 needs to move quickly to offer some reassurance to nervous MPs. If the boundary review’s plan is to be made agreeable to the Tory parliamentary party, Cameron is going to have to persuade an awful lot of MPs to retire.

I hear that 124 Tory MPs attended the inaugural meeting of the Tory ginger group pushing for renegotiation of Britain’s relationship with Europe. Those present included at least one minister — Theresa Villiers, several PPS and a few whips who were keeping a beady eye on proceeding. George Eustice, the convener of the group, told the room that he wanted the group to work with the government rather than against it and that he wanted front-benchers to feel comfortable attending the meetings. The group intends to put out a series of proposals as to which powers should be repatriated before issuing a white paper on how the government should renegotiate Britain’s relationship with the European Union.

If anyone had any doubts about how difficult the politics of banking reform and planning would be for the Conservatives, they’ll be dispelled by a glance at a couple of tomorrow’s front pages.  ‘Osborne to let banks off the hook—for now’ screams The Independent. This a reference to the Chancellor’s plans to consult with the banks on the conclusions of the Vickers report—which the government has seen but is officially published tomorrow morning. The political problem for Osborne is that anything other than the immediate implementation of Vickers’ recommendations will be seen as a favour to the banks. But pushing the reforms through now could undermine an already weak economy.

When Michael Howard offered David Cameron the pick of the jobs in the shadow Cabinet after the 2005 election, Cameron chose education. Howard was disappointed that Cameron hadn't opted to shadow Gordon Brown but Cameron argued that education was the most important portfolio. A sense of that commitment was on display today in his speech on education, delivered at one of the new free schools that have opened this term. His defence of the coalition’s plans to make it easier to sack bad teachers summed up its refreshing radicalism. He simply said, "If it's a choice between making sure our children get the highest quality teaching or some teachers changing career... I know what I choose.

I understand that following a meeting in Downing Street this morning, Eric Pickles, the Communities and Local Government Secretary, has been put in charge of dealing with Britain's 120,000 "problem families". In the aftermath of the riots, David Cameron promised to put all of these families through some a family-intervention programme by the time of the next election. This policy, though, was bogged down in the bureaucracy as it cut across so many different departments. Pickles' department will now have sole responsibility for this commitment. It will receive extra budget, with the money coming from education and work and pensions, and staff to deal with this.

If Tony Blair thought that a meeting with Gordon Brown was like dental surgery without anaesthetic, one wonders how David Cameron would describe being questioned on Europe by Bill Cash and Bernard Jenkin. At the liaison committee, the two veteran eurosceptics pushed Cameron on why he was supporting far greater fiscal integration in the Eurozone. Cameron’s answer was, basically, that this was the only way the Eurozone could be made to work. But one can’t help but feel that greater fiscal integration is simply storing up problems for the medium term given that it will do nothing about the divergence in competitiveness between Eurozone members. The rest of the session was dominated by yet more questions about relations between politicians and the media.