James Forsyth

The Prime Minister and his puppet Chancellor are currently facing the press and engaging in furious damage limitation. After that, the Chancellor will have to make a statement to the House where he can expect to be mocked by George Osborne and dissected by Vince Cable, who is the only politician to come out of the Northern Rock affair with his reputation enhanced. This is not quite a Black Wednesday moment but it is a huge blow to the government’s record for economic competence. In many ways, nationalising Northern Rock was the easy bit. The government now has a whole bunch of problems on its hands; John Redwood has a list of questions that Darling needs to answer that is well worth looking at. Northern Rock will not go away quickly or quietly.

Perhaps, the greatest political danger for the government from yesterday’s nationalisation of Northern Rock is that it fits so neatly into the narrative of a government that is incapable of making a decision. On The Today Programme this morning, Alistair Darling was repeatedly pressed on the question of why this step was not taken earlier and had no adequate answer. Darling’s performance this morning revealed just how vulnerable the government is over Northern Rock. The Chancellor could not parry the charge that allowing then bank to continue doing business even now it is nationalised is unfair competition.

Lib Dem frontbencher David Heath has confirmed that he will vote against the Lib Dem whip and for a referendum on the EU Constitution. Nick Clegg now faces a difficult choice. He can sack Heath and show that he will not back down from enforcing party discipline. However, this approach would highlight the Lib Dem’s breach of their manifesto promise to support a popular vote on the EU Constitution. Or, he can let Heath get away with defying the party line and create a precedent that will wreak havoc on party discipline. Two factors are likely to make up Clegg’s mind. First, whether the Lib Dems can succeed in getting their amendment on an in or out referendum down and second how many Lib Dem MPs look like following Heath’s lead.

Two Lib Dem frontbenchers are—in open defiance of their party line—supporting a referendum on the EU Reform Treaty, Sam Coates reveals this morning. This is a major challenge to Nick Clegg’s authority: if he lets David Heath and Nick Harvey get away with this then it will be hard for him to enforce party discipline on any other issue. Yet, if he sacks them he will draw attention to the fact that the Lib Dems have gone back on their manifesto promise to support a referendum on the treaty. Heath is in a particularly tricky position as he has a wafer-thin majority in a Euro-sceptic constituency and has been adamant that he will support a referendum come what may. How Clegg handles this coming crisis will tell us a lot about his leadership skills.

The idea that MPs should have to declare in the Register of Member’s Interests any family members who work for them is a sensible response to the Conway crisis. However appropriate it may be in certain circumstances for family members to work for an MP it needs to be placed on the record if the suspicion is not to grow that the whole parliamentary allowances system is a giant racket. It is depressing, but predictable, that the Speaker is unenthusiastic about these changes. As Fraser wrote last week, Michael Martin has not grasped how urgently the Commons needs to reform itself if trust in politics is not to be lost for good.

David Miliband’s speech on ‘the democratic imperative’ marks an important moment in post-Iraq foreign policy. It is the first time since Tony Blair’s departure that a Labour politician has delivered an intellectually coherent set of remarks on what strategic goals Britain should be pursuing in its foreign policy.   After the difficulties in Iraq and Hamas’s election victory, the question for many is why should Britain bother pushing for democracy at all. But as Miliband argues there is a practical as well as an idealistic case for democratic promotion: "In weak states, there are no military solutions to the insecurity and injustice that helps to breed terrorism, only political solutions.

Labour is clearly rattled by the row over it reneging on its promise of a referendum on the EU Constitution. Not content with threatening to withdraw the whip from Labour MPs who support honouring this manifesto commitment, Labour is engaged in a desperate attempt to discredit the cross-party ‘I want a referendum campaign’. Europe Minister Jim Murphy is reacting with panic to the planned ballot in his constituency of East Renfrewshire. His local Labour party has sent out a leaflet which is filled with—to put it politely—misleading statements. First, they claim that the ballot has been organised by the Conservative Party—which it hasn’t. Then, they claim that it is not a secret ballot—when it is, run by Electoral Reform Services.

The Brown re-launch, or strategic readjustment as I expect the Prime Minister would prefer us to call it, is the subject of Steve Richards’s column today. Richards notes how Brown is trying to counter Cameron’s commitment to a fairer society and a smaller state by talking about the kind of enabling government that is needed to ensure that British people can compete in an age of globalisation. He points out that Brown has combined this clearer message with a more effective style of delivery; putting him in a decent political position for the first time since his honeymoon. It does seem that Brown feels that he has hit upon the idea that he thinks will carry him through to the next election.