Advantage Tory right as Huhne exits stage left

So farewell then, Chris Huhne – well for the time being at any rate, as the erstwhile Energy Secretary quits in order to fight charges of perverting the course of justice in relation to a driving offence committed in 2003.

The leading Liberal Democrat politician was left with no choice but to resign from the Cabinet yesterday after effectively being charged with lying to the police over whether he or his ex-wife was driving at the time of the incident.

Mr Huhne, who continues to deny the charges, will now have to clear his name if he is to stand any chance of resuming what has been an eventful career over the course of less than seven years as an MP.

For now, though, his Lib Dem colleagues will have to manage without his combative presence around the Cabinet table as the curse that has seemed to bedevil the party’s senior figures since the last election strikes again.

They lost their cleverest minister, David Laws, within 16 days of the Coalition taking office, and nearly lost their most well-known, Vince Cable, over his ill-judged pledge to destroy the Murdoch empire – uttered before it succeeded in destroying itself.

Now they have lost their most abrasive in Mr Huhne, the stoutest defender of the party’s interests within the government and, by some distance, the Tory backbenches’ least-favourite Liberal Democrat.

Few Tory tears will be shed at his departure. Right-wing internet bloggers who have had Mr Huhne in their sights for some time were literally cracking open the champagne yesterday morning – and one even posted a video of himself doing so.

The evident Tory glee demonstrates the fact that Mr Huhne’s enforced resignation is likely significantly to alter the balance of power within the Cabinet in their favour.

His successor Ed Davey is a capable minister who deserves his Cabinet promotion - but he is no Chris Huhne, described by one commentator yesterday as a “political bulldozer who would try relentlessly to get his way, and who was not averse to media shenanigans to advance his cause.”

It was Mr Huhne, rather than Nick Clegg, who led the attack on the Tories over their handling of the referendum on the voting system last May, when Mr Cameron gave the green light for a series of bitter personal attacks against the Lib Dem leader.

And it was he who articulated the Lib Dem rage over Mr Cameron’s decision to veto a new EU treaty at the Brussels summit in December.

What gave Mr Huhne a particular degree of authority within the Cabinet was his strong power base within the party as a two-time leadership contender and de facto leader of the party’s social democratic tendency.

He could very well have become his party’s leader instead of Mr Clegg, had not a pre-Christmas postal strike in 2007 led to thousands of votes in his party’s leadership election arriving after the ballot boxes had closed.

Until yesterday, he would have been the likeliest replacement for Mr Clegg were the latter to have been forced out by party activists still grumbling over his decision to join the Coalition.

Westmorland and Lonsdale MP Tim Farron, the party’s distinctly Coalition-sceptic president, now looks odds-on for that role, possibly as soon as 2015 in the event of Mr Clegg’s three-way marginal Sheffield Hallam seat turning either red or blue next time round.

The short-term impact, then, of Mr Huhne’s departure is that it will embolden the Tory right and make this look even more obviously a Conservative-led government than it already is.

This in turn will be good news for Labour and Ed Miliband, whose essential line of attack on the Coalition is that it is a Tory government in all but name, and who this week restored some of his party’s sagging morale by putting Mr Cameron on the back foot over bankers’ bonuses.

The real nightmare scenario for the government, though, would come if Mr Huhne were to go to jail – forcing a by-election in his highly marginal seat of Eastleigh which would pitch the Lib Dems and the Tories against eachother.

And the potential consequences of that for the Coalition hardly need spelling out.

Scottish independence won't be the end of the devolution 'process'

Back in 1998, a now almost-forgotten former Labour cabinet minister coined the phrase: "Devolution is a process, not an event."

They were in fact the words of Ron Davies, the architect of the Welsh Assembly who is now primarily remembered for his 'moment of madness' on Clapham Common and subsequent 'badger-watching' escapades near the M4.

But as the repercussions of New Labour's devolution reforms of the late 1990s continue to reverberate around the body politic, it is clearer than ever that Mr Davies was spot-on in his analysis.

Just as the former Cabinet secretary Gus O'Donnell predicted in his series of 'exit interviews' before retiring last month, the future of the Union has suddenly become one of the hottest of political hot potatoes.

The extent of the Prime Minister's gamble in seeking to strong-arm the Scottish government into holding a straight yes-no vote on independence within the next 18 months should not be underestimated.

A less risky strategy would surely have been for the Westminster government to carry on doing what it has been doing to the Scots for the past 30 years, namely try to buy them off.

The carrot on this occasion would not have been money in the form of the highly-advantageous Barnett Formula of public spending, but rather the promise of more powers – or “devo max” as it is termed.

By handing significant financial autonomy and accountability to the Scottish government while allowing it to remain in the UK, the government would surely have satisfied all but a minority of pro-independence diehards.

But Mr Cameron appears to have eschewed that option in what appears to be an all-out bid to destroy the Scottish Nationalist First Minister Alex Salmond and kill the idea of independence stone dead for a generation or more.

His attempt to set the timetable for the referendum as well as fixing the question is designed to pitchfork the Scots into an early vote in the hope that they will reject independence.

But will it actually have the opposite effect? Will the Scots simply see it as yet more unwanted meddling in their affairs by a distant English premier whose party enjoys so little support north of the border it nearly decided to change its name?

If so, then Mr Cameron is going to look remarkably stupid before this game of political chess is played out. So stupid, in fact, that it could be he, rather than Mr Salmond, who finds himself out of a job.

The future constitutional position of Scotland may seem like a rather arid subject to those of us south of the border, but for the North-East, it could have some rather interesting political repercussions to say the least.

For starters, an independent Scotland would be more likely to compete aggressively against the Northern English regions for inward investment – an issue that has reared its head from time to time even within the existing Union.

The wider implications, though, would be in the change in political balance within England and the impact that this would have on traditionally Labour-supporting areas.

The secession of the Scots would mortally Labour south of the border, ending any prospect of it holding power alone at Westminster again and permanently shifting the centre of political gravity to the right.

The Labour-supporting regions of the North - whose political cultures in fact have more in common with the Scots than with the Southern English – may well then find themselves even more marginalised by the Westminster Parliament.

This, in turn, might well lead to a revival of interest in the idea of devolution within England, perhaps within a pan-Northern context this time round rather than individual assemblies for the North-East, North-West and Yorkshire.

My guess is that if Mr Cameron’s gamble does backfire, and the Scots ultimately vote for independence, it won’t be too many years before we see calls for some sort of 'Council of the North' encompassing all three regions.

Fanciful? Well, maybe. But devolution is, after all, a process, not an event.

Time for Labour to turn to its own 'Iron Lady?'

And so the new political year begins moreorless exactly where the old one left off…with Labour leader Ed Miliband’s long-term survival prospects once more being called into question.

The run-up to Christmas saw growing unease in Labour ranks over Mr Miliband’s failure to make more headway against David Cameron’s Coalition government, in what seemed like the beginnings of a whispering campaign.

Now that the season of goodwill is over, however, the muttering has broken out into the open, with Labour peer and former adviser Lord Glasman claiming that this week that the Labour leader has "no strategy and little energy."

And yesterday’s warning by Shadow Defence Secretary and leading Blairite Jim Murphy that Labour must have “genuine credibility” on spending cuts is being seen as another shot across Mr Miliband’s bows.

Lord Glasman’s comments were significant not so much in themselves as for the fact that they played into what is fast developing into an over-arching narrative about Mr Miliband’s leadership.

Perhaps his most telling point was on the economy, on which he said: “We have not won, and show no signs of winning, the economic argument…we have not articulated a constructive alternative capable of recognising our weaknesses in government and taking the argument to the coalition.”

He added: “Old faces from the Brown era still dominate the shadow cabinet and they seem to be stuck in defending Labour's record in all the wrong ways."

That was a clear reference to Shadow Chancellor Ed Balls, whose presence in that post is viewed by some as an insuperable obstacle to Labour’s attempts to regain economic credibility.

The ‘credibility’ question was also clearly uppermost in Mr Murphy’s mind as he spoke out the spending cuts issue in a national newspaper article yesterday.

Mr Murphy, who ran South Shields MP David Miliband’s leadership campaign, was ostensibly talking about defence, but the wider message was clear – that Labour needs to stop opposing every government spending cut for the sake of it.

Mr Miliband’s difficulties were compounded yesterday by a leaked memo from his press secretary Tom Baldwin claiming, somewhat absurdly, that he had led Labour to “probably the best recovery of any opposition party in history.”

And he caused himself further embarrassment by referring to the late Bob Holness as the host of ‘Blackbusters’ in a Twitter post as ill-advised as some of Gordon Brown’s YouTube appearances.

So having spent the last year trying to shed the hated ‘Red Ed’ tag, could this be the year when Mr Miliband becomes ‘Dead Ed?’

Well, it is interesting on this score is to see what some of the leading Blairite commentators are saying.

Although a lot of people in the party still believe the wrong Miliband was chosen as leader, there appears to be no great clamour for David to ride to the party’s rescue.

Instead, some of his former supporters seem to be latching onto the Brownite Shadow Home Secretary Yvette Cooper as Mr Miliband’s most likely replacement.

Take this, for instance, from The Independent’s John Rentoul, perhaps the most influential Blairite in the ranks of the commentariat.

He wrote: “Yvette Cooper could have won in 2010, had she not said that the time was not right for her and supported her husband, Ed Balls, instead. If she is clever, the Brownites and Blairites could unite behind her. “

Or this from Dan Hodges, a former Blairite insider and special adviser who now blogs for the Daily Telegraph.

He quoted a Shadow Cabinet source as saying: “Yvette’s the next leader of the party. The only question is whether it’s before the election or after.”

For my part, there is no doubt in my mind that Yvette Cooper is the potential Labour leader which the Coalition fears most.

Mr Cameron already has a ‘problem’ with women voters – some would say with women in general – and he could not get away with patronising the redoubtable Ms Cooper in the way he has tried to do with other female MPs.

The long-awaited release of the Margaret Thatcher biopic yesterday may well focus attention on why the Labour Party has so far failed to find its own ‘Iron Lady.’

Could this be the year they finally put that right?

If you want to see the future of politics, just listen to 'God'

Following on from last week's Review of 2011, here's my look ahead to the political year 2012.

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Predicting the future is always a risky business, but anyone looking for some pointers as to the direction which British politics might take over the next few years could do worse than listen to ‘God.’

Of course, by that I don’t mean him upstairs – though doubtless he might also have something to say about it - but the man who is universally known by that nickname in Westminster circles – the outgoing Cabinet Secretary Sir Gus O’Donnell.

Sir Gus officially retired yesterday as Britain’s most senior civil servant, but not before breaking the habit of a lifetime and firing off a few opinions of his own in a series of exit interviews with assorted media outlets.

In them he warned, among other things, that the greatest challenge facing Britain over the coming years would not be the state of the economy or even its future place in the European Union, but simply holding the United Kingdom together.

Sir Gus’s comments served as a necessary corrective to the fact that the implications of Scottish and Welsh devolution for the rest of the UK have sometimes been overlooked.

In last week’s column reviewing the political year 2011, I noted that the referendum on reform of the voting system held in May last year did not, in the end, prove to be the political game-changer that some of us thought it might be.

But there was something else that happened on the same day which may well prove to be of much greater significance in the longer-term – the outright victory of Alex Salmond’s Scottish Nationalists in the elections to the Scottish Parliament.

We have already seen how Mr Salmond is prepared to use such issues as the Eurozone crisis to press the case for Scottish independence, and we can expect much more of this in the coming year.

On the future of the Coalition, however, Sir Gus was less outspoken, saying that he expected it to run its course until a general election in 2015.

Perhaps it is unsurprising that he should take such a view, in that he played a pivotal role in bringing the Coalition together in the first place, and thus has an emotional stake in its long-term survival.

But ultimately, the Coalition will survive only as long as it is in the Conservatives’ interests for it to survive – and it is here that the underlying political dynamics may well be shifting.

With his party enjoying an unexpected mid-term lead in the opinion polls, might Prime Minister David Cameron be tempted over the next 12 months to try to convert that into the outright Commons majority that eluded him in May 2010?

We shall see. But Mr Cameron is perhaps fortunate in that the issue most likely to bring about a split between the Coalition partners is one on which his party enjoys far greater public support than the Liberal Democrats, namely Europe.

As John Redwood pointed out earlier this month, an election over the UK’s future relationship with the EU would be a very easy one for the Tories to win, and Mr Cameron would not be human if he did not at least toy with the idea of engineering one.

But if that Tory opinion poll lead is raising questions about the future of the Coalition, it is raising even more urgent ones about the future of Labour leader Ed Miliband.

His survival in the role must now be open to real doubt and is surely set to be one of the big running political stories of 2012.

History, at least, would suggest that Mr Miliband has little to worry about. The Labour Party does not do assassinations, and invariably allows its leaders the chance to fight at least one election even if they are patently not up to the task.

Against that, both Neil Kinnock and Michael Foot were at least able to demonstrate mid-term opinion poll leads over Margaret Thatcher, even if they went on to crushing defeats.

Mr Miliband has gained an unlikely ally in the Tory columnist Peter Oborne, who this week praised his attempts to move away from what he called the “manipulation and cynicism of the modernising era. “

But while 2012 may well see a growing appetite for a more value-based style of politics, it is far from clear that the public sees Mr Miliband as the man to deliver it.

Review of the Year 2011

Ever since the formation of the Coalition between David Cameron’s Conservatives and Nick Clegg’s Liberal Democrats in the aftermath of the May 2010 general election, British politics has by and large been dominated by two interrelated questions.

The first was whether, in spite of the obvious chemistry between the two leaders, an alliance between two parties with such vastly differing worldviews could actually come close to achieving its stated aim of governing for a full five-year Parliament.

The second was whether the tough economic measures it adopted would succeed in tackling the deficit, as the Tories had argued during the election campaign, or merely succeed in choking-off an incipient recovery, as Labour had warned.

Eighteen months on, those questions remain unresolved, but as the political year 2011 draws to a close, we are at least a little closer to knowing the answers.

On the first point, I wrote at the start of the year that if the Coalition managed to get through 2011, it would in all likelihood survive until its target date of 2015.

In making that prediction – which I may well be forced to revise over the coming 12 months - I was looking to May’s referendum on reform of the voting system as the likeliest breaking point between the two partners.

As it turned out, the Lib Dems’ crushing defeat in the referendum did not prove the Coalition breaker some of us thought it might, despite Mr Cameron having apparently given his party the green light to launch some bitter personal attacks on Mr Clegg.

And late in the year another issue emerged which on the face of it now seems much more likely to prevent the Coalition going the course: Europe.

Mr Cameron’s self-imposed isolation at this month’s European Summit capped what on the face of it was not a great year for the Prime Minister.

He found himself forced into a series of policy U-turns – over privatising forests, reducing prison sentences for defendants who plead guilty, and most notably over the ill-judged attempt to impose competition on the National Health Service.

Meanwhile the phone-hacking affair at the News of the World threw the spotlight on Mr Cameron’s close personal links with the Murdoch empire, while the travails of his defence secretary Liam Fox forced him into his first reshuffle.

And with the economy flatlining and unemployment on the rise, Chancellor George Osborne was forced to revise growth forecasts downwards and borrowing forecasts upwards as he conceded that the deficit would not, after all, be paid off in the current Parliament.

The fact that, in spite of all this, Mr Cameron ended the year ahead in the opinion polls probably says less about him that it does about the plight of the Labour opposition.

Party leader Ed Miliband’s one big success – and it was a not inconsiderable one – was to lead the attack on Murdoch and in so doing prevent him taking control of BSkyB - the first time the political establishment had stood up to the ageing media mogul in three decades.

He also made by far the most substantial of the three party leaders’ speeches in what was otherwise a distinctly unmemorable conference season, setting his face against the “fast buck culture” of the Thatcher-Blair years.

But the largely negative public reaction to the speech showed the extent of his task in winning over an electorate that still seems resolutely underwhelmed by him, and as Parliament broke up for Christmas, the muttering about his leadership in the Labour ranks was growing.

Mr Miliband’s failure to make the political weather was all the more baffling given the grim economic news, which increasingly appeared to bear out Labour’s warnings against cutting “too far, too fast.”

Inevitably the impact of the cuts was most keenly felt in the North-East, where more than 30,000 public sector jobs disappeared at a time when they were apparently still being created in other more prosperous regions.

But Labour remained hampered both by its failure to articulate a clear position on the deficit and by its perceived complicity in having created the problem in the first place.

And unless and until the public changes its collective mind about who is really to blame for the country’s economic plight, Mr Cameron’s continued political ascendancy seems assured.

On the big issues, is Cameron actually a worse PM than Brown?

A few weeks ago, a backbench Conservative MP got himself into a spot of bother after being caught on tape using a four-letter word to describe his leader David Cameron.

Given that the offending word used by backbencher Patrick Mercer began with an ‘a’ rather a ‘c’, the implication was not so much that he finds the Prime Minister personally unpleasant as that he regards him as a bit of a clown.

Mr Mercer’s accompanying description of Mr Cameron as “the worst Prime Minister since W.E. Gladstone” was generally viewed at the time as a rather unwarranted slur on both of these two worthy occupants of Number 10 Downing Street.

But in the wake of his potentially career-defining veto at last week’s EU summit on the future of the Eurozone, the question ‘Is Cameron actually any good?’ has suddenly assumed an added pertinence.

It is, of course, far too early to tell whether the Prime Minister did the right thing by blocking the proposed Treaty on stabilising the currency or whether it will turn out to be, in the words of his own deputy Nick Clegg, “bad for Britain.”

It may be a decade or more before we are able to arrive at a settled historical judgement on the issue, by which time Mr Cameron will almost certainly no longer be in office.

Will Hutton, the former Observer editor and author of influential 1990s tome ‘The State We’re In,’ believes it will turn out to be a mistake of historic proportions, and that by 2020 a flatbroke Britain will be begging to join a newly-thriving Eurozone.

This is however currently very much a minority view. Mr Cameron may have turned us into what one Cabinet minister this week called ‘the Billy No Mates of Europe,’ but if the opinion polls are anything to go by, the public seems to be applauding rather than condemning him for that.

As far as short-term tactical considerations are concerned, Mr Cameron’s actions at the summit cannot be faulted.

He knew that if he agreed to the proposed Treaty, his party’s increasingly self-confident right-wing would use it as an excuse to demand a referendum on Britain’s membership of the EU – the last thing Mr Cameron wants to see.

Rather than entertain that possibility, he chose instead to risk infuriating his Liberal Democrat coalition partners, knowing full well that they are in no position to bring down the government and fight a general election, especially over the issue of Europe.

Political pundits who tell us that Europe is a potential coalition-breaker are forgetting the fact that the Lib Dems’ pro-Europeanism is wildly unpopular in the Southern seats where the Tories are their main opponents.

So looked at purely from a domestic political point of view, Mr Cameron’s gamble seems so far to be duly paying off.

After a fortnight in which the Chancellor admitted his borrowing forecasts were wildly off course, unions staged the biggest strikes seen in a generation, and the Prime Minister was outvoted 26-1 at an important international gathering, the Tories pulled two points ahead of Labour in the polls.

This is a deeply worrying state of affairs for Labour leader Ed Miliband, one which victory in the Feltham and Heston by-election on Thursday night will have done little to alleviate.

As I wrote in this column the week before last, Labour ought to have a compelling narrative on the economy, but the public is currently not listening. So too it is with Europe.

Ultimately, however, Prime Ministers are not judged on whether or not they manage to secure a short-term tactical advantage over their opponents, but on whether or not they are seen to have acted in the national interest – a judgement that will rest in part on consequences as yet unseen.

It is already clear, for instance, that Scottish First Minister Alex Salmond intends to use the issue to ratchet up calls for full-blown Scottish independence, arguing that the UK’s new-found isolation will harm the economy north of the border.

For Mr Cameron, who leads what is still nominally called the Conservative and Unionist Party, this would be as perfect an illustration of the law of unintended political consequences as you are ever likely to see.

Perhaps the so-called ‘Little Englanders’ in his ranks should be careful what they wish for.

Osborne's date with political destiny

‘Make or break’ is doubtless an overused term in politics. Many are the times when it is said that a politician needs to make the “speech of his life” on such and such a day, only for the same old cliché to be trotted out again the next time he makes one.

Yet for Chancellor George Osborne, this Tuesday’s autumn statement on the economy is genuinely shaping up to be one of those dates with political destiny.

For years, Mr Osborne has been the man with the plan as far as the Tory Party is concerned, and his plan on taking over at No 11 Downing Street in May last year was straightforward and simple.

It was: sort out the deficit in the first couple of years, wait for economic growth to start kicking in again, sprinkle some carefully-targeted tax cuts around, and then win the next election hands down.

But it’s all gone horribly wrong. Far from providing a platform for new growth, 18 months of austerity measures have pitchforked the economy back towards the ultimate horror of a double-dip recession.

As such Mr Osborne’s masterplan for economic recovery – and outright Tory victory in 2015 – now looks hopelessly optimistic.

And of course, it is not just the fate of the economy and the government that is at stake here, but Mr Osborne’s own chances of succeeding David Cameron as Tory leader.

If recovery comes and the Tories win an overall majority next time, there will be nothing to stand between him and No 10. But if they lose – or are forced into another five years of coalition - it will be Mr Osborne who gets the blame.

All of which make Tuesday’s statement if not quite the “speech of his life” then certainly the most important he has made since that Tory conference address of 2007 which frightened Gordon Brown off from holding an election.

To succeed, he must somehow manage to reconcile two seemingly contradictory goals.

Firstly – and this almost goes without saying - he must manage to reassure the markets that the government remains serious about tackling the deficit.

But equally, he now needs to reassure an increasingly sceptical public that the government has a plan for growth – if not a ‘Plan B’ as Labour still insists on calling it, then at least a Plan A-Plus.

It is already clear from several strategically-placed leaks that switching more spending into capital investment in infrastructure is going to be central to Mr Osborne’s plans.

It all seems a far cry from the days when Margaret Thatcher commented sniffily: “You and I come by road or rail, economists travel on infrastructure” – but no matter.

Chief Secretary to the Treasury Danny Alexander gave an insight into the government’s thinking in a speech to the National Association of Housebuilders on Wednesday.

"We are shaking the Whitehall tree to make sure no-one is stockpiling capital that can be put to good use today. That's why next week's announcement will switch funds to capital spending plans,” he said.

This is all of a piece with Mr Cameron’s speech on Monday setting out measures to boost the housing market, both by encouraging the construction of more homes and by helping first-time buyers obtain mortgages.

And yesterday Deputy Prime Minister Nick Clegg got in on the act by pre-announcing a £1bn scheme to help the young unemployed, apparently to be paid for by further savings in other areas.

The risk for the government is that it will all be too little, too late to counteract the chilling effects of 18 months of what Labour leader Ed Miliband this week called “austerity rhetoric.”

But if he can use Tuesday’s statement to get the economy moving again at last, then it may yet all come right – for the coalition, for Mr Osborne, and most importantly for the long-suffering British public.

Cameron could lose big as Balls makes mischief

The week before last, 81 Conservative MPs ignored the blandishments of the party whips, and the pleas of Prime Minister David Cameron, to demand a referendum on EU membership.

It was the biggest rebellion of Mr Cameron's six years as party leader, but with Labour also supporting the government, it was far from being the tightest parliamentary vote since the Coalition took power.

For that, you would have to go back to July, and the vote on whether the government should contribute an additional £9bn to the International Monetary Fund to help prop up other countries’ ailing, debt-ridden economies.

On that occasion, the Coalition's majority was reduced to just 28 votes, with 32 Tories joining Labour in the lobbies to oppose the bailout plan.

At the time, Chancellor George Osborne hoped that would be the end of it, and that the international debt crisis would be making no further claims on the generosity of British taxpayers.

But in the wake of the Eurozone crisis, and specifically the Greek bailout, it seems that yet more billions will be required after all.

Mr Cameron was at great pains to stress yesterday that increasing Britain’s contributions to the IMF does not mean UK taxpayers are propping up the Euro.

“Britain will not invest in the IMF so the IMF can invest in a Eurozone bailout fund. That is not going to happen,” he said.

But nevertheless, there is a certain amount of hair-splitting, if not to say outright disingenuousness, going on here.

The role of the IMF is after all to help countries in economic distress all round the world – and there seems no reason why that could not include countries in the Eurozone.

Shadow Chancellor Ed Balls has called on the government to make clear that “directly or indirectly this money will not end up supplanting the European Central Bank and putting liquidity support in for Spain and Italy. “

As the mischievous Mr Balls knows perfectly well, there are plenty of Tory backbenchers who privately suspect this is exactly what is going to happen to the additional IMF cash.

So why is this such a potentially difficult issue for Mr Cameron? Well, do the maths.

If there was a rebellion on the latest IMF handout, only this time on the scale of the EU referendum revolt, the government would not only lose – but lose big.

It is clear that Downing Street has already wised-up to this danger and is trying to argue that a second Commons vote would be unnecessary.

Asked about it yesterday, Mr Cameron said the July vote had "allowed for some extra headroom and what we would anticipate doing would be within that headroom.”

And there is, of course, another reason why the government is keen to avoid such a vote – namely that it would further highlight the divisions in the Coalition between his party and the Liberal Democrats.

The Coalition’s inherent instability derives from the fact that it is a marriage of convenience between two parties with wildly differing worldviews, and on no single issue is this more clearly exemplified than on that of Europe.

The Lib Dems, at some cost in terms of their own popularity, have consistently advocated the concepts of European integration and “ever closer union” for most of the past 30 years.

By contrast, the Tories have been drifting steadily in the opposite direction – to the point where Mr Cameron – our most Eurosceptic premier since we joined the EU – is seen by some on the right of his party as a creature of Brussels.

Going into this year, it seemed likely that electoral reform would be the rock on which this fragile Coalition ultimately foundered, but already that seems a very distant memory.

While the debacle that was the AV referendum in May has effectively buried that issue for a decade, the issue of Europe has risen phoenix-like from the flames.

Mr Cameron spent a good part of his leadership in the early years telling his MPs to stop ‘banging on’ about Europe, doubtless conscious of the fact that the issue had destroyed the last two Conservative governments.

Now that it is back on the agenda, I suspect they won’t stop banging on about it until it has broken this one too.

Victory strengthens Cameron's hand against rebellious party

Of all the many factors that determine political success and failure, there can be no doubt that luck features pretty high on the list.

David Cameron has always been a lucky politician. He had the good luck to be elected to the Tory leadership at just the point when people were starting to tire of New Labour, and the good luck to be battling for power against Gordon Brown rather than Tony Blair.

This week his luck held out again, just at the point when it looked as though it might be finally running out.

Amid continuing fallout from Liam Fox's resignation and a looming Tory backbench rebellion over Europe - remember those? - news came through of the death of Colonel Gadaffi - another enemy in whom Mr Cameron has been fortunate.

When Britain first entered the Libyan conflict on the side of the anti-Gadaffi rebels earlier this year, I have to confess that my first reaction was: "Oh, no, here we go again."

At best, I feared another misguided crusade to foist Western-style political values on an Islamic country with no tradition of democracy, and at worst, a lengthy civil war costing hundreds of British lives.

As it turned out, though, my fears proved groundless. Mr Cameron promised that Britain's role would be limited to aerial bombing rather than boots on the ground - and he was as good as his word.

He also repeatedly stressed the importance of Britain's national interest in the removal of Gadaffi, rather than making the case for Britain's involvement on moral interventionist grounds as Mr Blair might have done.

The involvement of the former Libyan regime in the shooting of WPC Yvonne Fletcher in 1984 and the Lockerbie bombing in 1988 was of course well-documented, even if only one person has ever been convicted of either crime.

What was less well-known until the start of this conflict, was Gadaffi's involvement in arming the IRA and thereby prolonging the bitter conflict that blighted these shores from the late 1960s to the mid-1990s.

In this respect, Mr Cameron was merely following in a much older tradition of British foreign policy - the one first established by Lord Palmerston in the middle of the 19th century.

"We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow." he said in 1848.

The danger for Mr Cameron, as the BBC's Nick Robinson has pointed out, is that having succeeded in Libya he develops something of a taste for military conflict.

In this context it is worth remembering that Mr Blair's first war was the successful intervention in Kosovo, not the later much more problematic entanglements in Afghanistan and Iraq.

Some credit, too, should go to Dr Fox who, whatever his other shortcomings, left the Ministry of Defence with a reputation more formidable by far than any of his short-lived Labour predecessors.

Having faced down Chancellor George Osborne over the spending review last autumn, securing proper ongoing funding for our armed forces may well prove his most important legacy.

Victory over Gadaffi does not, by any stretch of the imagination, remove Mr Cameron's wider problems within his own party.

His enemies on the right are not in the least pleased by the substitution in the Cabinet of the right-wing traditionalist Dr Fox for the socially-liberal Justine Greening, who came in as transport secretary in last Friday’s enforced reshuffle.

They are said to be even more incensed by the elevation of a Cameron 'favourite,' Chloe Smith, to a middle-ranking Treasury job, ahead of what they see as more talented, but also more right-wing, rivals.

And above all, they are up in arms over the imposition of a three-line whip against plans to hold a referendum on EU membership in 2013, due to be debated in the Commons next week.

With mounting concern over the implications of the Eurozone bailout, this last issue has the potential to be as toxic for Mr Cameron as it was in the 1990s for his predecessor-but-three, John Major.

Unless the three-line whip is modified, there may well be resignations in the government’s junior ranks.

But in his calm and authoritative handling of the Libyan conflict, Mr Cameron has once again demonstrated why he is vastly more popular than his party.

And so long as that remains the case, they won’t dare push him too far.

A tale of two reshuffles

A couple of months back, I wrote a column highlighting the absence this year of one of the hitherto regular features of the political scene – the summer Cabinet reshuffle.

Partly this could be attributed to David Cameron’s hatred of them. He had made clear he saw no purpose in shifting ministers around every 12 months, and wanted his team to stay in place for the duration of the five-year Parliament.

But while the Prime Minister should doubtless be applauded for such good intentions, politicians are always ultimately at the mercy of events.

And with the departure of Dr Liam Fox from the government yesterday afternoon after a week or more of damaging allegations about his links to unofficial adviser Adam Werrity, Mr Cameron has been forced to have a reshuffle after all – an Indian summer reshuffle, if you like.

Alastair Campbell famously said that if a story about a beleaguered minister ran for more than ten days it constituted a genuine crisis management situation rather than a mere media frenzy, and Dr Fox had already passed this point.

Whether or not he is found to have breached the ministerial code – Cabinet Secretary Gus O’Donnell has yet to reveal his findings – the former defence secretary’s behaviour has been extraordinary by any standards.

I would be the last person to condemn politicians for needing to let off steam occasionally, but most of our elected representatives manage to do that without adding a day onto an official overseas trip in order to stage a boozy party with their mates in Dubai.

But if that element of the story was somewhat comical, more serious was the suggestion that Dr Fox had created a parallel foreign policy operation, with the help of ‘advisers’ paid for by a shady bunch of right-wing ideologues.

Dr Fox owed his position in the Cabinet to having come a good third in the 2005 Tory leadership contest, and to his status as the unofficial leader of the ‘traditionalist’ Tory right.

It partially explains why, even allowing for his dislike of reshuffles, Mr Cameron appears to have fought unusually hard to retain the defence secretary, long after his departure had begun to assume a certain inevitability.

It is hard enough for Mr Cameron trying to hold together the coalition with the Liberal Democrats, while also trying to hold together the coalition of left and right, Europhiles and Eurosceptics, social liberals and traditionalists within his own party.

His appointment of transport secretary Philip Hammond as Dr Fox’s successor last night will have been calibrated not to upset that delicate balance, as well as keep the changes in government to a minimum.

In contrast to the Prime Minister, Labour leader Ed Miliband was so keen to have a reshuffle this year that he changed his party’s rules in order to do it.

The changes he announced last Friday by and large succeeded for the simple reason it did what Tony Blair’s reshuffles seldom did - and put round pegs in round holes.

So, for instance, former health secretary Andy Burnham, who had looked lost for ideas at education, moves back to cover his old brief, while the former schools minister Stephen Twigg, who returned to the Commons last year after losing his seat in 2005, takes on the education portfolio.

I am less optimistic about the much-hyped Chuka Umunna’s elevation to the role of Shadow Business Secretary up against Vince Cable, a man more than twice his age and with ten times his knowledge of the business world.

Nevertheless, focusing his changes on these three key policy areas makes good sense for Mr Miliband, as they are the areas where the opposition most needs to make political headway over the coming months.

The government may have won a narrow victory in the Lords this week over its controversial health reforms, but the issue remains a toxic one for the coalition and a potential election-loser for Mr Cameron.

For now, however, Labour will be content to have secured the unexpected scalp of a man who two weeks ago seemed secure in his role as one of the most senior ministers in the government.

How many more unwanted reshuffles will Mr Cameron be forced to perform before he comes to realise they are simply part of the territory.

Cameron's glass may be half-full - but the policy cupboard remains half-empty

It is generally true to say that in order to be successful in politics, you have to be capable of conveying a sense of optimism about your country and its future.

One of Tony Blair's key strengths at the start of his leadership was his ability to communicate a vision of a bright 'New Britain' in contrast to the greyness of the John Major years.

Later, David Cameron donned the same mantle, exhorting the voters to "let sunshine win the day" as he pitched himself against a tired old Labour government.

But there can come a time when optimism crosses the line into mere boosterism, and in my view it’s a line Mr Cameron crossed in his party conference speech in Manchester this week.

"Let's reject the pessimism. Let's bring on the can-do optimism. Let's summon the energy and the appetite to fight for a better future for our country, Great Britain," he told the Tory faithful.

And again: "So let's see an optimistic future. Let's show the world some fight. Let's pull together, work together, and together lead Britain to better days."

If, by his own admission, Ed Miliband is no Tony Blair when it comes to speechmaking, then David Cameron is no Winston Churchill either.

And I sense that I was not the only one who was left somewhat unconvinced by the Prime Minister's attempts this week to summon up the bulldog spirit.

To take another of Mr Cameron's optimistic soundbites: "Right now we need to be energised, not paralysed by gloom and fear."

Yet in the eyes of many, it is his government which has produced the economic paralysis by cutting too far, too fast and choking off the fragile recovery that had begun to see us through the downturn.

In this context, the announcement of a mere 0.1pc growth in the economy during the last quarter could not have come at a worse time for Mr Cameron.

Against that gloomy backdrop, his attempts at uplift were no more persuasive than his earlier, now seemingly discarded mantra that "we're all in it together."

The most startling omission in Wednesday’s speech was the absence of any policy detail from the Prime Minister on how he plans to ensure that economic growth in the next quarter does not grind to a halt altogether.

“Here’s our growth plan,” he said. “Doing everything we can to help businesses start, grow, thrive, succeed. Where that means backing off, cutting regulation – back off, cut regulation. Where that means intervention, investment – intervene, invest. Whatever it takes to help our businesses take on the world – we’ll do it.”

Commenting on this passage on his blog, Alastair Campbell wrote: “What was happening in the Team Cameron speech meetings? Did nobody stop and say ‘er, Prime Minister, this is a bit embarrassing, and doesn’t really say anything?’”

Okay, so Campbell is hardly an objective observer - but he knows what it takes to produce a good conference speech, and he also knows a turkey when he sees one.

The background story bubbling away behind the scenes at this conference was the nascent leadership battle to succeed Mr Cameron.

Home Secretary Theresa May made her pitch for the affections of the Tory Right by inflating a somewhat tendentious story about an over-stayed student who defied deportation on the grounds of owning a cat into front page news.

Then, as always, there was Boris Johnson, the London Mayor lobbing his own hand-grenade into the Tories' never-ending debate about Europe by announcing he favours a referendum on EU membership.

And even Mr Cameron himself felt the need to acknowledge Chancellor George Osborne's leadership ambitions, jesting about his choice of The Man Who Would Be King as an audio book.

But joking aside, the Prime Minister should surely be deeply worried by this outbreak of posturing and positioning among the potential contenders for his crown.

The result of the last general election showed that the public are not entirely convinced by him, and I sense that his party are increasingly unconvinced by him too.

Do the Tories believe that Mr Sunshine’s unflagging sense of optimism will be enough to save them from the gathering economic and political storm clouds ahead?

Or are they already secretly planning for Life after Dave?

What was missing about the political summer of 2011?

As anyone who has ever worked at Westminster for any length of time will know, there are certain fixed points in the parliamentary calendar which do much to shape the narrative of the political year.

Some of these are pretty well immovable feasts: the Budget, for instance, is almost always in March, the local elections in May, the party conferences in the autumn and the Queen's Speech in November.

But 2011 will go down as different from most other years in one significant respect: there was no summer Cabinet reshuffle.

Perhaps it was just the fact that everybody was too busy talking about phone-hacking, but the usual crescendo of summer speculation about who's heading up and down the greasy pole never even got going.

Tony Blair was addicted to reshuffles, although over the course of ten years as Prime Minister he never managed to become very good at them

One of my most abiding memories of my time in the Lobby was the chaotic Number Ten briefing after the 2003 reshuffle which followed the then Darlington MP Alan Milburn's surprise resignation as health secretary.

Initially we were told that the Scottish Office and the Welsh Office had been abolished and become part of the newly-created Department for Constitutional Affairs under Lord Falconer .

Half an hour later, after hasty consultations with shocked officials from the departments in question, we were told, er, no, that was not quite right after all.

Mr Blair didn't like round pegs in round holes. He was one of those leaders - you get them in all walks of life – who feel the need to move people around every couple of years or so lest they get too comfortable in the jobs they are in.

By contrast, David Cameron is said to hate reshuffles, and that certainly seems to be borne out by the relatively stable composition of his frontbench team in both opposition and government.

Unlike Mr Blair, he seems to make a virtue of stability and allowing ministers to get to know their briefs.

Usually this is a good thing – but sometimes, as in the case of health secretary Andrew Lansley and his NHS reforms, they can become so obsessed with their particular field of expertise they become blind to the wider political picture.

Mr Cameron, though, may yet be forced to do the thing he seemingly most hates, even if the traditional time of the year for reshuffles has now passed.

At the end of last month, a file was handed by Essex Police to the Crown Prosecution Service following an investigation into whether the energy secretary, Chris Huhne, persuaded someone else to take speeding penalty points for him.

Downing Street was said to be ready for Mr Huhne to walk, but the one-time Lib Dem leadership contender is not short of chutzpah, and he is still gambling that the investigation will come to nothing.

Everyone, however, privately acknowledges that if he is charged, he will be forced to stand down, at the very least temporarily, while he attempts to clear his name through the courts.

What would happen then? Under the terms of the Coalition agreement, Mr Huhne would have to be replaced in the Cabinet by another Lib Dem, though not necessarily in the same role.

Many in both coalition parties would like to see the former Lib Dem Treasury minister David Laws brought back into the Cabinet fold.

But the consensus is that it is still too soon for the ex-minister forced to resign in disgrace after just 17 days last summer after revelations about his expenses.

Safer but duller choices would be either the foreign affairs minister Ed Davey or Nick Clegg's chief adviser, Norman Lamb.

Mr Cameron could of course take the opportunity for a wider shake-up. Why, for instance, leave the highly-talented Philip Hammond mouldering at transport, or telegenic Jeremy Hunt in the relative backwater of culture, media and sport?

But all the indications, though, are that he will seek to limit the number of changes to the bare minimum.

During the Major-Blair years, the summer reshuffle, and the months of speculation that invariably preceded it, became as much a part of the political year as all those other fixed points in the calendar.

Under Mr Cameron, it looks like becoming no more than a distant memory.

Meanwhile, back in the real world....

Once again, the week concludes with phone-hacking back at the top of the political agenda, as MPs discuss a possible fresh grilling for News International's James Murdoch amid more conflicting tales about who knew what and when.

Sure, it's all very entertaining, especially for those of us who have spent years longing to see the Murdoch Empire cut down to size, and in view of his long-standing links with the NI crowd, it remains a potentially toxic story for Prime Minister David Cameron.

But sometimes the inevitable media firestorm around stories such as these can detract from the really big issues facing the country, the ones that affect peoples' lives on a day-to-day level.

And for most people, not least in the North-East, the really big issue remains the fragile state of the economy and its impact on jobs.

The publication of the three-monthly GDP figures on Tuesday saw a brief, almost evanescent shift in the news agenda away from phone-hacking and onto the bigger economic picture.

The revelation that the economy grew by just 0.2pc in the last quarter will have come as no great surprise to anyone who has been attempting to run a business over the course of that period.

If the previous set of GDP figures in April, showing 0.5pc growth, were seen at the time as disappointing, then this week's were truly dismal.

The country may have avoided a double-dip recession – but it has done so only by the skin of its teeth, and there seems no great reason to suggest we are anywhere near being out of the woods yet.

It was tempting to see George Osborne's attempts to pin the blame for the economy's continued sluggish performance on the Royal Wedding as part of a worrying pattern of behaviour on the part of the Chancellor.

After all, this is the man who found himself compared to a rail announcer of yore by blaming April's figures on the winter snows.

But maybe Mr Osborne had a point this time round. The confluence of the late Easter, the wedding, and the May Day Bank Holiday, though no fault of the government's, was scarcely helpful at a time when the economy is struggling to get into gear.

With the two four-day Bank Holiday weekends in succession, the country essentially took a 12-day holiday – helped by a patch of unseasonally warm weather.

For Shadow Chancellor Ed Balls, of course, all this is hogwash. The cause of the problem is neither the Royal nuptials nor the weather, but the government's austerity measures which he believes are continuing to choke-off any chance of a recovery.

If Mr Balls is still some way from winning the argument on this, I sense that his calls for a shift of focus from deficit reduction to growth is at least starting to be given a fairer hearing by the public.

And of course, the overall GDP figures serve to disguise the very real regional disparities in growth that exist within the UK – as Institute for Public Policy Research director Nick Pearce pointed out on Tuesday.

"Outside of London, in particular, the recession continues to be felt and the UK economy might as well still be in recession, even if technically it isn't," he said.

But it is not just Mr Balls who is keen to see more measures to stimulate growth. Tory succession-watchers will have been intrigued to see London Mayor Boris Johnson setting out his own alternative economic strategy this week, with tax cuts top of his agenda.

Much as Gordon Brown once did, Mr Osborne is keen to create an air of inevitability around himself as the Prime Minister's eventual successor, but as the man who recommended Andy Coulson, he has been damaged by phone-hacking and his handling of the economy is also coming in for increasing criticism.

Meanwhile Mr Johnson, whose own ambitions to lead the Conservative Party one day remain undimmed, is playing a blinder on both issues, with the countdown to the Olympics only likely to increase his profile still further.

BoJo is on the move. Watch this space.

Why Cameron is not out of the woods yet

Ever since the start of the crisis over phone hacking that has engulfed the worlds of politics, journalism and the police over the past three weeks, Prime Minister David Cameron had appeared to be stuck on the back foot.

Much as he himself once managed to make Gordon Brown seem leaden-footed in his response to the MPs' expenses crisis two years ago, Labour leader Ed Miliband had seemed to be making the political weather as the public backlash against News International intensified.

Fortunately for Mr Cameron, he is far too skilled a politician for it to have lasted forever and sure enough, this week saw him finally come out fighting.

Prime Ministers always have an inbuilt advantage in the game of politics in that, while opposition leaders can just talk, they can actually do – and this week it was an advantage Mr Cameron exploited to the full.

Cutting short his trip to Africa, he postponed the parliamentary recess by 24 hours, enabling an extra session of Prime Minister's Questions and an emergency statement on phone hacking to be squeezed in before the MPs' summer break.

But besides raising the morale of the Tory Party by showing a bit of grit and determination in the face of his Labour tormentors, did it actually do him any good?

Well, his admission that he should not have hired the former News of the World editor Andy Coulson as his press secretary will go part of the way towards defusing the issue which has dogged him since well before the start of the current media firestorm.

But as Mr Miliband was swift to point out, having regrets about the appointment does not get away from the fact that it was, as he put it "a catastrophic error of judgment."

Mr Cameron has still yet to satisfactorily explain why he chose to ignore so many warnings about the dangers of making Mr Coulson Downing Street communications director.

The suspicion persists that he adopted something of a wise monkey stance in relation to his trusted press adviser - 'see no evil, hear no evil, think no evil.'

The disclosure that his chief of staff Ed Llewellyn had refused a detailed briefing on phone-hacking from the police could be interpreted as wanting to protect the Prime Minister from any suggestion that he could influence the investigation.

But it could equally be the case that aides like Mr Llewellyn simply did not want to tell the Prime Minister what they knew he did not want to hear.

Wednesday's debate also provided a convenient platform for Labour MPs to raise some additional issues which have further muddied the waters in relation to Mr Coulson.

First, Labour MP Chris Bryant claimed that the Royal Family had raised concerns with Downing Street about Mr Coulson's appointment – which would be hardly surprising since most of them had had their phones hacked.

Then the highly-respected former local government minister Nick Raynsford suggested that Mr Coulson might actually have practised phone-hacking while in the role of Downing Street press secretary, with a senior government official as the victim.

The Cabinet Secretary denied it, but if this allegation were to turn out to be true, the situation would look very grave indeed for Mr Cameron.

But the biggest reason why the Prime Minister is not out of the woods yet on phone hacking is because the question of his longer-term political survival is not really about that.

It is, rather, about his relationship with his Liberal Democrat coalition partners.

Nick Clegg and his party had no option but to go into the coalition in May 2011. The arithmetic of going with Labour didn't stack up, and standing on the sidelines and inflicting another election on the public would not have been forgiven.

But having entered it, they have found over the past 14 months just what a rock and a hard place they were put in as a result of the inconclusive election outcome.

As I wrote at the start of this year, a team is only as strong as its weakest member, and such has been the slump in the Lib Dems' political fortunes since joining the coalition that they currently constitute a pretty broken reed.

It remains my view that, in order to stand a chance of holding onto its Southern power base in which the Tories are its main challengers, the party has to find a way to break up the coalition at a point of maximum advantage to itself and maximum disadvantage to Mr Cameron.

As the political season draws to a close, that essential dynamic that makes this such a potentially unstable alliance between the two partners remains unaltered.

Mr Cameron may think he is safe for now. But as Lloyd George found, in a coalition, you are only ever as safe as your partners allow you to be.

Murdoch's power has been broken. Could Cameron's be next?

For the past thirty years, the British political establishment has been in thrall to Rupert Murdoch - the 24th member of Tony Blair's Cabinet as he was once dubbed.

In the course of that period, his media empire has variously decided the outcome of elections, dictated the membership of Cabinets, shaped policies on a wide range of issues and even influenced whether or not the country went to war.

But this Wednesday, the worm finally turned as the Australian media tycoon's bid to buy 100pc of BSkyB was swept away in the storm that has engulfed him in the wake of the phone-hacking scandal.

It was as if three decades of pent-up resentment had suddenly been unleashed in a torrent , as the politicians who have been forced to kow-tow to Murdoch all that time finally broke free of his yoke.

There is a certain historical irony in the fact that it was the dear old House of Commons which finally delivered the coup-de-grace to Murdoch's dreams of further media expansion.

For those of us with long memories, it seemed a fitting reward for the way in which he conned Parliament into agreeing to his takeover of The Times and the Sunday Times in 1981 by giving 'editorial guarantees' he had no intention of keeping.

These undertakings enabled the then Trade and Industry Secretary John Biffen to sidestep a reference to the then Monopolies Commission.

Within a year, Murdoch had broken every single one of them, including sacking the Times' editor and transferring the two titles into a different part of his business.

I will give two small examples from the recent past of how the influence of his empire has distorted the political life of the nation.

In 2009, the now former News International chief executive Rebekah Brooks let it be known that David Cameron's Tories would not get their support at the ensuing general election unless Dominic Grieve was replaced as Shadow Home Secretary. He duly was.

Then, last year, James Murdoch made it clear he wanted the Labour government's plans for regional news consortia scrapped. When the Coalition came in, they duly were.

These, however, are relatively trivial examples compared with, for instance, his papers' routine character assassination of certain party leaders and consultations with Tony Blair in the days prior to the invasion of Iraq.

But if Murdoch was undoubtedly the biggest loser of the week, it's not been a great seven days for Mr Cameron either.

Because it was not the Prime Minister who finally led the fightback against the Murdoch empire, but the man who wants his job - Labour leader Ed Miliband.

Mr Miliband undoubtedly took a gamble by calling a vote on the BSKyB bid – but within 48 hours every other party had followed his lead.

His reading of the public mood in this crisis has been consistently ahead of the curve and, for now at any rate, he has drawn a line under the troubles that had beset his leadership earlier in the summer.

Deputy Prime Minister Nick Clegg, too, ends the week with his position enhanced, again at Mr Cameron's expense.

It was his threat to vote with Labour on Wednesday that forced the Prime Minister into his U-turn on the BSkyB deal, potentially altering the balance of power within the Coalition in the process.

Mr Clegg has also pointedly disassociated himself with the shadow of Andy Coulson's appointment as Downing Street's director of communications that continues to hang over Mr Cameron.

"It was his appointment and his appointment alone. We did discuss it... it was something that we didn’t see eye to eye on," he said.

This is where the phone-hacking scandal starts to play into the much bigger and wider issue of the Coalition's ultimate survival.

Some Lib Dems have started to speculate that Mr Cameron may emerge from the scandal so badly damaged that they could actually bring him down.

I have argued from the start of this Coalition that the Lib Dems somehow have to find a way of getting out of it alive, and this might just be their best opportunity.

We would then not just be looking at the downfall of a media empire, but the downfall of a government.

Phone-hacking casualties pile up - but spare a thought for Gordon

First it was the News of the World, scrapped by its owner Rupert Murdoch in an attempted damage-limitation exercise amid allegations that it hacked into the voicemail messages of, among others, schoolgirl murder victim Milly Dowler, relatives of the 7/7 victims, the families of soldiers killed in Iraq, and - she had to get dragged in somewhere - Princess Diana's lawyer.

Then it was the turn of the Press Complaints Commission, facing the axe after a rare outbreak of consensus between Prime Minister David Cameron, who branded it "ineffective" and Labour leader Ed Miliband, whose favoured adjective was "toothless."

The casualties of the phone-hacking affair continue to mount up, with those still at risk including News International chief executive Rebekah Brooks, and the company's increasingly forlorn hopes of taking over 100pc ownership of BSkyB.

But the big question at Westminster this weekend is whether those casualties will stay confined to the world of journalism and the media - or whether the scandal will eventually claim political scalps.

Phone-hacking has been branded rather too simplistically this week as journalism's equivalent of the MPs' expenses scandal, or even as the politicians' revenge on the trade for having uncovered their duck-island antics two summers ago.

It is nothing of the sort. This is far more than a crisis in British journalism, it is rather a crisis in British public life that goes right to the top of the tree.

No less a commentator than Peter Oborne this week described Mr Cameron as a "profoundly damaged figure" for having hired Andy Coulson, the former News of the World editor arrested by police yesterday, and for his friendship with Ms Brooks.

"The series of disgusting revelations concerning his friends and associates from Rupert Murdoch’s News International has permanently and irrevocably damaged his reputation....He has made not one, but a long succession of chronic personal misjudgments," he wrote.

Is this overstating the case? Well, possibly - but if one thing is clear from the past week's events it is that this is a fast-changing story in which assumptions can be very quickly overturned.

Nobody would have predicted a week ago that the country's biggest selling newspaper, an iconic title with 168 years of history behind it, would be abruptly closed. But it has happened.

The most damning aspect of the affair for Mr Cameron is the fact that he was given details about Mr Coulson's possible involvement in phone-hacking before making him Downing Street director of communications after last year's election win.

In his article this week, Mr Oborne disclosed that Alan Rusbridger, editor of The Guardian, who was in possession of many of the facts long before they could be published, delivered the warning to Mr Cameron's adviser Steve Hilton prior to the election.

It is inconceivable that Mr Hilton would not have passed on these concerns to Mr Cameron, but evidently the Prime Minister chose to ignore them.

Knowing what we now know of the allegations made against Mr Coulson, that does not just call into question the Prime Minister's judgement, it calls into question his commonsense.

Meanwhile, spare a thought this weekend for Gordon Brown, who wanted to hold the same kind of judicial inquiry into phone hacking that Mr Cameron has announced this week, but was blocked from doing so by the cabinet secretary, on the grounds that it would be too sensitive before the election.

Had he got his way, and the grisly facts tumbled out ahead of polling day, it is very likely that Mr Brown would still be Prime Minister today.

Mr Coulson, who was then Mr Cameron's chief spin doctor, would have had to resign, and the public's doubts about the Tory leader would have been dramatically reinforced.

It's been said plenty of times before, but in politics, as in journalism, timing really is everything.

The battle David Cameron dare not lose

More than a quarter of a century ago, a young, recently-elected Labour leader found himself caught on the horns of an excruciating political dilemma as he sought to drag his party into the post-industrial era.

The National Union of Mineworkers under its leader Arthur Scargill had just gone on strike in protest at Margaret Thatcher's pit closure programme without calling a national ballot of its members.

Did Neil Kinnock condemn the strike and put himself at odds with the union which, more than any other, defined the Labour movement, or support it and leave his modernisation agenda holed below the waterline?

In the end, he did neither, choosing to sit on the fence until the battle was effectively over, although with the benefit of hindsight, he now says he regrets not having called for a ballot at the outset.

Was it possibly this example that the current Labour leader, Ed Miliband, had in mind, when he came down firmly against this week's one-day stoppage by the public sector unions over pensions?

It certainly represented a gamble for a man who owes his entire position to the trade union barons whose votes swung last year's knife-edge Labour leadership election in his favour.

Predictably, one of them has already branded him a "disgrace" for failing to support Thursday's action but, to give him his due, Mr Miliband is at least trying to show some leadership over the issue.

Whether he is proved right or wrong in his judgement depends of course on how the battle for public opinion already under way over the pensions issue ultimately pans out.

The argument on this score is currently pretty finely balanced. While some will invariably blame the unions for Thursday's disruptions, many are instinctively sympathetic to their cause.

Attempts by ministers to frame the debate in terms of a comparison between "generous" public sector pensions and those in the private sector risk being seen as advocating a "race to the bottom."

Mr Miliband's calculation, at the moment, is that the strikes will harm the union's cause and by implication the Labour Party's if it is seen to be supporting them.

But by focusing his arguments this week on the timing of the action – at a point when negotiations with the government are still ongoing – he has at least left himself a way out if there is a shift in the public mood.

For Prime Minister David Cameron, too, the stakes are high, partly because of the sheer amount of taxpayers' money involved, and partly because of the government's recent series of U-turns.

First it was the forestry sell-off, then the plan to reduce sentences for offenders who plead guilty early, and finally and most damagingly of all the proposed shake-up of the National Health Service.

Any more climbdowns – particularly in the face of pressure from the unions – and his government's credibility would surely be permanently shot to pieces.

The fact that Mr Cameron was prepared to put his personal authority on the line over the pensions issue in a series of interventions last week suggests he is well aware of this danger.

I began this column by alluding to the Thatcher-Scargill prize-fight of 1984-85 and, for both of the two main parties, its legacy continues to hang heavily over the politics of industrial relations in the UK.

If the strike hampered Mr Kinnock's attempts to modernise his party, it also helped cement Mrs Thatcher's reputation as the woman who transformed Britain from the economic basket-case of the 70s to the self-confident nation it became in the course of the ensuing decade.

All subsequent Tory leaders bar none have since struggled to escape her shadow, and for all his efforts to fashion a more compassionate brand of Conservatism, the current one is no exception.

Just as Ed Miliband hopes to be compared favourably with the Welsh Windbag, David Cameron cannot afford to be compared unfavourably with the Iron Lady.

Blair's last mission - to save Labour from the 'sons of Brown'

At first sight, former Labour health secretary Alan Milburn's criticisms of the Conservative-led Coalition's revamped health reforms this week might have seemed like routine political knockabout.

"The biggest car crash in the history of the NHS" was the former Darlington MP's withering verdict after Prime Minister David Cameron and his deputy Nick Clegg performed their screeching U-turn.

But closer inspection of Mr Milburn's argument reveals a rather more subtle agenda than simply Coalition-bashing.

For as well as highlighting the government's ongoing difficulties over the health changes, his comments also illuminate the continuing deep divisions within the Labour Party over its attitude to public service reform.

"David Cameron's retreat has taken his party to a far less reformist and more protectionist position than that adopted by Tony Blair and even that of Gordon Brown," Mr Milburn wrote in a newspaper article on Thursday.

"The temptation, of course, is for Labour to retreat to the comfort-zone of public sector producer-interest protectionism...it would be unwise in my view for Labour to concede rather than contest the reform territory."

This was, of course, an implicit criticism of Labour leader Ed Miliband for having allowed Mr Cameron to seize the reform mantle and supplant Labour as the "changemakers" of British politics.

And coinciding as it did with a renewed bout of internal Labour feuding , the timing of Mr Milburn's comments looked far from accidental.

First, there was the leak of documents purporting to implicate both Mr Miliband and Shadow Chancellor Ed Balls in a "plot" to overthrow Tony Blair soon after his third election victory in 2005.

Then the 'victory speech' that was to have been delivered by South Shields MP David Miliband had he not unexpectedly lost to his younger brother in last year's leadership contest mysteriously came to light.

If that wasn't enough, Mr Blair himself then plunged back into the fray, looking every bit the once-and-future-king as he broke a self-imposed four-year silence on domestic political issues in an interview with The Sun.

By showering praise on the Coalition for its education and health reforms, claiming they had carried on where he left off, he too called into question 'Red Ed's strategy.

"New Labour was the concept of a modern Labour Party in the middle ground with a set of attitudes orientated towards the future – and I believe if we had carried on doing that we would have won the last election," he said.

Asked whether Mr Miliband was right to say the New Labour era was over, he said: "It can't possibly be over, because it isn't time-related.

"It is about the Labour Party constantly being at the cutting edge, being a modernising party – always being full of creative ideas and isn’t pinned in its ideological past.

"That is always the choice for the Labour Party. It is the choice for progressive parties."

Knowing from past experience how these guys tend to operate, it is impossible to believe that this sudden spate of activity by the former Prime Minister and his allies was not in some way co-ordinated.

So what is Mr Blair up to? Is he simply trying to flog a few more copies of his book – or does he have a higher purpose in mind?

Could it be that the architect of New Labour is embarking on one last great battle to rescue the party he dominated for 13 years from the clutches of the "sons of Brown?"

The Blairites are back – and Ed Miliband had better watch his.

The Archbishop was simply doing his job

Over the course of the last couple of centuries, the Church of England has frequently if rather inaccurately been caricatured as "the Conservative Party at prayer."

If it was ever true, it certainly ceased to be so in the 1980s, when the church's trenchant critique of Margaret Thatcher's policies led to it being dubbed "Marxist" by Norman Tebbit – although perhaps the "SDP at prayer" would have been nearer the mark.

Thirty years on, the church again finds itself again in conflict with a Conservative-led administration, and for much the same sorts of reasons.

Just as Archbishop Robert Runcie in the 1980s took the Iron Lady to task over her government's apparent lack of concern for the poor and for social cohesion, so his present-day successor Rowan Williams is motivated chiefly by the impact of the government's reforms on the worst-off.

It would be tempting to think he had planned his attack to cause maximum discomfort for David Cameron in a week which has seen the Prime Minister forced to defend his handling of health and justice reforms.

Not so. The New Statesman article in which Dr Williams launched his salvo had been long planned, as the archbishop was actually guest-editing the publication.

In one sense, Dr Williams was simply doing his job. What on earth is a national church for, if not to occasionally offer a faith-based perspective on the politics of the day?

But of course his is not the only interpretation of how Christian teaching should impact on present-day political debates, as Roman Catholic archbishop Vincent Nichols reminded us when he praised the "genuine moral agenda" driving the Coalition's reforms.

Dr Williams' intervention may even have helped Mr Cameron this week by diverting attention from his internal difficulties over health and sentencing.

A fortnight ago, in this column, I posed the question whether the government's health reforms, and the career of health secretary Andrew Lansley, were now effectively dead in the water.

The answer on both counts would appear to be yes, with even the Health and Social Care Bill's central proposal for GP consortia to commission local health care now in danger of being watered-down.

And Justice Secretary Ken Clarke was forced to tear up his plan to give sentencing discounts to rapists and other offenders in return for early guilty pleas as Mr Cameron made a belated move in the direction of Prime Ministerial government.

Ordinarily this would all have presented a gift-horse to Labour, but the party is beset by internal difficulties of its own.

Party leader Ed Miliband was generally held to have had the worst of this week's Commons exchanges with Mr Cameron and the muttering over his leadership is increasing in volume.

The revelations about Shadow Chancellor Ed Balls' involvement in a "plot" to oust Tony Blair from power in 2005 will hardly help matters.

Having read some of the leaked documents myself yesterday, I would say a more accurate description of what was going on was a bid to rebrand Gordon Brown rather than oust Mr Blair, but the damage has been done.

Ultimately it is not up to archbishops to assemble a coherent critique of government policies. It is the opposition's job to do that.

And until Mr Miliband and Co can step up to the mark in that regard, Mr Cameron can continue to sleep easily in his bed at night.

That said, Dr Williams' claim that radical policies are being introduced "for which no–one voted" is a very hard one to answer – even if those self-same policies are now being trimmed.

The question of legitimacy that has dogged this Coalition from the start is not, I suspect, one that is going to go away in a hurry.

Are Lansley's health reforms now dead in the water?

First David Cameron announces a “pause” in the government’s plans to reform the National Health Service in order to listen further to the views of health professionals and the public.

Then the doctor’s trade union, the British Medical Association, reveals that it thinks the Health and Social Care Bill should be scrapped, and any changes achieved without legislation.

Finally, deputy premier Nick Clegg announces that the Bill is to go back before a committee of MPs for further scrutiny, setting back its likely passage through Parliament by at least six months.

The question on the lips of many Westminster watchers this weekend is: Are the government’s NHS reforms dead in the water?

Predictably, backbench Tory MPs are up in arms over Mr Clegg's intervention, claiming yesterday that he had "bounced" the government into delaying the Bill.

They made clear that whatever changes are ultimately made to the Bill, there are certain "red lines they wish to draw against Lib Dem encroachment on the original blueprint.

In an email sent to all Conservative MPs yesterday, backbencher Nick de Bois called on his colleagues to "reclaim the debate" over the NHS.

He said the "red lines" should include the requirement for all GPs to take on responsibility for primary care across England – ignoring the fact that GPs themselves oppose this provision.

The backlash against the reforms was growing long before the Lib Dems' hopes of changing the voting system went up in smoke, but it was nevertheless this that proved the tipping point.

Once the Tories decided to throw the kitchen sink at AV, it was obvious that Nick Clegg would have to be thrown some sort of bone to keep the Lib Dems in the government, and it was equally obvious that this would be it.

Politically, sacrificing a set of unpopular health reforms in exchange for keeping a voting system that kept them in power for most of the 20th century might seem like a smart move for Mr Cameron.

But the downside is that so much had been invested politically in these reforms that the now seemingly-inevitable retreat will be seen as a major blow to the Prime Minister's authority.

Even if the reforms are not dead in the water, the political career of Health Secretary Andrew Lansley surely is.

If the government ultimately decides to press ahead with the changes, Mr Lansley is likely to be replaced by someone who can more successfully sell them to the relevant stakeholders.

If on the other hand they are watered down or abandoned, his job is almost certain to go to a more emollient politician who can re-build bridges with the health professionals.

The latter scenario is surely the most likely one. Tory MPs want the new GP fundholding consortia in place by April 2013, but in the light of Mr Clegg's latest intervention, this is looking like an increasingly forlorn hope.

The danger for the government is that, if the measures do not reach the statute book this summer, the institutional upheaval will still be ongoing in the run-up to the next election, due in 2015.

Mr Cameron is nothing if not a pragmatist, and he will surely view the prospect of organisational chaos in the NHS as a risk he can do without as he prepares to face the country again.

In those circumstances, it would make more sense for Mr Lansley's proposals to go into the next Conservative manifesto rather than into a revised Health and Social Care Bill.

And who knows - if Mr Cameron can win an outright majority next time, the Tories might even be able to claim a mandate for them.