Was reshuffle the beginning of the end for Cameron?

Much has changed for David Cameron over the course of his seven years in charge of the Conservative Party – but there are two aspects of his leadership that have remained pretty much constant throughout that period.

The first is that he has tried to avoid reshuffles as far as possible. The second is that in his efforts to detoxify the Tory brand he has, by and large, continued to lead the party from the political centre.

Well, it had to end sometime I guess. Two and a half years after taking up residence in Downing Street, he finally summoned the nerve to move some of his more middle-ranking Cabinet members around the political chessboard.

And in so doing, he tilted the balance of power within his government decisively rightwards – and away from that fabled centre ground he has spent so long trying to cultivate.

On the face of it, this looks like pretty poor judgement on the Prime Minister’s part. To win an outright majority at the next election, his party will have to win approximately 2m more votes than it won in May 2010.

Yet history shows that every time the Conservative Party has lurched to the right in recent years – most notably under William Hague in 1999 and Iain Duncan Smith in 2003 - its support has gone down, not up.

Mr Cameron's entire political success, such as it is, has been built on persuading people that he is not like those Tory leaders of old and that his style of politics, like Tony Blair's, is about reaching out to those who are not his natural supporters.

On no issue is the change in Mr Cameron clearer than that of the environment. The man who once rode a bicycle to work to show his party’s new-found commitment to the green cause has now appointed a virtual climate change denier as environment secretary.

Sure, the changes announced on Tuesday may well bring about some superficial advances in terms of both service delivery and presentation.

On the latter score in particular, new health secretary Jeremy Hunt will surely be an improvement on the hapless Andrew Lansley who, in the words of one commentator, “could not sell gin to an alcoholic.”

But these are trifling gains when set against the central strategic error of failing to recognise that parties struggling to hold onto their support rarely solve their problems by retreating into their ideological comfort zone.

Indeed, it is tempting to believe the entire exercise was less a considered piece of political strategizing than an act of petulance designed to put the Liberal Democrats in their place following the spat over Lords reform and the boundary review.

With the forces of the Tory right now ranged even more formidably against him, there is no doubt that Lib Dem leader Nick Clegg will now find it even more difficult to persuade voters that he and his party are actually making a difference in government.

Meanwhile Labour leader Ed Miliband continues to make mischief by teasingly holding out the prospect of a post-Clegg, post-election Lib-Lab deal with ‘continuity SDP’ leader Vince Cable in the deputy PM role.

But inept as it may have been to drive his Coalition partners further into the hands of the enemy, even more ham-fisted was the Prime Minister’s treatment of his erstwhile transport secretary, Justine Greening.

Mr Cameron’s decision to remove her, apparently for having reaffirmed the government’s policy to rule out a third runway at Heathrow, has handed his real enemy – Boris Johnson – both a key weapon and a key ally in his campaign to replace the Tory leader.

The long-simmering battle between the two men has now moreorless descended into open warfare, with the London Mayor angrily denouncing Ms Greening’s demotion and demanding a statement ruling out a third runway for good.

Ms Greening – a former Treasury minister, take note – must now be odds-on to become Boris’s first Chancellor if he ever makes it into Number Ten – a double case of Blond(e) Ambition.

Hence a reshuffle that was supposed to relaunch Mr Cameron’s premiership has simultaneously risked alienating floating voters, angered his Coalition partners, and handed his main internal rival a big stick with which to beat him over the head.

From that perspective, it is tempting to see it as not so much a new dawn for his government, but the beginning of the end.

A renewal of vows? Pull the other one

There is a school of thought that says that once a government gets itself into a position where it needs a relaunch, the brand is probably already so badly tarnished as to render the whole exercise pointless.

To be fair, the Coalition is probably not at that point yet. It is only two years into its existence, and governments of a far older vintage have come back strongly from similar periods of mid-term blues before now.

But the largely negative reaction to this week’s relaunch, with Wednesday’s Queen’s Speech at its centrepiece, does suggest that the government’s current difficulties go deeper than merely a run of bad headlines.

Coming in the wake of a disastrous Budget, a dismal set of local election results, and the continuing slow drip of damaging revelations from the Leveson Inquiry, it seems the Coalition is currently suffering from a bad case of the political Reverse Midas Touch.

Three major criticisms have been made of the legislative package announced by Her Majesty in what, for her, was surely the least eagerly-awaited public engagement of this her Diamond Jubilee year.

The first was that, with only 16 Bills, it was ‘too thin,’ but for my part, I wonder whether this was not in fact a point in its favour.

Over the past two decades, we have been subjected to an increasing deluge of legislation, for instance the 21 criminal justice bills spewed out by Tony Blair and Gordon Brown’s administrations over the course of 13 years.

A Conservative-led government, committed to reducing the burden of regulation and shrinking the size of the state, should perhaps have made more of a virtue of this year’s relative paucity.

The second most oft-heard criticism this week was that there was little or nothing in the programme specifically directed towards tackling the country’s current economic difficulties or producing a programme for growth.

But this, surely, is a category error.  Budgets, not Queen’s Speeches, are where you set out your economic policy, and Labour leader Ed Miliband should perhaps have known better than to make the main focus of his attack.

The third main criticism of the Speech – and the biggest one as far as most Tory backbenchers are concerned – was that it concentrated too much on Lib Dem hobby-horses such as House of Lords reform and not enough on issues that mat

Again, this depends on your point of view.  A second chamber elected by proportional representation from region-wide constituencies could well provide a stronger voice for regions such as the North-East – but I can well understand why the Tories, in particular, would not want that.

For me, the most fundamental flaw in Wednesday’s speech was not that it was too thin, too lacking in economic content or too Liberal Democrat, but that it lacked a unifying narrative which would give people a reason to support the government.

Say what you like about Mr Blair, his Queen’s Speeches never suffered from this deficiency, even if, as time went on, they tended to be more about protecting people from nightmares than giving them dreams of a better future.

Perhaps the reason it lacked a unifying theme because it was less the product of one man’s over-arching vision and more the product of compromise between the government’s two constituent parties.

In this respect, the most interesting political story of the week was not the Speech, but Prime Minister David Cameron’s interview with the Daily Mail in which he bemoaned his lack of freedom of action to do the things he really wanted.

What was especially notable about this is that, while Lib Dem leader Nick Clegg loudly and often complains about the Conservatives, Mr Cameron very rarely does the same about the Lib Dems.

Yet here was the Prime Minister saying:  “There is a growing list of things that I want to do but can’t…..there is a list of things that I am looking forward to doing if I can win an election and run a Conservative-only government.”

This week’s relaunch had been billed in advance by some cynics as the Coalition’s “renewal of vows,” but Mr Cameron’s interview shows this to be well wide of the mark.

In truth, it seems to be heading all the more rapidly for the divorce courts.

Johnson the real winner once again

You can look at yesterday's local election results purely in terms of the 400 or so council seats lost by the Conservatives and the 800-plus gained by Labour.

You can look at them in terms of national share of the vote, with Labour opening up a seven-point lead over the Tories that if repeated in a general election would put Ed Miliband comfortably in Number 10.

You can look at them in terms of the almost wholesale rejection of the government's plans for a network of powerfully elected mayors in our major cities, not least in Newcastle where the idea was rejected by a majority of almost 2-1.

But whichever way you choose to look at them, it's already pretty clear that Thursday was a very bad night for the Coalition.

It was always likely that the Tories would try to get us to look at the results through the prism of their star performer Boris Johnson's ultimately successful re-election campaign for the London Mayoralty.

But this really won't wash.  Johnson is a political one-off, and so, in a different sense, is his Labour opponent Ken Livingstone, who found himself deserted in this election by a significant element within his own party.

Although in the short-term Mr Johnson's narrow win provides the Conservatives with a convenient fig-leaf for their wider failure up and down the land, in the longer-term his victory is a disaster for David Cameron.

Once again, Boris has proved that he is the proven winner in the Tory ranks, in marked contrast to a leader who couldn't even score an outright election win against the exhausted volcano that was Gordon Brown in 2010.

In one sense yesterday's results were entirely predictable given the catalogue of disasters that the government has visited upon itself lately.

Mr Cameron will hope he can draw a line under it all in time-honoured fashion, with a relaunch of the Coalition - or as some are calling it, a renewal of vows – likely to come as early as the next fortnight.

This will be followed by a wide-ranging summer reshuffle that could see Ken Clarke and Andrew Lansley thanked for their service and replaced by younger, more media-savvy operators such as Grant Shapps and Chris Grayling.

But even this poses difficulties for Mr Cameron, with the long-planned promotion of Jeremy Hunt having to be put on hold pending his appearance at the Leveson Inquiry into press standards.

For my part, I wonder whether something deeper than mere mid-term blues is at work here - whether a public that was initially disposed to give the Coalition the benefit of the doubt has now started to do the opposite.

It is surely significant that, while 12 months ago the Tory vote held up as the Lib Dems bore the brunt of voters' anger over the austerity measures, this time round they were both punished equally.

Equally ominous for the Conservatives is the rise and rise of the UK Independence Party, which took 13pc of the national vote in a set of elections where it traditionally makes little impact.

If UKIP can start taking as many votes off the Conservatives in a general election, it might even one day force them to embrace the merits of proportional representation

Mr Miliband, though, will refuse to get carried away by any of this.

Six months ago I thought the public had by and large made up its mind about him, but maybe they are taking another look and liking what they see.

The biggest encouragement for the Labour leader is the fact that the party appears to be on the march beyond its traditional strongholds.

Not only is it winning back bellweather Midlands cities like Derby and Birmingham that will be crucial to its general election chances, but also more southerly councils such as Harlow, Plymouth and Great Yarmouth.

As for the North-East, having rejected regional government in 2004 it has now rejected the nearest thing to it, a Newcastle city region led by a powerful, Boris-style elected mayor.

While I am no great fan of presidential-style politics, it is hard to see how the region can compete effectively for its share of the national cake without such powerful advocates.

Fear of change, the desire to stick to the devil you know, remains a powerful factor in determining political outcomes, and Thursday’s mayoral referendum was no exception.

And if there is a crumb of comfort anywhere for Mr Cameron in yesterday’s results, it may well be in that.

Bad news management costs Osborne dear

There is a hoary old adage in British politics that a Budget that looks good on the day invariably looks like a turkey a few weeks later.

But there can be few Budgets in the recent past which have unravelled quite as quickly as George Osborne’s latest package unveiled to MPs on Wednesday.

Within an hour of him sitting down, #grannytax was the top trending item on Twitter and the revolt against the Chancellor’s ‘stealth tax’ raid on pensioners was under way.

Rarely have the following days’ newspapers seen such a degree of unanimity over a Budget statement – or made such depressing reading for the man from Number 11.

Part of the largely hostile press reaction can be put down down to poor presentation and rank bad news management on the part of the government.

As one Labour veteran reminded us, Gordon Brown’s modus operandi was to get all the bad news out there beforehand and hold the good stuff back for a big ‘rabbit-out-of-the-hat’ announcement on the day.

The government appears to have taken the opposite approach with this Budget, with more leaks than a St David’s Day parade as one heterographically-minded blogger put it.

Indeed one reason it has had such a bad press is that most of the more positive measures were old news by the time the Chancellor got to his feet.

There were at least some good points. Annual tax statements will be a welcome addition to the public’s right to know, while the 2p cut in corporation tax ought to help meet the desperate need for new jobs.

And the imposition of 7pc stamp duty on the purchase of homes over £2m is the nearest we are likely to come to the Lib Dems’ cherished “Mansion Tax.’

Furthermore, despite its appalling presentation, I don’t necessarily go along with all the criticisms that have been made of the so-called ‘granny tax.’

As the Institute of Fiscal Studies has pointed out, pensioners have so far done better than younger people from the government’s austerity measures, and this at least helps even things up a bit.

Inevitably, much of the ire of left-of-centre politicians and commentators has been directed at the 5p cut in the top rate of income tax, worth around £42,500 a year to someone earning £1m.

It provided Ed Miliband with the best joke of the week – and perhaps of his leadership – telling the Prime Minister he will save so much that he “will be able to afford his own horse.”

A more serious moral point was made by the commentator Martin Kettle, arguing that the top-rate tax cut highlights the different worlds inhabited by the super-rich and the rest of us.

“The vast majority of us would be prosecuted if we opted not to pay [tax.] If the rich don’t pay, the law is changed to reflect the fact that they won’t pay up,” he wrote.

The economic arguments over the efficacy of the 50p rate will doubtless run and run, but this is perhaps one area where the politics should have trumped the economics.

If the 50p rate symbolised the fact that ‘we’re all in it together,’ then the political damage to the government engendered by its removal may well outweigh any economic benefit in the longer term.

The move towards a single personal tax-free allowance of £10,000 has been widely welcomed, but - just as Mr Brown once did – Mr Osborne is recouping some of the cost through so-called ‘fiscal drag.’

It means around 300,000 middle-income earners are finding themselves dragged into the 40p tax rate at the same time as top-rate taxpayers see their own rates cut by 5p in the pound.

But saving the worst till last, for me the most pernicious of all the Budget measures – at least as far as the North-East region is concerned - is the proposed introduction of regional rates of pay in the public sector.

As has been pointed out, this will only serve to entrench existing regional economic inequalities and institutionalise low-wage economies in areas such as the North-East, Wales and South-West.

The government’s argument seems to be that as private sector pay is lower in these regions, so therefore public sector pay ought to be lower too.

To me, that sounds suspiciously like two wrongs make a right.

What next for David Miliband?

It was Clement Attlee who famously told a Labour colleague that a period of silence from him would now be welcome, thereby inadvertently earning himself an entry in the Oxford Dictionary of Modern Quotations.

And it is certainly true that there are times in politics when it is best to keep your head down and your mouth shut.

By and large, the past 15 months have been such a period for David Miliband, the South Shields MP and former Foreign Secretary who, until October 2010, had been widely expected to become leader of his party.

But it wasn't to be and, rather than risk the sort of comparisons that might have undermined his younger brother's leadership, the elder Miliband stood bank from the political frontline and confined his public statements to the occasional supportive message.

Such was ostensibly the nature of his article in the New Statesman a couple of weeks back in which he outlined a seven-point plan for the future of the party and called for “restless thinking” in its bid to recapture power.

He made a point of praising his brother Ed on no fewer than four occasions, highlighting his success in maintaining party unity, and having spoken out "powerfully" over issues such as welfare cutbacks.

But that, of course, did not stop the political commentariat once more portraying David’s intervention as a covert leadership bid.

The resulting furore saw Mr Miliband forced into another round of interviews in which he appeared to rule out any return to the frontbench on the grounds that it would merely perpetuate the “soap opera.”

One rather venomous interpretation of his actions came from the Telegraph columnist Matthew Norman in an article headlined: ‘The sniping and self-pity of a truly feeble man.’

Likening Mr Miliband’s political modus operandi to the game of Knock Down Ginger, he accused him of thrice raising the standard of internal revolt before “scuttling away to hide in the bushes.”

“The pattern was set in the summer of 2008, when David wrote a barely coded article in the Guardian lacerating Gordon Brown. The moment it was greeted as the challenge to the PM’s authority that it certainly was, off he scarpered, denying any such intent,” he wrote.

“Within a year, his close friend and Cabinet ally James Purnell resigned, laying the ground for David to oust Mr Brown by doing the same. Again he bottled it, and stayed."

Mr Norman saw the New Statesman article, and the semi-retreat that followed it, as more of the same, going on to suggest a permanent silence from a man he charmingly described as “a mincing paean to metrosexual narcissism.”

It was left to the former Labour North official and Blairite blogger Hopi Sen to leap to Mr Miliband’s defence, pointedly describing Mr Norman as a “food writer” alongside various other less polite terms.

But beneath all this knockabout lies a serious point - namely what is to become of a politician who still has much to say about the future direction of his party – but who is unable to say it without his actions being either over- or mis-interpreted?

As one of those ubiquitous ‘friends’ put it: “This is someone who has spent a lot of time thinking about the future of the Labour Party. The way the cookie has crumbled, the only way he can do that is through argument and debate.”

Perhaps the real purpose of David’s New Statesman article was to find out whether he can actually now start to contribute to that debate without others seeing it as an attempt to further destabilise his brother’s somewhat faltering leadership.

If that was indeed his intention, the answer seems to be a resounding no.

Sadly, the likely upshot of this is that Mr Miliband may well come to feel that the only way to end the soap opera will be for him to remove himself from the political arena entirely, and leave Parliament at the next general election.

And given his stature in both the country and the region, I, for one, would consider that a shame.

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.

Too late for Ed to change the public's minds

So was it a political masterstroke as some pundits argued, or was it the beginning of the end of his leadership of the Labour Party – as two of the union barons who originally backed him for the job have claimed?

Opinions were certainly divided this week about Ed Miliband’s decision to come out in support of the coalition government’s pay freeze.

For Len McCluskey of Unite and Paul Kenny of the GMB, the move marked the end of Mr Miliband’s “bold attempt to move on from Blairism” and would lead to “certain electoral defeat.”

Others, though, saw the decision to accept the cutbacks – and take on the public sector unions in the process - as a vital first step towards restoring the economic credibility so crucial to Labour’s prospects.

Mr Miliband was of course following what is a well-worn strategy for Labour leaders – seeking to gain traction with the electorate by attacking their own side.

Contrary to popular belief, it was not started by Neil Kinnock at Bournemouth in 1985, but by Jim Callaghan almost a decade earlier in a speech to the Labour conference which later became paraphrased as “The Party’s Over.”

“We used to think we could spend our way out of a recession. I tell you in all candour that option no longer exists,” he told the comrades, burying decades of Keynesian economics and inadvertently paving the way for the Thatcherite consensus.

Mr Kinnock took it a stage further with his attack on the grotesque chaos of Militant-run Liverpool, before the tactic was perfected by Tony Blair, who seemed at times to want to define his entire leadership in opposition to his own party.

As Mr McCluskey was not slow to point out, Mr Miliband had initially attempted a very different approach following his surprise elevation to the job in the autumn of 2010.

His own conference address last autumn, which I described at the time as one of the bravest and most ambitious political speeches of modern times, represented no less than an attempt to refashion the political consensus on his own terms.

Fans of Yes, Minister will of course recall that, in civil service speak, ‘brave’ means ‘potentially littered with banana-skins,’ while ‘ambitious’ means ‘foolhardy,’ and so, alas, it has proved.

The largely negative response to that speech and Mr Miliband’s subsequent inexorable slide in the opinion polls seems to have persuaded him that a new approach is now needed, with the public sector pay announcement constituting at least a partial recognition that the argument over spending cuts has been lost.

But will it succeed in restoring his political fortunes? Well, on this score, it is perhaps instructive to look back at how those previous Labour leaders fared when they decided to take on their own parties.

Jim Callaghan, as conservative a leader as Labour has ever had in some respects, was simply not believable as a party reformer because of his previous track record in blocking Harold Wilson’s attempts to curb union power in the 1960s.

Likewise Neil Kinnock, who before dazzling us all at Bournemouth in 1985 had spent most of his leadership prevaricating over whether to support or condemn Arthur Scargill’s conduct of the 1984-85 miners’ strike.

And so despite its near-mythical status among politics-watchers, the Bournemouth speech had less impact on Kinnock’s popularity with the wider electorate, as was shown when he was soundly defeated by Margaret Thatcher in the general election 18 months later.

Tony Blair, however, was different. Within months of becoming leader, he had made his direction of travel clear, venturing where all his immediate predecessors had feared to tread by abolishing Clause Four of the party’s constitution.

The public was convinced from the start that he was a new kind of Labour leader, and unlike Kinnock and Callaghan, they duly rewarded him at the ballot box.

It is often said of political leaders that what they do in their first 100 days defines them thereafter, that it is in this period that the public makes up its mind about them.

For good or ill, I think the public has made up its mind about Ed Miliband. And decided he is not going to be their Prime Minister.

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.

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.

Lost North jobs still seen as a 'price worth paying'

Youth unemployment topping 1m. An additional 129,000 people out of work in the past month. The overall number of jobless at its highest level since 1994. This week’s unemployment figures told their own story.

If people were not already sufficiently well-appraised of the dire state of the British economy, Wednesday’s figures, coupled with more downbeat forecasts from the governor of the Bank of England, will surely have removed any lingering doubts.

Yet in the North-East, as is customarily the case when the economy as a whole is struggling, the picture is even bleaker still.

As The Journal reported on its front page the Monday before last, this region has seen a staggering 32,000 public sector jobs lost in the past year, while, public spending cuts notwithstanding, the number in London and the South East has actually risen by the same amount.

It is now more than a decade since the launch of The Journal’s original Case for the North campaign aimed at closing the economic divide with the South.

At the time, it was estimated that if economic growth continued at the same rate, it would take around 30 years to bridge the gap – a state of affairs which many of the region’s MPs and other political leaders regarded as intolerable.

I have to confess I don’t know whether any subsequent analysis has been carried out as to how long it would now take, but I don’t find it easy to hazard a guess as to how many more decades might have been added to that figure.

Back then, I wrote that the North-East cannot be expected to tolerate as a matter of course systemic imbalances in economic growth between regions, but in fact that has since become the unspoken policy of the British Government under both Labour and Tory administrations.

All of which makes the continuing debate over the direction of the economy perhaps more pertinent in this region than in any other.

For months, this debate has been stuck in a kind of stasis in which Labour endlessly and increasingly fatuously calls on the Government to adopt a ‘Plan B’ while the Government equally stubbornly insists it must stick to its course.

But this is now becoming more than just an arid intellectual battle between rival economic theories. People’s jobs, businesses and livelihoods are at stake.

The plaintive tone of Labour leader Ed Miliband’s speech to the Social Market Foundation on Thursday certainly conveyed the sense that a crisis point has been reached.

"Austerity at home, collective austerity abroad is no solution to the problems of jobs, growth or the deficit,” he said.

“Don't believe those who will tell you that any change in course will make us like Greece. The markets are as worried about the lack of growth in the economy as they are about debt levels.

"Knowing what we know now, about our economy, about growth prospects, about unemployment, about higher than expected borrowing, it would be the height of irresponsibility for the government to carry on regardless.

"I urge David Cameron: change course now, change course for the sake of our young people, change course for the sake of the country."

As it is, Mr Miliband is pushing at a partially open door in seeking a shift in the Government’s emphasis from deficit reduction to growth.

Chancellor George Osborne is understood to be working on a package of pro-growth measures to be unveiled in the autumn statement later this month.

They are likely to include a new job-creation initiative for the young unemployed, incentives for private companies to invest in big infrastructure projects, and a scheme to under-write mortgages for first-time buyers.

There may also be a rebate for high-energy using industries to alleviate the impact of green taxes, blamed by RTZ Alcan for Thursday’s decision to close its plant in Northumberland.

Some of that will doubtless help the North-East, as will Thursday’s announcement that Virgin Money, newly-enlarged with the acquisition of Northern Rock, will have its headquarters in Newcastle.

But it scarcely amounts to a regional economic policy, still less a strategy for tackling the enduring North-South divide.

Thirteen years ago, lost North-East jobs were seen by the then governor of the Bank of England as an “acceptable” price to pay for preventing the South-East economy from overheating.

Now it seems they are once again being viewed as a price worth paying.

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.

Miliband shows the extent of his boldness, but the reaction shows the extent of his task

Of all the many soundbites devised by Tony Blair’s speechwriters for their leader’s party conference speeches, among the most irritating was the claim that New Labour was “at its best when at its boldest.”

If New Labour had ever done anything remotely bold, it might have had more of a ring of truth about it, but all it ever really did was to maintain and entrench the political and economic consensus established in the 1980s by Margaret Thatcher.

It was this implicit recognition of New Labour’s shortcomings which lay at the heart of Ed Miliband’s conference speech in Liverpool this week, and which gave Labour’s current leader his own, rather more plausible claim to boldness.

Indeed, I would go so far as to say that, in setting out explicitly to overturn that consensus, Mr Miliband has made what was probably the most courageous conference speech by any major party leader over the course of the last two decades.

If anyone thinks I am overstating the case here, they had only to listen to the predominantly negative public reaction to the speech in Wednesday morning’s radio phone-ins.

Far from being a platform from which to relaunch his leadership, the speech left Mr Miliband on the back foot for much of that day, forced to defend himself against claims of a “lurch to the left.”

Does that mean the speech was not so much brave as foolhardy? Well, had it been a pre-election conference, then perhaps so.

But what Mr Miliband was setting out to do was not so much to secure a short-term electoral advantage as to change the entire terms of the political debate, and in this respect, he at least has time on his side.

Much of Labour’s week in Liverpool has been a collective ‘mea culpa’ for the failings and missed opportunities of the Blair-Brown years.

The warm-up act for Mr Miliband was provided on Monday by Shadow Chancellor Ed Balls, who expressed his own regrets over Labour’s economic record.

But while Mr Balls was talking merely about some aspects of economic management, the scope of Mr Miliband’s admission went far wider. “We did not do enough to change the values of our economy,” he said.

While cleverly branding David Cameron – the youngest Prime Minister in almost 200 years! - as the “last-gasp” of the ancien regime, the clear message was that Messrs Blair and Brown were also part of that failed consensus.

Not the least ambitious aspect of the speech was its attempt to restore the concept of ‘morality’ as a defining feature of our political culture.

Usually when a politician starts banging on about morality it precedes a dramatic fall from grace, but the confluence of the MPs’ expenses scandal, the banking crisis and phone-hacking has created a moment of opportunity which Mr Miliband has not been slow to spot.

Having already made his pitch for the moral high ground by leading the attack on Rupert Murdoch this summer, the Labour leader sought this week to build on that good work.

Now that Nick Clegg has vacated the role, there is a clear gap in the market for a ‘Mr Clean’ of British politics, and Mr Miliband has an authentic claim to the mantle.

Was it a lurch to the left? Well, in the sense that it was setting its face against the centre-right consensus of the past 30 years, then yes.

But on closer inspection there was little in the speech that would fit any traditional idea of left-wingery.

For instance, Mr Miliband said at one point that “government spending is not going to be the way we achieve social justice in the next decade.”

Had Tony Blair said this, everyone would have seen it as further evidence of his determination to bury Old Labour-style tax-and-spend and shift the party several degrees further to the right.

When Ed Miliband fought his brother for the Labour leadership a year ago, he made clear that he thought it was time to move on from New Labour.

At the time, this came over merely an adroit piece of positioning in a party weary of the factionalism of the Blair-Brown years, but now it is starting to look like there was real substance to it.

The largely hostile reaction to Tuesday’s speech illustrates the scale of Mr Miliband’s task – but at least he has a clear idea where he is going.

Now all he needs to do is to take the public with him.

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.