Good morning. As we report, the Coalition could be stealing Labour's clothes - some would say that the plural is unjustified - by proposing further increases in infrastructure spending. In a speech to the Manchester Chamber of Commerce, Danny Alexander said that the coming Spending Review would "show flexibility" and "shift resources wherever we can to support economic growth." Interestingly, one department that could benefit from greater investment in capital projects is the Ministry of Defence, which could be one way of appeasing Philip Hammond, especially amid US fears over the British Army becoming "dependent" on America. The FT (£) reckons that the extra infrastructure spending announced next month could be as high as £15 billion, and that the Coalition is drawing up a league table of infrastructure projects for the 2015-2020 period graded according to their potential economic benefits.
Where this leads Labour is unclear. The lack of infrastructure spending was their most notable economic critique of the Coalition. If that has been neutered, the impression will only grow that Labour has no substantive economic policy of all. The FT (£) has one potential answer: Ed Balls is planning a speech on the economy next week. His "five-point plan" remains in awkward limbo: adopted by him but not by his party.
GOVE AND TOP LABOUR DONOR UNITE
Meanwhile, Michael Gove has launched another attack on Labour. Writing for us, Mr Gove depicts them as a party in thrall to Balls:
Balls responds to every development in the same way – let’s party like it’s 1929. He wants to enlist us all in sponsoring a revival of his one-man show, "Gordon Brown 2 – Return to the Edge of Bankruptcy"
His critique of Mr Miliband centres on his inability to control his Shadow Chancellor:
Miliband’s passivity in the face of his shadow chancellor’s operating style is of a piece with his wider inertia.
In amongst it all is some praise for a pair of "gifted, fascinating thinkers": Jon Cruddas and Maurice Glasman. Given that Cruddas is responsible for Labour's policy review, this also suggests that Gove thinks his party do have something to fear in 2015.
Gove's comments are given added weight by developments within Labour. John Mills, one of the party's largest donors, has accused Ed of being "policy light" and failing to produce a credible economic plan. Aswe report, Mills said that Labour had failed to develop a "clear idea on how to get the economy growing again at a reasonable speed and how to get the deficit down to a much more sustainable proportion".
Andy Coulson thinks that Number 10 needs to make much more use of Samantha Cameron. In a piece for GQ, Mr Coulson called for Mrs Cameron to play a more public role as "she’s badly needed in the trenches". As we report, Mr Coulson also calls for her involvement in"select small strategy meetings" - rather suggesting a lack of faith in Dave's strategists. As with Sarah Brown in 2010, the PM could be grateful for the media talents of his wife.
RED CARD FOR EUROPE
Iain Duncan Smith will "fight every step of the way" against the threat of Brussels suing Britain for requiring EU immigrants to pass an extra test before claiming benefits, as we report. The interesting context is that of the rows over the Spending Review: Duncan Smith claims that the EU's stance could cost Britain £155 million a year, so the Right are linking complaints over budgets with those concerning the EU. The reason for Britain's particular trouble on benefits is that, while most EU countries have contributory systems of welfare, Britain's is means-tested, making no requirement of claimants to have paid social insurance during a period of employment, as we explain. This doesn't seem right to ourleader:
The ECJ will not rule on whether Britain is disadvantaged relative to other EU countries, but whether it treats foreign citizens differently. This makes it especially difficult for the UK to prevent the abuse of benefits – and is precisely the sort of area that needs to be renegotiated ahead of a possible referendum.
Against this backdrop, William Hague will today announce Britain's first concrete demand for EU reform ahead of any referendum in 2017. Hague supports the introduction of a new ‘red card’ system allowing national parliaments to block unwelcome EU laws and believes other Northern Europe countries, including Germany, would support it, reports theMail.
SHAPPS MISUSES STATS
The misuse of statistics has been a common theme of this Government, and the UK Statistics Authority have issued another rebuke. Grant Shapps had said that nearly one million people on disability benefits had dropped their claims rather than face medical checks. But the UK Statistics Authority has found that official figures showed that a rather less eye-watering 19,700 incapacity benefit recipients withdrew their claims before facing tests to see if they were fit to work, as TheTimes (£) reports.
CLEGG V MAY, ROUNDS ONE AND TWO
Nick Clegg and Theresa May have a couple of spats to attend to. On yesterday's Call Clegg, the Deputy PM reiterated his opposition to May's "snooper's charter", warning of the dangers of "kneejerk" proposals. The pair are also at odds over a less ambitious measure to make it easier to track who is using a particular computer, notes The Times (not online).
Clegg also has some advice from Mark Littlewood in the Times (£) on how to achieve electoral salvation:
A consistent, clear, genuinely liberal narrative, in which the State plays less of a role in our lives, and individuals have greater freedom to keep their own money, run their own affairs and make their own choices
MANDY AND THE FILTHY RICH
It's not such a bad time to be filthy rich in Britain after all - Britain has 509,000 millionaire households, an increase of a quarter on last year, reports The Times (£). One man who would be "intensely relaxed" about that is Peter Mandelson - who, notes The Guardian, has accepted nomination to the board of a Russian company with alleged links to organised crime and corruption.
TWEETS AND TWITS
Denis MacShane sees a bit of history repeating itself:
@DenisMacShane: W Hague to repeat call I first made as Europe minister 10 years ago for "red card" for national Parliaments to block EU legislation.
Good morning. There is no imminent threat of a leadership challenge to Dave, but plenty of chatter about who could replace him. Despite the continued possibility that 46 Tory MPs may send the letter necessary to trigger a confidence vote, the odds strongly remain on Dave seeing it through until 2015. But the path remains littered with obstacles - especially next year's European elections, when the Conservatives could well trail Ukip and Labour. A confidence vote would have untold consequences for the party. It would look self-indulgent, not least because it is unlikely to result in Mr Cameron's ejection, and therefore change at the top. It would serve only to highlight his - and the party's - internal weakness.
As James Kirkup writes, Mr Cameron is short of friends. Sometimes it seems that George Osborne is his only chum at the top. Much of this owes to Dave's rather exclusive way of operating. With this in mind, the identity of the new Chief Whip (Sir George Young is expected to stand aside at this year's reshuffle) could be critical in Dave's fortunes. Whoever it is, Dave will need to give him access to his inner circle for the good of his own status within the party.
No current game excites quite like imagining Dave's replacement. James notes that both Philip Hammond and Theresa May are manoeuvring for Life After Dave, while Michael Gove, especially after his recent declaration that he'd vote to leave the EU, is treated with suspicion. It might just be that the longest leadership campaign in history is already anyway. But if that's the case, beware the tortoises, as Isabel Hardman argues in The Times (£). Boris could yet go the same way as another long-standing blonde challenger, Michael Heseltine. Liz Truss and Andrea Leadsom could "represent the new Thatcher the party really yearns for." In many ways this is all rather odd: as Steve Richards writes in The Independent, "the Tories are more unified than Labour or the Lib Dems... Yet these two parties display impressive public discipline, while the Conservatives fall out even when they agree."
Leadership speculation is a byproduct of our age. Even if he last until 2015, as he surely will, he must resign himself to fighting an election campaign with large swathes of his party - and not just the "loons" - giving the impression that they only half-heartedly want him to win. And there are few things voters hate more than divided political parties.
ED HAS PROBLEMS TOO
Against this backdrop, there is some especially inauspicious polling news for Ed Miliband this morning. A YouGov poll for The Times (£) finds voters rating him as less trustworthy, decisive or competent than Gordon Brown, though Mr Miliband is still regarded as a better Labour leader. Perhaps most worrying considering Mr Miliband's critique of the Coalition, 50 percent regard him as out of touch.
What does it all mean? If Britain had a presidential system, Mr Miliband would be in big trouble. As Peter Kellner notes in The Times (£), only 21 percent think Mr Miliband would make the best PM - compared to 32 percent for Dave. It's a reminder for Labour that criticism of the Government alone will not be enough to return them to office. Labour's underlying narrative remains unclear, and the sense remains that they have not escaped their Left-wing comfort zone. Mr Miliband may be comforted that he is regarded as honest by a margin of 39-24 percent, and that voters frequently answered "don't know" to questions about him. But, nearly three years after becoming leader, he will know he should be doing rather better.
OECD ATTACKS NHS RINGFENCE
The OECD have joined those questioning the wisdom of protecting spending on departments while others have their funding aggressively cut. As we note, the OECD’s deputy chief economist echoed the thoughts of many:
We are perhaps somewhat doubtful [as] to the idea of ring-fencing certain spending areas. That tends to lead to deeper cuts in other areas which may not be warranted.
The OECD also forecast growth rates of 0.8 percent this year and 1.5 percent in 2014 - a 0.1 percent downgrade in both years. But, while recommending that more spending be shifted to infrastructure, the Government's fundamental fiscal consolidation programme was not questioned.
The spectre of the Star Chamber now looms over those ministers who are refusing to cut their budgets. As Sue Cameron writes, it was "known almost from the start for being secretive, arbitrary and oppressive". The mere threat of ministers having to explain their inability to cut to those who have is often enough to bring them into line - as in 2010. But there is much scope for obfuscation, with a possible tactic this year for Tories to propose departmental cuts that they know the Lib Dems would oppose. It all means that "fundamentally any Star Chamber will mark yet another round of Blue on Blue battles."
AFGHAN WAR COSTS £37 BILLION
Britain's involvement in Afghanistan has now cost at least £37 billion - equivalent to £25,000 for each of Helmand province's 1.5 million inhabitants. As the Guardian reports, the sum is significantly higher than the £25 billion that the MoD has estimated the cost of military operations in Afghanistan as being.
OSBORNE ACCUSES ENERGY COMPANIES OF EXPLOITING LOOPHOLES
George Osborne has said that he is changing the law to prevent gas and electricity companies claiming up to £900 million in tax relief. As wereport, Mr Osborne used Twitter to announce that he will introduce draft legislation in this year's Finance Bill. It could be an effective way of combining two voter complaints - cost-of-living issues and tax avoidance.
UNIONS GROW TO TEN-YEAR HEIGHT
For the first time since 2003, trade union membership has increased, according to a new government figures. As we report, membership nudged up to 6.5 million. But those terrified by the prospect of national strikes should be reminded that union membership was 13 million in 1979.
John Bercow's grace-and-favour Westminster residence is being funded almost entirely by the taxpayer, as we report. Bercow lives completely rent-free while, the PM paid £14,000 over the past year for the benefit in kind of living at Number 10.
BREAKING NEWS: Philip Hammond has defended his reluctance to cut his budget in an interview on Today:
I'm not a holdout... We can look for efficiency savings which everyone should be seeking all the time. If we need to go beyond our efficiency savings, we would need to have a discussion over how and where these would be achieved.
OSBORNE NEEDS SOME MORE FRIENDS
Good morning. No one ever said it was going to be easy. Facing resistance to cuts from a number of Tory big beasts - Philip Hammond, Theresa May and Owen Paterson, plus Lib Dems including Vince Cable - George Osborne will reconvene a "star chamber" to deal with Cabinet ministers who refuse to agree to the new round of £11.5 billion of cuts demanded of them for 2015-16. This amount to a formal interrogation by Mr Osborne and senior ministers at a special Treasury committee. But Danny Alexander's view that this would act as "deterrent" against ministers opposing cuts sounds more hope than expectation.
The National Union of Ministers look like they have simply had enough. And it's not hard to sympathise - under the latest round of cuts, some unprotected departments will be 30 percent smaller in 2015/16 than in 2009/10. As the FT (£) notes, the average of 6.6 percent Mr Osborne has asked unprotected departments to cut in the latest Spending Review would be a more palatable 4.5 percent if the ringfences were taken away.
While Mr Osborne has talked up the cuts already agreed, the other departments will not be as amenable. The seven departments who have agreed to cuts are: HM Treasury; Cabinet Office; Ministry of Justice; Foreign and Commonwealth Office; Northern Ireland Office; Energy and Climate Change; and Comunities and Local Government. Eric Pickles and Chris Grayling have already been praised for their commitment. But the bare facts remain soothing: though Mr Osborne says 20% of the necessary cuts have been agreed, this includes £1.5 billion of cuts from the budget that are being carried forward.
To realise the deficit reduction aims, our leader says a little more of Mr Grayling's ambition would not go amiss:
Given that this is the Government’s last real chance before 2015 to reshape the nature of the public sector, we urge it to embrace this approach – and to focus not on pruning individual leaves of the Whitehall tree, but lopping off entire branches.
LIB DEMS STUCK IN THE MIDDLE
Labour appear to be doing their bit for coalition disunity. As The Times(£) reports, Labour is considering allying with the Tories over the "snooper's charter", much to Lib Dem chagrin. Lib Dems could then get their own back - by backing Labour's motion for a mansion tax. This would not be binding for the Government, but it would leave Dave facing another Commons defeat - and reinforcing attacks on his party as that of the rich.
A senior Lib Dem said that they thought the Conservatives would not pursue the charter, recognising that it could lead only to "mutually assured destruction". The source presumably hadn't seen Nick Herbert'sTimes (£) piece, accusing opponents of the charter of "a paranoid libertarianism that denies any sense of proportion." Labour's stance on the Communications Data Bill, which would determine whether it passed, remains unclear, though former Home Secretaries Alan Johnson and Lord Reid support it. Meanwhile MI5 officers have described using the Woolwich attack as a reason to push forward with the Bill as a "cheap argument", reports The Independent.
HOW BORIS CAN BECOME PM
Andy Coulson has returned to the political fray to do a bit of stirring, aswe report. In an article for GQ, he writes: "Boris Johnson desperately wants to be prime minister and David has known the fact longer than most". He also outlines how Boris could become PM:
Stabbing David, or anyone else for that matter, in the back would be distinctly off brand - just not very Boris. He would much prefer to see David fail miserably in the election and ride in on his bike to save party and country.
HANCOCK INVOKES THATCHER
Matthew Hancock is giving a speech across the pond today about how conservatives need to be on the side of small business:
We as conservatives, as supporters of free markets, must recognise human behaviour for what it is, and make sure the rules of the game free us from the overmighty - whether in banking, energy, or government - and support the challenger, the competitor, the entrepreneur and the innovator... Whether the business start-up or the aspiring home owner, Mrs Thatcher was on the side of the insurgent,and so must we be.
DARLING WARNS OSBORNE
Alistair Darling has urged George Osborne not to sell Government shares in banks at less than the sums they were bought for in 2008. The RBS share price is £18 billion less than the Government paid in 2008, and writing in the Mirror, Darling said:
Selling the shares off cheap might be good politics in the short term but it is not good for the country. It’s an act of desperation... The government should put the interests of the country above its own.
WILL LABOUR LISTEN TO BURNHAM?
Few have noticed, but Andy Burnham is perhaps the boldest member of the Shadow Cabinet, with his plans for integrated health and social care. Given the Government's difficulties on the NHS, there is scope for Labour to gain traction on the issue. But the question, as Mary Riddell writes forus, is what do Labour do with it?
The undiluted Burnham plan could be Labour’s flagship policy for 2015 – a solace to all generations and a signal that social democrats have the credentials to govern in hard times. Will Labour be bold enough to take the risk? If not, then long before the end of the next Parliament, the ruins of the NHS may be interred under the epitaph inscribed by politicians: Nothing Could Be Done.
QCS BASH GRAYLING
Given Chris Grayling's ambitions, opposition to his justice reforms is inevitable. But he probably wasn't anticipating this: 90 QCs have written a letter to us, describing Mr Grayling's legal aid reforms as "unjust", saying they could "seriously undermine the rule of law".
STOP THE SPIN
In their rush to secure favourable headlines, politicians are using statistics in a way that is "no longer true". That's the verdict of the Public Administration Select Committee, who said that press releases needed to be made more "accurate and meaningful", as we report. All this unreliable data is leaving us "confused and disengaged".
PARLIAMENT NOT SO OUT OF TOUCH
Against this backdrop, it probably wouldn't be very advisable for Parliament to ask for £1 billion. But that's what it could be doing, having yesterday issued a tender contract to review the feasibility of restoration. The Times (not online) notes that, were Parliament not a Unesco World Heritage Site, demolition and rebuilding would be advised. As it is, Lords and MPs might have to work while building continues around them. Whoever said they were out of touch?
TWEETS AND TWITS
Brooks Newmark offers praise for Mr Osborne:
@TweetBrooks: The austerity vs growth choice is a false argument. We must live within our means. George_Osborne showing growth returning with austerity.
BREAKING NEWS: George Osborne has told Today that he could not foresee further cuts to welfare in the Spending Review. He said: "I am in effect ruling it out." He wants further savings to come "out of the machinery of government".
"We've just got seven departments to agree to substantial savings. They've accepted cuts of anywhere between eight and 10 percent... It's a difficult decision, I'm not hiding that from anyone - but it's necessary."
DUNCAN SMITH OFFERS FURTHER WELFARE CUTS
Good morning. Iain Duncan Smith has always been well-regarded by the Tory right, but his star may be rising to its greatest height yet. Mr Duncan Smith has offered to cut the welfare budget by up to an additional £3 billion annually to protect spending on the Armed Forces, as we report. He has personally contacted Theresa May and Philip Hammond with the details, after they had raised concerns about the impact of national security of further cuts to their departments.
We understand that Mr Duncan Smith has offered to restrict housing benefit for the under-25s, and to limit state payments to families with more than two children. It's a bold offer but one that our leader lauds:
This has got to be the right approach. To govern is to choose, as the old adage goes, and the Coalition has arguably made the wrong choices when it comes to public spending. It has protected programmes like the NHS and overseas aid from the scrutiny and radical reform that greater budgetary discipline would have necessitated.
The particular difficulty is that further cuts will require legislation, which would test Mr Cameron's ability to command support of the Lib Dems. Lib Dem MPs are likely to resist the changes as cuts too far, at a time when Mr Clegg's position is weakened and he is vulnerable to a show of strength from his opponents. Lib Dems have said that the only chance of welfare cuts happening is if Conservatives are first willing to agree to means-testing benefits paid to pensioners - but Dave's debate promise not to touch these makes that impossible.
The result is an unsatisfactory impasse. And the political rows will only rumble on, with the next spending review to be published on June 26th.
DON'T RULE OUT A CHALLENGE TO DAVE
As Dave continues his accumulation of enemies within the Tory party, the prospect of a no confidence vote lingers. There's a lot of anger about - so we can't be sure how close the 1922 Committe Chairman is to receiving the necessary 46 letters to trigger a no-confidence vote. David Ruffley yesterday warned of the importance of next year's European elections for Dave's future. But, as I write, that might not be Dave's main threat:
The Whips Office says there is a hard core of about 30 irreconcilables who will do anything to bring down Dave: they want to see him fail at all costs. Around them is a wider circle of disgruntled MPs, many of them sacked ministers and backbenchers who feel their talents have been ignored. How many of them have put letters in to Graham Brady is unknown. For my money the danger to Mr Cameron is not the coordinated revolt implicit in the Ruffley threat, but a sudden, unscheduled crisis.
LET DAVE CHILL OUT
Even against this backdrop, criticising Dave for having the temerity to go on a pre-arranged half-term break still seems quite something. A burned out PM helps no one but the opposition - whether that's internal or external. As Dan Hodges writes for us:
In one breath we criticise our leaders for being drunk on ambition, and hungry for power. Then in the next we criticise them for too readily abandoning the corridors of power in favour of their Balearic sun loungers.
COURTS COULD BE PRIVATISED
The reforming efforts of Iain Duncan Smith and Michael Gove rightly get much attention, but is Chris Grayling the most radical minister of the lot? The latest evidence of this comes in Grayling's plans to privatise the court system. As The Times (£) reports, this would establish the courts as a commercial enterprise free from Treasury control - and would save the Ministry of Justice £1 billion a year. Grayling's radicalism is borne of the need to find £2.5 billion in cuts before the 2015 general election.
NO ALTERNATIVE TO TRIDENT
The new Whitehall review into the UK's deterrent will reject alternatives to Trident, reports the FT (£). But the possibility of clashes remains. Lib Dems have long advocated a cheaper alternative and the Alternatives Review report will leave open the possibility of a scaled-down version of Trident, which would save £5 billion in capital costs and around £1 billion a year thereafter. The battle lines are being drawn, with a Tory adviser accusing Lib Dems of "gambling with our security". Meanwhile, Labour's exact policy remains under review.
BRITAIN COULD SUPPORT SYRIAN REBELS
Britain and France have opened the way to supplying weapons to opposition forces in Syria's civil war, reports The Times (£). After negotiations with the European Union, William Hague said: "While we have no immediate plans to send arms to Syria it gives us the flexibility to respond in the future if the situation continues to deteriorate."
BOLES TAKING BRITAIN OUT OF 19TH CENTURY
Nick Boles is tackling Britain's housing shortage head-on. Imploring that current housing laws risked sending the country back to the 19th century, when only the wealthy could afford homes, Mr Boles sees building on greenfield sites as increasing "human happiness", as he tells the Mail. And no one could accuse him of nimbyism: 7,000 homes are being built on greenfield land in his own Grantham constituency.
MAY ACCUSED OF BEING A KNEEJERKER
Theresa May's plans for new legislation after last week's Woolwich murder has been branded "kneejerk" by a senior Lib Dem, reports TheGuardian. The communications data bill - the so-called snooper's charter - remains staunchly opposed by Lib Dems, with Labour apparently also unconvinced by the safeguards offered.
BYE BYE BALLS?
As the Mail notes, will Ed Balls be a political goner by the next Parliament? William Hill offers odds as low as 9/4 that Balls won't be an MP after 2015 - his majority in Morley and Outwood is only 1100.
TWEETS AND TWITS
Jim Murphy resists a cheap attack on David Cameron:
@jimmurphymp: There are many reasons to be annoyed with David Cameron but him going on a short holiday isn't one of them.
Good morning. The reaction to Wednesday's terror attack continues to dominate the political scene. David Cameron has reacted in a characteristically calm way, calling the murder a "betrayal" of Islam and emphasising that "One of the best ways of defeating terrorism is to go about our normal lives." Other party leaders, plus President Obama, have issued similarly measured responses, as we report.
Eric Pickles spoke to Daybreak about the reaction to the attack:
"The very sensible thing that I think has come out of this is the overwhelming majority of Muslims and Muslim organisations have condemned this. It’s been unequivocal in the condemnation and those that sought to use this to divide us - it’s actually been a catalyst to bring the communities together."
But unfortunately not all the reaction has been so sensible. As TheGuardian reports, there has been a spike in Islamophobic crimes and incidents - including 38 over Wednesday night alone. The English Defence League have already held a demonstration in Woolwich, with another gathering planned for outside Downing Street on Monday. The British National Party have also announced their own in Woolwich on 1 June. Against this backdrop David Blunkett has warned of the "very nasty and angry politics" Britain is threatened by, which needs to be carefully managed to to ensure "something much more dangerous is avoided", as The Guardian notes:
"52 people lost their lives in 2005, but the existence of social media and rolling 24 hour news repeatedly showing gruesome images makes this much harder for authorities. It makes it that much harder to calm feelings, ensure rational debate and prevent attitudes from hardening, and to prevent the kind of reaction we have already seen from the English Defence League."
Mr Cameron has - quite rightly - insisted that there will be no "knee-jerk" legislation in reaction to the attack. But Theresa May could revive plans for a "snooper's charter" allowing authorities to monitor internet use, reports The Independent. Given the Lib Dems' staunch opposition to any such measure, that would cause further tensions in the Coalition.
D MILIBAND SLAPS DOWN LAWSON
David Miliband has returned to the British political scene, however briefly, using a speech in Dublin to admonish Nigel Lawson's case for withdrawal from the EU. Miliband accused Lawson of "folly" over his claim that the eurozone is a unified bloc; said there was no European plot against Britain on financial regulation; and argued against the notion "that the single market is somehow cosseting British industry". In hisspeech to the Irish Business and Employers Confederation, Mr Miliband concluded that "The answer is not less Europe, more Europe, or no Europe; it is a different Europe."
BYRNE TAKES LABOUR RIGHT ON WELFARE
Liam Byrne is determined for Labour to end questions over welfare by adopting a renewed emphasis on the "right and responsibility" to work, with increased "benefit penalties" if the unemployed turn down jobs. In an interview with The Independent (not online), My Byrne said "George Osborne is inventing dividing lines on social security, to hide a failure to bring down the cost. We are not going to get caught in that trap." Mr Byrne also spoke of bringing the "contributory system back". All very interesting stuff - but how will the rest of his party react? It might just be an election-defining question.
EU ADVANCES TAX TRANSPARENCY
The EU have reacted to recent tax avoidance allegations by forcing big companies to open up their tax affairs to greater public scrutiny. As theFT (£) reports, a law compelling companies to publish corporate profits and taxes on a country-by-country basis could be passed as soon as the summer.
NET MIGRATION LOWEST FOR A DECADE
New figures show that net migration fell to 153,000 in 2012 - a fall of 100,000 from its 2010 peak. As the FT (£) reports, the most significant decreases have been in student sponsored visas (although University visas have risen slightly since last year). It all means that the Conservatives could be able to boast of reducing immigration to "tens of thousands" in 2015, as they pledged to before the last election.
CHILDCARE COSTS COULD FALL BY A QUARTER
Figures released by the Department of Education show that, under plans to relax legal ratios for staff looking after children, the cost of childcare could fall by as much as 28%. The Guardian reports that this could yet raise hope among Michael Gove and Liz Truss that they could overcome Lib Dem objections to childcare reform. Even if it does not, childcare reform could be an important area in which the Conservatives say their will was thwarted by Lib Dem caution.
HANKERING FOR HAMMOND
The FT (£) reports that there are murmurs that Philip Hammond might be considering resigning in protest at the further cuts of the armed services he is being asked to preside over - setting himself up as a leader of the Tory right. Add his opposition to defence cuts with his criticisms of gay marriage and the EU and it's easy to see why, in these times of coalition and Dave's modernisation, some Tories hanker for Hammond.
A NEW JOB FOR MANDY
Peter Mandelson has had a fair few roles in his time but here's a new one: high steward of Kingston Upon Hull. As The Guardian notes, the prince of darkness has been appointed to a role that his grandfather Herbert Morrison once held.
TWEETS AND TWITS
William Hague's reaction to Wednesday's attack:
@WilliamJHague: PM @David_Cameron right to say Woolwich attack a betrayal of Islam and of Muslim communities who give so much to our country