Jobs for the (mostly) boys after politics

Sir Nick Clegg taking a leading role at Facebook has attracted some predictable venom on social media. I have no one view or the other about Nick Clegg: I have never met him. I think William Hague was right when he said that going into coalition with the Conservatives finished off the Liberal Democrats. That's unfortunate if it is the case as they are a useful balancing flywheel in British politics.

What interests me is the more general phenomenon, the fact that for leading politicians (or even not so leading ones), a career in politics, even a relatively short one, leads to a good job afterwards. Has this become the real objective?

In all fairness it should be pointed out that politicians are dropping out at a much younger age these days. It's no longer the case that all they have time to do is to write their autobiography before they pop their clogs. Harold Macmillan prolonged the process by producing a multiple volume autobiography, but then he did have a stake in a publishers.

Actually, Dave Cameron seems to be having a fairly relaxed time in his shepherd's hut, but he was always one for chilling out. He is also heading a fund to improve transport links between China and its trading partners.

If I had a garden like that, I would want to spend time enjoying it

William Hague is actually also chilling out a lot of the time in his lovely home in Wales with its superb garden and fantastic recently completed library. However, he does write for the Daily Telegraph and is consultant to a couple of companies. I wonder if Ffion will ever go into politics?

Sir Danny Alexander is vice-president of the Asian Infrastructure Bank. But the prize really has to go to George Osborne who has something like seven jobs, admittedly some of them very part-time.

Statement by the prime minister

Sometimes I wonder about the parallels between this current crisis and the Westland crisis which was supposed to bring down Margaret Thatcher as prime minister but which is barely remembered today (although it did unleash Michael Heseltine as an unguided missile). Actually Ed Miliband was more effective in the questions that he put to the prime minister today than Neil Kinnock was then.

Dave Cameron said that he had learnt from the experience of employing Andy Coulson and with the benefit of hindsight he would have done things differently. If Andy Coulson was shown to have lied, he would then apologise, but this 'conditional apology' was not good enough for Ed Miliband. I must say that I have never quite understood the fashion for apologies.

Ed Miliband was at his strongest when he pointed out that there were five opportunities for David Cameron to doubt Andy Coulson's suitability and the strongest of these was in relation to a New York Times article last September which led to the re-launch of the police investigation. Miliband suggested that the prime minister was caught in a tragic conflict between personal loyalty and the standards and integrity required in public life.

These are all powerful points, but Labour's relationship to the media has not been squeaky clean. The prime minister was able to castigate them as the 'slumber party' and pointed out that Rupert Murdoch had named Gordon Brown as a personal friend.

Nick Clegg's body language throughout was interesting, one of frozen immobility most of the time. Clearly the Lib Dems seen an advantage in distancing themselves over this issue.

Despite the saturation media coverage, I just wonder how interested those outside the political class are in all this. The crisis in the eurozone threatens to unleash a sovereign debt crisis and a second banking crisis which would be far more serious than what Ed Miliband described as a 'a catatsrophic error of judgment'. Which of us has not made poor personnel choices?

David Cameron faces media storm

All my hopes of a quiet Sunday at home were shattered after first Rebekah Brooks was arrested and then the Commissioner of Metropolitian Police resigned. A classic media storm quickly developed with one reporter suggesting to me that 'the dominoes are falling' and David Cameron himself might be in danger.

Apparently, Dave did not hear of the news of the Commissoner's resignation until he was 1 hour 10 mins. into his flight to South Africa when he had a satellite phone conversation with Home Secretary Theresa May.

There is no doubt that David Cameron has made errors of judgment in relation to Andy Coulson, not least in failing to heed advice that he was given, although some of that advice appears not to have reached him. David Cameron also said last week in the House of Commons that some of the assurances he was given by Andy Coulson may not have been well founded.

Ed Miliband has made good use of the situation and has been able to take his L-plates off and for once look authoritative. Tom Montgomerie suggests mischievously in The Times today that this is bad news for Labour as he is now well entrenched. His poll numbers have certainly not improved all that much (yet) but he now may look less like the head boy asked at short notice to make a speech.

Yvette Cooper has probably been an even more effective performer and has insisted that David Cameron has questions to answer. As it so happens, the Prime Minister is in South Africa and will not return until after Parliament goes into recess (he is about to give a press conference), although some Labour MPs are calling for the House of Commons to be recalled. David Cameron said in his press conference this morning that it would be appropriate for the House to be recalled on Wednesday for a statement and questions.

What is really serious about this crisis is that it further erodes trust in institutions, not just the media, but even more important the Metropolitan Police. The Met has had problems in the past with corruption and institutionalized racism and these have been tackled to good effect. Crime in London has been falling. However, it is evident that some members of the force have had a closer relationship with the media than is desirable.

It is now becoming apparent that the Mayor of London had lost confidence in the Commissioner and in effect he went before he was pushed (Theresa May would have probably implied that he should go in the Commons statement scheduled for todday). Bozza and Dave had a number of conversations over the matter over the weekend which must have been interesting given their political rivalry.

The Liberal Democrats have come out of this quite well because they were not having informal meetings with News International but in part this because they were not regarded as serious players before the last election. Nevertheless, Nick Clegg has managed to sound sensible and authoritative.

It should be remembered that there is a serious crisis in the eurozone and a potential debt default in the US, either of which could trigger a second recessionary wave at a time when governments have no shots left in their locker. Voters will make their decision at the next election in terms of the economy and public services, not the phone hacking scandal.

Nevertheless, David Cameron's image has been dented. He is good at the big picture but the flip side of that is that he does not always master crucial details and up to now has been able to breeze through on the basis of self-confidence. Clearly he now faces a more difficult phase as this story will rumble on for months and years.

But George Osborne is not going to be moving into No.10.

The economic outlook

The Magna Carta institute at Brunel University run by Justin Fisher held an interesting event on 'The Coalition - one year on' at the British Academy earlier this week. I plan to talk about some of the other presentations later, but here is a summary of what I had to say (my statistics generally come from the National Institute for Economic and Social Research).

The 'privatised Keynesianism' model identified by Colin Crouch in which the economy is driven by consumer debt linked to the housing market is no longer viable in the medium term, if at all. Consumer spending is forecast to fall by 0.6 per cent in 2011 (it still accounts for two-thirds of aggregate demand).

Consumers are being squeezed by inflation at 4.5 per cent with real disposable incomes falling. Indeed, I think that the Bank of England has de facto abandoned the inflation target. That may not be a bad thing, but they won't admit it is what they have done. Given fiscal consolidation, the economy needs a monetary stimulus and inflation also erodes the debt burden.

Real house prices are forecast to fall by 4.5 per cent in 2011, although the London market is still relatively buoyant, especially at the higher end where it is driven by foreign buyers. There is a fear of unemployment, particularly in the public sector. The Government's austerity rhetoric may have dented consumer confidence.

Export led manufacturing growth is forecast to be 6.9 per cent this year and 4.3 per cent in 2012. This is mainly driven by the weakness of the pound. All three political parties support rebalancing the economy and this is one of Nick Clegg's little known strategic objectives. However, much of manufacuturing is now essentially assembly operations and much of the value chain in industry has been wiped out. It should be noted that past government industrial policy interventions have not been conspicuoulsy successful.

The OBR's growth forecast for 2011 is now seen as rather optimistic and many commentators anticipate 1 to 1.5 per cent. It is unlikely that the economy will grow faster than the trend rate of 2.1 per cent until 2013. The higher growth rates recorded recently have little to do with government policy but reflect the fact that they have been hit less hard by the banking crisis (so far, but they are exposed to a Greek default). The German economy also has strength in high quality, high valued added manufacturing.

The output gap is probably larger than we thought whuich means that the sustainable output of the economy is lower than thought. Productivity growth is likely to be low and the economy will not grow as fast as it did without generating inflation.

It should be noted that the Coalition Government does not aim to eliminate the cyclical deficit (the cyclically-adjusted current budget) so in fact Conservative and Labour positions on the budget are less far apart than the rhetoric would suggest. There will be public spending increases in real terms over the Parliament, although as a share of GDP public expenditure will fall back to 40-41 per cent.

Given that the weakness of the recovery will depress tax revenue, even if (a big if) spending targets are met, net borrowing will fall to 3.6 per cent of GDP in 2015-16 rather than the projected 1.5 per cent. The current budget will run a deficit of 2.2 per cent of GDP compared with the 0.2 per cent forecast.

The Government has been criticised for the lack of a growth strategy, but there are limits to what governments can do to stimulate growth. The most useful measures such as skill formation only bear fruit in the medium term.

A good night for Dave

Dave Cameron has reason to be pleased with the local election results so far. BBC projections put the Conservatives on 35 per cent as against 37 per cent for Labour and 15 per cent for the Lib Dems. This is not a bad outcome for a party implementing unpopular policies. The Conservatives are also likely to be able to celebrate a big majority in the AV referendum.

In Scotland the presidential style campaign run by the canny Alex Salmond has paid off with a clear majority for the SNP. Labour may be able to take sole charge of the Welsh Assembly, but even there the result is on a knife edge. The results hardly show that voters think that they have a convincing alternative narrative or that they see Ed Miliband as a future prime minister.

Once again it is the Lib Dems who are the whipping boys for the Coalition Government. As expected, they have lost heavily in the council elections, especially in the north. There will now be increased party pressure on Nick Clegg to differntiate himself from the Conservatives.

Some of the things said in the AV referendum have left a sour taste in the mouth. It may never be glad, confident morning again, but it is not the end of the coalition. The two parties are inextricably bound together.

AV and PR

The Elections, Parties and Opinion Polls (EPOP) group organised a panel on the AV referendum at the Political Studies Assocciation (PSA) conference this week. Although it occupied the graveyard slot in the conference it attracted a good attendance and provoked some lively discussion. But perhaps that says something about the geekiness of political scientists as one can hardly imagine that outside on a warm afternoon in West London people were discussing AV as they sipped a coffee or enjoyed an early pint before the holiday weekend.

It was agreed that the debate had often been simplistic, misleading and irrelevant, but then, as someone remarked, that is true of many political debates. It looks likely that the referendum will be defeated on a low turnout (especially in London where there are no other elections).

British people are relatively conservative and tend to favour the status quo. They have been told that AV would be complicated and expensive, although, of course, any form of democracy costs money. The poll evidence suggests that older voters are more opposed and they are more likely to turn out and vote.

Given that AV is really a modified form of first-past-the post, what would be the consequences of either a win or a defeat for PR? Some think that a win would not be what some have called a slippery slope to PR, but would end the debate. Voters would be coralled into two voting camps, leading to less representation of the diversity of the electorate. What seems more likely is that a defeat would end the PR debate as a live item for some time to come. But it has always been a debate among the political class anyway.

What seems certain is that variants of PR will remain where they are embedded in 'secondary elections' for the devolved assemblies, the European Parliament and the London assembly and mayoral elections. The defeat of the referedum might give an impetus to Lords reform as a sop to Nick Clegg. A largely elected upper house would use some form of PR, although when this prospect was mentioned a life peer in the audience went slighty green around the gills.

No longer Boy George

It should be no surprise that in the weekend before the budget both the Financial Times and The Economist have published profiles of the Chancellor of the Exchequer, George Osborne. The one in the FT magazine is particularly long and favourable and looks as if it could have been 'placed' by the Chancellor's political advisers.

However, the message of the two pieces is essentially the same: the Chancellor is no longer Boy George. Before the election there were concerns that he would not be up to the role. He was seen as too preoccupied with scoring political points. But he has grown into the role well. Although not a workaholic, civil servants think that he has mastered the technical aspects of his brief well. He has an appetite for reforming taxes, rather than just cutting them.

He also has a good working relationship with the prime minister, symbolised by the fact that he works most of the time out of No.11 Downing Street rather than the Treasury. The door to No.10 is kept pinned open and the Chancellor takes a leading role in regular strategy discussions. The relationship between the Prime Minister and the Chancellor is the fulcrum of government and when it breaks down (Lawson and Thatcher) or is tense (the Blair-Brown 'dual monarchy'), the reverberations are felt throughout Whitehall.

David Cameron has a long way to go as Prime Minister and is currently enjoying a good war. However, Osborne is now seen as a potential successor in a way that he wasn't before. The Tory right see him as more attuned to their way of thinking than the Prime Minister.

One problem is Osborne's public image. He doesn't expected to be liked, but he does hope to earn the respect of the people. However, an Economist poll shows that William Hague is seen as the most likely successor, followed by Nick Clegg! Osborne only gets 9 per cent.

In part this reflects the way in which Nick Clegg is the public No.2 in the government and has acted as a lightning conductor for its policies. What is also interesting about the Economist poll is that although the electorate have taken on board Labour's message that the government is cutting too far, too fast and that the poor will suffer most, they also largely blame the existence of the deficit on Labour. That effect may, of course, fade over time and a big responsibility rests on Osborne for restoring the economy to better health.

Is Labour making an impact?

The latest YouGov poll puts the Conservatives on 42 per cent, Labour on 40 per cent and the Lib Dems on 8 per cent. I would agree that polls at this stage of a Parliament are largely irrelevant, but one might think that Labour would be making a greater impact.

I have not been impressed by Ed Miliband at Prime Minister's Question Time. He does land the occasional punch, but it is often stilted or over prepared. David Cameron is usually able to out point him, often with a spontaneous put down like the Basil Brush comment on Wednesday (after Ed had tried to claim that the PM was 'air brushed').

It looks like in its haste to get away from New Labour (which did win three elections in a row) the Labour Party has reverted to its old principle: never compromise with the electorate.

Of course, it's possible that the Government will be overwhelmed by a tidal wave of revulsion against the effect of the cuts. No doubt that is what the Labour Party hopes. But they have to have a credible alternative economic plan and as yet they don't. Admittedly, they do have time to fill in the famous blank sheet of paper, but they can't take too long.

Meanwhile, David Cameron has followed Nick Clegg in getting in some populist shots at bankers' bonuses. They are an easy target and they haven't showed much political skill. Whether it's good policy is another matter.

Liam Fox wins

Cuts in the defence budget will be less than 10 per cent after the personal intervention of the prime minister. It's a considerable victory for Liam Fox after what Michael Heseltine described 'as the letter designed to be leaked'. Even Hilary Clinton weighed in on his side.

There will be some painful cuts for the Navy and RAF, but the two aircraft carriers are safe. Cutting them would have hit jobs in what remains of the shipbuilding industry hard. There will be some unspecified savings on Trident as a concession to the Lib Dems.

The schools budget is also to be protected, at least in the sense tha Nick Clegg's 'pupil premium' for disadvantaged pupils will offset cuts elsewhere. This could mean that some schools with better off pupils could lose out.

All this means bigger cuts elsewhere. Higher education will take a big hit with 79 per cent of the teaching budget cut and £1bn off the research budget. Higher education is effectively being marketised and there will be big structural changes as a result with some universities merging or disappearing.

Although the Government is doing what it can to protect the less well off, some of these cuts, such as those in education, could hit median income families hard. However, the Government is going to give £1.5bn to Equitable Life policy holders from 'middle England', although their spokeswomen was not pleased and argued that taxpayers should have provided nearly £5bn.

And the Scottish Government has somehow found the money to abolish prescription charges.

Nick strikes the right note

Nick Clegg and the Lib Dem leadership came away relatively unscathed from the conference at Liverpool. Delegates staged a symbolic revolt over the controversial 'free schools' issue but the real test will come at Birmingham next year when the cuts have started to bite and the AV referendum may well have been lost.

Clegg's speech was short, sober and restrained and was designed to reassure anxious delegates. It largely achieved that objective. Many of them are councillors who have experienced coalition arrangements in local government and hence are familiar with the constraints and opportunities they offer.

If the Lib Dems had not entered a coalition and forced a second election they would have suffered at the polls. As it is, they have shown they are prepared to accept the responsibilities of government. Whether they will be given any electoral credit for that is another matter.

To those who believe the Lib Dems should have entered a coalition with Labour, Clegg said that Labour had ordered the invasion of Iraq, run roughshod over Britain's civil liberties and brought the country to the bank of bankruptcy.

Clegg had one decent joke about New Labour authors: 'Never in the field of political memoirs has so much been written by so few about so little.'

The Biden-Clegg relationship

Washington DC: One of the interesting by-products of the Coalition Government is the relationship that has developed between Deputy PM Nick Clegg and US Vice-President Joe Biden.

Within minutes of Clegg's appointment, Biden was on the phone to deliver his congratulations. They have been video conferencing and when Nick Clegg comes to the UN later in the month he will spend two hours in Washington with his opposite number.

The vice-presidency in the US has come a long way since it was described by one incumbent as worth a 'pitcher of warm spit'. Vice-President Mondale described the role as 'You die, I fly' in reference to his role as an attendee at state funerals.

The role of deputy prime minister has no constitutional foundation and does not always exist but it has had some distinguished incumbents such as Rab Butler and Michael Heseltine.

Nick blots his copy book

I watched Nick Clegg answer Prime Minister's Questions yesterday. Apparently this was a historic occasion as no Liberal leader had been in this position since Lloyd George, except that LG was not leader of the Liberals at the time. In any case PMQs did not start until 1961.

It seemed a polished enough performance, although Jack Straw's interrogation was persistent and long winded but hardly unnerving. Nevertheless, George Osborne kept giving him words of advice.

However, it appears that Nick made two serious errors. He said that the invasion of Iraq wsas illegal which is not the Coalition Government's position and he said that Yarl's Wood detention centure will close which again is not policy.

Perhaps his lack of experience showed, indeed at one point he referred to his old role across the chamber.

Bigging up Mandy

The Times is bigging up Peter Mandelson's memoirs, no doubt hope to attract paid traffic to its new website. As a subscriber to the paper, I was offered 'exclusive' video access on Saturday. I didn't bother.

No doubt Mandy's memoirs will be essential reading for those interested in the toxic conflicts at the top of New Labour. The Brown-Blair struggle had a damaging effect on the conduct of public policy and the effectiveness of the Government. Mandy says that he has rushed his memoirs out in order to inform candidates in the titanic struggle for the Labour leadership, but some commentators think he has been motivated by getting his account ahead of the Reverend Blair who is none too pleased according to some accounts.

There is a sense in which the dysfunctional struggles at the top of New Labour are yesterday's story. We now have a new Government which appears to be functioning well, the odd slip by particular ministers aside. George Osborne's ratings have shot up and William Hague is getting deservedly favourable coverage for his pragmatic yet still strategic conduct of foreign policy.

Mandy has revealed that Nick Clegg wanted Gordon Brown to go as the price of any coalition with Labour and that Gordon, reasonably enough, thought he had been humiliated enough. But most people had worked that out for themselves.

Do they still agree with Nick?

The Hon. Member for East Dunbartonshire

Lib Dem MP Jo Swinson tweeted this article which defends the role of the Lib Dems in the Coalition Government: Nick

Judging from her tweets, Swinson spends much of her time on an endless tour of events in her East Dunbartonshire constituency or raising issues like the security fencing round the Milngavie (Mull-guy) Reservoir. Makes sense given that her majority was down in May.

However, her many followers were puzzled by a tweet sent out around midnight last Saturday: Yes. What can she have meant?

Sam Cam unveils waxwork of Dave

I was very disappointed when I took my oldest granddaughter to Madame Tussaud's recently to find no waxwork model of David Cameron. But all has now been put right and Sam Cam has unveiled what she rates as a very lifelike model of her husband:
Wax

When we will see a model of Nick Clegg? I don't suppose his wife would turn up to unveil it?

No love affair with the beautiful game

It's claimed that England win the World Cup only when Labour are in office, but then there's only one example to back up that argument. However, there's no doubt that New Labour had a love affair with the beautiful game. After all, it was a way of blokes who had become middle class showing they could still connect with their working class roots.

Andy Burnham, now running for the Labour leadership, had an Everton ring tone on his mobile. Alastair Campbell, a long-suffering Burnley supporter, includes 68 references to football in the full version of his diaries as against 55 for the likely next Labour leader, the admittedly wonkish David Miliband. Tony Blair, who claimed to be a Newcastle United supporter, demonstrated his 'man of the people' street cred by doing headers with Kevin Keegan. Gordon Brown, a faithful follower of Raith Rovers of 'they're dancing in the streets of Raith' fame, is said to have limited his small talk to 'Did you see the match?'

It's all a bit different now. David Cameron claims to be an Aston Villa supporter (like Prince William), but it's unclear when he last went to a match. William Hague is into judo. Any awkward foreign customers had better watch out or they will be wrestled to the floor by the Yorkshire charm merchant! Nick Clegg likes to ski and probably judiciously avoids declaring an allegiance to either Sheffield team.

Of course, it was also top level civil servants who were into football. Cabinet Secretary Gus O'Donnell is a supporter of Manchester United: it is believed that his Irish father was as well. At Warwick University he played for the 1st XI and also for a six-a-team dominated by Chelsea supporters called the Blue Strollers.

PM lays it on the line

An interview in the Sunday Times with the prime minister was undoubtedly part of the 'softening up' process for the substantial public expenditure cuts and significant tax rises to be expected in the budget.

New Labour's way out of the structural budget deficit always relied on what David Cameron called 'trampoline' growth rates which I have always doubted were attainable in the medium term and look less likely now. They also assumed that interest rates would not go up very quickly, but once they do, the cost of servicing the debt - which brings no benefits to users of public services - will also increase.

On the tax side, the prime minister refused to rule out an increase in VAT. Of course, considerable revenue could be raised by broadening its base, but some of the revenue obtained would not be worth the political trouble. VAT on books, even at a lower rate, would be portrayed as a 'tax on knowledge'. VAT on newspapers would upset the press barons. VAT on construction would upset an already battered industry. But that doesn't mean that nothing can be done.

On the expenditure side, the Conservatives intend to tackle the very large amounts paid out in disability and incapacity benefits. New Labour did start to try to tackle this, but it is a political minefield. Lower back pain can be very debilitating and mental health problems are always difficult to assess. Freezing benefits for a year would bring in over £4bn and would be quite politically popular. However, it is puzzling that the Government appears to rule out means testing the winter fuel allowance and similar benefits. Should it be available to higher rate taxpayers?

However, it does seem that quite a lot of the cuts will fall on public sector pay, public sector pensions and public sector jobs. This would bring quick returns and might be quite popular with those not working in the public sector, but would also involve the Government in confrontations with the most unionised sector of the economy.

Nick has given his own version of the story in The Observer where he emphasises the need to make cuts sensitively. It seems that Nick and David are getting on very well, texting and E-mailing each other. Nick has been round to David's for dinner (which he refused to do before the election), but Sam Cam wasn't there as she and the children have been taking a holiday in Ibizia as they face up to life 'above the shop'. Apparently, the prime minister's sleep has been disturbed by the chimes of Big Ben at night.

David Cameron has had to deal with the tragedy in Cumbria (which I thought he did in exemplary fashion) and the Sunday Times says he is already looking his age. The job certainly aged Tony Blair. It's a tough task at the best of times and times are not easy.

Dave or David, Nick or Nicholas?

Given names often cause problems. I happen to have a Welsh one which gives people a lot of problems. I shortened it from 'Wynford' years ago. (There used to be a Welsh televison broadcaster called Wynford Vaughan Thomas who was a kind of sidekick to David Dimbleby on state occasions: I am not named after him!)

It is becoming increasingly common to call politicians by their first names as celebrity culture takes hold. It all started with the last London mayoral election when it was 'Ken' or 'Boris' or sometimes the affectionate 'Bozza'.

In private before the election David Cameron used to say 'Call me Dave!' But now he is prime minister, we must refer to him as David. But why is it Nick rather than Nicholas? I was talking with a colleague yesterday who specialises in culture and the media and she suggested that 'Nicholas' was a child's name.

Obviously it's 'Ken' Clarke as he is so blokeish. William Hague tried to be blokeish as opposition leader, but never shortened his name to 'Bill'. Just as well now that he is Foreign Secretary. George Osborne changed his first name from Gideon which was a smart move. I suppose one could shorten 'Theresa' to 'Tessa', but 'Theresa' sounds better for a Home Secretary. Incidentally, I have met her and I think that she is both very pleasant and very sharp. Choosing distinctive shoes is a smart branding device.

On the Labour benches, it's 'Ed' rather than 'Edward' Miliband. But David Miliband is not 'Dave'. I think he should become 'Dave' now to enhance his populist appeal. I knew their father slightly and I have to say that he is one of the few people I really disliked and not just because he was a Marxist. I actually find Ed a lot smarter and more likeable than Dave and it appears they are going to stand against each other for the leadership. Whether Yvette Cooper will stand against her husband remains to be seen, but she is smarter and more likeable.

New phase in British politics

Warwick University graduate Gus O'Donnell welcomes David and Samantha Cameron to 10 Downing Street as Cabinet Secretary. We always knew that Introduction to Government course would come in handy

Britain has its first new peacetime coalition government since 1931. Many details about policy and personnel remain to be made clear, but there are Liberals in government for the first time since 1945.

Gordon Brown was not much liked by the country. He lacked communication skills and had his flaws, as he admitted today. But he was a decent and honourable man who has lived his life in public service in accordance with core moral values. Hopefully, he can become the next head of the IMF.

David Cameron and Nick Clegg have begun a bold experiment. There will be many tensions, not least over the EU. Britain faces difficult circumstances and some hard choices, as David Cameron made clear.

However, the Lib Dems have already moderated the least palatable Conservative policies on inheritance tax and marriage. They are, however, backing the additional £6bn cuts deemed necessary by the Conservatives.

For the first time we have a photograph of the monarch appointing her prime minister.
The old and the new thus come together. Now the hard work begins.

Decision day

It increasingly looks like decision day in terms of the formation of a new government. Talks between the Conservatives and the Liberal Democrats appear to have gone well this morning. It also looks as if a coalition may be on the cards as the Conservatives consider that would give a more stable basis for government. In that case Nick Clegg could be deputy prime minister and Vince Cable might be business secretary.

Nick Clegg is currently explaining the deal to his 57 MPs in the Grand Committee Room of the House of Commons. This meeting was still going after 90 minutes and coffee and muffins were sent for. It is understood that the Tory proposals have had a 'mixed reception' which could mean a resumption of negotiations later today or tomorrow.

It is being reported that Gordon Brown will make a statement later and will offer to stand down as prime minister after a stipulated period.

Labour has been trying to sow dissent in Lib Dem ranks. There have been talks between Nick Clegg and Gordon Brown this morning and there could be further discussions later today. Lord Mandelson has held secret talks with Lib Dems over the weekend in the context of a so-called 'spoiler' offer.

The choreography of Gordon Brown's departure remains uncertain. The Queen returned this morning from her home at Windsor Castle to her London office at Buck House.

Dave Cameron is meeting his MPs at 6 p.m., among them will be new Warwick and Leamington MP Chris White.