Dave takes no chances at Henley

Dave Cameron is pouring plenty of resources into defending Boris Johnson's old seat at Henley on Thames (before Bozza it was held by Hezza). This might all seem a bit unnecessary with a safe seat and a local councillor as candidate. However, Dave is influenced by the example of Bromley in 2006 when the Conservative majority plummeted to under 700 in the face of a strong Liberal Democrat challenge.

I am sceptical about whether the Lib Dems can mount that strong a challenge in Henley, while Labour are already reconciled to losing their deposit.

The outcome of next week's crucial vote on the 42-week detention rule could well depend on the nine Democratic Unionists. The Home Secretary seems to have done a good job of calming the fears of some Labour MPs earlier in the week.

The Government seems to have followed a strategy of putting their heads down and getting on with the business of governing which is probably the best course to follow in the circumstances. Dave's performance at question time this week was somewhat undermined by hilarity over his new haircut.

Now Dave has his chance against Lib Dems

Dave Cameron's chances of winning an overall majority at the next election don't just depend on taking seats off Labour, but reclaiming former Conservative seats from the Liberal Democrats.

He may soon have a chance to show what he can do. Mark Oaten was at one time a potential party leader, but his career was damaged by a rent boy scandal. He was planning to stand down at the next election anyway, but may go early to take up a job opportunity.

Although his majority of over 21,000 may appear to be cast iron, it was obtained in a by-election after the Conservatives have overturned the original result in the courts. Winchester was once a solid Conservative seat and Dave will be hoping to take it back. If he can, it will be a further boost to his chances of success at the next general election.

Blair without the salesmanship

As Labour MPs claim that Gordon Brown is 'Blair without the salesmanship', a review of the odds for Labour leader shows that there is no clear alternative candidate. This is evident when one considers that Jack Straw is in the running at 7/1. He has been home secretary and foreign secretary, but he was moved on because he was not seen as a great success.

Boy wonder David Miliband is favourite at 5/2. But he could well be Blair without the common touch who comes across as a think tank wonk. Alan Johnson at 6/1 would be a safe pair of hands, but says he doesn't want the job. But then others have said that.

The dearth of candidates is shown by the fact that James Purnell is in the running at 10/1. A virtual unknown, he has been promoted as the 'heir to Blair' by the Spectator which does him no favours.

Bring up the rear of the field are Brown clone Ed Balls ('it's all Balls') at 8-1. Jon Cruddas at 10-1 who has soft left backing and back bench malcontent Charles Clarke at 33-1. As Private Eye would put it, that's enough candidates.

Increasingly, the true heir to Blair looks like Dave Cameron: informal, approachable, modern, compassionate and aspirational.

As bad as it gets

The Conservatives' reversal of Labour's majority at Crewe and Nantwich is as bad as it gets for Labour. It is evident that not only did some Labour voters stay at home but many of them switched straight to the Conservatives. Whether they will stay with them in a general election remains to be seen.

However, Gordon Brown is not going to resign nor are 70 MPs going to nominate an alternative leader. There is no clear alternative candidate. Alan Johnson would go down well with party activists, backbenchers and trade unionists, but less well with Middle England. David Miliband is still too inexperienced.

In many respects it's a case of 'The Economy, Stupid' and an economic recovery could do a lot for Labour's fortunes. However, it looks like there has been a step change in the price of oil which is not good for inflation or the economy generally. One welcome by-product is that East Asian countries may now reduce their subsidies of oil.

The Liberals got badly squeezed at Crewe, but can blame this on a two horse race.

Dave prepares for government

Conservative leader Dave Cameron thinks there are two likely scenarios for the outcome of the next general election - a small overall majority for his party or a large one. He is planning for government based on both scenarios. Talks with permament secretaries will start next January, although how much they are told about Conservative plans will depend on how receptive they are.

Dave Cameron thinks that Tony Blair ran a brilliant campaign, but was insufficiently prepared for government. Possibly Blair's mistake was to follow Conservative spending plans for his first term (which they would have topped up anyway) and then to over react in his second term by increasing spending rapidly, leading to the current problems with the public finances.

A summer of discontent?

Refuse collectors, home helps and social workers are threatening 'sustained strikes' this summer as unions prepare for a wave of industrial action over below-inflation pay deals. Unions sense that the 10p tax U-turn has left Gordon Brown vulnerable. One problem thus leads to another.

The news from Crewe and Nantwich is not good for Labour. An ICM survey for the News of the World found that 45% of Crewe and Nantwich constituents plan to vote Conservative, compared with 37% backing Labour. Meanwhile, a YouGov poll for the Sunday Times put the Tories on 45% to Labour's 25%.

Brown continues to face criticism from left-wing Labour MPs who were hoping for a lurch to the left while Blairites continue to mourn their lost leader. However, there is not really a credible alternative who would rescue Labour from their travails. Charles Clarke anyone?

Darling seeks to end 10p tax row

Alastair Darling has sought to defuse the 10p tax row, but at considerable expense to the public finances. Facing a difficult by-election in Crewe and Nantwich, and a revolt by Labour backbenchers which could have derailed the Finance Bill, Darling decided to raise personal allowances by £600. Higher rate taxpayers will not benefit because of an adjustment to the threshhold.

The move will cost £2.7bn and will not help all those who lost out by the abolition of the 10p rate. The package still leaves 1.1 million people who earn between £6,635 and £13,355 worse off. These include childless workers who are under 25 or work less than 30 hours and some female pensioners under 65. Moreover, people earning between £19,000 and £40,000 have already gained from tax changes and now will get more.

The money to pay for the package is to be borrowed which will put the 40 per cent debt rule under further pressure. The deal is for one year only and difficult decisions will have to be made later in the year about how to recover the money. It is not easy to see where additional tax revenues can be raised.