±«Óãtv

Lest I be misunderstood, let me spell out why I reported that a police investigation "will never happen" unless significant new evidence is produced.

It is not that the police have been told what to do (shellingout and others) or that the government has stitched it up (kaybrass and others) - or that I don't care about these issues (delphius1 and others).

After interviewing a serving prime minister in the investigation into "cash for honours" which got nowhere, and after the arrest of a Tory MP in the ±«Óãtv Office leaks enquiry which looks unlikely to get very far, the police are understandably wary about being dragged into another political row.

What's more, they are aware of the very high legal hurdles they'd have to cross before the Crown Prosecution Service would be prepared to consider prosecution.

Furthermore, they know that peers and MPs, unlike councillors, cannot be prosecuted under bribery laws.

In order to avoid being accused of having made their minds up at the same time as avoiding being sucked into an open-ended enquiry, the Met has agreed to examine the evidence before deciding whether to launch an investigation.

On the basis of what the Sunday Times has published to date, the view of my source was that that investigation "will never happen".

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He's back but probably not for long.

Yates of the Yard - the veteran of the failed investigations into the goings on at the Palace (the Burrell trial) and Downing Street ("cash for honours") has been called in to take a look at what's been going on in the Lords.

I say "take a look" because they are not - repeat not - starting a police investigation. Deary me, no. They are assessing the relevant material before deciding whether to launch an investigation.

I am also told by what, forgive me, I'll have to call "informed sources" that an investigation is "never going to happen" unless the Sunday Times have damning evidence that they've yet to reveal. The paper does have more which will embarrass the four Labour peers - indeed, there's talk of a video of Lord Truscott being released soon - but I doubt very much they have damning evidence of a breach of the law which they have yet to reveal.

The Met's desire is, I'm told, "to get out of this" whilst, of course, having been seen to take a proper look at what evidence there is.

Yates of the Yard will, I expect, soon be telling their Lordships that he's happy for them to get on and investigate themselves.

Update Fri 0850: More detail and reply to comments here.

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So why has the man who presided over the debacle of Damian Green's arrest been to the top job in the Met?

Why was Sir Paul Stephenson's appointment as Metropolitan Police Commissioner "a matter of almost glutinous cross-party consensus" according to Boris Johnson, who did not have the predicted bust up with the ±«Óãtv Secretary Jacqui Smith?

I hear that the politicians were rather impressed that Sir Paul publicly took the rap for what many people see as the cock-ups of his subordinates (in particular Assistant Commissioner Bob Quick who was in charge of the ±«Óãtv Office leaks inquiry that led to Mr Green's arrest), even at a time when it must have been tempting to dump them in it.

Loyalty, discretion and sticking to the agreed line - these qualities are perhaps not as undervalued as some had feared.

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Just in case you thought otherwise, we are not about to read the minutes of the leading up to the invasion of Iraq. This, despite the fact that the Information Tribunal has just ordered the government to release them. [Update 1809: Read the decision here [2Mb pdf].]

Having first failed to persuade the Information Commissioner (who argued that "release of these two specific and unusual sets of cabinet minutes would not in itself undermine the convention of cabinet collective responsibility") and then having failed to persuade the Information Tribunal the government can still try to persuade a court of its case that releasing cabinet minutes could impede free and frank discussion in the future.

Ministers could also decide to make use of the ministerial veto which was written into FOI legislation as a backstop. It would be the first time it had been used.

Proof that ministers and senior civil servants have taken this case very seriously came when the Cabinet Secretary, Sir Gus O'Donnell, decided to give evidence at the Tribunal. Proof of the historical significance of the case came when the distinguished Whitehall historian Professor Peter Hennessy decided to give evidence against him.

No imminent decision is expected.

Incidentally, if the minutes are published some people may be disappointed since by tradition cabinet minutes list the points made around the cabinet table and do not say who made them.

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It's House of Lords quiz time.

What is the difference between a "paid advocate" and a mere "consultant"? The answer is that it's not at all clear. Yet it's a distinction which is crucial to the question of whether Lords are available for hire to rewrite the laws of the land.

"Paid advocacy" is banned under the Lords' own rules which state that members of the house "must never accept any financial inducement as an incentive or reward for exercising parliamentary influence" and go on to say the members "must not vote on any bill or motion or ask any question on the house or a committee or promote any matter in return for payment or any other material benefit".

Consider the case of the Labour peer, Lord Taylor of Blackburn, whose private indiscretions to those he thought might be about to hire him were .

On the tape of his conversation with undercover reporters, he boasted that he received over £100k for his services and talked about the company Experian, which is advising the government on ID cards, and how he had helped them to amend and delay a particular piece of legislation. He is employed by them as a "a non-parliamentary consultant".

Consider too the case of after the alleged that he had introduced a lobbyist for the defence industry to a defence minister.

Lord Hoyle was, you've guessed it, employed as a "non-parliamentary consultant" by "Whitehall Advisers". His defence - which was successful when his case was investigated by the subcommittee on Lords Interests - was that the meeting had been for social not business purposes, that "Whitehall Advisers" were not lobbyists but advisers to the defence and aerospace industry and that it could not be proven that he had failed to declare his financial interest to the minister.

Consider finally the case of Lord Moonie who, , has tabled 40 technical questions on defence issues since September, compared with six in the previous three years. He is, of course, an adviser to a number of firms with defence interests.

Now, the Lords is not the Commons. Peers do not receive a salary (they get a daily attendance allowance). The "real world" experience peers can bring to the job is valued by many. Many consultancies and advisory jobs stem from that experience rather than being closet lobbying contracts.

However, the distinction between acting as a consultant and as a "paid advocate" which is clear in the minds of many lords and ladies is far from clear to them all or to the public whose interests they are meant to represent.

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- and doesn't it feel odd to write that? - has now defined the political narrative of the coming era.

Watch how our politicians will fall over themselves to show us that they too believe in the .

The phrase does of course have uncanny echoes of Gordon Brown's attacks on "the age of irresponsibility". The son of the manse's - "I'm angry too. I am angry at irresponsible behaviour" - is part of his attempt to surf the wave of anger with those who produced what Obama called, with a tone of defiance, "the winter of our hardships".

David Cameron has repeatedly blamed Brown for presiding over this "age of irresponsibility" and the Tories' new poster is aimed at public anxiety over excessive irresponsible debt.

Both men will be quick, I suspect, to echo Obama's appeal to what he called "traditional virtues" and his insistence that the question is not whether government is too big or too small, but whether it works.

I will be watching for the first British politician to borrow from today's rhetoric in speeches, soundbites and broadcasts. A great deal now rests on who is most convincing when it comes from their lips.

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What did he mean by ?

The fact that Mr Smudge has swopped jobs with Mr Mudge may matter very little to people outside the Westminster village, but reshuffles do tell us a great deal about how a party leader sees his strengths, his weaknesses and the balance of opinion within his party.

The return of Ken Clarke reveals that David Cameron regards his inexperience as his Achilles heel. The promotion of not just Clarke but of plain-speaking northerner Eric Pickes and tough-talking Chris Grayling, alongside the unveiling of William Hague as deputy leader in all but name, suggests that the Tory leader also sees the danger of being presented as "Lord Snooty", the prefect of the Bullingdon boys.

On Europe, he has sought to reassure his party by promoting arch-sceptic Mark Francois to the Shadow Cabinet, as if Messrs Hague, Osborne, Letwin and many others weren't enough.

So beyond the presentation has anything really changed?

The answer is yes. Having invited Ken Clarke into Team Cameron, they will have no choice but to listen to him.

A stray word here, a planned intervention there, or even his resignation would be devastating for the Conservatives.

Ken Clarke has been around politics long enough, and cares enough about the future of the country, to use any one of those weapons if he felt he had to.

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The price that needs to be paid to get the economy moving again or the bill for the age of irresponsibility? You pays your money - and, boy, do you pay your money - and you makes your choice.

Those are the competing soundbites to describe the latest government . In truth, the choice available is rather less stark since the Tories broadly back this plan. Their row with the government focuses on the need for and affordability of the fiscal stimulus - taxes and spending in other words - and how on earth we got in this mess in the first place.

What is clear, though, is that the prize in politics will go to those who can describe a future for the British economy which does not depend on ever-expanding banks lending ever larger sums to Russian oligarchs. Peter Mandelson made that point in rather more diplomatic language in a speech at the weekend.

That makes so fascinating. He's by instinct hostile to London, keener on manufacturing than banking and loves a scrap. Labour will hope to present a 68-year-old who doesn't own a mobile and wears Hush Puppies as more in touch with the past than the future.

Then there is the small matter of Europe. Is greater integration a vital part of its future or irrelevant to it?

Politics will soon focus on who can get us through this hostile environment. Talking of which, I am rather inconveniently spending the week away training to deal with just that in war zones around the world - so normal service may be interrupted a little.

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He's back. The man the public backed to be Tory leader in 1997, 2001 and 2005 but his party rejected.

Ken Clarke is to take on the Cabinet's re-tread Peter Mandelson as Shadow Business Secretary.

The deal was done over a lunch of meatloaf at George Osborne's house yesterday. Four people were present - Clarke, Osborne, Cameron and his Chief ofStaff, Ed LLewelyn. I am assured that hard cheese and sour grapes were not on the menu.

Conservative sources say that "no-one wants Ken to undergo a false conversion on Europe". The source said "the party has a settled view on Europe and he won't try to change it". In other words Cameron and Clarke have agreed to disagree on Europe.

Before tonight's news the idea of bringing Ken Clarke back has been attacked by euro-sceptics Norman Tebbit, John Redwood and Tory donor, Stuart Wheeler.

Mr Clarke's pro European views - in particular, his support for Britain scrapping the pound and joining the Euro - have alienated him from the mainstream of his party.

The issue of Europe is still a live one since some now argue that the current economic crisis demonstrates the case for the Euro.

Also, the Tories are opposed to the Lisbon EU Treaty which Clarke has backed and they are committed to holding a referendum on it which could lead to a Cameron-led government Britain re-negotiating Britain's relationship with the EU.

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As promised yesterday, here's my response to those of you who didn't like the coverage of the Shriti Vadera story.

Davidurquhart called it "an absolutely nothing story"; Younghal called it "over-hyped". The criticism, if I can sum it up, seems to be that since the business minister isn't the chancellor, and since she didn't first use the phrase herself (that is, since it was suggested to her by an interviewer and it shone no light on the government's attitude to the recession), this was not a legitimate news story.

My answer is simple - this was a day of and . Shriti Vadera - who is not only the business minister but the closest economic adviser to the prime minister - did herself use the phrase "green shoots", a phrase Gordon Brown had again and again attacked Norman Lamont for using in the early the 1990s.

The question of whether this government was downplaying the prospect of the recession before it happened and then being over-optimistic about the likelihood and timescale of recovery is an important one.

For example, the Tories suggest that the economic forecasts in the chancellor's pre-Budget report are hopelessly optimistic. Indeed, Baroness Vedera herself was and said that what made this crunch different from those of 10 or 20 years ago was that they had come with redundancies and closures. The implication here was that this time we might not see those things - but that is not how it has turned out.

Evidence that she saw the problem with her remarks was the fact that she did and, in effect, apologised for her words. What's more, her boss Peter Mandelson said that she wouldn't say the phrase "green shoots" again and that he didn't agree with that analysis.

No-one is claiming that this is the story of the year, let alone of the decade - but it was a legitimate story that did reflect on an important debate within politics and that came alongside the many detailed analytical stories we have done about the government's economic policies and the proposals from the opposition.

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Digby Jones - the most prominent of the 'goats' (government of all the talents) elevated to the House of Lords and made into ministers by Gordon Brown - has just butted those he once worked with.

The former Trade Minister Lord Jones told the Commons Public Administration Committee that the job of junior minister was "one of the most dehumanising and depersonalising experiences a human being can have".

He described the civil service as honest and stuffed full of decent people who work hard, but he believed there were too many of them:

"Frankly the job could be done with half as many. It could be more productive, more efficient, it could deliver a lot more value for money for the taxpayer. And the levers of change, the ability to affect change are so rare, because of the culture. I was amazed how many people frankly deserved the sack, and yet that was the one threat that they never ever worked under because it doesn't exist as long as they're being not criminal or whatever."

Ouch.

PS: I've had a few comments questioning whether I or the ±«Óãtv generally overdid the Shriti Vadera story yesterday. When I've a little more time I'll pen a response.

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Oh dear.

Do you remember one of the most notorious quotes of the last recession? The claim in 1991 by the former Chancellor, Norman Lamont, that he was seeing "the green shoots of economic spring".

Well, the woman who is Gordon Brown's most important economic adviser and the Business minister has just .

Baroness Vadera said today that "I am seeing a few green shoots". She was asked on ITV's Lunchtime News whether she saw "green shoots" and being the consummate "backroom girl" that she is and not a frontline politician she did not spot the trap.

Her reply was: "It's a very uncertain world right now globally... I wouldn't want to be the one predicting it. I am seeing a few green shoots but it's a little bit too early to say exactly how they'd grow."

What on earth could she have meant by green shoots on a day Barclays has announced 2,000 redundancies?

I'm told that she was referring to the fact that the bond market had begun to open up for bigger borrowers and also to the good news from retailers like Morrisons and Tesco's who this week promised to create thousands more jobs.

That is unlikely to reduce the smile on the faces of some Tories who will claim that it proves how out of touch Team Brown are.

It is, of course, a double edged sword for the Conservatives since it could remind people about the last recession.

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Credit is like the petrol that gets a car from A to B, but the petrol stations are closed - that's the metaphor used by the boss of a growing business I've just been interviewing about the problem with the banks.

Dan Wagner is chairman of Venda, which supplies e-commerce services to run online shopping for a whole series of big high street names. Even though he's growing his business, even though his suppliers are growing theirs, he can't get the bank loans he needs to expand his company.

That's the problem that today the announcement from the government is designed in part to solve. It's a problem experienced by many companies, as one of you wrote in a comment yesterday.

Another commenter, Chris Leopard, asked the question: "Why is it necessary to have to back up small business lending? I thought we owned some of these banks now, shouldn't we be pushing them about a bit?"

The idea of pushing the banks about a bit is the one the Liberal Democrats advocate. They suggest turning RBS, already 60 percent owned by us, into a state bank and ensuring that it offers more loans that it would do on purely commercial grounds.

It's an idea rejected by ministers and rejected by the Tories too. They argue that the problem is not that the banks are being mean or too cautious, but simply that there are far fewer banks available to offer credit than there once were. That's why they advocate loan guarantees, in the government's case for up to £20bn for small and medium size business loans, in the Tories' case for up to £50bn.

All sides agree that today is unlikely to be the solution although it may be part of it. That's why today is only the beginning of a process of trying to get credit flowing again and certainly not the end.

Intriguingly when I asked Peter Mandelson this morning whether he could rule out nationalising the banks he didn't do so. I'm not suggesting that this is about to happen, but it is evidence that everything is still on the table and no one yet knows what will make the difference.

UPDATE: My man at Venda has just been on to point out that although they couldn't get loans from the banks they were able to get money to expand by issuing shares instead. This is because they're a thriving business. It's an option that's not open to many weaker businesses

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The question worrying everyone is what will make the difference. So says one government insider about the late night and long weekend meetings that have been taking place about how to get the economy moving again or, more specifically, how to get credit moving.

One part of that is the likely to be announced on Wednesday for the government to underwrite up to £20bn worth of bank loans to small and medium size businesses. It's a version of what the Tories call their national loan guarantee scheme.

Another part of what's being discussed still is the idea of creating a "bad bank". That was the Swedish solution for dealing with so-called toxic assets. In other words a special institution is created in order to absorb all the riskiest loans and therefore remove some of the anxiety that banks have about what may lay hidden in their balance sheets.

A third aspect is so-called quantitative easing - in other words, what we used to call the printing of money. Today Gordon Brown meets the man known in America as "Helicopter Ben". He's the chairman of the Federal Reserve, Ben Bernanke, who wrote a paper saying that in circumstances like the ones we're now living in it could make sense to in effect drop money from the air on the electorate simply to get them spending again and to avoid deflation.

There is another way in which the government may try to revive the economy, which is another fiscal stimulus. All eyes are on Berlin today where Chancellor Angela Merkel's coalition government will unveil its own 50 billion euro stimulus - this after a long and fevered debate about what the German finance minister had dubbed "crass Keynesianism".

All of these options remain very firmly on the table as ministers try to answer that question: what on earth will make the difference?

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Neither Gordon Brown nor David Cameron will be, well, stupid enough to be saying "It's the economy, stupid". These days it rather goes without saying.

They are, though, going to repeat again and again and again their analysis of what's wrong with the economy until you may feel you're being treated as if you were stupid.

Thus this morning Gordon Brown's message at his jobs summit can be boiled down simply to - "It's the global economy, stupid". Or to quote what he is due to say directly :

"We are living through the first global financial crisis of the global age. We have witnessed nothing less than a worldwide failure of the banking system - a failure that began in America..."

You get the picture.

At around about the same time David Cameron will be making his own speech about the economy - launching not a summit but a poster. His focus will be on the damage that what he calls "the debt bombshell" will do to our children and our grandchildren.

His message, in other words - "It's Brown's economic policies, stupid".

Brown will accuse Cameron of leading the "do nothing Tories". Cameron will respond by calling Brown irresponsible. Labour say the Tories will slash spending. The Tories say Labour will hike taxes.

Each phrase will have been pored over, honed and message-tested in focus groups.

And what's more, both sides will seize on any evidence that others agree with them.

Thus, Gordon Brown travels to Berlin this week where he'll hail the German government's conversion to the idea of a fiscal stimulus. Thus, he heralds President Obama's plans for a massive stimulus of his own whilst his aides work frantically to get their man a visit to the Oval Office next month. And all this is but mere training for the day in April when London will host the G20 for a kind of economic Olympics at which Mr Brown will, no doubt, be awarded a clutch of rhetorical gold medals for his handling of the, you guessed it, global economic crisis.

Meantime David Cameron will point out that the man who said he'd saved the world couldn't save Woollies. He'll quote those like the heads of Next and M&S who have said that the VAT cut didn't work. And he'll claim that shop sales, plummeting house prices and rising unemployment prove that Brown's economic policies have failed.

Underneath the soundbites and slogans there is, of course, a very serious argument going on which will affect the lives of all of us for a long time to come.

This, though, is set to be a year of elections - local, European and, perhaps, even the general election. So, don't be surprised if pretty soon you may feel you want to shout "I've had enough point-scoring about the economy, stupid"

This is adapted from the script of my piece on .

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"We need action and action now".

So said the Shadow Chancellor George Osborne in a speech today designed to counter Labour's repeated assertion that the Conservatives are the "do nothing" party.

The action that should be taken, he argues, should focus on monetary policy (measures to get the banks lending again), not fiscal policy (cuts in taxes and higher spending).

To make his case he seizes on the criticisms of the government's VAT cut from the bosses of Next and M&S. Pointing out that Alistair Darling promised that "by encouraging spending, [the VAT cut] will help stimulate growth", Osborne says "Now it has been in place for more than a month I think the country is entitled to ask: what spending and what growth?" A tad cheeky since no policy known to man can turn recession into growth in the space of a few weeks, as Norman Lamont argued only yesterday.

Osborne goes on to state that the government's policies haven't merely been ineffective, they have been counter-productive as "they have alarmed the public about our soaring national debt, alerted them to the tax rises needed to pay for it if Labour is re-elected, and so undermined confidence in the future"

So what is the Tory alternative ? Action, says Osborne, in three areas:
- revising the terms of the bank recapitalisation;
- introducing a National Loan Guarantee Scheme;
- new liquidity support from the Bank of England for new business lending.

Expect a counter-blast from Gordon Brown next week when he meets the head of the US Federal Reserve, Ben Bernanke, and will no doubt hail Obama's plan for a massive fiscal stimulus. The Prime Minister will later fly to Berlin to meet Angela Merkel - who by then is expected to have abandoned her doubts about a stimulus package and announced one worth almost £50 billion.

Osborne's pre-emptive reply today is that they can afford it whereas we can't. His hope is that he can turn the political debate this year from one on whether government should act into one on how they should act.

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Four billion pounds (to be precise, £4.1bn). That's the cost of . So how will they pay for it? The answer is by spending less starting now.

Before Christmas David Cameron had already reversed his policy of matching Labour's planned spending increases for 2010 onwards. Now he's saying he'd spend even less this year too. He hasn't however specified what programmes he'd spend less on. That is not how government works. He has a point.

When any large organisation - the ±«Óãtv for example - cuts spending its boss announces target savings and his underlings are tasked to identify how exactly they can be found. That however has not been how politics has worked for the past two decades.

For three elections Labour has simply added up Tory "spending cuts" - in fact pledges to increase spending at a lower rate than the government - and then they've told voters how many doctors, nurses or policeman would go as a result. In response, the Conservatives have specified savings in waste or government programmes that they cancelled. In each case the Tories lost the argument and the election.

BCC (that's Before the Credit Crunch), David Cameron and George Osborne concluded that they could not win this battle and that the next election would be all about "it's society, stupid". Today's announcement confirms that they've been forced to return to the fray. Their hope is that the changed circumstances, falling interest rates, rising debts and Labour's acceptance that spending can't go on as it has ,will make their policy an election winner now as it's not proved to be in the past.

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Are the Tories about to pledge to abolish tax on savings?

The signs are all there.

This morning the Tory leader promised to set out how his party would help savers and how they'd pay for that help in a speech he's making this lunchtime.

A week ago the that he wanted to help people "who did the right thing in the age of irresponsibility". The paper reported that he was working on a £2.4 billion plan to abolish the basic rate of tax on savings and spending even more to increase the tax-free allowance for pensioners.

The Conservatives are likely to claim that their proposals will encourage "individual independence" and "social responsibility". Those are the words used by William Hague when he proposed a similar package in February 2001.

If Labour want to save themselves time they could dust off their press release from that day when a certain Alistair Darling declared "This is the same old Conservative Party. Its sums don't add up".

Plus ça change, plus c'est la même chose, you may say.

There is, though, one massive difference between the politics of 2009 and 2001. It's the recession.

The Conservatives can argue now as they couldn't then that savers are suffering thanks to plummeting interest rates. Indeed, they can quote the that ministers were looking at ways to do "more to help savers" in the run-up to the Budget.

What's more, they can point to the need to build an economy based on saving and not debt.

Labour, of course, will demand to know where the money's coming from. Before Christmas David Cameron signalled that the answer was lower public spending. If he doesn't spell out today what he'd spend less on, ministers are likely to come up with answers of their own.

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