´óÏó´«Ã½

...speaks 1000 words

A picture of happier times for Peter Watt - Labour's now ex-general secretary - and David Abrahams - the man who secretly bankrolled the party. (06 Dec: Unfortunately I can no longer show you the picture for copyright reasons). The party's top official was invited to be the guest of the party's secret donor at a dinner to celebrate the 75th anniversary of the Jewish Museum earlier this year.

Abrahams had, we now believe, given more than £650,000 to Labour via intermediaries, so no wonder Watt looked so happy. Trawling through the party's accounts we know that he had not given the party a major donation (ie more than £5,000) since 2002 when it became mandatory to declare all such donations.

Meantime, I understand that Matt Carter, Labour's general secretary at the time these payments began, has told senior officials that he knew nothing about them and, if he had, would not have approved them. Lord Triesman, who preceded Carter as general secretary has said publicly that he knew nothing about them. If they didn't know who did? Somebody clearly told Peter Watt that this practice had been going on for some time.

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An intriguing headline and photo combo on today's Telegraph front page. "Hunt for the 'real donor'" sits on top of a photo of David Abrahams and the former Israeli Ambassador Zvi Heifetz, who was cleared of money laundering.

They make no allegations. If they ever get enough evidence to do so, the story would be huge. If not, I trust they have good lawyers.

Update, 1:22 PM: It didn't take long for Zvi Heifetz to react. In an interview with the ´óÏó´«Ã½ he has just strongly denied any link to donations to the Labour Party. He said that his only connection with David Abrahams was to shake his hand at an event marking Israeli Independence Day.

Those close to Mr Heifetz have expressed anger at the notion that might be any stronger link, saying it was reminiscent of other cases in history where Jews have been accused of involvement in a conspiracy.

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So now we have and the letter he sent to David Abrahams (below). We now have confirmed that a second senior Labour official knew about secret donations to Labour.

However, questions still remain:

• How long did he know for?
• Why did he apparently tell no-one else - either the authorities or anyone in his party?
• And why did it take him so long to get around to contacting the man behind those secret donations with - we're told - the intention of halting the payments?

Labour's chief fundraiser's answer, it would seem, is that his eye was on the future and he believed that his then boss - the general secretary of the party who had to resign - had taken care of the past. It is now clear that that was not the case.

Unlike the alleged sale of cash for honours there appears to be little doubt in this case that the law has been broken. The prime minister has himself said as much. All that remains to be seen is whether the Electoral Commission will actually propose a prosecution, whether the police will set up their own inquiry and how many other people will be revealed as knowing about this scandal.

Words of condemnation, a swift resignation, and an internal inquiry have not halted the damage which only has the potential to grow.

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Well well well. A second senior Labour Party official knew about the secret donations by David Abrahams. Jon Mendelsohn - who was appointed by Gordon Brown to raise funds for him - was told about the arrangement last month by Peter Watt - the man who resigned as Labour's General Secretary a few days ago.

Mr Mendelsohn will, I'm told, issue a statement today in which he will claim that he was told the arrangement was a long-standing practice and was acceptable to the Electoral Commission. I am told that Mr Mendelsohn was uncomfortable with this arrangement and asked his office to arrange a meeting with Mr Abrahams to put the donations "on a proper basis".

We now know from Mr Abrahams that he received a handwritten letter from Mr Mendelsohn which began "Dear David" and ended, "with warmest regards, yours Jon" suggesting that the two should meet.

This version of events is clearly designed to cast Mr Mendelsohn as the innocent party. His only fault, according to this account, would appear to be that he failed to challenge his General Secretary and to tell members of Labour's NEC and his party leader of his concerns. The date on the letter is the only thing we know that casts some doubt on this. According to Mr Abrahams it was written on Saturday - that's the day after the Mail on Sunday contacted him and the party with the allegation that Labour had taken secret donations.

HARRIET HARMAN CORRECTION:
I was called with this story moments before going on air with it on the Today programme. In my rush I stated incorrectly that Harriet Harman had received funds from a Janet who now says she's a Tory voter. Ms Harman was, in fact, funded by the other Janet - Janet Kidd, who has not spoken at all since she was revealed as an intermediary for Mr Abrahams. I corrected myself on air but wanted to make sure that this slip caused by too little sleep and too much adrenalin was not repeated.

The nub of my point remains, however. Harriet Harman has accepted that her campaign may have asked Janet Kidd for a donation after seeing her name on the list of Labour's donors. If that call was made what did Janet Kidd reply given that she was not, in truth, a Labour donor but was merely a front for David Abrahams?

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From the PM's news conference:
Worried. Very worried. That is how I would feel if I were Harriet Harman. Repeatedly Gordon Brown has refused this morning to give her his unequivocal backing after it was revealed that her campaign for deputy leader accepted money from one of those used by David Abrahams to hide his donations. The Brown campaign and the Benn campaign refused similar offers.

Otherwise, Gordon Brown has adopted the same tactic as he did last week over the missing discs. Before a single question was asked he gave an apology, a denial of knowledge and an enquiry to establish the facts. Critically, and effectively, he also kept his cool.

The problem he has is to explain why the cash for honours saga wasn't warning enough to change his party's practices.

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First Northern Rock. Then those disks which went missing in Washington, Tyne and Wear. Now the mystery of the secret Newcastle donations.

The region that took Tony Blair to its heart is causing nothing but heartache for Gordon Brown.

This morning the chair of Labour's National Executive Committee, Diane Hayter, declared that "we'd set up systems that were absolutely rigorous" and - you know what - she appeared to believe it. This, mind you, just after it's been revealed that the party's top official connived in what were secret donations.

This coming after the cash-for-honours saga which, let's remember, began with secret donations - loans to Labour which were, you may recall, a way to keep donors' names out of the public domain.

Labour MPs in the north east tell me that one call to any of them would have been rigorous enough to stop this happening. Asked, "have you heard of Ray Ruddick?" they would have replied, "never heard of him - why, who is he?".

Had the reply been anything like, "he's given us over £100k in the past few weeks and he lives on your patch - he says his address is Blakelaw..." the response would have been hysterical laughter. Blakelaw is, one angry Labour MP suggested to me, a well-known estate on which, "the only way anyone there would have that sort of money is if they were very lucky or they were drug dealers".

If the conversation had become more candid - for example, "actually the money's really coming from a bloke called David Abrahams," the reply would have been, "don't touch it with a bargepole". Mr Abrahams is - let's put it this way - a "controversial figure" who's used different names, different ages, been deselected as a parliamentary candidate and has been involved in rows about the planning system.

Ms Hayter suggested this morning that alarm bells had not rung in the party because Mr Abraham's secret donations didn't come in one large sum. Hmmm. A look at the Electoral Commission register shows that Ray Ruddick of Newcastle gave over £100k in June & July as did Janet Kidd of Newcastle whilst John McCarthy of, er Newcastle, gave £35,000 (see this table).

Labour's "systems" appear to have failed because:

• If we're being told the whole story, then they relied on one person to interpret and obey the rules, who just happened to be the same person who was under huge pressure to find money to pay the bills.
• They appear to have relied on paper rather than human checks - i.e. checking whether donors were UK residents and on the electoral roll, rather than making phone calls like the one I imagine above.
• They scrapped a committee set up by Charles Clarke when he was party chairman to scrutinise large donations.

The party is still, I'm told, trawling through its accounts in an effort to discover what may lie hidden in them. They do contain donations from David Abrahams via a third individual - John McCarthy - whose entries on the Electoral Commission register (again, shown in this table) total over £200,000. The party believes that as much as half of this may, in fact, have been his own money. I am also told that a fourth name may soon emerge - giving around £20,000.

Whatever the final calculations the facts are clear. Labour allowed a "controversial" figure to secretly donate well over half-a-million pounds even after the harrowing experience of the first-ever police investigation to interview a serving prime minister. Gob smacking.

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The mix of politics and cash is simply too toxic - not least for this government - for the to draw a line under this latest story about party funding.

Questions still remain about how the party could knowingly accept so much money from someone who wasn't prepared to be revealed as a donor in public. Also still to come is an investigation by the Electoral Commission into whether there's been a breach of the law.

Party insiders hope, however, that by falling on his sword so swiftly, Labour's General Secretary will have limited the damage. Already Sir Alastair Graham the former Head of the Committee on Standards in Public Life has said that Gordon Brown needs a new strategy to restore trust in his government.

Meantime the prime minister is left to wonder - after Northern Rock, those 25 million missing names and addresses and now this - whatever next ?

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Labour's General Secretary Peter Watt has resigned after the . Mr Watt told a meeting of officers of Labour's National Executive Committee that he had known about this arrangement but had not known that it might be illegal.

Ironically, it was Peter Watt who had to deal with the fallout of the cash for honours allegations. Gordon Brown will, no doubt, hope that his resignation draws a line under this embarrassing revelation but will hardly be pleased that his early days as leader have been damaged by another row about a lack of transparency in funding the party.

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I laughed this morning when that Gordon Brown was to launch a fightback by proposing to build more runways and more nuclear power stations.

No, the prime minister does not believe that that's the way to restore his credibility and popularity. Indeed he believes no "relaunch" could do that. Instead, just as when he was chancellor, he is repeating his commitment to take the right long term decisions as Britain faces a difficult time. This, he believes, will over time - one thing he has got going for him - prove a flattering contrast with David Cameron.

So it is that he has on welfare reform this morning - one of the Tory leader's Big Ideas which he's promised to flesh out in the New Year.

Speaking to the CBI, Mr Brown contrasted the challenges of what he called the "old world" with those of the new. The problem used to be unemployment, now it's employability, he said. Governments now had to help people gain skills rather than to create jobs.

He put a toe in the water of tougher welfare reform by talking of pilot scheme forcing those on JSA (the dole to you and me) to take training schemes. This, say those close to him, is all of a piece with his earlier welfare reforms dating back to cuts in lone parent benefit in 1997.

It is, though, also about heading off the Tories' ideas for Wisconsin-style welfare reform and proving that there is no way they could raise £3billion from reforms other than by driving the unemployed into poverty

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Did he cover up as the Tories claim or did he not know? The release of e-mails relating to the child benefit data fiasco have been used to suggest that the chancellor was guilty of a "cover-up" of the role of senior officials. Alastair Darling’s focused purely on the role of "junior officials".

I am told that when he spoke to the Commons the chancellor had not seen the e-mails and had not been told of the potential involvement of a senior official. The briefing note produced for him by the NAO - which has now also been published - certainly did not mention a senior official.

The suggestion that a single 23-year-old on low pay at the Child Benefit Centre in Washington is solely responsible for this saga may suit certain people - including the managements of the NAO and HMRC who have clearly clashed in their accounts of this affair - but it beggars belief.

PS. The excellent by Ben Brogan, who’s travelling with the prime minister, neatly observes that just as our leader flew abroad, the generals moved in and took over all TV and radio broadcasters. Poor Gordon Brown has just suffered a very British coup.

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The e-mails which led to the loss of 25 million names, addresses and bank details have finally been released together with lots of black ink "redactions" to protect civil servants' identity. Along with them are letters from the NAO to HMRC (which you can see ).

The key thing we learn comes not from the detail but the tone of all the exchanges. They demonstrate little concern from either the NAO or HMRC about data protection. The NAO wants, it would appear, simply to reduce the size of the files it is sent. The HMRC is worried about the cost of filtering information in order to send the smaller files the NAO request. What about our privacy and our rights? No mention is made of them.

A few more details do emerge:

• First, as spun in advance, the NAO makes clear that it has no evidence that a senior manager ("the Process Owner for Child Benefit") made the the decision to release the data
• Secondly, the NAO has apologised "unreservedly" to senior management at the HMRC for not informing them of the request for the data implying that they went through more (co-operative?) junior staff
• Finally, there's one bit of fun. The e-mail below from the NAO tells the HMRC to "ensure that the CDs are delivered to NAO as safely as possible due to their content" ! If only….

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Her Majesty's Revenue and Customs have begun sending letters to the over 7 million households affected by the child benefit fiasco. The letter seeks to reassure people by stating that the missing data "is likely to still be on Government property". ().

How on earth does HMRC know that the missing data "is likely to still be on Government property"? When I asked their press office I was told that "this was the indication of the investigation" and that the chancellor had already said as much. A quick check of Hansard reveals that he did not say that. He did say that there was no evidence the data had fallen into the wrong hands but there is a big difference in these statements - one says "don't worry your heads", the other "so far there's no proof crooks have got their hands on your precious personal data".

Meanwhile, the National Audit Office is preparing to release to MPs the exchange of e-mails between its officials and staff at HMRC. These e-mails will, it's claimed, show that the official at the HMRC who sent the e-mail was "a junior official" and that, although the e-mail was copied to a "senior official" there is no evidence that that senior individual took the decision to release the full database in breach of HMRC procedures and, almost certainly, the law.

Note: the term "junior official" has a precise Whitehall definition. It means below Grade 7. Thus, confusingly, someone termed a "senior business manager" may still be a "junior official" in Whitehall speak

UPDATE 1430GMT: Oh dear oh dear oh dear. Apologies for my statement above that "the term 'junior official' has a precise Whitehall definition. It means below Grade 7." That is what I was told. Now I'm told that the only cross-Whitehall definition of junior is someone not in the "senior civil service" i.e. the top brass - permanent secretaries, directors general, who are Grade 5 and above.

So, is a "senior business manager" in HMRC junior or senior? Wish I knew.

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I could, you may argue I should, be focusing this morning on the raw politics of losing the personal data of almost half the adult population. Somehow, though, that is not what moves me.

Sure, this is another blow to a chancellor who will never again find the soubriquet "safe pair of hands" attached to his name.

Sure, it is another sign that ministers wake up each day wondering what will happen to them rather what they will make happen.

Sure, Labour MPs are beginning to wonder whether, in the words of one I spoke to yesterday, "we are beginning to look like the Tories in the mid-90s".

However, what interests me much more than any of that is the yawning gap that has opened up between what we're told about the protection of our personal data and the reality. What is clear to me is that the public would like to see the information they provide guarded like a dangerous virus in a lab (or, after the of this summer perhaps rather better than that). In reality, there is clearly a culture of casualness toward it which allows one man, apparently, to copy 25 million names and details onto two discs and chuck them in the post.

Forgive me if I'm misunderstanding something - I'm sure you'll respond if I am - but I fail to see the relevance of job cuts or unopened post or low morale at HMRC to this. Employees should know that data protection is sacred and if they don't there should be systems in place that ensure they alone cannot make serious errors. Instead I hear that after a previous major security lapse, missing data turned up months later in someone's desk marked something like "Nick's disc".

Tackling this won't be easy for politicians. What this case shows - as did the scandal about illegal immigrants becoming security guards and the foreign prisoners fiasco - is that making the government machine work is so much harder than passing new laws.

Will plans for ID cards be the victim of this scandal? Not necessarily and certainly not forever. This saga is, of course, a huge boost for the opponents of them. Assurances that biometric data cannot be duplicated will not be enough to silence that opposition. This brings us back to the raw politics. A weakened government faced by doubts about its competence may conclude that the fight for ID cards is not a fight worth having.

POST PMQs UPDATE, 13:00 GMT: Much joy among Labour MPs that their man survived unscathed at PMQs. One Labour whip quoted joyfully the Guardian's Simon Hoggart who that David Cameron was not so much shooting fish in a barrel as "harpooning" a porpoise in a bath. Despite this, the whip said, the Tory leader missed the bath.

Why?

Well, Gordon Brown delivered three crucial things before the Tory leader could even get to his feet: an apology, an explanation (procedures had not been followed) and an announcement (even more reviews into data protection). But before Labour gets carried away, I pass on this view from the Tory camp: that given the public's real anger about this, David Cameron chose to be seen not playing party politics by linking this fiasco with other recent ones. There was never enough ammunition today to deliver a killer blow. Time will tell whether the impact of this story is a long-term corrosion in the belief in the government's competence.

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Intriguing news. Alistair Darling is to make a second and unexpected statement to the Commons this afternoon. It is not about Northern Rock but is, I'm told, about a "major operational problem" at Her Majesty's Revenue and Customs. One rumour (and it is, I stress, no more than a rumour) has it that it is about "data loss".

Do get in touch if you know more - your message will, of course, be treated as strictly confidential.

UPDATE, 12:30 PM: It is indeed, as I mentioned above, data loss on a huge scale. I understand that the data of over a million people has been lost by HMRC. It relates, I'm told, to benefit claimants, and not the income tax system or tax credits. Although there is no evidence that anyone has yet lost money, the potential is clearly there for the false use of people's identities.

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Chancellor Alistair Darling refused repeated invitations in the Commons this afternoon to promise that the taxpayer would get back with interest all the money lent to Northern Rock. He spoke instead of doing what was "best to protect the taxpayer". When it was pointed out to a Treasury spokesman that there was a significant difference between these forms of words journalists were told that there were limits to what could be said in the middle of commercial negotiations over the possible sale of the bank.

In the Commons, shadow chancellor George Osborne suggested that Mr Darling had made an unequivocal promise to get all taxpayers money back when he appeared before the Treasury Select Committee. The record shows that, under pressure of questioning about the scale of loans to Northern Rock, the chancellor said "We fully expect to be able to get that money back" (see below) although it is far from clear whether he was referring to all the money including the interest. When a Tory backbencher pointed out that he'd studiously avoided giving clear guarantees the Chancellor repeated this form of words saying that: "The money leant by the Bank of England is secured against assets, such as mortgages, held by Northern Rock. So we fully expect to get it back."

To this non-expert observer, the gap between what some predict the taxpayer may pay and what the Treasury say is between the pessimists and the optimists. The pessimists assume we'll be lucky to get much of what's been loaned back. The optimists that we could, in theory, get it all back with interest.

Thus it is with my colleague Robert Peston's revelation this morning (which the Tories have picked up with glee and refer to as the story of the "secret Treasury loan"). Robert's calculated that if the Treasury don't get this bit of our money back (I'll leave him to explain what it is) it could cost taxpayers hundreds of millions of pounds. Whitehall sources say that, so far, this facility's only worth £20 to £30 million. There is, in fact, no contradiction between these two statements.

---

Transcript of Alistair Darling before Treasury Select Committee on 25 October ()

Q822 Mr Mudie: What is the total you have agreed with them?

Mr Darling: What we have agreed - and again, Clive Maxwell will set this out in further detail - is that they have that facility but it is secured against collateral. We have also guaranteed various deposits but of course, we fully expect to be able to to get that money back"

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Are you sure we'll get our money back, Darling?

"His job is on the line". So said the Tory shadow chancellor, George Osborne, with menace today. He will keep reminding Alastair Darling of his pledge in Parliament to ensure that taxpayers get their money after the Northern Rock saga finally comes to an end.

It's a puzzling story this for those of us not steeped in the ways of the City. On the one hand ministers assert that the huge loan given to prop up the Rock - worth £900 for each and every one of us (the Lib Dems have helpfully calculated) - is easily covered by £100bn of assets. On the other we're told that, in truth, there's nothing like that much money and, besides, the interest on the loan - amounting to at least hundreds of millions of pounds - may not be repaid (my colleague Robert Peston's blog is the place to go for the detail).

Vince Cable of the Lib Dems says the only way to protect our cash is nationalisation. The Tories are backing attempts to find a buyer. Alastair Darling is in a very uncomfortable place:

• unwilling to rule any option in or out for fear of prejudicing the process

• aware that predators are circling waiting to pick the meat off the bones of Northern Rock leaving the government with just the gristle

• aware too that small shareholders, employees and those with the north east's interests at heart are watching too

• and facing warnings not to do another Railtrack - in other words to take decisions that produce legal action down the line

Besides that we now have predictions of the slowest economic growth in 15 years. Gordon got out just in time.

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What are the government up to on the great 28 days or more debate?

They believe that their opponents - in the Tories, the Liberal Democrats and the pressure group Liberty - have conceded that there might be circumstances in which it is necessary to detain terror suspects without charge for more than 28 days. That unlikely coalition has pointed to existing emergency powers that allow detention for an additional 30 days.

Ministers believe that to declare a state of emergency would be a huge victory for the terrorists. They are trying to re-shape and sell their proposals as having the same effect, coming with the same safeguards but without the need to declare an emergency.

Thus, they plan to propose that:
• detention beyond 28 days could only be triggered in certain prescribed circumstances
• it would require the specific prior authorisation of the home secretary
• in addition it would require judicial approval every 7 days beyond the original 28
• the home secretary would have to notify Parliament and then report back to them after the end of the extended detention
• the power would be time limited - lasting not years but perhaps just weeks or months

This is in line with - but goes further than - the principles laid out by the prime minister in July when he declared that he wanted to reach a consensus on the issue. Then he spoke of extending up to double the current maximum - i.e. 56 days.

The only significance of the 58 day figure is that ministers claim that their opponents have accepted in principle that there are circumstances in which it could be acceptable to detain for this extended period.

I do not believe that 58 will be the final figure that the government will propose. Indeed I suspect that no figure will be given until ministers are confident that they can secure a parliamentary majority for it.

They hope to move the debate away from the number of days and onto the trigger, the mechanism and the criteria for what they insist will be a reserve power used in rare and special circumstances.

UPDATE 10:45AM: As good an explanation as you will get of why the government feels so outraged by the Tory charge that it is playing politics with terror comes in Steve Richards’s this morning. It's worth a read.

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Uncertain, racked by doubts, yet to be convinced? You need half an hour with Gordon. Results guaranteed… or your money back.

Don't believe me? Just listen to the personal testimony of Lord West before and after Gordon.

This is what the Terror GOAT (Government of All the Talents) had to say about the case for extending detention for terror suspects beyond 28 days on the Today programme this morning:

"I still need to be fully convinced that we absolutely need more than 28 days and I also need to be convinced what is the best way of doing that."

And this is what he had to say after a chat with Gordon:

"I am quite clear that the greater complexities of terrorist plots will mean that we will need the power to detain certain individuals for more than 28 days... I am convinced that we need to legislate now so that we have the necessary powers when we need them. The government would be failing in its responsibility to protect national security if we waited until we needed more than 28 days to act."

Miraculous, I think you'll agree.

It worked on John Denham too, who as chairman of the Home Affairs Select Committee argued that "Any new legislation should not propose longer than 28 days detention unless the evidence is compelling" but as a member of Gordon's Cabinet now argues… (You're way ahead of me).

Update: I'm sorry. It's all perfectly clear now after a briefing by the prime minister's spokesman. "Lord West has made his position quite clear, the words speak for themselves", journalists were told. Yes, but which words?

Ah, they'd thought of that. Asked if Lord West had made the statement of his own volition, the reply came '"he thought it was necessary to make sure that his position was properly understood. I'm not sure that he has changed his mind. I will let Lord West and his most recent statements speak for themselves."

So that's cleared that up.

Update 2: Lord West has taken another opportunity to clarify his position (or should that be positions):

"Well I haven't changed my position, I think being a simple sailor, not a politician, maybe I didn't chose my words well. What I think we do need to do is to prove to the British people with the evidence that this is the case, as I say I'm convinced that that is the case. We need to show that... maybe my choice of words wasn't particularly clever."

This wasn't enough to silence David Cameron, who in the Commons statement on terror asked the prime minister to explain Lord West's apparent change of mind. The Tory leader suggested that people would believe Admiral West was "leant on" and accused the government of being "not so much concerned with the evidence as with the politics".

Gordon Brown pointed out that in the past Lord West has clearly said there would be occasions when we need more than 28 days. Speaking on the 16th July on ´óÏó´«Ã½ Radio 4's Today programme, he said:

''Looking at the complexity of this, there will be occasions when we need more than 28 days. How we exactly do that is something that I hope we can come to some sort of consensus on.'' He went on to say, however, that there were "great attractions" in Lord Carlile's proposal for specific time limits to be scrapped altogether in favour of senior judges using their discretion in each case. "I tend towards not wanting to see Parliament setting exactly a longer limit" he said.

Trying to be fair to the "simple sailor" (who was, let's recall, the former First Sealord), I think what he was reflecting this morning is the hope that the government can find a way beyond simply extending the 28 day limit to allow a tiny number of terror suspects to be detained for longer if necessary.

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The home secretary's story today was that she didn't reveal the problem of illegal immigrants working in the security industry as she thought it best to act first to measure the scale of the problem and then to sort it out.

The figures she produced indicate that the figure of 5,000 illegal immigrants licensed to work in the security industry may turn out to be an underestimate. Based on the outcome of checks made so far the worst case scenario could be over 8,000. Ministers insist that it is impossible to be more precise than they have been so far since they will only have accurate figures once checks are complete in December and say that 5,000 is still the best estimate at the moment.

This is how the worst case scenario (not, I should stress either a Home Office or a ´óÏó´«Ã½ estimate) is calculated:

Officials in the Borders and Immigration Agency are still checking the immigration status of 40,000 people from outside the European Economic Area who have been licensed to work in the security industry.

10.5% of a sample of 6,000 cases have been shown not to have a right to work.

Checks are ongoing on 12.5% who simply do not appear on the Border and Immigration Agency records. A Home Office official has conceded that they are "almost certainly not entitled to work".

If this proves to be correct then the total figure of those not entitled to work will be 23% (10.5% + 12.5%).

If the sample of 6,000 cases is representative of the 40,000 backlog and around 23% turn out not to be entitled to work the figure would be around 8,800.

There are a couple of reasons for treating this worst case scenario with caution:

The figure is reached by extrapolating from a sample. Later checks may reveal that a lower proportion are illegals. The Home Office have indicated that the Borders and Immigration Agency started examining those cases they regarded as the highest risk - ie looking at certain nationalities and postcodes which are associated with illegal immigration.

The figure is based on an assumption that all 12.5% of "unknowns" prove not to be entitled to work. This may prove to be inaccurate.

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The Guildhall:
(From the balcony overlooking the Lord Mayor's Banquet)

Hard-headed internationalism. That, Gordon Brown told us tonight, is what sums up his foreign policy.

What does it mean? It's more revealing to look at what it doesn't mean.

"Internationalism" - means NOT unilateralism or isolationism - i.e. not what Bush and Blair are accused of in Iraq, and not what Brown hints David Cameron may mean. It is also not another word Brown could have used - "multilateralism" - which could be taken to be a commitment to work only through the UN. This brings us on to...

"Hard headed" - by which Brown means NOT soft or naïve - in other words, not believing that what's right is whatever the United Nations agrees. A key, though heavy, part of Brown's speech tonight focuses on the need to reform international institutions - the UN, the G8, World Bank and the IMF.

The words will be endlessly analysed as were all such phrases uttered over the years at the Lord Mayor's Banquet - particularly those uttered by new prime ministers.

I have just dug out Tony Blair's 1997 speech. The headlines were about Europe but just look at this:

"This Government's determination to stand firm against a still dangerous dictator is unshakeable. We want to see a diplomatic solution and will work with others to achieve this in the next few days. But Saddam should not take as a sign of weakness the international community's desire to find a peaceful way forward if possible. He has made this fatal miscalculation before. For his sake, I hope he will not make it again."

Proof, if any were needed, that words matter - but it's deeds in response to events that count most.

PS: As memorable as the speech is the sight of Gordon "Where there is Greed" * Brown sitting in a gold throne, dressed in white tie being introduced by a trumpet fanfare. Who, I wonder, will have the last laugh - him or his hosts in the City of London?

* "Where there is Greed" was the title of a polemic written by Brown in the 1980s.

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William Hague - speaking in the Commons Queens Spech debate - appears to have just made a new commitment to his party's Euro sceptics.

He was asked once again whether his party would promise a referendum if the Tories come to power after the EU Treaty (or what they insists is still the EU Constitution) had been ratified. The Shadow Foreign Secretary went through the usual list of "ifs" implicit in that question - if there's no referendum, if the treaty's ratified elsewhere, if there's an election after that process is over - before going on to say that if all those "ifs" came to pass "We could not let matters rest there".

In other words Hague is saying that the Tories would not accept that ratification by the Commons and by all other EU nations put an end to the debate. They would insist, presumably, on either a post ratification referendum or, if that were not possible, a re-negotiation of Britain's membership of the EU.

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There are no misunderstandings on our part. So, said No 10 this morning. In other words, tonight's speech will attempt to clear up misunderstandings on the other side of the pond.

Consider for a moment where those "misunderstandings" may stem from:

- first Gordon Brown appointed a foreign secretary who was happy for his concerns about the Lebanon war and doubts about the war in Iraq to be widely known

- then he appointed Mark Malloch Brown as Milliband's deputy - someone who the White House loathes with a vengeance after his years at the helm of the UN

- next came a speech in Washington in July by one of Mr Brown's closest Cabinet allies, Douglas Alexander, who stressed the importance of "soft power" over military action

- then came the first Brown/Bush summit at Camp David at which in public and, apparently in private too, the new PM was thought to be giving the president a very obvious cold shoulder

- next came the foreign secretary's party conference speech which sought to bury Blairite foreign policy, not to praise it (although as I wrote at the time it's not clear it signalled much real change).

Meantime Sarko has that he - and France - is more than willing to be America's new best friend.

Gordon Brown did want - and need - to distance himself from the most embarrassing and politically damaging parts of the Blair/Bush partnership but it's no wonder that tonight he feels that the Americans need to hear a few warm words.

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This is the key extract of the Treasury's answer to the Daily Telegraph's FOI request. You can read the full detail on the :

"We have records of officials considering the proposal on 9th January 2007. Advice on this measure entitled "Workstream H: Measure 1220 - Inheritance tax transferable nil-rate bands" was sent to Treasury Ministers as pre-Budget advice on 6th March 2007...

Following his appointment, the (current) chancellor received the above paper on 27th July 2007. The chancellor confirmed that this measure was under discussion for the pre-Budget report on 20th August 2007. Advice on "Inheritance tax (IHT): transferable allowances" was received by the chancellor on 3rd September 2007. The chancellor responded to this advice on 5th September 2007 asking officials to work up final proposals. Subsequent detailed costings followed before the pre-Budget report set out all details on inheritance tax reforms on 9th October 2007."

This confirms that the government can prove that it worked up proposals on IHT long before the Tory conference but has produced no proof that the chancellor made the decision to go ahead with those proposals before George Osborne's .

Intriguingly, this answer shows that he only took an interest in IHT one day after the Mail on Sunday carried the headline "Tories to scrap death duties" ie on 20th August.

What's more, today's answer does NOT give us any detail of what happened in the crucial month before the PBR when all the key decisions would have been taken eg were the detailed costings ordered before or after the Tory conference?

Revealingly when I asked one of those keenest to spike the Tories' guns when Darling made his decision the answer was "we'll never know".

I stand by my original verdict.

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We'll know soon. Or rather we won't quite.

The Treasury is about to release information about what advice was submitted to the chancellor and when about changes to the inheritance tax regime. This is in response to a Freedom of Information request made some weeks ago which the prime minister alluded to in his fiery exchanges with David Cameron at the dispatch box on Monday.

You may recall :

David Cameron: "I tell you what, look me in the eye and tell me that you were planning to reform inheritance tax before our party conference. Can the prime minister look across the Dispatch Box and just say it?"

The prime minister: "The answer is yes-unequivocally yes. Every year… All the records will show it, under whatever rule they are released under the Freedom of Information Act."

The information which will be released will show that:

Gordon Brown considered inheritance tax reform up to a few days before his last Budget in March. Specifically, he was given advice on the "transferability of nil rate IHT allowances" in March. This was the measure which his successor Alastair Darling announced in October.

Furthermore, the Treasury will reveal that Darling commissioned further advice on this in August, responded to that advice and continued receiving more papers up until mid September - before the Tory conference.

So, will this prove that the government were "planning to reform inheritance tax before our [the Conservative] party conference"? Yes and No.

Yes, it will be clear that ministers were considering and had asked civil servants to produce detailed proposals on inheritance tax reform well before and in the immediate run-up to the Tory conference. Furthermore, Whitehall sources tell me that the assumption in the Treasury was that this would be in the PBR and, indeed, detailed costings of the measure had been drawn up.

No, however, it does not prove that ministers had finally decided to include the proposals in the pre-Budget report before the Tories announced their plans. Final decisions on what goes in and what's left out of Budgets and PBRs are made in the last day or two before they're delivered (partly because the final economic forecasts are only produced at the last minute) After all, Gordon Brown considered the idea in March but did not announce it.

What it will be impossible to assert, I believe, is that ministers cobbled together an inheritance tax plan when they heard the shadow chancellor's speech at the Tory conference and then announced their hastily drawn up plans a week later.

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Had someone tipped him off, I wonder? Gordon Brown was on best behaviour when he stepped out with David Cameron this morning although, it looked to me, as he was doing almost all the talking. I suspect that he will be rather less respectful to his opponent in the Commons debate this afternoon.

Did this deliver the vision which the prime minister himself acknowledged he needed to set out? Well, that depends on what you mean by a "vision". There is, as yet, no pithy phrase or slogan, no piece of soaring rhetoric, no memorable soundbite that captures what Brown's Britain will look like. His opponents have been quick to deride tired old ideas and policies. He, though, is likely to counter that he has - unlike his opponents - set out plans for how he will meet people's aspirations for education for all, affordable housing and a cleaner environment over the next decade. If it is more of a list of what he'll do to meet voters concerns than what people conventionally call a vision, I suspect he'd say "so be it".

PS. Jack Straw did, after all, walk down the stairs backwards after handing the Queen her speech. I'm told that at yesterday's rehearsal (yes, like weddings, they do rehearse these things) the Lord Chancellor was cheered by the heralds when he ignored the Earl Marshall's advice that these days it was acceptable to walk forwards.

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Her Majesty's most Gracious Speech, as sticklers for parliamentary protocol like to call it, has always been a curious piece of political oratory. The speech is, after all, hers in name only. The script is her government's. This year's Queen's Speech will be curiouser still. Why? Because we already know most of what it will contain. Not thanks to pre-briefing or spin but thanks to a Brownite constitutional innovation - the pre-legislative statement or draft Queen's Speech delivered by the prime minister himself in the summer.

We cannot, therefore, expect too many surprises today. There will, as promised, be bills to enable more homes to be built, to extend the time young people stay in education and training and to give MPs more power over going to war and public appointments.

If surprise is too much to ask for what about "vision"? That's a question posed by Gordon Brown's friends and foes alike. The answer is that it is probably too much to ask for. Do not misunderstand me. I make no comment on Mr Brown or his visionary qualities. I merely note the limits of a speech which is - for all the efforts to make it appear to be more than this - simply a list of the bills the government plans to pass over the next Parliamentary year. The pledge to pass the Coroners Bill must, after all, sit alongside grander declarations of intent. Year in, year out overarching themes or titles are grafted onto these lists of course ("Investing for the future", "Building a stronger Britain" ...you know the kind of thing). They are, though, usually no sooner uttered than forgotten. And Gordon Brown's not too worried about that.

What he wants from the Queen's Speech may be revealed by one of the images of the day. Besides the pomp - the carriages and tiaras; besides the parliamentary peculiarities - the door to the Commons being slammed in the face of Black Rod; we watchers of politics will study the body language of the Prime Minister and the Leader of the Opposition as, for the first time, they walk side by side from Commons to the Lords to hear the Gracious Speech.

David Cameron and Tony Blair smiled as they chattered about whether the PM had seen the portrayal of himself in the film "The Queen". As it happens, he hadn't. Brown and Cameron, though, don't do small talk. Indeed, if it were down to Brown they won't do much talk at all.

The Prime Minister sees today less as a chance to outline his vision and more about exposing the choice between him and his opponent. Or, as he would have it, between the long term thinking Britain needs and short term electorally driven opportunism. His message will be "This is how I think education or health or the constitution needs to change to prepare the country for the next 20 years - what would HE do ?" His aides say that unlike Tony Blair he is not looking for issues where he can take on on his own party. He wants, instead, to take on and defeat the Tories on what he calls the Big Arguments.

The loudest and longest parliamentary arguments of the forthcoming session may be on other things - on the EU Treaty and new terror laws. Expect another fierce - non party - debate - on abortion too. And lest that not seem lively enough, the government will signal, although not spell out the details of, legislation to come on immigration and party funding.

Her Majesty's script will, I hazard a guess, speak of the need to build a national consensus. A consensus between Brown and Cameron? After today's speech? Now that is too much to ask for.

UPDATE, TUE 10:20 AM: For those who like the pomp more than the politics, take a careful look at Jack Straw who will today become the first non-peer to hand the Gracious Speech to Her Majesty (he is the first MP to be Lord Chancellor). Rumour has it that this one-time radical plans to walk backwards after handing over the text - a tradition abandoned by his predecessor Lord Irvine .

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Rarely has an acronym been less appropriate. It is not neat to be NEET. Very far from it. Talking about NEETs though is very cool in Westminster just now. Today it was the turn of the prime minister and his Children's Secretary Ed Balls.

NEETs are those kids who are Not in Education, Employment or Training - what some would in the past would have dismissed as "dropouts". Clearly, being a NEET is a problem if not a looming tragedy for the individuals themselves. What's changed is that politicians increasingly see it as a incipient crisis for Britain as well.

NEETs often go on to be the long term unemployed and unemployable. The Tories regard them as one of the foundations of what David Cameron calls "the broken society". What's more, the more NEETs Britain has the more immigrants Britain needs to do the jobs which need doing but which Brits are not able or ready to do themselves.

Britain has more NEETs than most of our global competitors. The figure often used is 10% i.e. one in ten of 16 to 18 year olds - or 200,000 - are NEET. This is slightly misleading, however, as it includes those who are between course or jobs. The figures for long term NEETs is much lower -1% or 20,000.

The government's answer outlined today to this is part carrot, part stick. Young people will get more help - financial as well as personal - to take suitable qualifications (diplomas, apprenticeships or training more often than traditional school routes) and will face fines if they resist all these tempting offers.

Though this group cannot claim benefits this fits neatly into a growing political debate about welfare reform.Yesterday Peter Hain re-defined Gordon Brown's controversial promise pledging to help "British benefit claimants" to become "British workers with British jobs". He is determined to answer the Tories promise of a more radical shake-up by promoting the government's own plans to cut the numbers on Incapacity Benefit.

The Conservatives have yet to unveil their detailed plans. They may draw on the ideas outlined in a pamphlet published today by the Adam Smith Institute which draw on what happened in the American state of Wisconsin in the 1990s. Similar ideas are, interestingly, been advocated by Labour's Frank Field who was made minister for welfare reform by Tony Blair a decade ago with a remit to "think the unthinkable".

Ten years after Tony Blair pledged to cut the cost of failure the parties are battling about who knows best how to do it.

UPDATE 07:00 PM: I have just seen for myself the NEET problem and possible solutions on a visit to South Yardley in Birmingham.

On a playing field where I was planning to film a piece to camera I stumbled across a group of kids who'd been kicked out of or dropped out of school. The mother of one of them had, they said, been sent to prison because her child refused to go to school. Nothing would persaude these kids that they should have stayed in school. Asked about possible fines for being NEET they laughed before claiming that most kids in their area were like them.

Earlier, I met kids who prove that there is some hope. They had been helped by youth workers paid for by Birmingham City Council. A group of them had built a sports car from a kit and, in the process, become convinced that there was more to life than simply hanging around.

One thing's clear - it's going to be quite a challenge.

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It was an evening I shall not forget.

To my left, Gerry Adams. To my right, Colin Parry, whose 12-year-old son Tim was killed by . The two men had never met before.

To add to the poignancy of the evening we were sitting in Canary Wharf, next to the site of . In the audience, those who'd been there on both those fateful days, and Victor Barker, who buried his 12-year-old son after . All had been brought together by the (a charity of which I am a patron) founded in the names of Tim Parry and Jonathan Ball, the three-year-old boy who was the other victim of the Warrington bomb.

It was an evening that reminded me how far we'd come in a short time, and how very far there is to go in escaping from violence in the name of politics and ideology. It reminded me too of how much the determination and the dignity of victims like Colin and his wife Wendy can help in that escape.

Parry's first question to Adams as they shook hands awkwardly in front of the cameras was "why Warrington?". There was, of course, no answer. Adams had come with a speech that began with praise for the Parrys' "grace", with a repeat of apologies the IRA had given to "non combatants" and his own "sincere regret" for those who'd suffered in this "long, vicious and deadly war". It contained, however, no doubts that "the armed struggle" had been a necessary part of the search for justice in Ireland even though, he insisted, that he'd never believed in a "military solution".

It was Colin Parry's speech which was altogether more memorable. Inviting Adams had not been easy, he said, but it had been infinitely more easy than carrying the injured body of his son, holding him as he died and carrying his coffin. It was, he went on, infinitely easier for him to talk to Adams than to fight him - this the guiding philosophy of the Foundation, which now teaches young people how to solve their differences (whether in Northern Ireland, or in a Liverpool scarred by gun crime, or in Leeds, where religious tensions can overspill daily) through dialogue and not confrontation.

I first met Colin and Wendy Parry weeks after that tragedy to persuade them to make a Panorama programme about their search for understanding about the death of their son. We took them to live with families on either side of the sectarian divide in a country they'd never before visited. They travelled to Ireland and to America to meet those who raised funds for those who killed their son. I believed then that this might help them by giving them some sense of purpose in those days which otherwise would have been empty of anything but grief and anger and incomprehension.

I would never have believed then that they would turn that journey into a search for ways to avoid future conflicts. The lesson Adams takes from his history is that politics and politics alone can avoid or bring to an end armed conflict. The lesson the Parrys took is the value of dialogue, and an understanding that violent conflict is a choice and one which can be avoided.

They both chose to take part in last night's event. All credit to them.

As for me, I have never been prouder of any programme I've been involved with. It is a small reminder that journalism and television can be more than mere entertainment.

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