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Concede and move on. That was always the mantra of Team New Labour when something went wrong.

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Interesting then that Douglas Alexander has just delivered an important speech about what has gone wrong for Labour on the economic argument. In it he concedes that his old boss and mentor, Gordon Brown, got it wrong on the politics of the deficit and made it look as if Labour were in denial about the need to cut public spending.

His key quote is that:

"[R]epeated refusal by some to use the word 'cut' for many months after the global financial crisis and the repetition of phrases like 'Mr 10%' gravely damaged voters' confidence that we got it...too many people still got to polling day with the impression that Labour preferred to talk about familiar political dividing lines rather than future policy consequences."

The person who refused to use the word "cuts", labelled their opponent "Mr 10%" and preferred to talk about dividing lines lived in No 10.

Let's be clear. Labour's shadow work and pensions secretary is not criticising Gordon Brown or Alistair Darling's economic policy.

"We got the recession response right, and yes that meant a temporarily higher deficit, but the politics wrong in leaving the impression that we were too unwilling to talk about the consequences of our decisions.
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"I believe that the label of 'denial' was defied by the fiscal plan laid out by Alistair...In making the right judgements during the crisis, we saved the taxpayer from the untold cost of a recession turning into a depression. But, as with every important choice you make in government, there was a price to be paid - the public got that and they were worried that we didn't."

In terms of "moving on" Douglas warns that the experience of the United States where there's been a "jobless recovery" could be repeated here and notes, interestingly, that that was one of the causes of the rise of the Tea Party Movement.

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So many promises, so difficult to keep, such little time to decide. Liberal Democrat MPs now find themselves under intense pressure over how to vote on tuition fees.

Should they stand by their pledge to students, even if that means not standing by their coalition agreement with the Conservatives?

This morning, 104 Lib Dem Parliamentary candidates at the last election insist that it's the pledge that counts and that as a pledge it's worth more than a mere manifesto promise.

They say:

"This is not an attack on the Coalition Government's policy programme generally; nor is it some kind of 'rebellion' and it should certainly not lead to the party splitting. However we feel that this is a pledge that cannot be broken due to the nature in which it was signed and publicised during the 2010 General Election. This separates it from manifesto promises that have had to be sacrificed due to the concessions that coalition government brings."

So, a pledge trumps a manifesto promise - but what about an agreement?

The Lib Dems were laboriously consulted on the deal with the Tories. It explicitly stated that MPs could abstain if they didn't like the new coalition's policy - which, it was clear, would be an increase in fees. If they now vote against then why, some Tories might ask, should others stick by the agreement?

This is why Simon Hughes is seeking to persuade all colleagues that the only way to look like they're at least trying to respect the pledge and not breaking the agreement and to stay united is to collectively abstain.

The problem is that this would entail Vince Cable, the minister who's proposing the legislation, to abstain on it and it would require MPs, like Charles Kennedy, who've re-stated their determination to vote against higher fees to double-rat.

Another idea, anyone?

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We know Ed Miliband's standing up for them but who exactly are they?

The Labour leader's phrase "the squeezed middle" is deliberately vague. It has the same widespread appeal as "hard-working families who do the right thing" - the phrase William Hague once used.

Pretty much everyone - bar, perhaps, the very poor and the very rich are meant to think Ed's talking about them. What's more, the phrase has the advantage that newspapers tend to replace it with the more reader-friendly words "middle classes". , for example, implies he'll stand up for their readers even though he said no such thing. What's wrong with that, you may ask? After all, he's a political leader trying to re-build a widespread coalition of support.

The problem is that, as someone once said, to govern is to choose and when there's no money to spend you do really need to choose.

So, it matters whether Ed Miliband's standing up for people on £50,000 a year who stand to lose their child benefit or those on £40,000 who stand to lose their tax credits - both, incidentally, statistically part of the rich "few" rather than the poor "many" - or those he met in Tescos in Dudley yesterday who earn £6.81 an hour and had the same views about those on benefits as Howard Flight (even though they didn't use the word "breeding"). If he intends to stand up for them all at the same time that may tell people something about his willingness to make choices.

When I interviewed Ed yesterday, he refused to define his terms beyond saying it didn't mean millionaires and that everyone knew what it meant anyway. . He explained that he meant those above and below the median salary and, in particular, those earning less than £45,000 and, therefore, on the basic rate of income tax. He went on to say that the words "squeezed middle" and "middle classes" meant something different.

This is the group who John Healey, the man who topped the shadow cabinet elections, identified as "one third of the population who manage with a household income either side of the UK's £22,000 median... more than 7 million families with an annual income between £14,500 and £33,800; 14 million people working hard for low and modest wages." Healey wrote that:

"The squeezed middle seem stuck in no man's land. Too poor to get the best from the market, too well off to claim state benefits. Not wealthy enough to get a mortgage, not sufficiently vulnerable for social housing.
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We too easily allow a mobile, metropolitan class to skew our understanding of society. Too many of those in the media, political and public policy world take people earning 40 or 50 thousand pounds or more as typical of 'the middle'. The real squeezed middle are overlooked by the press, and overlooked by the modern Right."

This is the group Ed Miliband's really talking about but, spotting the danger of saying so this morning, he quickly reverted to saying that he meant everyone who wasn't rich and wasn't poor and were, after all, middle class.

Many wiser than me who've slogged through long years of opposition - whether on the Tory or the Labour benches - will tell you that Ed's wise not to pin himself down to policy positions early, that opposition's a marathon and not a sprint, that being seen to listen and learn is the most important priority after an election defeat.

However, definition matters too. At the moment Ed Miliband's struggling to find it.

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Attacking the government for going soft on the banks is a political banker for any leader of the opposition. David Cameron did it. Now Ed Miliband has followed his lead.

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There is an added piquancy now given the scarcely concealed divide between the chancellor and the business secretary.

When was unveiled before the election Vince Cable called his guarantee of anonymity for highly-paid bankers a "whitewash".

Now George Osborne is considering not even going that far, at least until other countries do the same. The prime minister insisted today that the government was simply following Sir David's new advice that it would be "be mistaken to go it alone."

With Lib Dems feeling growing pressure over their U-turn on tuition fees they will increasingly demand tougher action on the banks.

This is one to watch.

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I have now learned that the migration cap that the home secretary will announce today will actually be lower than 43,000 because it will exclude senior staff transferred to Britain by their companies. However, I'm told by Home Office sources that if you add the number of senior staff who entered the UK last year to the new cap you do, indeed, reach a figure of 43,000.

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This was the highest figure recommended by the migration advisory committee which included so-called "intra-company transfers" in their recommendations. The government's decision to exclude intra-company transfers means that next year's figure for the number of skilled migrants entering the country could be higher or lower than 43,000. It could be higher or lower than the number who came in last year. It means that, in effect, there is no firm cap on skilled migration since the numbers entering the country will depend on the decisions of companies about how to deploy their staff.

The so-called immigration cap was always rather less than it seems. Immigration from within the EU cannot be capped. Migrant workers were only ever one of four immigration flows into the country - the others being students, family members and illegals. Now, we learn that the cap on migrant workers is only a cap on certain categories of workers.

Am I being too cynical to think that ministers would like a headline figure which sounds like a dramatic cut when, in fact, it isn't?

PS. This is not to suggest that this government is not limiting immigration. Its proposals have been welcomed by the hawks at Migration Watch. In the next few weeks they will publish proposals to cut the number of students on below-degree-level courses coming to the UK - the number last year was 160,000.

Update 1420: I await the home secretary's statement with interest. The latest I'm told is that 43,000 is equal to the new cap plus last year's level of intra-company transfers. However, the tougher policy for ICTs to be unveiled this afternoon means that the figure will be lower.

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David Cameron promised to cap immigration from outside Europe at the last election. His then rival Nick Clegg said the policy ignored the fact most immigration came from the EU.

After weeks of behind-the-scenes tension between the Lib Dem-run Business Department and the Tory-run Home Office, the coalition is about to produce its compromise.

The home secretary will, I understand, cap the number of skilled migrants at around 43,000 next year - that's just 13% lower than 2009's figure and the highest figure recommended by the independent migration advisory committee last week.

Staff transferred by their companies to the UK from another country will be exempt from the cap if their salary is over £40,000.

The Conservatives pledged to get immigration down from hundreds of thousands to tens of thousands per year. To do so they will have to persuade their coalition partners to back major cuts to other immigration routes.

Consultation on proposals to cut the number of non-degree level students coming to the UK will be published soon but have not yet got cross-coalition agreement. In the new year, ministers will produce proposals to reduce the number of family members who can join those already living here.

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George Osborne will try to reassure his party today that Britain's participation in the EU bail-out of Ireland will not set a precedent for any other eurozone country.

Bill Cash and George Osborne

He is responding to the concerns articulated today by the grand-daddy of Eurosceptics, Bill Cash, who claimed that:

"Germany and others want Britain to be caught up in the web of the Stabilisation Mechanism, wrongly signed up to by Alistair Darling - and we are going along with it all. What therefore is the point of an opt-out on this? We are being trapped into a situation of more Europe, not less... Over and over again, we are told we are resisting integration when in fact we are going along with it."

The "mechanism" Mr Cash is referring to was agreed in the midst of the Greek euro crisis over that weekend in May which followed the UK general election. It's controversial because, unlike the eurozone bail-out "facility", its legal basis is questionable: it uses parts of EU treaties which refer to assistance after natural disasters; it is administered by the EU Commission and had previously been limited to helping non-eurozone countries with balance-of-payments problems.

Back in May Alistair Darling attended an emergency meeting of European finance ministers while coalition talks dominated the news in London. He agreed to more than to double the mechanism funds available and to allow its use by eurozone countries. George Osborne, who he consulted that weekend, had wanted him to abstain but accepts that this would have made no difference to the outcome as Britain had no veto and could not form a blocking minority.

Last week the prime minister told the Commons Liaison Committee:

"This mechanism exists, it operates because of QMV (Qualified Majority Voting); we are part of it because of the actions of the last government."

If all its funds are not used up on Ireland, the mechanism could be used again. George Osborne is signalling that when it comes to an end in 2013, he will fight to ensure that Britain never again pays to bail out a eurozone country - unless, of course, ministers choose to.

His problem is that many Eurosceptics in his party have heard these sort of reassurances before from both Conservative and Labour ministers and they've long since stopped believing what they're told.

Update 1828: No-one in the Commons challenged the chancellor's claim that bailing out Ireland was in the national interest.

No-one cast doubt on his belief that the UK will get its money back.

George Osborne could not, however, reassure MPs on both sides of the House that after Ireland there wouldn't be more bail-outs which Britain would have to contribute to via the EU "mechanism".

He plans to re-negotiate the mechanism when it runs out in 2013.

He hopes that there are no bail-outs between now and then.

He insists that Ireland is a special case.

However, he knows that the mechanism may get used again and that Britain would struggle to stop that. In the meantime, he'll come under pressure abroad to grant the EU more power and more cash to deal with the next crisis. And he'll come under pressure at home to say "No".

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"'I told you so' is not much of an economic policy."

17 November: George Osborne leaves an Ecofin meeting in Brussels

With those words the chancellor sought to silence Eurosceptic rumblings on his own backbenches about the Irish bail-out. They're unlikely to be enough.

Eurosceptics believe that every European crisis is regarded as an opportunity by federalists to seek more money and more power. They believe that Britain should recognise this and treat every crisis as an opportunity to get power back.

Governments - this one as much as its predecessor - like to "deal with the world as we find it" - another quote from the chancellor this morning. Today's priority is to help stabilise the eurozone and to help our neighbours in order to avoid a crisis in our principal export market: a threat to our own banks and to the Northern Irish economy in particular.

David Cameron once told his party to stop "obsessing about Europe". The reason the obsessing may start again is because Eurosceptics want to change the world as they find it, not simply to accept it.

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Britain has offered to make a direct bilateral loan to Ireland as well as contributing to EU and International Monetary Fund (IMF) loans. Government sources say that the government wants "to help a friend in need".

Although final figures for the bail-out will not be agreed for several days, I understand that Britain expects to contribute £7bn or more in total.

The cost of the direct British loan to Ireland is expected to be "in the low billions". The UK will also contribute as a shareholder of the IMF and as a participant in the EU mechanism (as against the eurozone facility) agreed in May by the former Chancellor Alistair Darling.

All the funding will be in the form of contingency loans which the government expects to see paid back.

The chancellor is expected to make a statement in the Commons tomorrow. He is likely to face questions from Eurosceptics like John Redwood about why Britain has agreed to use any European mechanism at all.

Update 2203: John Redwood has just been on the ´óÏó´«Ã½ News channel expressing his concern:

"It's not something I'd recommended that we do, and obviously when we hear about it in the House tomorrow I'm sure many of us will want to know why, how much, how long are we out of the money, what are the prospects of being repaid, what is the interest rate? Of course this will be money we have to borrow ourselves, because we don't have any money. All the money we're spending on top of traditional programmes is borrowed."

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Could a British, Eurosceptic, Conservative prime minister have to pledge billions to save the euro from collapse? Will David Cameron agree to increased EU powers to avert a future crisis of the sort brewing around Ireland? The answer to both questions appears to be yes which may land the Tory part of this coalition in a very hot Irish stew.

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The chancellor couldn't have been clearer when he arrived in Brussels this morning:

"We're going to do what is in Britain's national interest. Ireland is our closest neighbour and it's in Britain's national interest that the Irish economy is successful and we have a stable banking system," George Osborne said ahead of a meeting of European Union finance ministers.

"So Britain stands ready to support Ireland in the steps that it needs to take to bring about that stability."

He and the prime minister took a decision last week in Seoul that Britain would be ready to promise £7bn in loans as part of any Irish rescue plan. The arguments in favour of this are not hard to understand. David Cameron's favourite fact on his recent trips to India and China is that Britain does more trade with Ireland than with the so-called BRIC (that's Brazil, Russia and the two he visited) countries.

Add to that the fact that British banks are heavily exposed to Ireland and the economy of Northern Ireland is heavily influenced by that in the South and you can see why ministers are so concerned.

Most Eurosceptics will share that economic concern but politically they want to let out a hearty cheer when they hear the European Council president, Herman van Rompuy, warn that both the euro and the EU face a "survival crisis". "I told you so" they want to shout "the euro's doomed".

They believe that every EU crisis is an opportunity to re-shape Britain's relationship with it and loathe the idea that their government might simply go along with plans to spend more money and give more powers to prop up the euro.

Thus this morning :

"The UK should make it clear that we are not part of any Euroland rescue or facility. We should say we do not think they can use EU disaster relief provisions to offer Ireland more cash. If Ireland does not wish to take any EU money, the UK should be Ireland's ally."

And the leader of the "Britain Out" brigade, :

"Britain should do all it can to support our friends and neighbours. Not by bailing the Euro out, but by helping countries out of the Euro. The misery and pain in Ireland will only stop when Ireland has freed herself from monetary union."

Although Britain is not in the euro and thus does not contribute to the eurozone crisis fund, we do contribute to an EU crisis "mechanism" - signed up to by Alistair Darling in those five days in May after the election. In addition, we are shareholders in the IMF who would play a role.

What's more, this crisis is adding to the pressures on Germany's Angela Merkel - whose voters have done more bailing out than anyone's and resent it deeply - and will, thus, increase her determination to strengthen the EU's powers over weaker economies.

So, if there's a bailout, Britain will pay. The longer the crisis goes on the more demands will increase for greater EU powers. Britain, whether she likes it or not, is going to be thrown into this Irish stew.

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We may make mistakes but we are quick to correct them. So a key member of David Cameron's inner circle said to me last week. Now I know what he was referring to. The photographer, Andy Parsons, is losing the civil service job he just got and is returning to the Tory party's books. So too Nicky Woodhouse, the woman behind Webcameron.

Webcameron

When I interviewed the prime minister, last week I asked him about the symbolism of employing a "personal photographer" at public expense at a time of massive spending cuts.

It was a description he rejected - insisting that Mr Parsons was to be used across government and would save public money. However, it was the argument which, I'm told, has persuaded him to change his mind and force them back to the jobs they've only just left.

Quick is not, perhaps, a description for Team Cameron's response to this given the amount of column inches written about it. But they will hope that it's been quick enough to ensure that the story of the photographer you're paying for doesn't enter the public's mind as deeply and damagingly as the story about the chauffeur driving a car behind David Cameron's bike - an image which came up again and again in pre-election focus groups.

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Tonight at the Guildhall (apologies for the earlier reference to the Mansion House) the prime minister asserted that Britain is neither in decline nor, according to the people he has spoken to since moving in to Number 10, is it seen to be.

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He heralded a foreign policy based on "hard-headed internationalism". I wonder if he realises that this is precisely the phrase used by Gordon Brown at his first Guildhall speech three years ago?

Just like his predecessor, David Cameron pointed to our well-known assets: language, time zone, membership of the EU and UN Security Council, the City of London and our military.

He insisted that it is by resolving our economic problems at home that we will restore our status abroad. He argued that our military will remain the fourth largest in the world, even after the cuts.

David Cameron pointed to three ways in which his foreign policy is different to that of his predecessors.

He claims that it is more commercial, more strategic and that overseas aid under the coalition is more focused on delivering a safer world.

What he did not deliver was a vision. There was no equivalent to the resolution of the cold warrior Margaret Thatcher, the ethical foreign policy of the early Blair years, the interventionism of the later Blair years or the Brown declaration that "global problems require global solutions".

There is no list of the problems facing the world - Iran, the Middle East peace process, Burma and so on - with Cameron's proposed solutions.

In their place comes that promise to be more "hard-headed" and more focused on Britain's national interest.

David Cameron looked much more comfortable than his predecessor at this banquet, dressed in white tie, surrounded by ambassadors, dukes and bishops and heralded by trumpets.

However, I'm told that he found writing this speech much harder than Gordon Brown did.

It is hard to escape the conclusion that foreign policy under David Cameron will be much more defined by what happens - by events, in other words - and much less by any guiding vision.

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The prime minister will use his Guildhall speech tonight to take "head on" the argument that Britain is embarked on an inevitable path of decline. It's an interesting decision - perhaps one Sir Humphrey would have described as "brave" - since it invites people to examine an argument which, so far, has not had a wide airing.

Later, I'll outline the Cameron case for the defence; first, here's the case for the prosecution. This, in other words, is not my view but the combined views of those who say that Britain is in decline:

The economy, stupid

Britain has the biggest deficit in the G20 and now faces a decade of retrenchment.

China's rise cannot be halted. The world is moving East.

The City of London's in decline

For more than 20 years, London has been one of the principal financial centres on the planet - but now it's in decline. Higher taxes, public and political hostility to banking and financial services and the rise of the East are leading people to leave the City of London or, just as seriously, never to choose to come here in the first place.

A coalition government committed to "re-balancing the British economy" will lack the will to maintain the City's pre-eminence.

A declining military

The British army was humiliated in southern Iraq, some claim. They had to rely on the Americans coming to their aid in the "Charge of the Knights".

Despite showing extraordinary bravery British forces in Helmand have been no more successful than they were in Basra and have, once again, needed the Americans to come to the rescue.

British defence cuts are so serious that soon we will have aircraft carriers without aircraft and need to share the one we do have with the French.

After the Iraq war, Britain has lost the will to project its power around the world.

In Europe but not running it

Britain is prepared neither to join the EU fully nor to pull out of it.

The first Eurosceptic prime minister in two decades has, in effect, put Britain's relationship with the EU on hold - able neither to go forward nor go back (see my earlier post on Europe's push-me-pull-you).

David Cameron has felt forced to present a 2.9% rise in the EU's budget as a victory just days after pledging a freeze.

For the next 18 months the PM's energies will be taken up by defending Britain's rebate.

Marginal on the world stage

The era of the dominance of the post-war powers is coming to an end, illustrated by the G20's replacement of the G8. Inevitably the pressure to re-structure the UN threatening our role as one of the Permanent Five on the Security Council will eventually succeed.

America is led by a president who, unlike most of his predecessors, has no affection nor historical attachment for Britain.

David Cameron

Margaret Thatcher was a lover of the military and a cold warrior. Tony Blair was a lover of the military and a neo-con. David Cameron is neither. He's a sceptic about the military and about projecting British power abroad.

Gordon Brown briefly counted on the world stage thanks to Britain being in the chair of the G20 during the banking crisis and his mastery of international financial architecture.

The prime minister's foreign policy focus on the "British national interest" means that Britain is forced to charm the Chinese despite its human rights abuses and to re-set its relationship with Russia despite the murder of a Russian on British soil almost certainly by Russian agents.

In contrast David Cameron was a minor player at the G20 Seoul summit. It is hard to see him being a major player in the EU or the UN.

That, to repeat, was the case for the prosecution. Later, I'll post David Cameron's argument against Britain being in decline.

It's a debate that is, of course, far from new. Ever since the end of World War II, ever since an American secretary of state said the Britain had "lost an empire and had yet to find a role", Britain has worried about its status in the world.

Some politicians - Nick Clegg perhaps - would say that Britain should stop pretending to be what it is not and should accept that our power and status depend on being one of the biggest and richest countries in the EU. That, though, is not the view of most Conservatives. So, even though David Cameron is temperamentally relaxed about his status, he will be feeling the pressure all British prime ministers feel to show that Britain matters.

One intriguing little story emerges from my time in Seoul. President Obama chose not to have a bilateral meeting with David Cameron at the G20 summit. I think we can safely assume that this was not because Downing Street did not ask for one. If the PM had cared as much as Gordon Brown - whose orders to officials to do everything they could to secure a meeting for him with the president at the Pittsburgh G20 summit leaked - we could easily have seen a repeat of the "Obama snubs PM" story.

Update, 10:21: This debate is not only happening here. Look at the words of Robert Kagan, former foreign affairs adviser to Senator John McCain and former department staffer on ABC yesterday:

"Britain has taken itself out as a major player in the international system, at least for a while, with the kind of cuts that they've made in their national security budget.

"The problem is, the United States doesn't have the luxury of doing that. I mean, Britain can become a free-rider in the international system, but that is the price that they've paid."

PS: An earlier version of this post read "Mansion House" instead of "Guildhall"; apologies.

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Seoul: We can't say we weren't warned. David Cameron had predicted that this was not going to be one of those summits that saw the G20 in a "heroic phase".

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He insists that while the summit may not have produced a "glistening headline", it made good and steady progress and that we should treasure what the G20 does and understand that if it didn't exist, something like it would have to be invented.

Britain helped secure a commitment to try again to get a world trade deal and the solution to the issue which dogged this summit - the so-called "global economic imbalances" between the old industrialised countries like Britain and America, which have spent and imported too much, and the newly developing economies like China which have saved and exported too much.

In the early hours of this morning, fractious negotiations between China, America and the hosts South Korea broke down in acrimony, according to a British source. The "summit sherpas" from the UK, France and Russia were called in, it's claimed, to settle the dispute. They did so by calling on the International Monetary Fund to produce a study and for the G20 to discuss the issue all over again next year.

It may be that Downing Street wants to counter the impression that the prime minister has played a much more marginal role here than Gordon Brown did at the London summit last year. Privately, officials who have worked for both men say, though, that there are good reasons for that. Britain is not now chairing the G20, the world is no longer facing a crisis and the UK's policy of deficit reduction means that Britain is no longer seen as a problem.

Mr Cameron ends his week in East Asia feeling that at the very least, he's banged the drum for British trade in a part of the world which looks like creating wealth and jobs for a very long time to come.

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"I was worried for the safety of the people in the building because I know people who work in there - not just in the Conservative Party but in other offices as well," the prime minister told me this morning.

Last night, on arriving at his hotel in the South Korean capital Seoul, David Cameron and his aides watched live coverage on ´óÏó´«Ã½ World News of a peaceful student protest turning into a violent assault on his party's HQ. Wry amusement that they had missed the protests soon turned into alarm when they heard that protesters had not just smashed through police lines but had also made it up several storeys to within feet of the staff working there. They were only turned back by a quick-thinking security guard who pretended that they'd got the wrong floor.

The prime minister told me:

"What I felt when I saw those pictures was: Of course people have a right to protest peacefully, but I saw people who were bent on violence and on destroying property and that is completely unacceptable. We need to make sure that behaviour does not go unpunished."

He praised the "extremely brave" police officers manning what he called "the thin blue line" which could not prevent protesters breaking through and insisted that it must not happen again.

"They were very brave, those police officers; but as the police themselves have said, there weren't enough of them and the police response needs to reflect that. So I'm very glad that the Metropolitan Police Commissioner has said what he's said and I think we need to learn the lessons very rapidly."

I put it to the PM that we could be seeing a re-run of the Thatcher years. He denied that, claiming that the fact that this government is a coalition ensures that this is not a case of back to the future.

On this, the morning after the riot before, David Cameron has had to turn his attention elsewhere. He has already marked Remembrance Day with veterans of the Korean War, met FIFA's vice-president to sell and now has the small matter of the G20 summit of world leaders to attend to.

On his mind, no doubt, is the question: "Is this what it will be like from now on?"

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If I were not here, David Cameron will tell Chinese students later, I would be back in the House of Commons facing questions from an opposition party whose constitutional duty is to hold the government to account.

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Britain, he insists, is stronger for that and as a result of having powerful independent courts and media.

The prime minister clearly hopes that this will not be seen merely as a civics lesson from a distinguished visitor but as advice about China's future development.

Diplomatically, his speech echoes the assertion of the Chinese Communist Party that the country's history and its vast size make it different, but he still asserts that "the best guarantor of prosperity and stability is for economic and political progress to go in step together".

What he does not say is that if he were Chinese and campaigned for these views he could well end up in prison. Nobel Peace Prize Winner Liu Xiabo was sentenced to 11 years in jail for publishing a political manifesto which was seen as a threat to the stability of the state.

I understand that the prime minister did raise Mr Liu's case with Premier Wen at a banquet on Tuesday night - but how vigorously no Chinese student nor British voter is likely to ever know.

I will be watching carefully to see whether the Chinese media report the political content of the prime minister's speech or merely relay his praise for China's economic development.

Beijing has changed dramatically since I first travelled here with Tony Blair. The bikes have been replaced on the streets with traffic gridlock.

The streets, once grey, are full of the colour of Western commercialism mixed with the buzz of Chinese entrepreneurship. Back then the bars of Western hotels were full of secret police.

On Tuesday, I interviewed the dissident Ai Weiwei in full public view on a busy street. He condemned the prime minister for failing to condemn the Chinese government.

What has not changed though is that the Chinese will not tolerate calls for a change to their one-party state either from their own people or a distinguished visitor - except, that is, in code.

Update, 10:33: The test of David Cameron's message may turn out to be whether anyone beyond the hall at Peking University actually heard it. China TV may choose to report his praise for their country and even the call made by one questioner for lower tuition fees for students coming to the UK. But somehow I doubt whether they will report the PM's call for greater political openness. The Chinese propaganda ministry has even recently speeches and interviews.

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Beijing: "It's a trade mission."

The message on board the prime minister's plane to Beijing could scarcely have been clearer. David Cameron has brought the largest-ever British delegation to China to secure business deals - to open British supermarkets and English-language schools and even to export British boars to sire Chinese pigs.

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He has not come to pick a fight with China on human rights. In about addressing areas of disagreement "with respect and mutual understanding acknowledging our different histories".

On his last visit here - as leader of the opposition three years ago - David Cameron was much less coded. He spoke then of his "deep concerns" about freedom of expression, of religion and of the media in China. He declared his hope that by the time of his next visit China would have ratified and implemented the International Covenant on Social and Political Rights. His hope was in vain. The covenant remains unsigned.

Veterans of the Sino-British relationship insist that the advice given to Margaret Thatcher 30 years ago remains true today - namely that British prime ministers can choose whether to play to the crowd by condemning China in public or to have influence by keeping their disagreements private.

The problem with this advice is that those who have witnessed Britain's quiet diplomacy in recent years say that it has amounted to little more than British politicians pointing at a piece of paper which formally raises their concerns about human rights before moving on to more pressing topics. When recently Britain did publicly criticise the death sentence handed down to a drug smuggler who was almost certainly mentally ill, the Chinese authorities reacted by cancelling the so-called "human rights dialogue" - the channel designed to ensure that trade and human rights could be discussed concurrently but separately.

Ai Wei Wei, the campaigner and artist whose ceramic sunflower seeds are on display at the Tate Modern, has only just been released from house arrest. He has urged the PM to say that the civilised world cannot see China as a civilised country if it doesn't change its behaviour. Mr Cameron is unlikely to take that advice but will, no doubt, raise the case of the Nobel Peace Prize winner, Liu Xiaobo, the political reformer who is languishing in a Chinese jail.

It is no surprise that David Cameron's deepest concern now, like that of every recent prime minister, is to secure for Britain a growing share of China's growing wealth. Today he and Premier Wen will agree to double the value of trade between their two countries over the next five years to $100 billion. He also wants to persuade China's leaders to buy more foreign goods in order to help re-balance the world economy and to play a role equal to their economic might in tackling the political problems of Iran, Sudan and Zimbabwe, to name just a few.

It may not be a surprise but it is a reminder of how limited is the power of our government to even express deep concern let alone do anything about China's continued policy of repression and opposition to democracy.

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"Hey Stan, put the beef back in the oven, they're talking on the telly about those...".

When I worked on On the Record - the old Sunday lunchtime programme - that's how we used to talk about ideas we feared might not instantly grip the imagination of the Great British public.

So it is with the business plans the government is publishing today.

However, those inside Number 10 who've driven the process could scarcely be more excited.

Today the prime minister will claim that they will produce "a power shift - a radical redistribution of power from governments to communities and people - and a horizon shift, so that we govern for the long-term".

It's quite a claim for the .

Today's departmental business plans will spell out a series of detailed timetables of what the government will do in order to allow the public sector to "self improve".

In other words, instead of setting targets for schools, hospitals, police forces and the like, ministers will set themselves targets to ensure that they free up teachers, doctors and police officers to take the decisions about what needs to be done.

Progress on these targets will be published monthly.

What, you may ask, will ensure that the services themselves improve?

That's where - according to coalition philosophy - you come in, dear reader.

Each business plan will promise to publish data - some of it never published in this form before - to allow parents, patients, victims of crime and so on to monitor standards and demand improvement.

So, for example, crime maps will be published showing crime stats street-by-street and reoffending rates will be shown prison-by-prison as part of what one insider promises will be "an avalanche of information".

David Cameron will claim that:

"Instead of bureaucratic accountability to the government machine, these Business Plans bring in a new system of democratic accountability - accountability to the people.
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"So reform will be driven not by the short-term political calculations of the government, but by the consistent, long-term pressure of what people want and choose in their public services - and that is the horizon shift we need."

is fond of recalling how in the days before privatisation, ministers used to be asked questions about why someone's telephone line had not been installed on time.

His aim is that in future it will seem equally bizarre to ask a minister about the performance of an individual school or police force.

He - and the coalition - are banking on transparency, customer power and the restoration of professional autonomy to drive change in the public sector.

The question hanging over today's launch though is whether the public are yet ready to abandon decades of habit which has led them to say "we elected you - so why's our school/hospital/police force so hopeless?"

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The official line could not be clearer.

This was a decision for the business secretary alone. He was acting in a semi-judicial capacity. If he had the slightest doubt, Vince Cable had no choice but to refer the matter to the proper authorities. Was politics a factor? Deary me, no.

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Hold on a second. We are talking about whether the Murdochs - the most powerful media-owning family on the planet - and News Corp - the owner of many of Britain's biggest-selling and most influential papers - should take 100% control of BSkyB - the principal broadcast competitor to the ´óÏó´«Ã½. You don't get much more political than that.

Vince Cable did have a choice. The business secretary could have said that the proposed takeover raised competition concerns which the European Commission should rule on but not concerns about media "plurality" - whether the takeover limits the number of media voices. After all, he could have argued, News Corp already controls, even if it doesn't 100% own, the company behind Sky TV.

Had he done so he would have infuriated many in his own party, given Labour another stick with which to beat him, his party and the government and put himself in opposition to the bosses of the Guardian, the Mail and the ´óÏó´«Ã½, who recently wrote a joint letter raising their concerns about the deal.

However, by referring the deal, Cable has added to the growing list of government decisions which have disappointed the Murdochs.

Rupert and his son James believed that David Cameron would, on coming to power, neuter Ofcom, the regulator which they regard as over-mighty and as having held back their businesses. Daddy Murdoch's recent speech in London argued that governments shouldn't curb the "enthusiasm or energy" of growing companies as "this is what competition is all about". He went on to complain that "when the upstart is too successful, somehow the old interests surface, and restrictions on growth are proposed or imposed. That's an issue for my company. More important, it's an issue for our broader society".

The Murdochs hoped to persuade ministers to cut the ´óÏó´«Ã½ down to size and believed that the six-year licence freeze was more of a let-off than a disaster for the corporation.

And now this.

Yesterday I wrote about the problems this government now confronts. Imagine how much harder they would be if the Sun, the News of the World, the Times and the Sunday Times were to start shouting betrayal over Europe, defence deals with the French or going "soft on crime" or if they were to mock the prime minister daily for hiring "a vanity photographer" at public expense.

The editors of those papers will insist that they make their own editorial decisions and are too good at their jobs to allow their papers' stances to be determined by something like a referral to Ofcom. However, I wonder whether, the next time they happen to chat to their proprietors, the message they'll hear from Rupert and James is "I'm right behind this coalition. I hope you still are?"

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When Alastair Campbell was inside No 10 he used to note the monotonous regularity with which someone in the media trotted out the phrase "in the prime minister's worst week ever". I'm away from Westminster today but it occurs to me that no-one's used the phrase for David Cameron yet.

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So here goes. This is why this week just might be a candidate for his "worst week ever"... so far.

• A bomb plot brings David Cameron face-to-face with the reality of the terror threat.

• He discovers that the police failed to find the explosives at first.

• Then he discovers that the President of the United States was informed more than 10 hours before him.

• And then he discovers that his junior home office minister had known about it for hours but didn't bother to tell her boss or No 10.

• Just as terror is in the headlines, news emerges of what the PM calls the coalition "car crash" about whether to keep or scrap control orders for terror suspects.

• His EU budget deal is hailed not as a triumph but a climbdown by the Eurosceptic press, his backbenchers and Norman Tebbit, who condemns a "Vichy-style betrayal".

• He is forced to concede that prisoners will have to be given the vote thanks to a European Court of Human Rights ruling.

• He is embarrassed by the revelation that the taxpayer is going to foot the bill for a personal photographer and camerawoman - a small fact but one which will be used again and again by his critics - see today's PMQs - to claim that he is a vain hypocrite.

It is only Wednesday so, if you permit me, I'll include Boris's warning - less than a week ago - that he would not allow London to be "cleansed" of poor housing benefit recipients.

We all said that the Spending Review was the toughest set of decisions ever to face a modern PM. Perhaps. But it also blocked out the day-to-day realities of power when things beyond your control and over which you do not take decisions go wrong.. and then go wrong again... and then again...

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Where will it all end?

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That's the question politicians never want to answer when they unveil new treaties. They always insist, as David Cameron and Nicolas Sarkozy no doubt will today, that they are merely making practical, common-sense, non-ideological policies. This, in other words, is an entente frugale forged in tough economic times.

After all, they will ask, doesn't it make sense for Britain to make use of France's aircraft carrier when ours is being repaired - and vice versa?

Isn't it sensible to save money by sharing nuclear expertise to test the safety of our nuclear weapons?

Maybe.

However, it will now be easier - much easier - for future politicians to ask: if we are using each other's carriers and if our men are training together, why don't we form a joint air-wing? One source I spoke to described that as "a downstream issue".

Others may say: if we are testing our nuclear components together, would it not make sense to join together to purchase the next generation of warheads? Someone in the know told me that our two countries would use different missiles "for the time being".

Atlanticists may welcome all this as proof that France is at last abandoning its hauteur towards Nato.

Europe enthusiasts may also welcome it as the first step towards a common European defence.

Sceptics may wonder whether it will end up being about much more than symbols.

The questions I have raised are not ones that will be settled this year - perhaps not even this decade. But my hunch is that the signing of two treaties between France and the UK may have very profound implications for the future.

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Ed Miliband is developing a nice line in the political use of humour - rather better than his deputy's.

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Today the Labour leader suggested that, at last week's EU summit, the prime minister had turned "No, no, no" into "No, maybe, oh go on then" since he'd agreed to a 2.9% budget rise and not the freeze he'd promised.

His hope was to unsettle Tory Eurosceptics. He was helped by Charles Kennedy who praised David Cameron as "one long-standing pro-European... to another".

What's interesting is that - in public at least - they are, so far, refusing to be unsettled. Only Sir Peter Tapsell rose to his feet in the chamber today to demand a referendum.

Don't be deceived though - the issue of Europe put to sleep by David Cameron so successfully for so long is stirring again.

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