4.57pm: Here's an afternoon summary.
• Nick Clegg has launched the process which will lead to a referendum on electoral reform taking place next year. The referendum (set for 5 May 2011) will be included in a bill that will also make provision for a boundary review equalising the size of constituencies and cutting the size of the Commons from 650 to 600 at the time of the next election. Clegg said that he wanted the next election to be fought on the new boundaries using AV. But he faces strong opposition from a coalition of MPs committed to first-past-the-post (mostly Tories) and Labour MPs opposed to the boundary review.
• But the Electoral Commission has not endorsed the plan to hold the referendum on the same day as the Scottish and Welsh elections. Several MPs criticised this aspect of Clegg's plans, often on the grounds that differential turnout in Scotland and Wales might make the overall result unfair. The Electoral Commission is not going to say whether or not it supports the timing until the government has published its bill. But a spokesman has just told me it can see "advantages and disadvantages" in holding the referendum on 5 May 2001.
• Clegg also announced a partial climbdown on the coalition plans for fixed-term parliaments. The government will legislate to fix 7 May 2015 as the date for the next general election. But the proposal to create a law saying that there will be no general election unless 55% of MPs vote to over-ride the fixed-term parliament legislation has been revised. Clegg confirmed that a majority of MPs would still be able to pass a vote of no confidence and he said that if a new government could not be formed within 14 days of a successful no confidence vote, an election would be called. But, in other circumstances, two thirds of MPs would have to vote for a dissolution of parliament, Clegg said. (See 3.46pm)
• Michael Gove, the education secretary, has just announced the Building Schools for the Future projects covering nearly 700 schools will be cancelled with immediate effect. In a statement, he also announced a review of all capital spending in schools. Ed Balls said it was "a black day for our country's schools".
• Danny Alexander, the chief secretary to the Treasury, has announced spending cuts worth £1.54bn. He said that although these commitments were made by Labour, the money was not available. (See 4.37pm)
4.50pm: Here's some reaction to the Clegg statement.
This is from Alexandra Runswick, the deputy director of Unlock Democracy.
Unlock Democracy welcomes confirmation that the prime minister's power to choose the date of the election is finally being consigned to history. Fixed term parliaments are an important rebalancing of power from the executive to parliament. These new proposals are stronger than those initially announced and far more likely to stand the test of time. It is good to see the government listening and engaging constructively.
We welcome this historic announcement and look forward to actively campaigning for the abolition of the outdated first past the post system. After weeks of speculation, the public can now look forward to a long overdue debate about our electoral system and the chance to change to a system which gives them more choice at the ballot box.
And this is from Ashley Dé from the Electoral Reform Society.
The worst kept secret in Westminster is fantastic news for anyone interested in rebuilding trust in politics.
On May 5th 2011, and for the first time in our history, the people expected to use the voting system to elect their parliament will have the chance to change it. We have MPs enjoying power without any real mandate and millions of voters who've never made a difference in election after election. It's time we turned the page on the politics of the 19th Century and this is that chance.
Our decrepit system has consistency failed the public, so it's fitting that its fate rests with the judgement of the British people. This is their chance to make first-past-the-post history.
And this is from Andy May, a spokesman for Take Back Parliament.
Tory back bench dinosaurs are making a hypocritical attempt to shut down the referendum vote.
Insisting on at least 40% of registered voters having to vote yes before a bill is passed is absurd. Only one in twenty MPs would have been elected to parliament had this rule been used in the general election.
Supporters of the No campaign are desperate to wreck the referendum from the start and frustrate the democratic will of the people. The public deserves a real choice on a fairer voting system.
4.42pm: The Liberal Democrats have just announced that John Sharkey will chair the Lib Dems' Fairer Votes campaign. Sharkey is a former joint managing director of Saatchi & Saatchi who has worked for the party before.
4.38pm: Back in the Commons, Julian Huppert, a Lib Dem MP, says he can't understand the opposition to AV. All parties in the Commons use some form of preferential voting in their internal elections, he says. And some MPs were elected using preferential voting systems until 1950. Huppert is referring to the university seats (which used STV).
4.37pm: Nick Clegg is still delivering his statement, but I'm going to break off because the Treasury has just issued the written ministerial statement from Danny Alexander. He is cutting spending programmes worth £1.54bn. Education is losing £1bn, business £265m, communities £220m and the Home Office £55m. These programmes were due to be funded either through "end year flexibility" (a Treasury rule that allows underspending to be redistributed) or from the reserve. Alexander said that it was "highly unrealistic" to expect the underspending to release enough money and that there was not enough money in the reserve to make up the difference.
Alexander said:
The previous government committed to spending money it simply did not have, but this coalition government has taken action to address this serious situation. The decisions have not been easy, but the understanding and cooperation of my cabinet colleagues has enabled us to act swiftly to ensure that the nation can live within its means.
The reality is that these unfunded spending promises should never have been made, because the money was never there to pay for them. We did not make this mess, but we are cleaning it up.
4.19pm: Cathy Jamieson, Labour, asks if the government has consulted the Scottish government about the date of referendum. Clegg says it will be consulted, implying that it has not yet been formally asked for its view. Clegg says the government believes in telling parliament first.
4.18pm: Frank Dobson says he has 86,000 electors in his Holborn and St Pancras constituency. It is the sixth largest constituency in the country. But he is aware that many people are not on the register. What will the government do about it?
Clegg says Labour did nothing to address this problem when they were in power. But if he can rectify the problem, he will.
4.09pm: Chris Bryant, the Labour former minister, asked if the cut in the number of MPs would be followed by a cut in the number of ministers in the Commons. Clegg didn't address the point in his reply. Christopher Chope, a Tory backbencher, tried again to get him to answer, but Clegg just made a broad point about MPs still being able to hold the executive to account.
4.04pm: David Davis, the Tory backbencher, has queried the decision to hold the referendum on 5 May 2011. He said he was not worried about voters not being able to understand the question. He was worried about "differential turnout" (because the turnout may be higher in Scotland and Wales). Clegg dismissed the charge. But a few minutes later Bernard Jenkin, another Tory backbencher, rose to press the point again.
4.00pm: Charles Kennedy, the former Lib Dem leader, has just asked a question. Kennedy is thought to be very sceptical about the coalition, but he has said little about his reservations in public. When he got to his feet, we thought he might take a swipe at Clegg. But he didn't. He just asked a technical question about constituency size.
3.59pm: Clegg is replying now. He starts with a tribute to the work Labour did in its early years on constitutional reform. But the consensual tone doesn't last long. He's now accusing Straw of being "misleading and patronising" in what he said about the dangers of the AV referendum being hold on the same day as the Scottish and Welsh elections. And he ends with a broadside against Labour.
Is the Labour party a party of progress or of stagnation? Is it a party that stands for something, or does it just stand against everything? Is the Labour party in favour of change or is it just in favour of itself?
3.52pm: Jack Straw is responding for Labour. He says that the plans to allow for an election 14 days after a vote of no confidence, if no new government can be formed, represents a U-turn.
On AV, Straw says Clegg used to call it a "miserable little reform".
Straw says Labour supports voters being allowed a vote on AV. But that will not be used as "cover" for proposals in the same bill changing the boundaries of constituencies and cutting the number of MPs.
The need for constituencies to be the same size is already set down in statute, he says.
Of the 10 largest constituencies, six are Labour. And of the 10 smallest, only three are Labour. (Generally Labour constituencies have fewer votes, which is why the Tories complain that more votes are needed to elect a Tory MP than a Labour MP.)
Straw also complains that Clegg wants to redraw boundaries without taking account of the 3.5 million people who are not on the electoral register.
On the call to cut the number of MPs, Straw says the international comparisons used by Clegg are "tendentious in the extreme". Straw says Clegg has also failed to make allowance for the fact that MPs now do more constituency work than in the past.
3.49pm: Clegg is still making his statement.
Addressing the subject of the referendum on the alternative vote, he says it will be on 5 May 2011. Having the referendum on the same day as the local elections, and the elections in Scotland and Wales, will save £17m. Voters will be able to understand the difference between the issues.
Clegg says the 2015 election will be fought on the new boundaries. Only two constituencies should be exempt from the rules saying constitutencies have to be roughly the same size: Orkney and Shetland, and the Western Isles. There is jeering in the Commons; Orkney and Shetland is a Lib Dem seat.
3.46pm: Nick Clegg is speaking now. David Cameron is sitting on the front bench listening.
Clegg says the government has an ambitious programme for political renewal. He rattles through the proposals in the coalition agreement. And he says he will give more details about some of them this afternoon.
First, he introduces legislation to fix the date of the next general election: 7 May 2015. "This prime minister" - ie, Cameron - has given up his power to set the date of the election.
Clegg addresses the "55%" issue. MPs will still be able to pass a motion of no confidence. These powers will be written in statute. If no new government is formed within 14 days of a vote of no confidence, there will be an election.
There will still be provisions for the Commons to vote for a dissolution of parliament. But that will need the support of two thirds of MPs, not 55%.
Clegg says these rules will ensure, if no government can win the support of the Commons, there will be an election.
Second, he says the government wants to cut the size of the Commons to 600. There are 650 MPs now. Originally the Tories said they wanted to get rid of 10% of MPs. The coalition has settled for a slightly lower number.
3.36pm: With Nick Clegg about to make his AV statement in the Commons, here's an afternoon AV reading list.
• Fraser Nelson at Coffee House suggests David Cameron is contemplating the re-alignment of British politics.
There is an analysis emerging in Tory circles, which I suspect Cameron shares, that the era of majority governments is over in Britain. That coalition is the new future – which is why it's good to ensure the Lib Dem deal is built to last. The AV system would, of course, make this outcome more likely. I suspect it won't be long before we hear Danny Finkelstein telling us how AV is quite a good idea, and will benefit the Tories after all. If we're so nice to the Lib Dems, they'll put us No.2 on their preference list and that will help in Labour-Tory marginals. He's largely there already.
• Mike Smithson at PoliticalBetting wonders whether AV could end up destroying the Lib Dems.
We've seen in the London Mayoral elections, where there's a simplified alternative vote, how the big two squeeze out the yellows. Could what happens to Clegg's party in the capital every four years apply at general elections?
• Sunny Hundal at Liberal Conspiracy considers the arguments that would be effective in an AV campaign.
3.15pm: At the lobby briefing this morning someone asked about Sebastian James. The name didn't mean anything to most of us, and the prime minister's spokesman wasn't very revealing. But I've just taken a peak over the Times's paywall and all is revealed. Sam Coates reveals that he is a Bullingdon Club contemporary of David Cameron's. He was in the notorious photo, and he will be appointed to head a government review looking at how money is spent on school buildings. According to Coates, James's full name is the Right Honourable Sebastian Richard Edward Cuthbert James. He is now the group operations director of DSG International, the company that runs Curry's.
2.51pm: Sally Keeble, the former international development minister, is giving evidence to the Iraq inquiry this afternoon. I expected the hearing to be quite dull. But the inquiry has just released a letter she sent to Tony Blair in June 2003 in which she strongly criticised Clare Short, the international development secretary at the time of the war, and the department as a whole. Here's an extract:
Following our phone conversations, I want to set out my misgivings about DfID's performance in dealing with the humanitarian consequences of the action in Iraq ...
There were of course difficulties because of Clare's position. Some of the consequences of her decisions were disastrous, specifically: the lack of pre-planning, the difficulties in providing humanitarian supplies for the troops, the refusal to contribute £6m towards the dredging of Um Qasr and the refusal to engage fully with [the Office for Reconstruction and Humanitarian Assistance].
However, quite apart from the political difficulties, there were also real difficulties with the performance of the department at official level.
The inquiry has also released the text of a letter sent in response by Suma Chakrabarti, the DfID permanent secretary at the time, dismissing Keeble's claims as "unfounded".
2.27pm: Lord Patten's briefing must be over (see 12.08pm). According to Channel 4 News, the Pope's visit is going to cost at least £10m.
1.44pm: Here's a lunchtime summary.
• Danny Alexander, the chief secretary to the Treasury, is set to announce fresh spending cuts worth £1bn. In a written ministerial statement this afternoon, Alexander is expected to say that programmes that would have been funded by Whitehall underspending under Labour's plan will not go ahead because the money is not available. The departments affected include education, business, communities and the Home Office. Last month Alexander cut or froze government spending projects worth £10.5bn.
• A union leader has said that civil servants will strike if the government tries to cut their pensions or their jobs. Mark Serwotka, the general secretary of the Public and Commercial Services union, issued the warning this morning, when several unions thought they would be discussing the issue today with Francis Maude, the Cabinet Office minister. But the meeting is now not going ahead. Maude will deliver a speech about civil service reform later today. Union figures believe that Maude will announce cuts to sick pay provisions for civil servants and the extension of variable pay rates for people working in different regions, as well as changes to redundancy pay arrangements. (See 8.28am, 12.08pm, 1pm)
• Ed Balls has said he would be "very wary" of supporting a switch to the alternative vote in a referendum. The Labour leadership contender suggested that the idea was being proposed "in a partisan way" as part of an attempt to "gerrymander" the constitution. Nick Clegg, the deputy prime minister, will make a statement about the plans for a referendum on AV, which will be combined with moves to equalise the size of parliamentary constituencies, in a Commons statement at 3.30pm. The broad thrust of what Clegg will announce has already been revealed. But the statement should be interesting because it will provide us with an indication as to how Labour will react, and how strongly the Tories will oppose the abolition of first-past-the-post. (See 10.48am and 12.08pm)
• Ofcom has rejected complaints about Sky News' coverage of the general election. Ofcom received almost 2,800 complaints from viewers who had objected to Adam Boulton's treatment of the Lib Dem leader, Nick Clegg, and his on-screen clash with the former Labour spin doctor Alastair Campbell, as well as Kay Burley's interview with a campaigner for electoral reform. Mark Sweney has more details at Media Guardian.
1.00pm: What really happened to that Cabinet Office meeting to discuss cuts to civil service redundancy pay? Downing Street said this morning: "There was no meeting planned, so no meeting was cancelled or pulled out of." But the union version is rather different. Here's was one union source told me.
We did not get a formal invitation to a meeting. But we were told from the Cabinet Office that there would be a meeting, that it would be at 4pm today and that it would be to discuss an announcement going to be made by Francis Maude. This morning we were then told that it was not certain whether the meeting would go ahead or not. Then, at about midday, we were called officially by the Cabinet Office and told that it was off, with no explanation why. It's a bit disingenuous for them to say that it was not being planned.
Interestingly, the unions believe that the Maude announcement will not just cover the civil service compensation scheme. They're also expecting Maude to announce cuts to the sick pay provisions for civil servants and the extension of variable pay rates for people working in different regions.
12.57pm: Ed Balls has given a strong hint that he would not support switching to the alternative vote electoral system in a referendum campaign. According to PoliticsHome, this is what he told the Daily Politics show:
I'm very wary ... I support AV, it's in our manifesto, but if this is being done in a partisan way while gerrymandering the constitution. Why should we [Labour] campaign for something which is being done in an improper way?
12.42pm: Earlier I put up a post about a survey of Conservative party members showing that they are mostly very happy with the decisions being taken by the coalition (see 9.57am). A ConservativeHome survey at the end of last week also showed Tories backing 11 out of the 14 main measures in the budget.
Liberal Democrat members also seem to be on board. This morning Liberal Democrat Voice published its own survey. It is based on a small sample (350 members) but it suggests a majority of Lib Dem members back all the major budget measures. Predictably, the measure that attracted most Lib Dem opposition was the VAT increase. But 48% of Lib Dem respondents supported it, and only 42% opposed it. This is Stephen Tall's conclusion:
For the moment, then, it seems that Lib Dem members – like much of the public – are prepared to give the new coalition government the benefit of the doubt as they tackle the UK's financial mess.
12.08pm: I'm just back from the Downing Street briefing. Here are the main points.
• Francis Maude, the Cabinet Office minister, won't be meeting civil service unions today to discuss cutting redundancy payments. Downing Street said there was "no meeting scheduled". That will come as a surprise to the unions, who seemed to know this morning exactly when it was meant to be taking place. (See 8.37am.)
• Nick Clegg's statement to the Commons will cover the government's plans for a referendum on the alternative vote and for equalising the size of parliamentary constituencies. Other issues may come up too, but he won't say much about Lords reform.
• Downing Street said the government had "no plans" to change the law governing strikes. The prime minister's spokesman played down the Times story (see 10.44am), but did not deny it.
• Lord Patten, the former Tory chairman, will give a briefing later today about the Pope's visit. David Cameron has given Patten the job of overseeing the preparations for the pontiff's trip.
• Michael Gove, the education secretary, is making a statement in the Commons about school spending cuts. It will partly overlap with a written ministerial statement from Danny Alexander, the chief secretary to the Treasury, about the last government's end-of-year spending. (See 8.28am.)
• The announcement about an inquiry into allegations that British officials colluded in torture will come "quite soon".
• Downing Street will not explicitly back John Bercow's plans for reform of prime minister's questions. (See 10.23am.) The prime minister's spokesman said Cameron would be "open" to suggestions from the Speaker, but he would not comment in any further detail.
• And Downing Street also refused to say whether Cameron supported the parents who let their their children, aged eight and five, cycle a mile to school on their own. (The story was here in the Sunday Times yesterday, but you'll only be able to read it if you've subscribed.) Boris Johnson today challenged Cameron to back the parents. (See 10.44am.) The prime minister's spokesman said Cameron "thinks people should be taking decisions for themselves". But he would not comment on the particular case, or criticise the school for challenging what the parents are doing.
10.54am: I'm off to the Downing Street lobby briefing. I'll post again after 11.30am ...
10.48am: Nick Clegg is making a statement on electoral reform this afternoon. I presume this will be the announcement about the referendum on the alternative vote taking place in May next year. Clegg was due to announce this tomorrow, but the news has already been well-trailed so he may well have decided just to get on with it.
10.44am: I've already mentioned a couple of the stories in the papers today (see 9.23am and 10.23am). Here are some of the others worth flagging up:
• Sam Coates in The Times says that ministers are considering tightening the laws regulating strikes. Although Downing Street is saying it has "no plans" to change union legislation, the story quotes a Tory source saying the cabinet is "feeling inclined to be very bullish and aggressive" about confronting the unions. Coates says one option being discussed is a change that would require a certain proportion of workers to vote in favour for a strike for it to be legal, instead of just a majority of those actually voting. The CBI has said that 40% of the workforce should have to vote for a strike for it to be allowed.
• Lord Ashdown says in an article in the Times that the coalition is failing in Afghanistan.
In these kind of operations, winning militarily but losing politically means losing. And we are losing politically. It's the insurgency that is expanding across the country, not the writ of Kabul.
He says the international community should start preparing an international conference on the future of Afghanistan, "a bit like Dayton for Bosnia". He goes on: "Would this prevent any chance of a civil war? No. But it might give us the best available bulwark against one."
Both the Times stories are locked behind the paper's paywall.
• Boris Johnson in the Daily Telegraph says he supports the couple who are allowing their children, aged eight and five, to cycle a mile to school on their own.
Children, especially male children, need to learn about risk and daring; and if we don't give them opportunities for excitement they will simply invent their own, with gangs, and sometimes that will end in disaster. That is why I passionately support the right of the Schonrocks to take their own decisions, and to take their own risks, and I hope our new government does so, too.
• Philip Hammond, the transport minister, has said that pensioners could consider paying for their bus travel instead of using their free bus passes, to help the public finances, the Daily Telegraph reports.
• The Daily Mail says John Bercow has allowed his nanny and her husband to live rent-free in the Speaker's official residence.
10.23am: I'll post a summary of the main political stories in the papers quite soon, but I'm going to give Steve Richards's interview with John Bercow in the Independent special treatment because it's full of good lines. Here they are:
• Bercow said that the leader of the opposition gets too many questions at prime minister's questions.
Six questions are too much for the leader of the opposition. They end up taking a large number of minutes, say 10 minutes out of 30; that is a third of the time gone.
• He attacked the Daily Telegraph. He criticised the paper for what it said about his decision to appoint a black woman as chaplain to the Commons. And he suggested it was making a mistake in continuing to run stories about MPs' expenses.
If there is a newspaper which has defined itself by MPs' expenses, massively increasing its sales, using it as its USP, if it thinks it's going on for several parliaments to come then it's guilty of delusion on an industrial scale.
• He said that party conferences should take place at weekends, so that the Commons can carry on sitting through September.
It is quite wrong for party conferences to be used as an excuse for the Commons not to sit. Conferences could be held at weekends. Parliament should sit throughout September.
• He claimed that "organised barracking" of speakers during PMQS began in the 1970s. Bercow said that he had conducted some research and discovered that the shouting started about 40 years ago because of the mutual loathing felt by Harold Wilson and Ted Heath. Bercow said the public "detest" this behaviour.
• He said that the people who attacked him or his wife, Sally, were either snobs or bigots.
The snobs are those who regard themselves as socially superior because of their background, the person they have married, or the money they've got. The worst snobs are of no distinction at all. The bigots are people who cannot bear the idea of a Speaker with an opinionated wife. If she wants to be a Labour MP she has every right ... but of course whether she succeeds is a matter for her and Labour.
Is Bercow right about the public "detesting" rowdy behaviour at PMQs? I can believe that people do write to him to complain. But I suspect that they also find the aggro quite watchable. There are parliaments that conduct themselves in a more "civilised manner" as Bercow is calling for – the European parliament, the Scottish parliament, the Welsh assembly – but I'm not aware of any evidence that shows that that's good for ratings.
9.57am: Conservative party members are strongly opposed to Ken Clarke's plans to cut the number of people being sent to prison. According to a survey for ConservativeHome, 65% of members are opposed, and only 31% are in favour.
But I'm being mischievous. The survey is actually very good for David Cameron. ConservativeHome asked about 17 early decisions taken by the coalition government and the other 16 are strongly supported by Tory members.
9.23am: The Daily Telegraph has splashed on the government's plans to change the rules relating to civil service redundancies. James Kirkup's story includes this quote from a letter sent from the Cabinet Office to human resources directors in the civil service.
You must not assume that the old terms will continue unchanged for more than the next couple of months or so.
The Telegraph story also claims that "some ministries have 'pools' of several hundred workers who do not have allocated jobs but who are not sacked because of the cost".
9.14am: Not all public spending has ground to a halt yet. As Reuters reports, Serco has just announced that it has signed a £415m contract to build and manage a new prison at Belmarsh in London.
8.37am: The talks about the civil service compensation scheme are not due to start until 4pm, I've been told by a union official. The PCS (see 8.28am) is expecting to be joined by five other unions: the FDA, Prospect, Unite, GMB and the Prison Officers' Association (POA). They will be meeting Francis Maude, the Cabinet Office minister.
8.28am: It looks as if civil service cuts will be the story of the day. Ministers are due to meet civil service union officials today to discuss possible changes to the civil service compensation scheme, which determines how much civil servants receive if they get made redundant. The government thinks it's too generous. But Mark Serwotka, the general secretary of the Public and Commercial Services union, has already been on Radio 4 warning that the government's stance could provoke a strike. According to PoliticsHome, this is what he said:
We live in difficult times, we have a crisis caused by financial markets, and now it's hard-pressed public servants who are paying the price, and that can't be right.
People need to understand that there is no democratic legitimacy for cuts on this scale. I believe there is no argument for cuts in public services at all at the moment.
If we get attacked on pensions and jobs and pay then I think the inevitability of industrial action stares us in the face.
I'll be blogging more about the talks throughout the day. And there will be other public spending news too. As Nicholas Watt reports in the Guardian, Michael Gove is due to announce today cuts of up to £3.5bn in the schools budget. I'm not sure yet whether this is related to a written ministerial statement that George Osborne will be making today about "public spending control". Otherwise, it's a bit patchy. Norman Baker, the transport minister, is making an announcement about green buses. Sally Keeble, the former international development minister, is giving evidence to the Iraq inquiry at 2pm. I'll be keeping an eye on these stories, as well as covering any other breaking news from Westminster and bringing you all the best politcs from the papers and the web.
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