Clegg gives his backwoodsmen an opening to attack a Cameron appointment

By Paul Goodman

The Sun splashes today on the invasion of Britain by giant rats.  Most other papers clear space for today's A-level results.  But the main political story this morning is the attack by Liberal Democrat backbenchers on Sir Philip Green, appointed last week by David Cameron to help find efficiency savings.  The Times (£) and the Financial Times (£) both give it prominent space.  Andrew George and Mike Hancock are quoted as attacking Green.

In one sense, the kerfuffle is trivial: another tilt at the Coalition by Liberal Democrat backwoodsmen.  George tabled an amendment to the budget urging an investigation into the effects of the VAT rise.  Roger Williams, who backed it, said yesterday that Sir Philip's tax affairs should be investigated.  So did Mike Hancock, who voted against the increase.  The other Liberal Democrat who did so, Bob Russell, phoned in yesterday evening to an LBC show, compered by Iain Dale, on which I was a panellist.  He added to his complaints about VAT a new assault on the Government's housing benefit plans.

In another sense, however, these events are significant.  Nick Clegg said yesterday that the Government's examining an anti-avoidance tax rule.  It was this remark that gave journalists reason to ring up Liberal Democrat MPs to seek their views on Green.  The Deputy Prime Minister had an obvious reason to make it: his Party's seen by many voters as a captive of the Conservatives, and has consequently plummeted in the polls - which, furthermore, are turning against AV, the Liberal Democrat's main potential gain from coalition.  Clegg has to try to prove that Liberal Democrat ideas have leverage in government.

Tim's postulated what he calls Montgomerie's Law of the Coalition - that it will either drift left under Liberal Democrat pressure, or break up.  There's certainly plenty of it as the Government passes the hundred day mark.  Simon Hughes has been applying it this week, suggesting that Liberal Democrat MPs should have a veto on Government policy.  (There's already a partial one in place: as, I argue in today's Telegraph, Vince Cable has a veto on tax cuts for higher earners.) But pressure from the left of the Coalition will spur counter-pressure from its right - as the budget struggle over capital gains tax indicated.

Ministers, trying to negotiate between the two, therefore face what I'll call Goodman's Coalition dilemma: which wing of the Coalition can they least afford to offend?  There are arguably too many specially-drafted Government advisers.  Dale recently had a tilt against the appointment of several ex-Labour Cabinet Ministers, and Douglas Carswell wrote a tongue-in-cheek blog post headed "Government appoints MP adviser".  But if Green's advice on waste can save the taxpayer scores of billions, the appointment will be worth the trouble.  And as Mark Field rightly points out in the Times, "nothing would do more damage to the City of London than continued uncertainty about tax, which really was one of the worst legacies of the Labour Government".