Barnsley MP Michael Dugher was chosen to be Ed’s PPS for a reason. It quickly became clear Chuka Umunna was way out of his depth in the role, so who better to replace him than a man who knows the party inside out and has worked in Downing Street, the MoD and various other government departments? However it’s not just Ed who has spotted Dugher’s talents in the past…

Though he ended up as Gordon’s Moussa Ibrahim at the end of the last government, between his days as Geoff Hoon’s Special Adviser at the MoD (2002-’05) and becoming Gordon’s last spinner in October 2008, Dugher took time out in the private sector, becoming Head of UK Public Affairs for global data giants EDS. He left the MoD just before the 2005 election and went to EDS in 2006, via a role in the Leaders of the House’s office overseeing Privy Council matters.

When Dugher took the role of EDS’s top UK lobbyist, the company said he bought a ‘wealth of experience from his under-standing of the parliamentary process’. However that’s not all he had to offer. A rather interesting FoI shows that EDS’s public affairs team, headed up by Dugher, lobbied MoD officials and Ministers some thirty-three times between 2006 and 2007. Crucially Dugher was meeting with Lord Drayson, who was in charge of procurement of equipment and support.

The relationship built up between the MoD and EDS paid off handsomely for the latter. In government Labour paid EDS a total of £4.2 billion for IT during their years in government. Including £2.3 billion for the troubled Defence Information Infrastructure contract which was signed when Dugher was still Hoon’s SpAd. The MoD paid EDS a further £570 million during the period Dugher worked for them. All very cosy. 

Surely there are rules against this sort of thing, Guido hears you ask. Well yes there are:

‘Under the terms of their contract, special advisers are required to submit an application to the head of their former Department for any new appointment or employment they wish to take up during the two year period after their last day of paid service.” 

Guido spoke to Dugher last night who claimed that the move was cleared by the Cabinet Office. However this clearance was only in relation to his last role working for the Leader of the House/Privy Council. Dugher says that the both the Cabinet Office and EDS were well aware of the move and possible conflicts of interest. However, the MoD tell Guido:

“We do not hold any data to confirm that Mr Michael Dugher has submitted an application to the MoD under “The Business Appointment Rules for Civil Servants” for permission to seek an appointment with EDS as a lobbyist. The requirement for Michael Dugher to notify the department of his intention to commence employment with EDS under Business Appointment Rules only applies for two years after his last day in service and therefore this requirement ceased from 2007’

Though he cleared it with the Cabinet Office, Dugher was back lobbying the MoD within two years of leaving as a SpAd, which doesn’t look so good. This is often the way with the giant revolving door of government and Guido only raises this all for one particular reason. Dugher is currently in charge of Labour’s own long-overdue defence procurement review. We all know how badly Labour’s spending on MoD contracts went. Dugher certainly has some inside knowledge of what went wrong…

Before the 2010 general election Guido had a sense that we were heading towards coalition government, stuck his neck out, and called it a month before the election. Reading the runes again it seems to Guido increasingly likely we are looking at a one-term Tory-led government.

Right now the bookies favour no overall majority, polls suggest Labour could be the largest party, in that event the LibDems, probably without Clegg, will in all likelihood support a Labour government.

The primary cause will be the economy, the probability of a double-dip recession is rising. The US economy is in trouble, the Eurozone is in turmoil, growth is faltering at home and abroad. Inflation is out of control, real incomes are actually falling in the UK. By 2015 the answer the electorate will give to Ronald Reagan’s “Are you better off than you were four years ago?” question may well be “No.”

Osborne’s plan was to bear down on the deficit for a couple of years, restructure taxes a little, revolutionise education policy, tinker with welfare to make work pay, give tax cuts in 2013-14 once the fiscal picture was improved and go on to win the Tories a governing majority. In the second term, free of the LibDem drag,  they would really press on with radically remaking government and the Big Society. Alas they may only have one term.

Things are not turning out so well. Osborne may need to have a root around in his desk to find some of Gordon Brown’s old lines about “it started in America” and “global economic downturn”. Osborne’s hawkishness on the deficit is being rewarded by the international bond markets, but there is little he can do about international demand. US confidence has been shaken up by the downgrade and even German GDP growth was only 0.1% last quarter, Europe may well go into recession within a year, assuming the continental banking system doesn’t collapse next week. None of this will enhance Tory election prospects.

It gets worse for Downing Street; Andy Coulson could be in the dock the year before the election, or worse still, in jail. This will of course tarnish Cameron and Osborne. There is also the possibility that Coulson, as well as other News International figures, could sing about matters that would be excruciatingly embarrassing for the Tories. Osborne, who was really responsible for getting Andy Coulson his job, will be in a particularly uncomfortable position, perhaps even more so than Cameron. Coulson knows where the bodies are buried…

Apparently:

“No 10 has conceded to Labour demands for a formal commission to investigate the causes of last week’s riots after behind-the-scenes cross-party talks coordinated by the Liberal Democrats.”

Ouch…

BlackBerry is in the news as the “weaponised” encrypted communications system of choice for politicised riot organisers, there is talk that the police and MI5 have called in GCHQ boffins to crack the encrytion on the BlackBerry RIM data network.  On the other side over in Downing Street they also use BlackBerrys. After the last government was blighted by missing laptops, data and even “honey trapped“ phones, Downing Street think they have come up with a solution to protect the BlackBerrys of top aides.

Everyone has to carry around not only their government communications network issued BlackBerry phone, but a BlackBerry Smart Card Reader too, with another SIM card in it. If the two are separated by more than ten metres or so, the Blackberry stops working. So if a pickpocket stole the BlackBerry, it would be useless. Carrying two units in your pockets is of course a little cumbersome and inconvenient. Unfortunately from a security point of view, the wonks and spinners have taken to just sello-taping the two of them back to back…

Two weeks ago Guido noted who was blaming who within Downing Street for the Coulson situation. It was made clear to him that Steve Hilton was trying to push any flak firmly in the direction of Cameron’s Chief of Staff Ed Llewellyn. The latter came under intense pressure as the crisis blew up, with widespread calls for him to walk. How funny then that Hilton was subject to such a particularly wounding insider briefing in this morning’s FT:

Just a thought…

As reported yesterday, Downing Street have signed off the plans for a mini-shuffle should the CPS press the big-red Huhne button. All talk of the one time leader in waiting being able to cling on, despite a charge, has withered away, even amongst his most loyal Praetorians online. As Guido told you back in May, the two LibDem front-runners for the Energy and Climate Change brief are Ed Davey and Jeremey Browne:

“Both are Orange Bookers, though Browne is seen as more right-wing which will likely dent his chances for the soppy climate change brief. Obviously Laws is toxic and Guido understands that Sarah Teather has little chance of a promotion.”

Huhne has managed to convince everyone he’s a bit left-wing, which makes Davey seem a likelier option. Though given he held the LibDems Foreign affairs brief before the election, it would make sense to pop him in the Foreign Office and promote the telegenic Browne to the Cabinet.

After she lost control of her backbenchers, leaving the Prime Minister floundering at the height of the phone hacking crisis, the speculation that Warsi is for the chop is growing. Grant Shapps is much tipped to replace her as Tory chairman. Newsnight’s permanent fixture Michael Fallon wouldn’t be too happy though. The current Deputy Chairman has been pressing the flesh recently…

Guido reckons two birds could be killed with one stone here. Shapps, the uber-loyal Cameroon Housing Minister could go and beef up the CCHQ operation, Warsi could stay out of trouble sticking little windmills on a map in Huhne’s old job, and a LibDem could replace Shapps. However it is unlikely that the yellows would be willing to swap a Cabinet job for a mere Minister. Though given the fact that Huhne walking would be their third Cabinet cock-up in a row, perhaps Dave should put his foot down.

Steve Hilton is coming under all sorts of fire for some mad blue-sky ideas he may or may not have thrown around in Downing Street. The FT are running with the fact that he suggested cutting maternity leave, job centres and pondered why the PM had to obey the law. Though the article is somewhat weakened by the concession that “the shaven-headed policy guru’s friends admit that three-quarters of his ideas fail to get off the drawing board – to the relief of colleagues.”

There is all sorts of speculation flying around about who leaked it, the knives seem to be out for  Hilton again, and this article looks suspiciously like the revenge of Sir Humphrey. The theory that this was Steve himself flying a kite can’t be discounted though. Amongst the bait, upon which the opposition have dutifully bit, there was a gem though:

“When Mr Hilton was looking at ways to cut the deficit, he suggested replacing hundreds of government press officers with a single person in each department who would convey all necessary information via a blog.”

Guido thinks this is a fantastic idea. Imagine all those efficiency savings. If three-quarters of Hilton’s ideas go in the bin, this one, along with his Eurosceptic conversion should be the last to go…

Downing Street released the text of the letter in reply to Tom Watson regarding Andy Coulson which Tom claimed not to have received. Toby Young reckons the whole thing is a red herring in any case because Tom was merely telling the PM to watch Channel 4′s Dispatches, which had rehashed some of the Coulson allegations. Tom claimed in parliament that he had received no reply. Perhaps he should kick one of his many union funded researchers to re-check the files…

While yesterday’s twelve hour naval gaze dominated Westminster, Downing Street thought it would be a good idea to sneak out the Special Advisers pay list. Due to the government pay freeze announced when the Coalition was formed, not much has changed from last year. Except for one lucky boy…

Eyebrows have been raised across Whitehall that Rohan Silva, über-Hiltonite and No. 10′s blue-sky thinker, got a nine grand bump, when all the other SpAds were politely informed by letter that there would be no pay-rise this year.

“It can’t be performance related” said a colleague…

In an email in September 2010, David Cameron’s Chief of Staff told Yates of the Yard that he would be “grateful” if the Prime Minister was not told about the Met’s relationship with Coulson’s former deputy, and phone hacking suspect, Neil Wallis. He is also alleged to have turned down a briefing on the phone-hacking situation from the police. Steve Hilton also claims he told Ed Llewellyn about the information passed on to him by the Guardian. Llewellyn claims that he did not pass this information on to his boss. Though it’s likely to be overshadowed by today’s other events, the pack smell blood, and it’s doesn’t look good for Dave’s £140,000 school chum and ultra-loyalist.

UPDATE: The Telegraph are keeping up the pressure.