8.54am: Happy New Year, everyone.

The Commons and the Lords do not start sitting until tomorrow, but there is plenty on the agenda today. The cabinet is meeting at the Olympic Park at some point, and David Cameron and his team will be discussing Cameron's plans to bounce Alex Salmond into an early yes/no referendum on Scottish independence. The Guardian splashed on the story today.

Nicola Sturgeon, the SNP's deputy leader, has just told the Today programme the SNP will stick with its plan to hold its own referendum later. "We're going to do what we said we'd do before the election." she said. "I know that's a novel concept in England."

She added that Cameron's decision to interfere would backfire. I'll post more quotes from her interview later.

Otherwise, there are some good stories in the paper. The Telegraph says the Treasury has concluded that, despite the claims made by the low-tax lobby, the 50p top rate of tax does raise money. (Perhaps Arthur Laffer will have to redraw his curve?) And in the Daily Mirror, Alan Johnson is saying Ed Miliband needs to get out more to explain himself to voters. I'll be looking at these stories, and others, in more detail later.

Here's the full agenda for the day.

10am: The Leveson inquiry resumes. Dominic Mohan, editor of the Sun, Kelvin MacKenzie, the former editor of the Sun, Duncan Larcombe, the Sun's royal editor, and Gordon Smart, the paper's showbiz editor, are giving evidence.

10.30am: Campaigners will publish a report challenging the cost of the government's legal aid, sentencing & punishment of offenders bill.

3pm: Nick Clegg hosts a press conference with Mark Rutte, the Dutch prime minister, Andrus Ansip, the Estonian prime minister, and Olli Rehn, the European Commissioner for economic and monetary affairs. Clegg and the others are among the participants at a summit of liberal European leaders that Clegg is hosting in London.

As usual, I'll be covering all the breaking political news, as well as looking at the papers and bringing you the best politics from the web. I'll post a lunchtime summary at around 1pm and an afternoon one at about 4pm.

If you want to follow me on Twitter, I'm on @AndrewSparrow.

Photograph: Murdo Macleod

9.15am: We ended last year with David Cameron doing battle with the European Union. And we begin this year with Cameron picking a fight with Scotland, England's largest partner in the UK union.

Cameron's offer to a party committed to holding a referendum on Scottish indpendence to use Westminster legislation to facilitate such a referendum may look helpful, but you don't have to be Vernon Bogdanor to work out that he is trying to frustrate Alex Salmond's plans. On the Today programme Nicola Sturgeon (left), Salmond's deputy, responded with a loud rasberry. Here are the key points. I've taken the quotes from PoliticsHome.

• Sturgeon said Cameron was trying to influence the timing and the wording of the referendum.

This is a blatant attempt to interfere in a decision that is rightly one for the Scottish government ... What Westminster is trying to do is not [lend Scotland powers to have a binding referendum]. Westminster is trying to attach conditions so that they can dictate the timing, the wording of the referendum.

• She predicted that Cameron's plan would backfire.

I think most people in Scotland listening to David Cameron will say and think, 'here we go again, another Tory lead government, trying to interfere in decisions that rightly belong to the Scottish people'. Now, perhaps I should be relaxed about that because the more a Tory government tries to interfere in Scottish democracy then, I suspect, the greater the support for independence will become.

• She said the SNP would stick to its plan to hold its own referendum in the second half of this parliament. (Salmond wants to go for 1314, the 700th anniversary of the battle of Bannockburn, once branded - by Andrew Marr, I think - Scotland's "Battle of Britain" because it saved the country from foreign domination.)

We'll stick to our plan. I mean, it may be a novel concept for other parties that you stick to what you said you would do in an election but we said very clearly in the election that our immediate priority if elected would be to seek to strengthen the Scotland Bill, currently going through the Westminster parliament to give the Scottish parliament important economic, job-creating powers and that we would have a referendum on independence in the second half of this parliamentary term.

9.44am: There is not a lot in the news at the moment to cheer the left. But today's frontpage story in the Daily Telegraph will probably bring some delight to place like the Polly Toynbee household this morning.

Ever since the last Labour government introduced a 50p top rate of tax for those earning more than £150,000 and George Osborne decided to keep it (at least, for the short term), rightwingers have been arguing for its abolition on the grounds that high tax rates can actually be counter-productive. These arguments have been enthusiastically reported in the Conservative press, and Osborne himself has made it clear that he is sympathetic. Here are some examples.

• In August last year Osborne implied that the 50p rate was "economically inefficient".

There's not much point in having taxes that are very economically inefficient. I've said with the 50p rate I don't see that as a lasting tax rate for Britain because it's very uncompetitive internationally, and people frankly can move.

• In September DeAnne Julius, a former member of the Bank of England's monetery policy committee, and other heavyweight economists wrote a letter to the Financial Times (subscription) saying the 50p rate was doing "lasting damage to the UK economy".

If a small portion of these highly mobile workers move elsewhere because of the 50p rate then it is clearly a self-defeating way for the Treasury to try to raise money, and a reduction in tax avoidance would be more effective. It is often portrayed as a justified tax on the rich but the economic damage it causes means that it is against the interests even of ordinary workers who don't pay it.

We call on the government to drop the 50p tax at the earliest opportunity as part of a package of measures to stimulate growth. Only by returning to an internationally competitive tax regime will Britain enjoy long-term sustainable economic growth.

• In September the Institute for Fiscal Studies criticised the 50p rate.

Paul Johnson, director of the IFS, said: "It looks like the 50p rate may be too high and that it is possible it will reduce tax revenues.

"It could lead to more people investing in tax avoidance, illegally hiding their income or even leaving the country altogether. I wouldn't have introduced the 50p rate in the first place."

• And in November the Daily Telegraph published a letter from more than 30 senior City figures criticising the 50p rate. The signatories included Sir Nigel Rudd, the chairman of BAA, the airports operator; Chris Grigg, the chief executive of British Land; Tony Pidgley, the chairman of Berkeley Group, the house-builder; Harvey McGrath, the chairman of Prudential; and Ian Powell, the chairman of PricewaterhouseCoopers.

We await the conclusions of the HM Revenue and Customs evaluation of the sums raised by the 50 per cent rate. However, we are confident that the cost to the Treasury, if any, in the short term will not be material and that the advantages over the life of this Parliament in terms of generally increased economic activity will more than outweigh any direct costs.

But, according to Robert Winnett in today's Telegraph, that HMRC report - which was commissioned by Osborne in the hope that it would show that the 50p rate was futile - is going to show that it is raising a decent sum after all. The full details are in the Telegraph splash. Here's are some excerpts.

However, the HMRC report is expected to show a "surge" in revenues totalling hundreds of millions of pounds from the first year — undermining the economic case for scrapping the levy ...

The Daily Telegraph understands that an annual assessment of the tax's impact on enterprise will be made – and the levy will be scrapped before 2015 only in the "unlikely event" that evidence shows that it is damaging the economy ...

The HMRC report, to be delivered after Jan 31, will defy predictions that top earners will avoid paying the 50p rate.

Labour predicted revenues of more than £2 billion a year from the levy.

It is now thought that the revenues will only begin falling "over time" as wealthier taxpayers develop ways of circumventing the higher rate, faced by those earning more than £150,000.

Happy New Year Polly.

10.06am: This is what the Press Association have filed about today's cabinet meeting at the Olympic Park.

David Cameron today hailed the London 2012 legacy as ministers gathered at the Olympic Park 200 days before the Games' opening ceremony.
The Prime Minister called a Cabinet meeting at the site in Stratford, east London and urged ministers to fully exploit the opportunities the summer showpiece and the Queen's Diamond Jubilee will offer.
Cameron, London mayor Boris Johnson and Lord Coe, chairman of the London Organising Committee for the Olympic Games, will tour the park later while other ministers fan out to visit sports facilities, businesses, schools and organisations across the UK in a co-ordinated push to promote the Games' value.
Opening today's meeting, the Prime Minister said: "A very warm welcome everyone to the Olympic Park, and a happy new year.
"This is the first Cabinet meeting of the new year and it is appropriate we are having it here."
He told senior Government ministers they would hear a presentation from Lord Coe, updating them on progress for the Games' legacy.
Cameron said six of the eight main venues had already secured their legacies, adding: "Not only are they already up and running, but they already have a future, and we can be very proud of that."
Ministers travelled to the site on board a high-speed Olympic Javelin shuttle train from St Pancras station in central London.
Their meeting took place at the 7,000-capacity handball arena, with tables erected on the court surrounded by multi-coloured seats.
Today's Cabinet meeting was the first for new Cabinet Secretary Sir Jeremy Heywood, who took up the post after Sir Gus O'Donnell retired last month.
Earlier, organisers said newly-agreed contracts for the long-term running of three more of the eight permanent Olympic venues would create 254 jobs for local people paid at London living wage rate.
Officials remain confident they will secure deals for the remaining two - the main stadium and the media centre - in time for the opening ceremony.

There are more details in a news story on the Number 10 website.

10.19am: Kelvin MacKenzie, the former Sun editor, is about to give evidence to the Leveson inquiry. In the light of the speech he made to a Leveson seminar last year, the hearing could be a classic. You can follow all the details on our Leveson live blog.

10.36am: You can read all today's Guardian politics stories here. And all the politics stories filed yesterday, including some in today's paper, are here.

As for the rest of the papers, I've already mentioned the Telegraph splash about the 50p top rate of tax. (See 9.44am.) Here are some other stories and articles that are particularly interesting.

• Jill Sherman in the Times (paywall) says more than £31bn has been wasted in Whitehall over the last two years, according to a Times audit.

The scale of the inefficiency is more than twice the extra £15 billion of cuts for 2015 onwards announced by George Osborne, the Chancellor, in November and more than a third of the £81 billion cuts needed in this Parliament.

An analysis of more than 70 reports from the National Audit Office (NAO) and parliamentary select committees found at least £31.8 billion of wasteful overspending since 2009. The waste comes in areas ranging from welfare and capital projects to farm payments. Some of the figures are annual and ongoing, others relate to projects that have been delayed or abandoned.

The watchdog also claims that the Civil Service lacks commercial competence, resulting in Whitehall being "ripped off" by the private sector.

• Sam Coates in the Times (paywall) says Labour's membership barely rose last year.

Labour's membership barely rose last year, The Times has learnt, prompting accusations that the figures are being used in a misleading way by Ed Miliband's office.

The sharp rise in membership in 2010, immediately after the formation of the coalition but before Mr Miliband became leader, was not repeated in 2011, according to a source. This has not stopped Mr Miliband's office telling Labour MPs to emphasise that 65,000 new members have joined the party since the election as a way of deflecting criticism of his leadership.

According to party accounts, Labour had 156,205 members at the end of 2009. This rose to 193,961 by the end of 2010. The figure for last year, to be published this summer, will show only a tiny rise, according to a Labour source, and will remain well below 200,000.

This contrasts with the rhetoric of Mr Miliband's office and senior members of the Shadow Cabinet, who regularly defend the Labour leader by mentioning the 65,000 new members since the election. However, the party says that 35,000 of these joined before Mr Miliband was chosen as leader.

• Alan Johnson tells the Daily Mirror that Ed Miliband needs to explain himself more to voters.

Mr Johnson says [Miliband] does have what it takes to get to Downing Street, yet small opinion poll leads "can't hide the fact the public remains suspicious about Labour".

He warned that the party sounded like a "university seminar" or "debating society", an apparent criticism of r Miliband's conference speech.

And the ex-Shadow Chancellor added: "The public need to equate Labour with Ed ­Miliband. That means going out on the stump, constantly identifying issues which ­resonate and hammering home Labour's message."

• Jonathan Brown in the Independent says some members of the Commons culture committee want to take fresh evidence from Rebekah Brooks, the former News International chief executive, about phone hacking.

A meeting between members of the parliamentary inquiry investigating phone hacking at Rupert Murdoch's News International will take place this week amid mounting tensions over its future direction.

Members of the House of Commons Culture, Media and Sport Select Committee hold conflicting views of the scandal, with some MPs seeking fresh evidence from at least one senior Wapping figure – the News International former chief executive Rebekah Brooks.

A first draft of the MPs' long-awaited report was produced before Christmas. There will be calls tomorrow for Ms Brooks to be asked to explain her role in authorising a £1m payment to the publicist Max Clifford in 2010 for having his phone messages intercepted.

• Boris Johnson in the Daily Telegraph says Margaret Thatcher would disapproved of modern boardroom greed.

To take the issue of the hour, I believe she would have strongly disapproved of boardroom greed. She never really much liked the City - she thought that on the whole the bankers liked interest rates to be too high for the good of her vision of a property-owning democracy. Insider traders were prosecuted on her watch, after years in which such tip-offs had been treated as a "victimless crime" that was traditionally conducted over a vinous, nose-tapping lunch. She got rid of automatic commissions for stockbrokers ...

Thatcher wasn't against money, and she wasn't against pay as an incentive to real exertion and real talent. But - and I have taken the trouble to consult her biographer, Charles Moore, who supports the point - she would have been totally opposed to all that now whiffs of a male-dominated cartel, a you-scratch-my-back-and-I'll-scratch-yours conspiracy against the shareholders and the wider interests of the company.

I'm going to the Number 10 lobby briefing now. I'll post again after 11.30am.

11.49am: I'm just back from the lobby briefing. The most interesting thing we learnt is that George Osborne is masterminding the government's attempt to defend the union (or - if you're a conspiracy theorist - to abolish it, and ensure that England is ruled by a Conservative government until the end of time). He's chair of the ministerial group on Scotland and he led the discussion on the government's plans at this morning's cabinet. (Yes, we thought that was odd too. Why not the Scottish secretary? Because cabinet committees are chaired by a senior minister, the Number 10 spokesman said.) All very intriguing. There is speculation at Westminster that Osborne is not the union's greatest fan. On the way back, a Scottish colleague told me than an independence referendum would be a "win/win" for Osborne, who is Cameron's chief election strategist. Either Scotland votes to keep the union, and Osborne trounces the SNP. Or Scotland votes for independence - and Labour waves goodbye to power at Westminster for good.

I'll post a more detailed summary of the briefing in a moment.

UPDATE at 12.40pm: On Twitter Lucy Rigby has taken issue with my hyperbole. She points out - rightly - that Labour would not be waving goodbye to power at Westminster for good if Scotland went independent because Labour won in England in 1997 and 2001.

12.01pm: When I started as a lobby correspondent in the mid-1990s, the daily 11am lobby briefings took place in Christopher Mayer's office at Number 10. There was a small sofa, but most reporters had to stand and it was a bit of a squash. This meant it was not very comfortable and it was hard to take notes. The briefings didn't last for long.

Later the briefings were held in a basement nearby, which meant that lobby journalists did not soil the Number 10 doormat every morning, and then Alastair Campbell kicked us out of Downing Street altogether. Normally the briefings are now held in the Treasury. But the normal room wasn't available and so today we were back in Number 10, which was nice. And there were chairs - so it did drag on a bit. Here are the main points.

• George Osborne is chairing the ministerial committee deciding what to do about a referendum on Scottish independence, the prime minister's spokesman said. The chancellor briefed the cabinet on this issue this morning. (See 11.49am.) The spokesman did not have a lot to add to what David Cameron said about this in his Andrew Marr interview yesterday. Cameron thinks a referendum needs to be "legal, fair and decisive", the spokesman said. He also claimed that uncertainty about Scotland's future was damaging Scotland's economy.

It is clear that one thing that business never likes is uncertainty, whether that is legal uncertainty, political uncertainty or economic uncertainty. Certainly, the feedback [Cameron] has had and the Chancellor has had from business suggests that this uncertainty around Scotland's place in the Union is having an effect. It affects their decisions to invest, it affects their decisions on how they plan for the future.

I asked if there was any hard evidence about this. The spokesman did not mention any, but a colleague later mentioned this Citigroup report advising investors to be cautious about investing in Scotland's renewable energy sector because of uncertaintly about the future.

• The spokesman said Cameron still thinks the 50p top rate of income tax should be temporary. Asked about today's Telegraph story (see 9.44am), he said:

The prime minister has always been very clear that the 50p rate should be temporary but that in our efforts to reduce the deficit we need to demonstrate that we are doing it in a fair way.

The spokesman also said that information from self-assessement tax returns was still coming in and that the Treasury had not yet receive a report from HM Revenue and Customs about how much the tax has raised this year.

• The spokesman described a report in today's Financial Times (subscription) saying that John Hourican, chief executive of RBS's global banking and markets division, is in line for a £4m bonus as "speculative". No decisions have yet been taken in relation to bonuses at RBS, the spokesman said. UK Financial Investments, the body that controls the government's stake in the largely state-owned bank, would ensure that pay at RBC "reflects and rewards performance", he said.

• The government will consider whether it is necessary to change health advice in the light of today's report from the science committee saying people should have at least two drink-free days a week, the spokesman said.

12.50pm: At 1pm Sky are broadcasting an interview they've recorded with David Cameron in which (among other things) he says the government is still committed to scrapping the 50p top rate of tax. I'll cover the whole interview live before posting a lunchtime summary.

1.01pm: Sky is now showing its David Cameron interview.

Q: If you knew then what you know now about the state of the economy, would you still have been in favour of the Olympics coming to Britain?

Yes, says Cameron. It will not just be a great few weeks. There will be a "lasting legacy".

Q: But this is oversold, isn't it?

No, says Cameron. Look at the velodrome. It will be world class, as will the swimming centre. Six out of eight venues have already got a legacy commitment.

Q: Why was the spending on the opening ceremony doubled?

Cameron says the opening ceremony will be great.

Q: What will you see yourself?

Cameron says he will use the time to network with people coming to Britain.

Q: What would your Olympic event be?

Probably tennis, says Cameron.

Q: And do you want Boris Johnson presiding over it?

Cameron says he wants Johnson to win "very badly". He will be campaigning hard for him. He and Johnson are very close. They are good friends. Much of what is written about them is wrong. After he finishes as mayor, Johnson has a lot to offer in terms of public service.

1.07pm: They are now talking about the 50p top rate of tax.

Cameron says he wants it to be temporary. These things will be decided in the budget.

Q: But bonuses are not taxed at 50p.

Cameron says the government tries to ensure that bonuses are taxed at 50p.

People want to know that pay is related to reward.

Q: The head of investment banking at RBS is due to be paid £4m.

Cameron says he is not going to comment on individual cases. But he also says that he thinks that final decisions have not been taken and that this case involves decisions taken in 2009.

1.10pm: They turn to the economy.

Q: Defict and debt levels are not coming down.

Cameon says the deficit is coming down. The government has not met its original target. But it is getting the defict under control. It has a plan.

Q: How close did the coalition come to falling apart over Europe in December?

It was "a pressure point". The coalition's negotiationg position was discussed in advance. The Lib Dems were "disappointed". But he and Nick Clegg will continue to work closely.

Q: What did you win for Britain at that summit?

Cameron said he stopped Britain being part of a new treaty with no safeguards.

Q: Do you still want to help the eurozone?

Yes, says Cameron. But the IMF should not be doing what the eurozone itself should be doing.

Q: Do you think the eurozone will hold together?

Cameron says he thinks this is "the most likely" option. But the eurozone has to take some "decisive steps". It needs to address the short-term problems. And it needs to address longer term problems too.

Q: Is unemployment going up in the UK because of the eurozone?

Cameron says the crisis in the eurozone has had a "chilling effect" on the British economy.

1.16pm: They are now talking about Scotland.

Q: Are you playing into Alex Salmond's hands?

There has to be legal clarity, Cameron says. It has to be clear who is responsible for a referendum.

If Salmond wants a referendum, why should it be put off until 2014.

Q: Because Salmond is in power ...

But the uncertainty is having a bad effect on Scotland, Cameron says.

1.18pm: They turn to the Stephen Lawerence murder.

Q: Is Britain a less racist country than it was when Lawrence was murdered?

Race is still a problem, says Cameron. But Britain is not as racist as it was.

Q: Are you looking forward to PMQs?

Cameron says he has enjoyed having a break from it. But it is an important part of the job.

Q: Are you going to change your style?

Cameron says at PMQs you need to explain the government's policy. But the chamber is "rowdy" and confrontational. "It's a bit like the Circus Maximus." He tries to get across the arguments.

Q: Do you ever apologise to Ed Miliband afterwards?

Cameron says he and Miliband do not give each other any quarter.

Q: Will Miliband still be Labour leader in 2015?

Cameron says he concentrates on leading his own party.

Q: How do you rate how Miliband is doing?

Cameron says being opposition leader is a hard job. He did it for five years. He does not want to do it again.

1.25pm: The Sky interview is over. It was quite lively, although not particularly revelatory. Sky have been using his remarks about the 50p top rate of tax being temporary as their main news line, and I didn't see an alternative, although I thought Cameron's comments about Boris Johnson were interesting. He was warmer about Johnson than I've heard him in the past (although not warm enough, I think, to convince people like my colleague Jackie Ashley, who said in a recent column that she thought Cameron would be privately hoping for Johnson to lose the London mayoral race) and he hinted that he would like to see Johnson return to the Commons at some point.

I'll post a full summary of the interview and all this morning's other events soon.

2.00pm: Here's a lunchtime summary. It's a bit later than usual because of the Sky Cameron interview.

• Scotland's SNP government has said that David Cameron's decision to call for an early yes/no referendum on Scottish independence will backfire. "Most people in Scotland listening to David Cameron will say and think, 'here we go again, another Tory lead government, trying to interfere in decisions that rightly belong to the Scottish people'," Nicola Sturgeon, Scotland's deputy first minister, told the Today programme. "The more a Tory government tries to interfere in Scottish democracy then, I suspect, the greater the support for independence will become." Downing Street has revealed that George Osborne has taken the lead in pressing for a quick referendum. Johann Lamont, Labour's new leader in Scotland, has said that she would welcome an early referendum - and that it should be run from Edinburgh. "We want the referendum to be held as quickly as possible and we want it to be run in Scotland," she said. If Cameron's plans, which are due to be published in detail soon, "help there to be a quick, clear and decisive referendum result, we would welcome them," Lamont said. But Henry McLeish, the former Labour first minister, told the World at One that the debate should not just be about independence.

The danger in David Cameron's approach is that he polarises opinion between this rock of unionism at Westminster and a hard place of independence. There are far more alternatives that need to be debated.

McLeish also said that Labour should lead the campaign against independence in Scotland.

Certainly in Scotland, the unionist campaign – if you want to call it that - should be led by the Labour Party – indeed one of the difficulties over the last 12 years is that Westminster hasn't really taken devolution seriously, it hasn't taken the ideas of difference, identity, and nationality seriously. And it now finds itself on the edge of a referendum and it's waking up and it's kind of hitting out in every direction.

• Cameron has said that the government is still committed to abolishing the 50p top rate of tax, despite a report suggesting that it raised significant extra funds in its first year. According to the Daily Telegraph, the report HM Revenue and Customs report into the 50p rate will show that it has generated a "surge" in revenues totalling hundreds of millions of pounds. But Number 10 said the Treasury has not yet received a report from HMRC about how much the tax has raised this year. (See 9.44am and 12.01pm.)

• Kelvin MacKenzie, the former Sun editor, has told the Leveson inquiry that the paper is "less bullish" than it was when he was in charge. There more details on our Leveson live blog.

• Cameron has suggested that Labour is to blame for the fact that John Hourican, the chief executive of RBS's global banking and markets division, is reportedly in line to receive a £4m bonus. Asked about the story in today's Financial Times, Cameron said:

These decisions have not finally been made. Some of them - including this one I think - may relate to decisions made before this government. From what I read of that case, it was actually decided in 2009 before this government took office.

• Jeremy Hunt, the culture secretary, has said that the government will unveil plans to get more young people involved in sport. He made the announcement as the cabinet met at the Olympic Park.

Since 2005, when we won the bid, the proportion of young people playing sport regularly has actually been falling and we want to address this. Which is why this week we will be announcing a brand new youth sports strategy designed to deal with this problem - that so many people stop playing sport when they leave school outside the environment of compulsory PE. We want to build up much, much, stronger links between schools and local sports clubs, so if people play a sport at school they carry on playing when they leave school as well.

In his Sky interview, Cameron said that the Olympics would leave a lasting legacy.

Six of the eight main venues have all got legacy uses, I'm sure the only two to go, the stadium and the broadcasting centre, I'm sure good uses will be found for both of those. So, yes, it's a lot of money to spend for a short event, as it were, but its lasting legacy and also an enormous commercial for Britain. We're going to use the time to best effect by having huge investment conferences every day of the Olympics, which we hope can bring in billions of pounds to Britain.

But the Olympics cabinet coincided with the Federation of Small Businesses publishing a survey showing that six out of 10 small firms believe the Olympics will not have a positive impact on their business in the long term.

• Cameron has hinted that he would like to see Boris Johnson return to the Commons at some point. In his Sky interview, Cameron said that Johnson had "a huge amount to offer the country in public service" after he finished being London mayor. Cameron also said that, despite reports that they are rivals and that Johnson wanted his job, he wanted Johnson to win the London mayoral election again "very badly".

We get on extremely well. I think a lot has been written and said about our relationship that's quite wrong. We're very good friends, we're very close. I think he does a great job and I will be strongly supporting him ... I think he's got a lot to offer London for another four years, but I also think he's got a huge amount to offer the country in public service, so I'm going to get on with the job I've got to do, and Boris, I hope will be mayor of London for another term, and after that, he's got a lot to offer.

• A report commissioned by the Law Society of England and Wales has said that the savings made by reducing the availability of legal aid for civil cases will be significantly less than half of that predicted by the government.

• David Miliband has spoken about his "frustration" at being in opposition. In an interview with The Hindu newspaper, he said: "I think for everyone in the Labour Party, it feels very frustrating at the moment. Because opposition is a permanent lesson in frustration; you can talk but you can't do anything."

2.39pm: Here's a 50p top rate of tax reading list.

• Daniel Knowles at the Telegraph says that, even if the 50p top rate of tax is raising money now, it will not raise money for ever.

If you are taxed at 50 per cent – or even 90 per cent – for a year, you are very unlikely to move to Switzerland. Moving is expensive and tedious, and at the end of it, you live in Switzerland. Moreover, jobs aren't lost when individual bankers choose to set up in Geneva; they are lost when companies decide that they can do better business in Switzerland. In the short run, people who move abroad will be easily replaced. So the idea that the 50p rate would instantly start cutting tax revenues was, from the beginning, supremely silly. But over time, a higher rate of taxation will begin to cut into the City's competitiveness.

• Benedict Brogan on his Telegraph blog wonders whether the Tories will call for the 50p top rate of tax to be abolished at the next election.

The good news [about the 50p rate staying until 2015] is that this will give the Tory side of the Coalition something to campaign for, as presumably Labour an Lib Dems will fight a 'soak the rich' campaign in 2015 to keep the top rate. But will Mr Osborne be so bold? The bad news is this opens the way to those on the Tory side who might be tempted to argue that for tactical reasons abolition of the 50p rate need not be a manifesto priority. The same focus groups that persuade Mr Cameron to attack capitalism are hardly going to urge him to give the wealthy a tax break. There is a PS to all this as well: if the deteriorating economy makes scrapping the 50p rate unaffordable, what does it do to the prospects for cancelling the abolition of Child Benefit for the better off? I seem to recall that when it was announced, the hint was that an improving economy this year might make that vote-loser unnecessary after all, and give Mr Osborne a pre-election rabbit for his hat. I suppose that wheeze is being rethought too?

• Paul Waugh on his PoliticsHome blog says Cameron has left a lot of "wriggle room" in his comments on this.

3.16pm: Jane Martinson, the Guardian's women's editor, has been interviewing the Tory MP Louise Mensch on video. You can watch it here.

3.24pm: More on George Osborne and Scotland. James Forsyth at Coffee House suggests that it is unfair to suggest that Osborne is not the union's greatest fan. Osborne is a unionist, he says. But Osborne is also in favour of Scotland having fiscal autonomy, he adds. Yet this option - aka, devo max - is also one the government has ruled out, he says.

3.33pm: Here's an afternoon reading list.

• Peter Kellner at YouGov on how Ed Miliband is performing relative to other opposition leaders.

It's clear from those figures that Miliband's figures are far worse than those of Thatcher or Cameron at the same stage in their careers. He hovers roughly half way between Hague and Duncan Smith – not happy precedents.

• Anthony Wells at UK Polling Report on why Miliband's approval ratings are worse in YouGov polls than in MORI polls.

• Gavin Kelly at the New Statesman says "a whole generation of Labour figures to change - unlearn - how they practice politics".

To take one example, it remains something of a mystery why Labour has opted to cede the rhetorical argument about taxing wealth and property to the Lib Dems.

Any new property tax will of course be fiendishly hard to design in a way that raises serious money without being politically toxic (as the person who tried and failed to get the Blair government to reform council tax so it raised more from high-end properties I know how not to do this). All the more reason for Labour to be getting on with this hard work now rather than leaving it to others.

• James Kirkup at the Telegraph says David Cameron versus Alex Salmond over Scottish independence will be "a career-defining battle between the two most impressive politicians in Britain today".

• Robert Peston on his blog suggests that giving shareholders the right to have a binding vote on executives' pay, as David Cameron proposes, will not make much difference.

It is certainly the case that shareholders have taken executive pay more seriously since 2002, when it became mandatory for quoted companies to publish a separate directors' remuneration report and shareholders were given the right to vote on remuneration.

But it is not altogether obvious that turning this vote from an advisory one into one with compelling force would lead to another step change in shareholder engagement with executive pay.

The big uncomfortable fact is that many investors are, by dint of who they are, absentee landlords.

If they are hedge funds and other speculators that hold shares for months, or weeks or even fractions of a second, they could not give a fig about whether a chief executive is paid £4m a year or £5m a year.

4.01pm: Here's an afternoon summary.

• Dominic Mohan, the Sun editor, has told the Leveson inquiry that when he made a joke about "Vodafone's lack of security" at at showbiz event in 2002 he was making a jibe against the Daily Mirror. There were rumours about phone hacking at the time, he said. But, when pressed, he was unable to give details. "I can't remember – it was a very long time ago," he said. There are more details on our Leveson live blog.

• David Willetts, the universities minister, has said that universities are not offering students enough opportunities to gain real-life work experience. Calling for more "sandwich" courses - courses that allow students to combine a period of work with their study - he said: "One reason we attach importance to sandwich courses is that when there's an appetite among students for real world experience, then that should be available to them."

• Brendan Barber, the TUC general secretary, has said that the 50p top rate of tax should be made permanent. Responding to today's Telegraph story (see 9.44am), he said: "Early indications suggest this tax is raising much-needed revenues and has not caused the mass exodus of business that apologists for the super-rich claimed it would. Scrapping it would simply be pandering to those at the very top - whose rewards the prime minister says he wants to crack down on."

That's it for today. Thanks for the comments.