Uwe Corsepius, EU Council’s secretary general

UPDATE: According to a British official, the UK has today been invited to participate in the treaty negotiations, a significant shift that will allow London to weigh in on some of the most sensitive issues to be discussed, including whether EU institutions will enforce the new pact.

Senior officials from European national finance ministries chatted last night in the first informal negotiations on the highly-touted new intergovernmental treaty to govern the region’s economic policy, though diplomats say little substance was discussed.

Ahead of the talks, however, Uwe Corsepius, the new secretary general of the European Council, sent out a four-page letter to negotiators in an attempt to set a roadmap for how the talks will proceed – and we at Brussels Blog got our mitts on it.

By Andrew Bounds

The government has risked a fresh fight with Derby after Theresa Villiers, rail minister, pulled out of a rail conference in the city at short notice to attend to constituency matters.

Business and civic leaders in the city, including the Conservative leader of the council, Philip Hickson, are already seething after Bombardier, the UK train maker, lost out to Siemens in a train contract.

It has shed 1,400 jobs as a result and is reviewing the future of the plant.

Ms Villiers told the Derby and Derbyshire Rail Forum on Tuesday that she would not deliver a promised keynote speech on Thursday because she had a more pressing issue.

The Ministry of Defence has issued to the Guardian  excerpts from Liam Fox’s diary from November last year up until last month showing a range of meetings with Adam Werrity, ranging from excursions in to the MoD and social get-togethers, to his attendance at conferences abroad and departures on holiday with the secretary of state.

Also coming out of Whitehall is the text of a letter setting out the interim findings of the permanent secretary Ursula Brennan’s inquiry into the defence secretary’s meetings with Mr Werritty.

The permanent secretary says: “There has not yet been time for a thorough analysis of the evidence; this will be conducted this week.

“I have also commissioned a series of interviews with past and present members of Dr Fox’s Private Office, including special advisers, staff who travelled with the Secretary of State on relevant visits and the Secretary of State himself to confirm their recollections of the events in question.”

Coverage as it happened of Wednesday’s prime minister’s questions and the parliamentary debate on phone hacking at the News of the World. The debate followed shock allegations that the tabloid hacked into the mobile phone of murdered schoolgirl Milly Dowler.

Apologies for the lack of the posts over the past few days, which has been due to a combination of holiday and overseas work assignments. Normal service will resume on Wednesday with coverage of PMQs and the emergency House of Commons debate on phone hacking.

George Parker, political editor, tells the FT’s Daniel Garrahan that the referendum on the alternative vote has been dominated by party political bickering. And the cracks that have started to appear in the coalition will lead to a more business-like relationship between the Conservatives and the Liberal Democrats.

Lloyds Banking Group could be forced to sell hundreds of extra branches under initial recommendations put forward by the UK’s Independent Commission on Banking as part of its efforts to make banks safer and inject more competition into the retail market.

Specific measures to weaken the state-backed bank’s dominant 30 per cent share of the market for current accounts, by selling “assets and liabilities” over and above the 600 branches it is already divesting, were among far-reaching proposals in the commission’s long-awaited interim report.

News International, the publisher of the News of the World, has admitted liability in eight cases relating to the phone hacking scandal and offered an “unreserved apology”.

“Following an extensive internal investigation and disclosures through civil cases, News International has decided to approach some civil litigants with an unreserved apology and an admission of liability in cases meeting specific criteria,” the group said in a statement.

The FT’s Westminster blog is running live commentary on the Budget. Join us here from 12.30pm, London time.

Commentary led by Jim Pickard and Alex Barker of the FT’s political team, Michael Hunter, markets reporter, Gordon Smith, FT.com’s deputy news editor and co-ordinated by Darren Dodd, of the UK newsdesk.

FTSE 100 unchanged at 5,763.64 after the Budget. Sterling down 0.8 per cent at $1.6230, yield on 10-year denominated UK government debt down 4 basis points at 3.57 per cent.

Chancellor sits down at 1.39pm.

Jim Pickard: I wonder what Robert Chote makes of the new ‘fair fuel stabiliser’ – the OBR chief expressed doubts about this a few months ago.

Also, how does the cut in fuel duty – and freezing of air passenger duty – fit with the coalition’s promise to raise ‘green taxes’ as proportion of the total?

Fuel duty cut by 1p per litre from 6pm tonight.

The Westminster blog is briefly interrupting its holiday break so readers can listen to the Vince Cable audio clip, courtesy of the BBC website.

Read our story: Cable says he ‘declared war’ on Murdoch 

JP = Jim Pickard  KS = Kiran Stacey GP = George Parker

11.53 KS – There’s still a little more mileage yet to come from the book, so we’ll continue live-blogging until lunchtime. But we’ll be moving onto a new post now, so please stay with us.

11.40 JP – Blair reveals details of the “arctic meeting” with Brown over pensions reform, which ended up with his chancellor allegedly resorting to political threats to try to get his way.

Brown opposed Adair Turner’s proposals for pension reforms; Blair supported them. So Brown made a proposal: if Blair abandoned his support for the pension reforms, Brown would agree not to call for an Labour party inquiry into the “cash for honours” affair which threatened to overwhelm the Blair premiership.

“The temperature, already well below freezing point, went arctic,” Blair recalls, adding that some things said at this “ugly” meeting are better not put into print.

In the event, Blair decided to push ahead with the reforms and two hours later Jack Dromey, Labour’s treasurer, put out a statement calling for an inquiry. “I don’t know for a fact that Gordon put Jack up to it,” says Blair. But it’s clear where his suspicions lie.

11.30 JP – Sometimes working in Westminster it is extremely hard to work out where a rumour has come from, whether it is genuine and so on. The same seems to be true even for those at the top.

Blair recalls the “bizarre” time that Andrew Smith resigned as work and pensions secretary in 2004 to escape being sacked. Except Blair had no plan to fire him. “So wound up was he that he obviously didn’t believe it and said, no, he really preferred to go rather than suffer the indignity of being sacked.”

Check out these video interviews with FT experts on key areas of the Budget.

Westminster blog

on the UK political scene

About this blog Blog guide
Jim Pickard and Kiran Stacey, FT Westminster correspondents, share the latest news and analysis on the UK's political scene.

Follow the latest news on the UK coalition government.

To comment, please register for free with FT.com and read our policy on submitting comments.

All posts are published in UK time.

Contact the Westminster blog team: Jim Pickard, Kiran Stacey, Nicholas Timmins, Elizabeth Rigby and Helen Warrell.

The illustrations of Jim and Kiran are by Nick Hardcastle.

See the full list of FT blogs.

The authors

Jim Pickard joined the lobby team in January 2008. He has been at the Financial Times since 1999 as a regional correspondent, assistant UK news editor and property correspondent.

Kiran Stacey is an FT political correspondent, having joined the lobby in 2011. He started at the FT as a graduate trainee in 2008, working on desks including UK companies and US equity markets before taking over the FT's Energy Source blog.

Contributors

Elizabeth Rigby, the FT's chief political correspondent, joined the lobby team in September 2010. Elizabeth has worked at the FT for more than a decade and was most recently its consumer industries editor.

Helen Warrell is the FT's UK reporter, covering home affairs, crime and policing. She joined the FT in 2008 and has spent time as a reporter in the Brussels bureau and more recently, editing the paper's Asia coverage on the world news desk.

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