The briefing session started with a chirpy "Hi I’m Vince Cable" and ended with me walking out of the room fumbling around for my phone to withdraw an offer I’ve just made on a house. "After a week of jokes" the acting Liberal Democrat leader, part time comedian and Brown baiter thought he "should get down to something more serious". It is hard to know what Gordon Brown will be more scared of.

Mr Cable returned to his favourite riff: Britain’s housing market is in the midst of a "grossly inflated bubble" that is about to burst. This time he came armed with slides - terrifyingly pointy slides. "The logic of the position is painfully clear," he told us. "It is going to crash."

It certainly grabbed the attention of most of my erstwhile colleagues in the room. When he said "something very big is now happening", you could sense the journalists scribbling down his words believed it was more than just a Lib Dem presser. It was almost as if "Professor" Cable, doomsayer and former Shell economist, had hijacked a room in parliament to give a university seminar.

Put simply, he believes economy has been awash with credit and the reckoning is nigh. Those, like Mr Brown, putting their hopes on Britain being a special case are sorely wrong. Lack of supply, rising demand, bureaucratic planning, and rich Russian oligarchs do not explain the extraordinary boom in house prices. Just like America, this little island is due for a correction. Ominous signs emerging: Mr Cable said he recently met his first constituent in Twickenham with negative equity. "The house of Gordon has been built on a flood plain and the waters are now seeping in," he bleakly said.

Whilst it is always refreshing, if a little perturbing, to hear politicians talk down the value of most voters’ most cherished asset, we have heard this from Mr Cable before. What made today different was his call for a "safety net". Peter Lilley removed state support for arrears during the last Tory government, Mr Cable said, leaving borrowers with no protection. The government must step in and and bang heads together with the mortgage lenders to set up a bank repossession operation that aims to keep most families in their homes.  That made me a bit happier about the prospect of becoming a homeowner. But not much.

Liberal Democrat activists obsessed with civil rights may well be taken aback by our report revealing Chris Huhne’s involvement in a company that pioneered mobile CCTV use in Britain (he certainly seemed to be when I put it to him).

But Nick Clegg, Mr Huhne’s rival for the Liberal Democrat crown, also has a surprising business past. For almost a year, Mr Clegg worked as a partner at GPlus, one of the most influential lobbying groups in Brussels.

This brief lobbying liaison is not something Mr Clegg is keen to highlight on the stump. He prefers to talk up his time as a trade negotiator, journalist and ski-instructor. One can understand why: since he left company, GPlus have taken on clients such as Vladimir Putin and Gazprom, the Russian energy giant. These are hardly popular causes among the LibDem faithful. 

In a press release announcing his appointment, Mr Clegg said it was ”especially exciting” to be joining GPlus at ”a time when Brussels is moving more and more to the centre of business concerns”. But, for all his initial excitement, this was a short career bridging the gap between him stepping down as an MEP in 2004 and becoming an MP in 2005. He lectured at Sheffield University during the same period.

Mr Clegg’s lobbying colleagues tell me he actively worked with them for just six months, largely part-time. As one of five partners, Mr Clegg drew on his inside knowledge of the European parliament to give several lectures to staff and clients such as Centrica, the energy group. He spent very little time on lobbying work for existing UK clients such as Asda, the supermarket chain, or Aviva, the insurer. But he did join GPlus teams pitching for new business.

Friends of Mr Clegg told me that the work helped him to support a family while he was waiting for a seat in parliament. But Mr Clegg does not seem to have made the most of the opportunities from his new job. When he joined the company, Mr Clegg  was awarded equity rights, which he never chose to exercise. He thus missed out on a big windfall: GPlus was bought by Omnicom for about £8m, soon after Mr Clegg’s departure. 

My editor has set me the herculean task of finding the "wedge issue" in the Liberal Democrat leadership race. As no candidate has declared their interest, this is proving rather difficult. But I think I have found one: the referendum on the European Union treaty. There is a danger it could make the LibDem race relevant.

A few weeks before Sir Menzies Campbell packed his bags and fled to Edinburgh, he was under pressure to back Conservative calls for a referendum. To defuse the issue, he threw a sop to MPs in euro-sceptic constituencies by backing calls for a referendum on EU membership.

This is a nice idea that everyone can support because it has absolutely no chance of actually happening. More significantly, it effectively let Gordon Brown off the hook - the Tories, Lib Dems and Labour eurosceptics really have to join forces to cause trouble when the reform treaty comes to parliament next year.

Could this cosy compromise with Labour be threatened by the leadership race? Very possibly. Little differentiates Chris Huhne and Nick Clegg, the two favourites to succeed Sir Menzies, at least in terms of policy. They are both economically and socially liberal. But they have to find a way to stand apart.

(more…)