Tory rebels set Cameron a deadline - but it's Osborne who's in greater danger

Conservative MPs are planning to demand the removal of Osborne as Chancellor if the economy fails to recover by May.

If David Cameron hoped that his pledge of an in/out EU referendum would lead to a cessation of hostilities in the Tory party it looks as if he was sorely mistaken. Little more than a week after Cameron's speech, Conservative MPs are reacquiring their taste for regicide. The Guardian reports that the Tories are prepared to force a vote of no confidence in the PM unless the party's poll ratings improve by the summer of 2014. One minister is quoted as saying: 

This is not necessarily about waiting until 2015 and seeing if David Cameron loses. This is about being ready for the moment when the party realises that Cameron is not a winner.

If this sounds outlandish, it's worth remembering that just 46 MPs - 15 per cent of the Conservative parliamentary party - are required to write to the chairman of the 1922 Committee, Graham Brady, to trigger an automatic confidence vote. 

One MP said: "There is a core of MPs that is determined to get rid of Cameron right now. They think he lost the last election, they think he cannot win the next election and maybe doesn't even want to win the election. They think he just likes the idea of being a coalition prime minister.

"While this group are wrong to think of a move now, there would be support for a contest if there is no movement for the party by 2014. There would be no problem in drumming up 46 letters to Graham Brady at that point. I could name them. I would support it."

Cameron's cause is not helped by the fact that any bounce from his speech appears to have already dissipated. Labour's lead fell to just six in the weekend polls but it had risen to nine by the middle of the week and today it stands at 12, back at the level seen before Cameron's referendum pledge.

But it's not just the PM that MPs have in their sights. The Daily Mail reports that the rebels are prepared to demand the removal of George Osborne as Chancellor if the economy fails to show signs of recovery by the time of the local elections. "The idea is that you deliver an ultimatum to the PM telling him to get rid of George," one MP is quoted as saying.

Another adds: "You wouldn’t get 80 people supporting Adam Afriyie for leader but you might get 80 or 100 people saying get rid of George." 

But it is hard to see Cameron acquiescing to this demand. Unusually for a Prime Minister and Chancellor, Cameron and Osborne are close friends, with Osborne godfather to Cameron's son, Elwen. Tory MPs, however, will remind the Prime Minister of his response when asked back in 2010 if he could ever sack Osborne. 

Yes. He is a good friend, but we’ve has that conversation a number of times over the past four years.

To be fair to George he said ‘If ever you want to move me to another job, it is your decision and it is your right’.

The assumption that Osborne and Cameron rise and fall together most likely remains correct. But if the sacrifice of Osborne is the price for saving his leadership, the PM may yet be forced to act. 

Conservative rebels are preparing to write to David Cameron demanding the removal of George Osborne if the economy fails to improve. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Why Theresa May won't exclude students from the net migration target

The Prime Minister believes the public would view the move as "a fix". 

In a letter to David Cameron shortly after the last general election, Philip Hammond demanded that students be excluded from the net migration target. The then foreign secretary, who was backed by George Osborne and Sajid Javid, wrote: "From a foreign policy point of view, Britain's role as a world class destination for international students is a highly significant element of our soft power offer. It's an issue that's consistently raised with me by our foreign counterparts." Universities and businesses have long argued that it is economically harmful to limit student numbers. But David Cameron, supported by Theresa May, refused to relent. 

Appearing before the Treasury select committee yesterday, Hammond reignited the issue. "As we approach the challenge of getting net migration figures down, it is in my view essential that we look at how we do this in a way that protects the vital interests of our economy," he said. He added that "It's not whether politicians think one thing or another, it's what the public believe and I think it would be useful to explore that quesrtion." A YouGov poll published earlier this year found that 57 per cent of the public support excluding students from the "tens of thousands" target.

Amber Rudd, the Home Secretary, has also pressured May to do so. But the Prime Minister not only rejected the proposal - she demanded a stricter regime. Rudd later announced in her conference speech that there would be "tougher rules for students on lower quality courses". 

The economic case for reform is that students aid growth. The political case is that it would make the net migration target (which has been missed for six years) easier to meet (long-term immigration for study was 164,000 in the most recent period). But in May's view, excluding students from the target would be regarded by the public as a "fix" and would harm the drive to reduce numbers. If an exemption is made for one group, others will inevitably demand similar treatment. 

Universities complain that their lobbying power has been reduced by the decision to transfer ministerial responsibility from the business department to education. Bill Rammell, the former higher education minister and the vice-chancellor of Bedfordshire, said in July: “We shouldn’t assume that Theresa May as prime minister will have the same restrictive view on overseas students that Theresa May the home secretary had”. Some Tory MPs hoped that the net migration target would be abolished altogether in a "Nixon goes to China" moment.

But rather than retreating, May has doubled-down. The Prime Minister regards permanently reduced migration as essential to her vision of a more ordered society. She believes the economic benefits of high immigration are both too negligible and too narrow. 

Her ambition is a forbidding one. Net migration has not been in the "tens of thousands" since 1997: when the EU had just 15 member states and the term "BRICS" had not even been coined. But as prime minister, May is determined to achieve what she could not as home secretary. 

George Eaton is political editor of the New Statesman.