Morning Call: pick of the papers

The ten must-read comment pieces from this morning's papers.

1. The sad record of fiscal austerity (Financial Times)

The ECB could have prevented the panic, says Martin Wolf. Tens of millions are now suffering unnecessarily.

2. The Lib Dems are not a serious national party (Times) (£)

Forget who said what to whom, says Daniel Finkelstein. Nick Clegg has failed to lead his MPs away from interest-group politics.

3. George Osborne hasn't just failed – this is an economic disaster (Guardian)

Coalition austerity has delivered depression and a lost decade, says Seumas Milne. Labour has to avoid locking itself into more of the same.

4. If Nick Clegg’s story won’t stand up, the Lord Rennard scandal could finish him (Daily Telegraph)

Even victory at the Eastleigh by-election will not put an end to the Liberal Democrat leader’s troubles, writes Mary Riddell.

5. Beppe Grillo's antics may yet shake the whole European system (Guardian)

From Italy to Eastleigh, the economics of self-flagellation have set off a wave of wildcat populism, with unpredictable results, writes Simon Jenkins.

6. Negative interest rates mean more pain for savers (Independent)

This suggestion by Paul Tucker, deputy governor of the Bank of England, may sound shocking, but it's a technical device, writes Hamish McRae.

7. Castro pledge is chance for change (Financial Times)

Lifting US constraints on Cuba will speed the regime’s demise, says an FT editorial.

8. Discarding Trident would not aid global nuclear disarmament; it would only imperil UK security (Independent)

It is imperative that discussions on the nuclear deterrent be driven by national security needs, not short-term political considerations, says Lord West.

9. Mr Clegg's voting system and the comedian who's exposed what a joke the euro is (Daily Mail)

Thanks to its proportional representation electoral system, the balance of power in Italy is held by a party whose leader is a stand-up comedian, writes Simon Heffer.

10. Britain's massive debt to slavery (Guardian)

Today the records that detail just how much the trade in humans benefited the UK will be made public, says Catherine Hall. 

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.