Modeling Journey

Chancellor Merkel turned aside Sarkozy's request for consideration of the much vaunted "Euro Bond", arguing that it really amounted to the stronger EU countries guaranteeing the debt of the weaker ones, but without any commitments by the weaker ones to remedy their public finances.

"He's now determined this is what he wants to do. It's like a reinvention of Thatcher's great drive. I always argued that the last Conservative government freed up the markets, but what was missing was the next bit – getting society in Britain ready to meet that change.

"We never did. We ended up with a sort of mid-20th century society, many locked away in welfarism, and a 21st-century economy. We see now that one cannot meet the results of the other."

Cameron has said the government will use intensive intervention to turn around the lives of 120,000 problem families. Duncan Smith said he believed that intervention during the early years could make a huge difference.

"I'm passionate about it because, if we get this right – as they have shown in Colorado over 25 years – whole communities are turned around by early intervention," he added.

Duncan Smith said early years intervention was cost-effective because, if nothing was done to stop young people becoming adult offenders, they cost the state much more in the long term. In Washington state in the US, there is even a Which?-style buyers' guide saying how much could be saved within five years for every dollar invested, he said.

The government could use this principle to persuade investors to pay for early intervention by getting them to buy a "social bond", he said.

"We could suggest to the private sector we create a social bond," he added. "We'd say: you can put your money into this for five years, and we'll give you a guaranteed return because we think it saves us money. We'll give some of it back to you."

Clive Goodman: The good man who wrote The Letter

News International’s controversial decision to alter a critical letter submitted to a parliamentary inquiry was not directly demanded by the police, the Daily Telegraph can reveal... The company has been accused of a cover-up after it gave MPs a significantly redacted version of a letter, written by Clive Goodman, the former royal editor at the News of the World... James Murdoch, the chairman of News International, also faced calls to resign over the scandal.  

The Goodman letter, sent four years ago, alleges that a secret deal was agreed in which he would keep his job if he did not “implicate” other members of the tabloid paper’s staff. He also alleged that editors at the tabloid, including Andy Coulson, supported phone hacking.

On Tuesday News International claimed that the document was altered at the request of Scotland Yard. However, their explanation came under scrutiny after a much fuller version of the same letter was released by law firm Harbottle & Lewis.

The letter submitted by Mr Murdoch to the Common’s media committee removed allegations that Mr Coulson “supported” phone hacking and that it was “widely discussed” at editorial conferences and references to the secret deal.  

Deep Throat on the trail of The Letter

The Daily Telegraph has learned that while Scotland Yard asked for names to be redacted to preserve the integrity of its ongoing investigation, it did not prescribe any other alterations.

It means that the decision remove entire paragraphs of the letter was taken solely by News International.

Cameron and Coulson

Phone hacking was widely discussed at Rupert Murdoch's News of the World, according to a reporter who was blamed as the sole culprit, contradicting repeated denials by senior executives and dragging Britain's prime minister back into the scandal.

In a letter written four years ago in an appeal against his dismissal from the tabloid, former royal reporter Clive Goodman said the practice of hacking was openly discussed until the then editor Andy Coulson banned open talk about it.