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Cameron must beware the formidable dragon

In Arizona, a popular Democrat congresswoman is shot for being too liberal on health care; in Pakistan, the charismatic governor of the Punjab is assassinated for being too liberal on religious tolerance.

As MPs return to work at Westminster today, the global media headlines are a reminder that they are fortunate to be putting only their political careers rather than their lives at risk when they stand up in public and say what they think.

Even without the tragedies in the US and Pakistan, the mood at Westminster is sombre. The official terrorist threat level across Britain has been raised from "substantial" to "severe" -- one short of the highest possible -- and MPs are acutely aware of their own vulnerability.

For some of them, the risks of their career are self-inflicted.

The former Labour MP for Bury North, David Chaytor, was sent to prison for 18 months last Friday for an elaborate expenses scam that embroiled members of his family in fake rental claims.

Tomorrow, another Labour MP, Eric Illsley, will appear in court on charges of dishonestly claiming for council tax and other expenses on his second home. If he is found guilty, he will be booted out of parliament and there will have to be a by-election in his constituency of Barnsley Central.

Barnsley is a safe Labour seat and would be far less challenging for the three main parties than the tense by-election taking place this week in Oldham East and Saddleworth.

The Labour leader, Ed Miliband, is hoping that his party can hang on to the seat after the former Labour MP there was ousted by the election watchdog for telling lies about his Lib Dem opponent.

Victory for Labour would be a huge relief for Miliband and underpin his fragile authority over his party. He has been floundering during the Christmas holidays and was humiliated last week on a radio phone-in when listeners attacked him for preventing his brother, David, from being elected party leader.

Ed Miliband is not helped by his decision to appoint the former home secretary, Alan Johnson, as shadow chancellor. Johnson is a fluent media performer but he has not been doing his homework on the economy and has got himself into some awkward muddles over policy as a result. He also upset the party spin-doctors last week when he was photographed drinking pink champagne at around €20 a glass in the Savoy Hotel.

For the prime minister, David Cameron, the lack of serious opposition to his tough economic policies is an unexpected bonus at a time when he is struggling to maintain the commitment of his fellow MPs to the coalition with the Lib Dems.

Cameron said yesterday that if he had not raised VAT this month to a record 20pc, Britain would be "in a hole like Ireland".

He is privately hoping that some Conservatives will switch to the Lib Dems in the by-election this week in order to try to defeat Labour. His fear is that a poor showing by the Lib Dems would undermine their leader, Nick Clegg, and put intolerable strains on the coalition. Across Britain as a whole, support for the Lib Dems has slumped by two-thirds in the past few months to a mere 7pc of the electorate.

Still, one of Cameron's biggest worries is that the VAT rise, together with the impact of the severe winter weather on food and energy prices, will trigger a dangerous outbreak of inflation.

Prices are already rising faster than the official target level and the Bank of England is poised to push up interest rates later in the year if inflation looks like getting out of control.

The dilemma of how to reconcile such a move with expanding employment in the private sector to offset government cutbacks is all too familiar to Cameron's most important guest at No 10 this week, China's vice premier, Li Keqiang.

China has emerged as a key player in the battle to save the eurozone. It has been buying up Spanish government bonds and seems to be interested in putting some of its massive international reserves into other wobbly euro members as well.

But there are worries in Whitehall about just how China may try to deploy its formidable financial strength in the future. Among the many intriguing revelations in the recent WikiLeaks releases was a report that, after Spain got eurobond support from China, the Spanish government lobbied other EU members in an unsuccessful effort to have the moratorium on arms sales to China removed.

Irish Independent