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Great drama today at the Scottish parliament in Edinburgh, as Alex Salmond and the minority SNP government tried to win approval for next years budget.

The Lib Dems and Labour made it clear they were against. The Tories were willing to support the measures, thanks to the SNP agreeing to fund an urban regeneration scheme. It boiled down to the two Green MSPs, who want £100m a year spent on free insulation for Scottish homes. They were offered just £22m for next year. Not enough, said the Greens around 4pm, they want another 50%. Their decision threatened the whole £33bn budget. Rarely can the Green Party have held such sway in British politics.

It's just the kind of horse-trading we will see in a hung parliament at Westminster one day.

As I write the SNP has just offered the Greens another eleven million. It was not enough. The budget has fallen.

Watch my film on the day's events at Holyrood tonight on Newsnight.

The former Labour MP Bert Hazell (North Norfolk 1964-70) who died earlier this month was the second oldest ex-MP in history. He was 101 and eight months old at the time of his death.

The oldest ex-MP in history is thought to be Theodore Cooke Taylor, an MP from 1900 to 1918 who lived to be 102.

By my reckoning, Michael Foot is now the oldest living ex-MP, though I could easily be wrong on this. He was born in 1913 and so will be 96 this year. Remarkably, Foot first stood for Parliament in 1935.

Foot is one of only four survivors from the 1945 Parliament. The others are Francis Noel-Baker (89), John Freeman (95) and Ernest Millington (92) who was actually elected as a Common Wealth MP at a by-election in April 1945, but switched to Labour and survived until 1950. That makes Millington the only surviving MP from the Second World War.

There might be rather more to the Kawczynski story than I originally thought.

On Wednesday night (21 January 2009) I reported on Newsnight on the extraordinary intervention when the Conservative MP for Shrewsbury & Atcham, Daniel Kawczynski (who, incidentally, claims to be the tallest MP in history!) dramatically raised a point of order in the House.

He complained that a police officer had visited his Commons office, without a warrant, as part of a criminal investigation, and, much to his "shame" he had ended up handing over to the police an item of constituency correspondence. The police were looking into a series of threatening letters which had been sent to various MPs, including the Schools Secretary Ed Balls, with a Shrewsbury postmark.

Superficially there seemed to be some parallels with the Damian Green affair before Christmas. But, as I pointed out on Newsnight on Wednesday, Mr Kawczynski was not arrested and his office was not searched. What's more, the Metropolitan Police told Newsnight that the officer's visit had been by prior appointment, and by his own admission in the Commons chamber the MP handed the letter over voluntarily.

And the Conservative high command on Wednesday was pretty dismissive of the whole affair, making it clear they did not intend to pursue the matter, and that it was a non-story. They seemed to think he had over-reacted, and told him not to talk to the media.

On Thursday the Speaker Michael Martin rebuked Mr Kawczynski for "rushing" to make his point of order before he got his "facts together", and he warned MPs:

"I would only ask that honourable members, before they rush to point of orders and before they make statements that can reflect badly on professional people who are doing a decent job of work, that the best thing they can do is to sit and wait for a while and get the facts together."

The Speaker continued: "the honourable gentleman's approach would have been perhaps different if he'd have given himself a breather and thought about what was going on."

The reaction to the story has been pretty unanimous - that Mr Kawczynski is a rather eccentric though amiable figure, and grossly over-reacted. (Some have used stronger and more abusive language).

I now wonder, however, whether the media, the Speaker and The Conservative Party have been unfair to him, and whether there were indeed quite important principles at stake. Worse than that, did the police abuse their position?

Mr Kawczynski has sent me two statements (see below) made by members of his staff, a 22-year researcher and a young intern. These statements explain how, without Mr Kawczynski's knowledge, a plain clothes policewoman got the agreement of the MP's staff to come and visit his office. She wanted to compare handwriting and to see if the Shrewsbury MP had received any letters from the person who was threatening other politicians.

Mr Kawczynski's intern did indeed discover a letter with similar handwriting, but when the policewoman asked to take it away, the intern and the MP's researcher both expressed doubts about the propriety of doing so without the MP's say-so. The staff members both suggest that before the MP returned to his office, the policewoman tried to coerce his staff into handing the letter over by saying that legally the police would be able to seize it anyway.

According to the Mr Kawczynski's researcher Jack Colson:
"... the Police officer announced that she would have to seize the letter. I told her that it would have to wait until the morning as I was not able to contact Daniel. I explained that the letter is not mine and belongs to Daniel, and also contained potentially highly confidential and personal information. At this point the Police officer explained to me that "regardless of your cooperation" she had the right to seize the letter as evidence."

The intern Helen Roberts recalls:
"Jack said that he could not allow the paper out of the office without Daniel's permission to which the police officer informed us that she could legally seize the document right then but that she would not out of courtesy."

Eventually, when Mr Kawczynski turned up, he agreed to give the letter to the policewoman, though he soon expressed regrets about doing so in his point-of-order to the House.

The statements by the two staff members are worrying. If the two accounts are right, it seems astonishing following the Green affair that a policewoman should have used such methods to try and persuade two very young and inexperienced members of the MP's staff to hand over the letter, without a warrant and without first consulting the MP himself. The fact it was a police officer based at the Commons, rather than an ordinary member of the Met Police (as in the Green affair), makes it worse, as one would expect Westminster police officers to be aware of the Parliamentary privilege which applies to MPs' correspondence.

Fortunately, Michael Martin announced yesterday that in future any police officer who wants to approach an MP as part of an investigation will first have to go through the House authorities.

But Mr Kawczynski is still unhappy. On Thursday night he said:
"Telephoning an intern to ask if they could come around immediately to show my staff some handwriting samples does not constitute making an appointment with me; stating to junior staff in my absence that if correspondence was not provided voluntarily, they had the power to seize it, was also unacceptable."

Ok, it's not the biggest scandal in politics, but I do think Mr Kawczynski has good cause to feel aggrieved.

STATEMENT BY JACK COLSON, PARLIAMENTARY RESEARCHER TO DANIEL KAWCZYNSKI MP MADE AT 10PM, 21 JANUARY 2009

At about quarter to six on Wednesday evening I received a phone call from a woman who identified herself as a member of the Parliament based plain clothes Police team - I do not recall her name. She explained that there had been a number of potentially threatening handwritten letters sent to members of Parliament from an address with a postcode within the constituency. She told me that the letters had contained white powder, and had been handwritten in 'backwards handwriting' - as though they had written using a mirror. She said that she would like to come and show me the letters to see if I recognised the handwriting to this and I agreed.

Less than five minutes later she arrived. The police officer showed me the letters, and I told her that I did not recognise the handwriting, and then showed her part of a letter from the only constituent of Daniel's who consistently sends strange handwritten letters in. On seeing that this was not the writing, Helen Roberts one of Daniel's interns s aid that she thought she recognised the handwriting. She then pulled a letter from a file and showed it to the police officer - ensuring that she only showed the handwritten address so as not to reveal the sender's confidential content.

At this point the Police officer announced that she would have to seize the letter. I told her that it would have to wait until the morning as I was not able to contact Daniel. I explained that the letter is not mine and belongs to Daniel, and also contained potentially highly confidential and personal information. At this point the Police officer explained to me that "regardless of your cooperation" she had the right to seize the letter as evidence.

I explained that this was not acceptable, folded the letter up into my pocket and rushed off to try to find Daniel. I went upstairs to outside the Chamber, and asked one of the ushers if he was in the Chamber.

After going in the Usher came back and told me that he was. At this point I passed a note to Daniel via an usher explaining that I urgently needed to see him outside the chamber. I did not mention the fact that there was a police officer in the office. About 20 minutes later I was told by one of the ushers that Daniel had made his speech - on equitable life - and left the chamber. I then received a call from Daniel's intern, Helen, explaining that Daniel was downstairs and that I needed to get down there.

I went downstairs and saw Daniel in the office, talking with the police officer. She explained the situation, and also explained that she was able to seize the letter regardless of cooperation. At this point Daniel asked me to hand her the letter, although he was plainly very unhappy about having to do so. He then left and went to vote in a division that was being called.

STATEMENT BY HELEN ROBERTS MADE AT 10PM, 21 JANUARY 2009

On Wednesday 21st January at approximately 5.45pm Jack Colson, the Researcher for Daniel Kawczynski MP was called by a member of the police from Parliament. Jack told me that she asked if she could come down to the office and ask us if she could look at some documents for her and see if we could identify the writing.

When she (Doreen) arrived about 5-10 minutes later she brought down a copy of an envelope which was addressed Ed Balls MP. Along with this there were three additional pieces of paper which had Gordon Brown, Harriet Harman and Ed Balls name written backwards.

She informed Jack and myself that these had been screened by police security in Parliament and that white powder had been found in the envelopes. She informed me that the white powder was salt. The letters came from Shrewsbury (which is Daniel's constituency) and they wondered if we recognised the writing.

I did recognise the writing and found an original letter from a constituent who had very similar writing. The police officer said she wanted to send the letter to a handwriting specialist for comparison.

Jack said that he could not allow the paper out of the office without Daniel's permission to which the police officer informed us that she could legally seize the document right then but that she would not out of courtesy.

Jack went to find Daniel who was in the House to ask his permission. I continued to look for more documents from the specific constituent. I informed Doreen that we had several hundred 'Post Office Cards' sent by constituents over the past few months and that we might be able to recognise the writing from one of those. She asked me if she could take them and I said that she would have to ask Jack who would need to seek permission from Daniel.

Daniel was called down to the office from the House and met with the police officer. Copies were made of the letter from the constituent and also the police officer gave us copies of the envelope and the MP's names written backwards. The original letter from the constituent was taken by Doreen and I was asked, as the individual who found the letter, to come and make a statement to the police explaining what happened. I made this statement. Doreen asked me to send a copy of the handwriting to the constituency office and ask them to look through their records to see if there was any more correspondence from the constituent. I was once again asked by Doreen if it would be possible to go thorough the post office cards and I reiterated that she would have to ask Jack who would need to seek permission from Daniel. She asked if I could have a look myself. Also, we were asked to keep an eye out for similar handwriting and to keep the envelope if another letter comes, to keep the envelope and inform parliamentary police.

Daniel came down to the office and has the card with the contact details of Doreen, the copy of the constituents letter and the copies of the envelope which was addressed Ed Balls MP and the three additional pieces of paper which had Gordon Brown, Harriet Harman and Ed Balls name written backwards.

The promotion of , and will inevitably grab any headlines David Cameron gets from .

And these three men should do a lot to lessen the Tories image as the party of toffs, run by former members of the such as Cameron, Osborne and Boris Johnson. All three are blunt, down-to-earth, punchy politicians, good at getting their message across on TV. (And, incidentally, all three are physically big.)

But another striking feature of today's changes is the continuity. It was David Cameron's first substantial reshuffle for 18 months, yet there were remarkably few casualties. Only his Environment spokesman got the chop. Yet there had been wide predictions of a lot more dismissals - with and most commonly mentioned as casualties.

Mr Cameron may be reluctant to sack anyone outright - a problem Gordon Brown seems to have as well. As a result the Shadow Cabinet, like the Cabinet itself, has been getting bigger and bigger.

Nor did several names widely tipped for promotion get new jobs. Rising star stays with his culture brief. There's no return for to the shadow cabinet for Damian Green, as many expected following the Home Office leaks affair. Nor were there promotions for others who've been widely mentioned such as , and .

In the past Tory leaders such as Michael Howard and Iain Duncan Smith reshuffled their teams every few months - often three times a year. Portfolios passed from one person to the next like a game of 'pass the parcel'. And the same, of course, has occurred in government reshuffles, with the result that as soon as a minister or shadow minister has mastered his or her subject they are are moved on - to the detriment, surely, of good government, or of effective opposition?

David Cameron seems to want to move away from this. He has already made it known that will be health secretary if he wins the next election, and many other members of his team are continuing with the jobs they've held for several years, such as (Development) and (Defence).

Even in moving from party chairman to the communities and local government post there's an element of continuity, since she spent many years on that brief in the past.

After two days back at Westminster Government whips face two fairly serious bouts of dissent.

The first is on the proposed third runway for Heathrow, on which the Cabinet held what Downing Street describes a "brief" and "constructive" discussion this morning. The two biggest Cabinet critics of the runway plans, Ed Miliband and Hilary Benn, both voiced their opposition in strong terms, and it was agreed they would go away and try and resolve their differences in discussions tonight with the Transport Secretary Geoff Hoon. That debate is still unresolved, I understand, which means a government announcement on the third runway isn't likely until next week. But the fear among government whips in the lobbies tonight, I'm told, was that the Conservatives would exploit Labour divisions by putting down a motion on Heathrow on their opposition Day next Wednesday.

The second, and bigger outbreak of dissent - with some rebels in common - is over Peter Mandelson's proposed part privatisation of the Post Office. Labour MPs who are unhappy about this have been invited to meet Lord Mandelson, the Business Secretary, early tomorrow afternoon.

A Commons motion against Mandelson's Post Office plans, has already attracted the signatures of 70 Labour MPs. The motion won't officially be tabled until tomorrow (Wednesday) when the rebels expect to attract a lot more Labour names.

In the end, however, neither rebellion is likely to succeed. The Heathrow runway doesn't require Parliamentary approval, and the Conservatives support the part-privatisation of Royal Mail, in principle at least.

More significant perhaps is what this shows about the current state of politics.

In the words of a Labour backbencher who is heavily involved in both protests: "Would any of this argument be taking place if Labour MPs really thought there was going to be an early election?"

What a delicious twist - and one hardly anyone's spotted.

Last week David Cameron , the multi-millionaire hedge fund boss as the new co-Treasurer of the Conservative Party.

Mr Fink, who used to run the Man Group, is now effectively in charge of boosting Tory coffers in the run-up to the next election.

And with whom did Mr Fink set up in business last spring, and appoint as chairman of his new hedge fund ISAM?

None other than the man whose famous and huge-successful fund-raising paid for Tony Blair's three election victories.

There's much speculation as to whether David Cameron will bring Ken Clarke back to the Shadow cabinet in his forthcoming reshuffle.

It would be a daring, bold move, . Indeed the talk is that Clarke might shadow Mandelson as Conservative business spokesman, replacing the unfortunate Alan Duncan who seems to have annoyed his colleagues by taking a skiing holiday.

It would be a big gamble. First, it would be seen as something of a snub to George Osborne, giving the impression that Clarke is de facto shadow chancellor (in much the same way that after Norman Lamont was wounded by the ERM debacle in 1992 Clarke acted as de facto chancellor in media interviews until he took on the actual job a year later).

Then there are Clarke's very different views on Europe - an issue that will come to the fore again with the European elections in June, David Cameron's pledge to leave the European People's Party after those elections, and the second Irish referendum on the Lisbon treaty later this year.

Indeed, over the years, on a whole range of policy, Ken Clarke has been one of the Tories' worst serial rebels.

But perhaps the most difficult obstacle to Ken Clarke's return would be that he supported the government's cut in VAT to 15 per cent. One could argue, in fact, that he come up with the policy first, suggesting it in , a couple of days before the Chancellor announced the measure in the Pre-Budget Report.

"If it's possible to afford a fiscal stimulus I would go for VAT because the only case for a fiscal stimulus is to stimulate spending and consumer demand, so the tax on spending is the one to go for. But it should be temporary."

And he specifically suggested a cut to 15%.

(In the same interview, incidentally, Clarke seemed to rule out his return by saying it was "tedious" being an Opposition spokesman.)

David Cameron, in contrast, has famously said of the VAT cut: .

Not even a skilled media operator like Ken Clarke would find it easy to explain away such a big difference on a major government policy.

But if Gordon Brown can bring back Peter Mandelson, then Cameron could probably get away with appointing back Ken Clarke.

The Conservative Party high command is so worried about some of David Cameron's Parliamentary candidates that they've started holding meetings every two weeks to monitor what they call a "watch-list" of those "have the potential to embarrass the Party".

This is revealed in the minutes - leaked to Newsnight (download them here (pdf)) - of a meeting of senior national officials - the party's deputy chairmen and vice chairmen - held on 28 October last year.

The minutes say:

"Care needs to be taken over the candidates that have the potential to embarrass the Party - there will now be a fortnightly meeting to assess the watch-list of candidates, and the reasons they are on the list needs to be taken into consideration."

And the document shows that a Conservative Central Office official has even been appointed to keep a close eye on what these potential trouble-makers get up to:

"The public output e.g. blogs, websites, press releases of candidates will [sic] now to be monitored by a new member of the CRD team," the minutes read. "Let JM or Stephen Gilbert know if there are any problems with candidates - de-selection should be the last option." [JM is probably John Maples MP, the Deputy Chairman in charge of candidates.]

The minutes make it clear, however, that Central Office thinks that local associations are often a bigger problem than individual candidates.
"But there is nothing to deal with the awkward associations - senior volunteers to help?"

And the party is taking measures to keep their potential candidates on message, even before they have been elected, according to the leaked report - by arranging for candidates to meet the Chief Whip at Westminster, Patrick McLoughlin:

"The Chief [Whip] is keen to meet with the candidates so they can get used to being line-managed by the Whips' Office."

Line managed? An interesting phrase.

The minutes show that despite David Cameron's slogan of 'Power to the People' - reiterated in spirit in his economy speech this week - when it comes to his own party organisation he is more centralist than ever, and that Central Office doesn't fully trust its candidates or local associations. In monitoring candidates and their output so closely, the Conservatives have clearly adopted many of the techniques honed by Peter Mandelson and Tony Blair for New Labour in the 1990s. These were designed to ensure that the new Labour MPs elected in 1997 were less troublesome than many of their predecessors.

What will also concern many candidates and grassroots activists is the suggestion in the minutes that extra resources may have to be pumped into constituencies which have candidates who are female or come from ethnic minorities. This seems designed to save the party from the potential that such seats might be lost in disproportionate numbers.
"Of 250 candidates, 70 are women and 10 are of an ethnic minorities [sic] - something extra needs to be done to ensure that these ones are not lost."

In response to a questions from Newsnight, a Conservative Party spokesman refused to identify the candidates with "the potential to embarrass the party".

But he said: "It is quite standard for political parties to monitor their candidates - it would be extraordinary if they did not."