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Andrew Sparrow with all today's politics news â€" including more cuts, and David Cameron's announcement of a torture inquiry

4.13pm: David Davis, the former shadow home secretary, has just welcomed the announcement. He asked Cameron if the inquiry would be able to see whatever it wanted, including the records of on-camera court hearings, and whether its report would be published in full.

Cameron said Sir Peter Gibson will be able to see what he wanted. Gibson will report to the Prime Minister. Cameron said he wanted to be able to publish the report in full, however, that he will have to decide what is appropriate in the national interest.

4.10pm: More from the Cameron statement. This is what he said about compensation:

We can's start this inquiry while criminal investigations are ongoing.

And it's not feasible to start it when there are so many civil law suits that remain unresolved.

So we want to do everything we can to help that process along.

That's why we are committed to mediation with those who have brought civil claims about their detention in Guantánamo.

And wherever appropriate we will offer compensation.

As soon as we've made enough progress, an independent inquiry led by a judge will be held.

Cameron has not, so far, explained what "enough progress" actually means.

4:02 pm: Sir Menzies Campbell praised Cameron for his statement and the way he produced "a very delicate balance between what are competing interests".

But Mike Gapes, the Labour MP who chaired the foreign affairs committee in the last parliament, asked Cameron to explain why he was confident that those former suspects who are suing the government for compensation would settle. Gapes asked if they would receive large compensation payments. Cameron said it would not be sensible to negotiate in public.

4.00pm:Here are some excerpts from statements by Cameron '.

On the problem facing the security services:

Our services are paralysed by paperwork as they try to defend themselves in lengthy court cases with uncertain rules.

Our reputation as a country that believes in human rights, justice, fairness and the rule of law - indeed for much of what the services exist to protect - risks being tarnished.

On the accusations of security services:

Mr Speaker, while there is no evidence that any British officer was directly engaged in torture in the aftermath of 9/11, there are questions over the degree to which British officers were working with foreign security services who were treating detainees in ways they should not have done.

About a dozen cases have been brought in court about the actions of UK personnel, including, for example, that since 9/11 they may have witnessed mistreatment such as the use of hoods and shackles.

This has led to accusations that Britain may be complicit in the mistreatment of detainees.

The longer these questions remain unanswered, the bigger the stain on our reputation as a country that believes in freedom, fairness and human rights grows.

3.58pm:Harriet Harman is responsible work. She welcomed the appointment of Sir Malcolm Rifkind ', saying that it is respected throughout the Commons.

She welcomes the publication of the intelligence guidance.

She says she hopes that the "administrative inquiry" will bring the matter to a conclusion. But she has some questions. What can the inquiry do that the intelligence and security committee can't do?

She asks what effect the inquiry will have on the cases already before the courts.

3.50pm: It was very Cameron, that statement. In tone, it reminded me of the statement he made after the publication of the Bloody Sunday report. He managed to combine an acknowledgement of wrong-doing with broad praise for the security services and a pragmatic approach to finding a way forward.

3.48pm: Cameron is still going on. He says there are problems about intelligence information being disclosed in court. He says what has happened in UK courts has put a strain on Britain's relations with the US. He says he hopes that the supreme court will be able to resolve some of these issues.

He announces that Sir Malcolm Rifkind will chair the parliamentary intelligence and security committee.

3.45pm:Cameron starts now. He said that some detainees alleged mistreatment by British officials. And the officials were accused of conspiring in the extradition of suspects.

These allegations are "paralysing" the security services, he says. He wants to sort this out.

Cameron said that the first wants to pay tribute to the special services. They are the best in the world.

They do this without any public, or often private, recognition ... We should never forget that some officers have died for their country.

Cameron says there is "no evidence" that any intelligence officer was directly involved in torture. But there is evidence that officers may have witnessed mistreatment "such as the use of hoods or shackles".

The longer these issues remain unanswered, the more "spot" on intelligence.

The government cannot start an inquiry while criminal cases are ongoing and civil cases pending. The government will try to resolve these claims. Compensation will be offered. Once these have been cleared up (he does not say they all have to be settled) there will be an inquiry.

It passes through some of the issues it will consider, for example, whether the officers had sufficient guidance.

Cameron says Britain should not be "naive or starry-eyed" about the conditions that applied after 9/11.

Inquiry will be headed by Sir Peter Gibson, the judge, who is also Commissioner of special services. The group will also include the Times journalist Peter Riddell.

Cameron says he expects it to start before the end of this year. It will be able to take evidence in public.

It will reach "an authoritative view" on the actions of the state.

Today the government is publishing the guidance issued to intelligence officials when dealing with detainees held by other countries.

3.42pm: David Cameron is about to make his statement, but William Hague is still at the despatch box at the end of Foreign Office questions. He has just been asked about Tony Blair's role as a Middle East peace envoy. Hague said he never expected to say in the Commons that he supported the good work of Tony Blair. But, in this respect, he does, he says.

3:14 pm: I 've just read the words of Francis Maude gives the afternoon. The main thing, of course, the announcement of the redundancy pay, which I 've already written about (see 10:13 am and 1:51 pm). But there are two other lines of news worth mentioning.

• He signals that he wants to cut civil service sick pay: "On arrangements for sick pay in the Civil Service we propose to consult on reforms that bring these arrangements into line with good practice elsewhere in the private sector and the wider public sector."

• He suggests that in future civil servants would have to prove that they had management excellence as well as policy expertise if they wanted to get to the top. Sir Gus O'Donnell, the head of the civil service, has been asked to ensure that "operational delivery is regarded as at least as valuable as ... policy development" in the fast-stream programme for high flyers. In other words, the government now wants managers, not just thinkers.

2.48pm: Ed Balls, the shadow education secretary and Labour leadership candidate, has accused Michael Gove of making "a litany of errors" in the list of schools affected by the cancellation of the Building Schools for the Future programme. He has posted details on his blog. "This is a disgraceful way for a secretary of state to make an announcement when opportunities for young people and the hopes of communities are in the balance," Balls says.

2.32pm: Francis Maude has today made an announcement about cutting redundancy payments for civil servants. But he also answers parliamentary questions about redundancy payments to ministers, and yesterday he revealed how much has been paid to the Labour ministers who left office after the election. They got a total of just over £1m, under rules that say ministers who leave office under the age of 65 can get a quarter of their annual salary. Pete Wishart, the SNP MP who asked the question, wasn't impressed:

2.21pm: Tim Farron, the Lib Dem MP who stood unsuccessfully for the deputy leadership, told the Daily Politics show earlier that losing the alternative vote referendum would not break up the coalition. This is what he said, according to PoliticsHome:

It musn't be a deal-breaker. Getting the referendum is a deal-breaker and should we win it and the Conservatives wouldn't push it through, that would be a deal-breaker. But if the people decide to turn us down it's in their hands.

1.51pm: Here's a lunchtime summary.

• Unions have responded with fury to a decision to cut redundancy payments for civil servants. Francis Maude, the Cabinet Office minister said payments should be capped at 15 months' salary for those taking voluntary redundancy and 12 months' salary for those facing compulsory redundancy. These proposals are less generous than the terms that were offered by Labour earlier this year and that were accepted by five of the six civil service unions. Maude said the government would legislate to bring in the changes because the Public and Commercial Services union (which rejected the Labour plans and defeated them in the high court) was being unreasonable. But the PCS leader Mark Serwotka said: "Following the high court ruling we wrote to the Cabinet Office offering further negotiations to agree a fair and legal deal, so Francis Maude's announcement today betrays a breathtaking arrogance and a contempt for his own workforce." Prospect's deputy general secretary Dai Hudd said: "The government wants to rip up their rights in a way that would do justice to King John, but it will not work. These rights are protected by law and bully boy tactics will not get round that fact." (See 10.13am)

• The Treasury has dismissed suggestions that Sir Alan Budd is leaving his post as chairman of the Office for Budget Responsibility earlier than expected. Budd, who is 74, will step down at the end of the month. But he was only appointed to head the OBR on an interim basis and the Treasury said he always intended to leave in the summer. (See 9.22am, 9.51am and 10.53am)

• Four peers are leaving the House of Lords so that they can keep their non-dom status, it was revealed today. Lord McAlpine, Lord Laidlaw, Lord Bagri (all Conservatives) and Baroness Dunn (a crossbencher) have decided to leave before a law comes into force tomorrow saying that peers have to be full UK taxpayers. Lord Ashcroft is still keeping us in suspense about his intentions (although in the past he has indicated that he will stay in the Lords and give up being a non-dom). (See 11.56am and 12.43pm.)

• Downing Street has confirmed that David Cameron will make a statement to MPs at 3.30pm about the treatment of terror suspects by British intelligence officials. The prime minister's spokesman said it would be "a comprehensive statement which is intended to both deal with the legacy issues and the past, and provide clarity for the security services to get on with the vital job they do for this country."

• Philip Hammond, the transport secretary, has said that a decision on whether new intercity express trains should be introduced on two busy rail routes will be made in October, at the time of the spending review. The Press Association says: "It is by no means certain that the Intercity Express Programme (IEP), which would provide new 125mph trains for the East Coast and Greater Western lines, will go ahead. The IEP has been independently reviewed by Sir Andrew Foster whose report today recommends a period of reflection to consider the alternatives to IEP. "

• Dame Clare Tickell, the chief executive of Action for Children, has been appointed to review the early years curriculum.Sarah Teather, the education minister who announced the review, said that it is establishing a review, because it "is concerned that the structure is too rigid and puts too many burdens on the early years of force". (See 10:43 am.)

• A plan to save £20bn a year through radical devolution of power to local government has been put forward by the Local Government Association. Eric Pickles, the communities secretary, has said that he wants to stop councils "being smothered by central government and strangled with regional bureaucracy". (See 11.39am and 12.13pm)

• An inquiry has concluded that the Welsh assembly should have the power to vary income tax. (See 12.57pm.)

12.57pm: My colleague Steven Morris has filed a story for the Guardian website about the Holtham report calling for the Welsh assembly to be given the power to vary income tax and borrow money.

The Independent Commission on Finance and Funding for Wales also called for the scrapping of the "unfair" Barnett formula, which the UK government uses to work out the grant Wales receives, and said it should be replaced by a simple system that took into account the country's needs.

Also set out in the commission's 184-page final report were recommendations that stamp duty ought to be devolved to Wales and discussions take place about the possibility of devolving corporation and capital gains taxes. It also suggested that local authorities be given discretion to levy a higher council tax on second homes.

12.43pm:My colleague Polly Curtis sent me more about the four colleagues who are leaving the House of Lords, because they do not want to abandon their non-home status. (See 11:56 am) Tomorrow is the deadline for non-house colleagues to decide on a vacation, or do they start paying full taxes in the UK.

Lord Bagri and Baroness Dunn have resigned in the past couple of days in addition to Lord McAlpine and Lord Laidlaw who had already announced their intention to go.

It follows the introduction of a new law that bans people who are registered abroad for tax purposes from sitting in both houses of Parliament in the wake of the mystery over the tax status of the Tory donor and deputy chair of the Conservative party Lord Ashcroft.

Ashcroft confirmed in March that he was a non-dom, something that his party leadership had been kept in the dark about. At that point he suggested that he would remain in the House of Lords under the new rules, indicating that he would relinquish his non-dom status.

Today, however, his press secretary working rumors that he may have changed his mind, refusing to confirm whether Ashcroft will remain in the house, the day after tomorrow 's term. "You LL 'have to wait and see" he said.

In April peers were given three months in which to get their tax affairs in order to comply with the new rules about the tax status of parliamentarians.

The House of Lords, the source confirmed that all four will retain their titles, despite all his life without having access to the Houses of Parliament or the right to attend the debate.

12.22pm: Here, as promised, is an AV referendum reading list.

• Ann Treneman (who was behind s paywall Times ') writes about how Nick Clegg attacked Labour, when he made his statement yesterday, announced the referendum AV.

It was all very entertaining, except for one tiny detail. Nick needs these people. It is the paranoid, churlish Labour MPs who are going to back him on AV - not Dave, who - no matter how many glasses of water he pours - is against it.

• Nicholas Watt on his Guardian blogAnalysis of the reaction of stock a statement Clegg ', and says: "was not enough support from their Party.

• Stephen Tall at Liberal Democrat Voice says Lib Dem MPs should have been more supportive. "Sometimes ... the liberal thirst to prove our scepticism and independence can suggest indifference or even hostility."

• John Prescott on his blogsaid Labour must oppose the plans.

This package is poisonous and labor must fight with every part of it.

• But Sunny Hundal at Liberal Conspiracy offers three reasons why Labour should support the proposals.

Constant Labour oppositionalism at everything looks very unprincipled, especially since all the five Labour leadership candidates committed to AV reform. If the party now does a big u-turn in the hope of splitting the coalition â€" it will simply backfire.

• John Rentoul on his blog explains how the referendum could be lost. "Support for change is as soft as a puffball."

• And Anthony Wells at UK Polling Report explains how many MPs each region will lose under the proposals to cut the size of the Commons.

Wales will suffer from severe shortage of places, compared with 40 to 30, as quotas shall, in accordance with quotas in other parts of the country.

12:13 pm: Eric Pickles, the communities secretary, has written an article for Comment is free who seems to view his presentation LGA. He complains about spending money on tips ", some of the more absurd" does not work 'can be found at ". (It' s too polite to point out that these supposedly funny jobs are often adverstised in the Guardian. ") But he also argues that it seeks to decentralize power.

My department used to make town halls deliver for Whitehall. Now its purpose is to free up councils to deliver for the public. I won't be micromanaging, second guessing and interfering in council affairs any more. Councillors have been prisoners of regulation, chained to the radiator with red tape, for too long. It's my job to free them.

Does lecturing councillors about "non-jobs" count as interfering? Pickles suggests that it doesn't, although I suspect that some of his audience may disagree.

11.56am: Four peers are leaving the House of Lords so they can keep their non-dom status. My colleague Polly Curtis has posted this on Twitter.

Lord McAlpine, Lord Laidlaw, Baroness Dunn and Lord Bagri have resigned from the Lords to keep their "non-dom" status

11:39 am: A plan to save £20bn a year by decentralising spending is being unveiled at the Local Government Association conference today. The LGA is publishing a report called "Place-based budgets - the future governance of local public services" which calls for "the largest devolution of power for generations". It calls for councils to be put in charge of, well, pretty much everything. The list includes "economic regeneration, planning, housing and regeneration, home energy efficiency, managing flood and climate risks, adult skills, local transport, primary health care, policing and probation, and support into employment for the long-term unemployed and workless". LGA sources say that the proposals are being taken very seriously by the Treasury. They would say that. But David Cameron and Nick Clegg are both passionate about decentralisation - its the key area where their political philosophies overlap - and so the LGA may be pushing at an open door.

Dame Margaret Eaton, chairman of the Conservative LGA, will talk about this in a speech she delivers at the conference. Here 's an extract, which was released in advance.

Today I am proposing a radically different way of doing things that will save up to £100 billion over five years and help protect vital frontline public services from painful and damaging cuts.

There are huge opportunities to save money and give people a bigger say in the public sector by starting with a clean sheet and giving power to the people who know their areas best. That is the way to reform the system and save money rather than to cut services we know people really need ...

Ministers must do everything humanly possible to cut out the bureaucracy, unnecessary administration and complexity that clogs up the system before they even think about cuts to the everyday services our residents depend on.

10.59am:There, with great 'comment about today s Nick Clegg' plans for a referendum on the alternative vote. I LL post 'raid on the best stuff later. First, though, here are some interesting stories, not-AV and products from the rest of today 's papers.

• Nicholas Timmins in the Financial Times says the government will push for regional pay in the civil service. This would allow staff outside London to be paid less.

Almost three-quarters of the government's 520,000 civil servants â€" including huge numbers at the big four departments of work and pensions, Revenue & Customs, and the ministries of defence and justice â€" work outside London and the south-east.

Public sector pay in the regions â€" which includes that of civil servants â€" is about 5 per cent higher for men and 11-13 per cent higher for women than in the private sector, according to the Institute for Fiscal Studies, even after allowance has been made for public sector jobs on average requiring higher qualifications than private sector ones.

When Gordon Brown was chancellor, the Treasury pushed the idea of paying less in the regions to cut central government costs. But while the civil service does have London weighting, among the large departments only the ministry of justice has introduced an element of regional pay for junior and middle-ranking staff.

• Andrew Tyrie, the new chairman of the Commons Treasury committee, suggests in an interview in the FT that some government policy relating to financial regulation "appears to be being made on the hoof".

• Philip Stephens in the FT writes in praise of William Hague.

As officials across Whitehall compare private scorecards on their new political masters, Mr Hague has emerged with pretty much top marks. Some speculate he could turn out to be the most powerful foreign secretary in recent memory â€" just as the UK's voice in world affairs grows weaker.

• The Daily Mail says that 30 bills tabled by backbench Tory MPs represent an "alternative manifesto". "The alternative agenda focuses on an uncompromisingly right-wing agenda, including withdrawal from the EU, abolition of the TV licence and the reintroduction of national service."

• Rachel Sylvester in the Times (which is now behind a paywall) says that Tories ministers are starting to doubt the wisdom of ringfencing some departmental budgets, and that the Department for International Development is a target. "I remember a former Foreign Office minister telling me how irritating it was, when travelling in Africa, to see DfID-funded consultants criss-crossing the continent in first-class cabins while he had to fly economy."

• And, in its business section, the Times says the government "is drawing up contingency plans for a possible collapse of BP amid mounting fears that the oil giant could be broken up or taken over in the wake of the Gulf of Mexico oil disaster". The story quotes one insider saying one possibility would be government intervention to protect BP.

10.53am:More information about the decision by Sir Alan Budd, 'to stand down as head of the Office of Budget Responsibility. (See 9:22 am.)

Here's the official Treasury statement.

It has always been the case that Sir Alan planned to leave in the summer. He was appointed to provide forecasts for the emergency Budget and to advise on the establishment of a permanent OBR. He has established the OBR as a credible, independent body and the Chancellor is incredibly grateful for his important work on this issue. The government will seek to ensure continuity for the OBR in recruiting Sir Alan's successor.

And here sa 'big offer from the Fabian Society' s Sunder Katwala, who wrote about it the next left.

Is the aim of the robust independence of the ORB served by George Osborne alone again hand-picking the next chair, as a political appointment?

Why not let the Treasury select committee make the appointment, or hold public hearings with the leading candidates? When the (currently interim) OBR is placed on a statutory basis, surely it should be made accountable to parliament and not the executive?

Osborne's public argument as to why the OBR is needed gives him no obvious grounds to refuse such calls without undermining its credibility or purpose.

10.43am: Dame Clare Tickell, the chief executive of Action for Children, will review the early years curriculum, the government has announced. In a news release, the education department says that "ministers are concerned that the [early years foundation stage] framework is currently too rigid and puts too many burdens on the early years workforce, which has led to some of the workforce saying they are spending less time with children, and more time ticking boxes."

In the Daily Telegraph today, says Graeme Paton review may lead to "diaper program" with 69 goals are in a landfill.

10.13am:Francis Maude has just issued a statement that the government will introduce legislation "as soon as possible" to limit duplication of payments to civil servants. He says he wants to bring them into line with the "best practices in the private sector".

Under the plan, staff who face compulsory redundancy will get a maximum of 12 months' pay. And staff who take voluntary redundancy will get 15 months' salary at most.

Under the current rules some long-standing employees can receive a package worth more than six years' salary, according to the Cabinet Office.

Maude says:

What is on offer now is simply untenable and completely out of kilter with what is on offer in the wider public sector and the private sector.

Our ambition now is that a negotiated, sustainable and practical long-term successor to the existing scheme can be agreed â€" one that is flexible and appropriate for current economic climate and also fair for lower paid workers.

9:51 am: A Treasury aide has sent me a text about Budd (see 9.22am). He says it was "always the case he planned to leave in the summer".

9.31am: Gordon Brown has been offered "several lucrative academic posts", Michael Settle reports in the Herald. Brown's spokesman said: "It's true he has been approached by several academic institutions regarding various things. None of these is settled or completed as yet. There have been approaches in this country and in others."

9.22am:Sir Alan Budd stepping down as head of the Office of the liability of the budget at the end of this month, reports Telegraph. He was only appointed as an interim chairman. But this still does seem very early to be leaving. I've got some calls out to Treasury people and I'll let you know if we get a proper explanation.

9.09am:Once again, we 'will not be short stories today. Two cabinet ministers are delivering speeches, which must disclose information about how the government intends to restrain government spending, but it 's not all the reductions. Here sa 'schedule for the day.

9.30am: A report will be published calling for the Welsh assembly to be given the power to vary income tax. Gerald Holtham was asked to chair a commission on the subject two years ago as part of the coalition deal between Labour and Plaid Cymru.

12pm:Dame Margaret Eaton, chairman of the Tory Local Government Association, will speak at the conference LGA. It will be assumed that the radical decentralization can save up to 100 billion pounds over five years.

1.30pm:Eric Pickles, communities secretary, will speak to the LGA. He will attack the boards to create the "out of work" .

2pm:Francis Maude, the Minister of the Cabinet of Ministers, will speak at the conference of the civil service. He announces reduction in redundancy of the civil monetary .

3.30pm: David Cameron is due to make a statement in the Commons to announce the setting up of an inquiry into allegations that British intelligence officials colluded in torture.

3.45pm: Bob Ainsworth, the former defence secretary, gives evidence to the Iraq inquiry.

We've also got announcements from Sarah Teather, the education minister, on the early years curriculum and from Lord McNally, a justice minister, on data protection. I'll be doing my best to keep an eye on everything, flagging up what's important and â€" as usual â€" bringing you the best politics from the papers and the web.