8.51am: We've got the first PMQs of 2012 and David Cameron will be at the dispatch box as the prospect of a full-blown constitutional crisis between London and Edinburgh looms. Alex Salmond was on the Today programme earlier and he flatly rejected the UK government's claim that the Scottish parliament does not currently have the power to call a referendum.

There's certainly a difference of view. The UK government has suddenly come up with one view. But if you take for example the leading textbook of Scottish constitutional law - that's Law and Practice, Himsworth and Neil - it says such a bill, in other words a consultative referendum, would almost certainly be within the Scottish parliament's powers. So there's a great deal of legal opinion that says the Scottish parliament can bring forward a consultative referendum.

Alistair Darling, the former Labour chancellor, was on the programme too. He told Jim Naughtie that he would play his part in an anti-independence campaign and that it was "important for people to be prepared to work with Liberals and Conservatives". This prompted a rare Naughtie tweet.

alistair darling putting himself firmly in the frontline of a referendum campaign...a notable move #r4today

I'll post more from the Salmond and Darling interviews shortly.

Otherwise, here's the agenda for the day.

10am: The Leveson inquiry resumes. Peter Wright, editor of the Mail on Sunday, and Liz Hartley, head of editorial legal services at Associated Newspapers, are giving evidence.

10.30am: Michael Gove, the education secretary, gives a speech on technology in schools. As Jeevan Vasagar reports in the Guardian, he will say that the existing curriculum in Information and Communication Technology (ICT) has left children "bored out of their minds being taught how to use Word and Excel by bored teachers".

12pm: David Cameron and Ed Miliband clash at PMQs.

2.15pm: George Osborne, the chancellor, gives evidence to the Commons Treasury committee on banking reform.

As usual, I'll be covering all the breaking political news, as well as looking at the papers and bringing you the best politics from the web. I'll post a lunchtime summary at around 1pm and another in the afternoon.

If you want to follow me on Twitter, I'm on @AndrewSparrow.

And if you're a hardcore fan, you can follow @gdnpoliticslive. It's an automated feed that tweets the start of every new post that I put on the blog.

Photograph: Jeff J Mitchell/Getty Images

9.17am: I've already mentioned Alex Salmond's interview on the Today programme. Here are the main points. I've taken the quotes from PoliticsHome.

• Salmond said that the Scottish parliament "almost certainly" has the power to hold a referendum on indendence without Westminster passing new legislation.

• He said David Cameron's tactics would increase support for the SNP. Cameron's comments about a referendum on his interview on the Andrew Marr show prompted an "incredibly adverse reaction", Salmond said.

I think it's going to increase support for independence and the SNP, I thought his intervention at the weekend was almost Thatcher-esque in its nature, you know, the idea that London knows best and that he's really operating in our best interests but wanted to set the ground rules for our referendum despite the fact that he's got no mandate whatsoever for doing so.

• He said that he thought the UK government and the Scottish government could reach a deal on the terms of a referendum.

As long as it's recognised that the mandate for the Scottish parliament to organise and hold the referendum, it must be a referendum built in Scotland and decided by the Scottish people, as long as that's recognised I'm sure that politicians north and south of the border are capable of coming to an agreement at some time this year on the ground rules for such a poll.

• He said that having a straight yes/no independence question, and excluding a further devolution option (so-called devo max), would be "very strange".

There's a lot of opinion in Scotland, according to some opinion polls, huge opinion and support for what's called devo max ... I just don't think it's right and proper at this stage before people have had a consultation on the referendum question or questions for the UK government to start ruling that out.

• He denied that he wanted devo max on the ballot paper because he feared Scotland would vote against independence. "That's not a fair characterisation of our position," he said. "I've said what is our sine qua non for us on the ballot paper ... I'm putting forward the view that that [a choice on independence] will certainly be on the ballot paper."

• He denied that he was wriggling. "I think your listeners across these islands will not associate the words Alex Salmond and wriggling very closely together," he said.

Photograph: Murdo Macleod for the Guardian

9.57am: And here are the main points from Alistair Darling's Today interview on Scotland. Again, I've taken the quotes from PoliticsHome.

• Darling said Alex Salmond wanted to delay the referendum until 2014 because he was "playing for time". The referendum should be sooner rather than later, Darling said. By setting 2014 as his preferred date for the referendum, Salmond has already shifted his position, Darling claimed. "One of the good things to come out of this week is that he has had to move from 2015 to 2014."

• He said Salmond still had not answered fundamental questions about how independence would work. For example, "would we be going into the euro with all strictures that they are now going to visit on members? How much debt will we have?"

• Darling said the referendum campaign should not be seen as a battle between the Tory government in London and the SNP government in Edinburgh.

• He stressed the need for the pro-union parties to work together in the campaign against independence.

What I am saying is it is important for people to be prepared to work with Liberals and Conservatives. It is important we fight this thing together. This campaign will only be won if it is fought in Scotland by people who have got Scotland's best interests at heart.

• He played down the idea that he would play a leading role in the anti-independence campaign. Although he said he would "play his part", he said Naughtie was "jumping the gun" when he raised the idea of Darling being at the forefront of the campaign.

This answer does not seem to have stopped a "Darling should lead the no campaign" movement starting on Twitter.

Here's the Daily Mirror's Kevin Maguire.

Alistair Darling sounds as if he's auditioning on R4 for leadership of anti-Scottish independence campaign

Here's the Guardian's Patrick Wintour.

Osborne needs to get out of the road on scotland and leave it to Darling: no time for an English novice.

Here's Iain Martin.

Alistair Darling proving v good in appearances on independence, Scotland etc. Has the measure of Salmond.

10.11am: For the record, here are the latest YouGov GB polling figures.

Labour: 40% (up 10 points since the general election)
Conservartives: 40% (up 3)
Lib Dems: 10% (down 14)

Government approval: -18

10.16am: My colleague Paul Owen is covering Michael Gove's speech about computing and IT in schools on a live blog. On the blog, there will also be a Q&A with experts on how teachers can use new technology to improve their teaching in various subjects.

Photograph: Rex Features/Paul Grover

10.25am: On the Today programme Alex Salmond was talking up the case for including "devo max" in the independence referendum. But, in a separate radio interview, Michael Moore (left), the Scottish secretary, said that it was not clear what this meant.

Devo max is a brand without a product, it's a concept we should get more powers and I think it is entirely legitimate to debate whether or not we should have more powers. I am actually piloting through the members of parliament at the moment the biggest transfer of powers to Scotland since the Act of Union ... We can't have ill defined ideas which no one quite understands what they mean on a ballot box that gives a mandiate for discussions nobody is quite clear on.

Photograph: Martin Argles for the Guardian

10.36am: Grant Shapps (left), the housing minister, has announced today that people who sublet council homes could face up to two years in jail. The full details are in a news release on the Department for Communities website. Here's an extract.

The Minister set out proposals to criminalise the abuse of social homes - such as unlawful subletting and key-selling - with a possible two year jail sentence. He said the plans could free up thousands of homes for housing waiting lists.

Tenancy cheats can earn thousands of pounds a year renting their social homes out to private tenants - but if caught, may currently face no greater penalty than losing their tenancy.

Mr Shapps wants to see much greater legal consequences for these cheats - and so is consulting on proposals that would introduce specific criminal offences for tenancy fraud, such as those which already exist for social security fraud.

Some estimates suggest that between 50,000 and 160,000 social homes are currently being unlawfully occupied across the country.

The Minister said the plans would also strengthen councils' legal rights as landlords to help them detect and prosecute tenancy fraud more effectively and return lost revenue back to local coffers.

11.00am: You can read all today's Guardian politics stories here. And all the politics stories filed yesterday, including some in today's paper, are here.

As for the rest of the papers, here are some stories and articles that are particularly interesting.

• Mark Odell and Jim Pickard in the Financial Times (subscription) say the HS2 high-speed rail project is now considered "low" value for money according to official calculations.

Critics of the HS2 project who have long questioned its economic cost and environmental impact, highlighted the government's calculations in its accompanying Value for Money Statement.

This shows that the traditional measure of value for money of infrastructure schemes – or the cost-benefit ratio – for the first 140 miles of the route from London to Birmingham has dropped from a gain of £1.60 for every £1 invested, when last calculated in February 2011, to £1.40.

"The Treasury wouldn't normally get out of bed for that," said Stephen Glaister, a transport economist and executive director of the pro-motoring RAC Foundation. "The economic case for HS2 had not been made." Other rail and road schemes were "much more attractive", he said.

The official analysis shows that a large part of the fall is due to the change in the government's economic forecasts but a rise in the estimates of the operating costs of high speed services also had a significant impact.

• Jill Sherman in the Times (paywall) says George Osborne is planning to raid the £140bn council pension fund to pay for infrastructe projects.

Local authority chiefs will meet Treasury officials this week to discuss how money held in 80 funds can be used for local projects.

Union leaders, who are locked in a battle with ministers over public sector pension reform, attacked the plan yesterday. Brian Strutton, national secretary of the GMB, said that many local goverment funds were now in deficit and should not be plundered for risky projects. "Members pensions' savings will be put at risk by investing them into dodgy infrastructure projects that are notoriously more expensive than planned and are unlikely to yield good returns," he added.

The Chancellor's move, which could raise at least £10 billion, comes after his announcement last November that £30 billion would be spent on infrastructure projects during the next ten years. Mr Osborne said in the Autumn Statement that £20 billion would be raised from private sector pension funds with £10 billion from extra government spending.

• Andrew Grice in the Independent says Ed Miliband may fight the next election pledging some form of mansion tax.

Labour may fight the next election on a pledge to bring in a "wealth tax" on owners of high-value properties, it emerged yesterday ...

The "squeezed middle" championed by Mr Miliband would not face higher taxes, which would be targeted on the highest earners. Rather than extend the 50p top tax rate, Labour might impose a new property tax, which would be harder to evade.

One option would be similar to the mansion tax on homes worth more than £2m which was advocated by the Liberal Democrats at the last election. Although they have pressed it recently inside the Coalition, David Cameron and George Osborne are not keen and the Government looks unlikely to adopt it – leaving the field clear for Labour.

• Ed Miliband tells the Daily Mirror in an interview that he has no plans to bring Alistair Darling or Jack Straw back into the shadow cabinet.

Mr Miliband said he was very happy with the his frontbench team. "I talk to people like Jack (Straw) and Alistair (Darling) a lot and I will continue to do so.

"I don't think either of them want to return to the Shadow Cabinet and I am very happy with the Shadow Cabinet."

He added: "The party elders are invaluable sources of advice to me."

• Alex Salmond in the Financial Times (subscription) says the UK government should adopt a "plan Mac B" and follow Scotland's economic policies.

We urgently need a credible plan for jobs and growth based on the Scottish experience, where the recession was shorter and less sharp. Our recession lasted four quarters and gross domestic product fell 5.9 per cent. The UK recession lasted six quarters and GDP fell 7.2 per cent.

Scotland does not yet enjoy the full economic powers of independence that the Scottish National party will campaign for in the referendum we announced on Tuesday. We, however, have delivered a distinctive approach focused on protecting public investment; boosting access to finance; encouraging private investment; and enhancing economic security to promote confidence. We specifically brought forward capital expenditure, increasing public investment in infrastructure. This is an immediate stimulus and also unlocks a cycle of investment, growth, jobs and tax revenue.

11.37am: If Scotland becomes independent, will it have to join the euro? Polly Curtis has been considering the matter on her Reality Check blog. Here's her verdict.

There is no precedent to Scotland's position vis-a-vis the EU. By law if it is considered a new state it would have negotiate entry to the EU from scratch, although it would readily satisfy its tests having been a member already. Any new member state has to join the euro. Whether it is considered a new state or whether it would retain any of the UK's exemptions, would have to be negotiated with the 27 member states of the EU – including the remainder of the UK.

11.50am: It's time to dig out Lord Glasman's New Statesman article. With PMQs looming, David Cameron will certainly have a copy in his folder. Two quotes are particularly valuable.

First this:

On the face of it, these look like bad times for Labour and for Ed Miliband's leadership. There seems to be no strategy, no narrative and little energy. Old faces from the Brown era still dominate the shadow cabinet and they seem stuck in defending Labour's record in all the wrong ways - we didn't spend too much money, we'll cut less fast and less far, but we can't tell you how.

And then this:

Endogenous growth, flexible labour-market reform, free movement of labour, the dominance of the City of London - it was all crap, and we need to say so. Stanley Baldwin had a far more robust industrial growth strategy than Brown and Mandelson could conceive of ...

That last quote ends with the line "let alone Cable or Osborne", but you would not expect Cameron to say that.

We'll find out soon whether Cameron will use the quotes.

And we will found out soon how his feud with Ed Balls is going. After saying in a Sunday Telegraph interview that sitting opposite Balls at PMQs was like being heckled by "someone with Tourette's", Cameron apologised - although I was not clear whether he was apologising to Balls, or apologising to people with Tourette's for comparing them to the shadow chancellor.

At Coffee House, James Forsyth thinks Ed Miliband may try to avoid the Glasman jibes by asking six questions about Scotland.

12.00pm: David Cameron starts with a tribute to the four servicemen who have died since the last PMQs as a result of service in Afghanistan.

12.01pm: Graham Stuart, a Conservative, asks Cameron to congratulate a food company in his constituency. Unfortunately, the Food Standards Agency won't let it export to the far east. Will Cameron ensure job-destroying regulation is removed?

Cameron says exports to China went up 20% last year. A minister will look into this case.

12.03pm: Ed Miliband starts with his own tribute to the dead servicemen.

George Osborne said in his autumn statement that train fares would only go up by 1% above inflation. So why are some fares going up 11%.

Cameron said the power to allow this was granted by the last Labour government.

Miliband says that is wrong. Labour stopped this. But the coalition has reversed this policy.

Cameron says Miliband is wrong. In 2009 Labour allowed train fares to rise by up to 11%, because they introduced a 5% flexibility, on top of the RPI plus 1% formula used to control prices.

Miliband says Cameron is "just wrong". Labour took away that power. Cameron came back to office "and brought that power back". Will he reverse the policy?

Cameron says he orginally had an RPI plus 3% policy. That changed. Miliband is not willing to take difficult decisions he says. He should listen to Jim Murphy, who said there is a difference between popularity and populism, and that difference is credibility. Miliband should get some.

12.07pm: Milband says Cameron is wrong. Cameron said he wanted to take on crony capitalism. He has failed at the first hurdle. Will he admit he's wrong?

Cameron says Labour introduced the rail fair flexibility issue. They changed this for one year - the election year - but they had no intention of making that permanent.

(At last - we seem to have an explanation as to why Cameron and Miliband are contradicting each other so bluntly.)

12.09pm: Sir Roger Gale (as he became in the New Year's honours list) asks if high-speed rail will be extended to his Thanet constituency.

Cameron starts with a final point about rail fares. Under Labour, unregulated fares went up 23%, he says. High speed rail is a good thing, he adds.

12.10pm: Labour's Luciana Berger asks if Cameron will adopt the policy Miliband proposed yesterday to get energy companies to put pensioners on the lowest tariff.

Cameron sidesteps this. But he says that, unlike Labour, the coalition has made the increase in cold weather payments permanent.

12.12pm: Ed Miliband rises again.

Labour think the UK benefits the people of Scotland and the people of the UK in equal measure. Does Cameron agree that they must make the case for the shared benefits of the union?

Cameron says he and Miliband are going to be in 100% agreement on this. He passionately believes that the UK is stronger together. He is "sad" that this debate is even taking place. He looks forward to having the debate because the SNP are happy to talk about the process, but not the substance.

Miliband says he agrees. It is not a fight about process, he says. There should be cross-party talks in Scotland about the timing of the referendum. Does Cameron agree that there needs to be a discussion about the substantive issues involved. There should be a serious, thoughtful debate. People deserve nothing less.

Cameron says Milband is right. It is important for the UK government and parliament to speak to the Scottish parliament and government. The referendum must be decisive and fair. On timing, he does not understand why the SNP want to put this off.

12.16pm: PMQs Snap Verdict: The fact check merchants will have to adjudicate on the first exchange, I'm afraid, because - not being an expert in the rail fare price regulation - it was impossible to tell who was right and who was wrong. Sounded like they both had a point. On the union, it was pure consensus - important, but dull.

12.20pm: Cameron says dealing with the care problem will be a big challenge. The government wants to address the problem of people having to sell their homes. It is looking "hard" at this issue.

12.21pm: Labour's Michael Meacher says the 1,000 richest people have got richer by £137bn. That would pay off the deficit. Will Cameron tax them more and create one million jobs?

Cameron suggests Meacher could be talking about what happened when Labour was in office. The government wants the richest to pay most, he says, and that is what is happening.

12.23pm: David Simpson, the DUP MP, says Nick Clegg is reported to have said that the UK will sign up to the EU treaty Cameron rejected. Is that right?

Cameron says Britain did not sign up to the treaty because it did not get the safeguards it wanted. That won't change. What coalition partners want to put in their election manifestos is up to them.

12.24pm: Labour's Valerie Vaz asks Cameron if he will restore funding to the UK Research Council. Cameron says he will look into this.

12.25pm: Cameron says the government is working to bring "closure" to the issue of Guantanamo Bay.

12.26pm: Labour's Gregg McClymont asks if Cameron will confirm that the 50p top rate of tax will remain for the rest of this parliament.

Cameron says the government's policy is much the same as Alistair Darling's when he introduced it (ie, that it should be temporary). He says the government will monitor how much it raises.

12.28pm: Labour's Tony Lloyd asks when the ratio of top pay to average pay will come down.

Cameron says he wants the government to publish information about pay ratios in the public sector. The last government did nothing to address this, he says.

12.29pm: Labour's Tony Cunningham says the NHS is in crisis in Cumbria.

Cameron says the government is committed to year-on-year increases in NHS spending, unlike Labour. He also wants to look at the way alcohol is causing health spending to go up.

12.30pm: Sir Bob Russell (another newly-knighted backbencher) asks if Israel should be treated like apartheid South Africa because of its treatement of Arabs.

Cameron says he supports Israel's right to accept, but does not support its policies towards Arab settlements.

12.32pm: Cameron says the government will be spending £4m to get more people on the bone marrow register.

12.33pm: Julian Brazier, a Conservative, asks if Cameron supports a plan to get the Territorial Army to set up free schools.

Cameron says he wants to see cadet forces expand in areas where they have not been active before.

12.34pm: Dame Joan Ruddock (a third, newly-gonged backbencher) asks about the cut to housing benefit.

Cameron congratulates her on her honour, even though he disagrees with what she has down in her political career. (She tried to "disarm Britain", he says, referring to her past as chair of CND.) He says rents are going down as a result of the housing benefit cuts.

12.40pm: Verdict: Ed Miliband was right. I haven't become an expert in rail fare regulation over the last 10 minutes, but Labour did scrap the flexibility allowing operators to raise regulated fares by up to 5% above the national rate in 2009 - you can read a Dow Jones News story about it here, and the Guardian version of it here - and the coalition has reinstated that flexibility. It seems pretty clear cut. Cameron's argument was that Labour was still to blame because the suspension was a one-off, pre-election concession. But the coalition does not seem to have been under any obligation to reverse it, and so Miliband's charge stacks up (although I notice that the Guardian 2009 story includes a quote from the Lib Dem Norman Baker - now a transport minister - saying: "While this will provide welcome respite from the normally unrelenting rise of annual fares, it is just a pause, not the end of higher train fares").

UPDATE AT 3.22pm: Actually, it's a bit more complicated than that. There is some evidence to back Cameron's claim that the Labour decision was just a temporary one. See my post at 3.22pm.

1.15pm: Here's a lunchtime summary.

• Alex Salmond, Scotland's first minister, has insisted that the Scottish government does have the legal right to call a referendum on independence without Westminster approval.He also claimed that David Cameron's determination to force an early referendum on independence will increase support for leaving the UK. He said the the prime minister had no mandate to set the rules for an independence referendum, describing Cameron as "almost Thatcher-esque". (See 9.17am.)

• Cameron has accused Salmond of being afraid to call the referendum on Scottish independence. At PMQs, he said that he passionately believed in the union and that he wanted a debate on the issues.

I sometimes think when I listen to [the SNP] that it is not a referendum they want, it's a never-endum ... Let's have the debate and let's keep our country together ... I passionately believe in the future of our United Kingdom. I passionately believe we are stronger together rather than breaking apart ... Frankly, I look forward to having the debate because I think there have been too many in the SNP who are happy to talk about the process, but they don't want to talk about the substance.

Downing Street said that Cameron would be personally involved in talks in the coming week about the timing and the scope of the referendum. Ed Miliband said pro-union politicians should start focusing on the issues at stake. "We on this side of the House believe the United Kingdom benefits the people of Scotland and the people of the rest of the United Kingdom in equal measure," Miliband said. "We are stronger together and weaker apart."

• Miliband has accused Cameron of failing to "stand up to the train companies" because the government has sanctioned fare increases of up to 11%. He said Cameron had "failed at the first hurdle" in his efforts to tackle irresponsible capitalism. Cameron claimed that fares were going up by up to 11% under a formula introduced by Labour. But Miliband said that Labour abolished that rule in 2009, and that it was re-instated by the coalition.

• Grant Shapps, the housing minister, has announced that a new criminal offence will be created to stop council tenants subletting their homes. Offenders could face up to two years in jail. David Orr, chief executive of the National Housing Federation, which represents housing associations, said his organisation fully supported the plan. "Tenancy fraud is a grave abuse and tackling it has always been a priority for social landlords," he said. "With so many people requiring affordable housing, such behaviour is unfair on the large numbers of people on waiting lists. Criminalising subletting will mean that the profits will become the proceeds of crime and will be available for confiscation on conviction."

• A teaching union has criticised Michael Gove, education secretary, for attacking IT teaching in schools. Chris Keates, the NASUWT's general secretary, said: "Such assertions are based on a deliberate misrepresentation of the evidence which in fact demonstrates widespread good practice which needs to be built upon." But Stephen Twigg, the shadow education secretary, broadly welcomed the speech. There are full details on our digital literacy live blog.

• Andrew Lansley, the health secretary, has announced that Professor Sir Bruce Keogh, the NHS Medical Director, will lead a review of the steps taken to protect women with PiP breast implants. In a statement to the Commons, Lansley also said that private providers how inserted the implants had "a responsibility to put things right".

• Peter Wright, the Mail on Sunday editor, has told the Leveson inquiry that he was "uncomfortable" to learn that his journalists had used the private investigator Steve Whittamore. There our full details on our Leveson live blog.

• Maggie Atkinson, the children's commissioner for England, has said that the welfare bill could breach children's rights. In an impact assessment (pdf), showing the potential effects of the bill on children's rights in England, she identified groups of children whose rights may be breached by the implementation of the bill.

• MI5 has been named on a list of Britain's most gay-friendly employers for the first time. As the Press Association reports,MI5, which has not always welcomed gay employees out of a perceived fear they could be vulnerable to corruption, was ranked at number 62 in the top 100 list of Britain's best employers for lesbian, gay and bisexual staff. It is the first time MI5 has appeared in the list compiled by the equality charity Stonewall.

• Cameron has been urged to tell Vladimir Putin that he is not welcome at the London Olympics unless Russia makes meaningful efforts to improve its human rights record.

2.05pm: More on Ed Miliband, David Cameron and rail fares. My colleague Polly Curtis has been making some calls for her Reality Check blog and she (like me) thinks that Miliband was in the right in this exchange.

But on Twitter Ric Holden from Tory HQ has been hitting back. He has been looking at the press notice issued by the Department for Transport in August 2009 about Lord Adonis's decision to abolish the rule allowing fares to rise by well above inflation and he has noted that it says Adonis intended to remove this "for 2010". It did not say "from 2010", says Holden, arguing that this proves it was only ever a one-year exemption.

2.14pm: Here's the Guardian audio of PMQs.

2.54pm: At PMQs David Cameron said that rents were going down as a result of the government's housing benefit cuts. (See 12.34pm.) Is that correct? My colleague Jill Insley has sent me this.

The cost of renting a home in England and Wales did fall in November (on the lastest available figures according to LSL Property Services, which owns lettings agents Your Move and Reeds Rains) but this is the usual pattern for rents every year. In 2010 rents fell by -1.2% in December, and rose by 0.1% in November - the smallest rise that year. In 2009 and 2008 they fell in November and December after a general trend of growth during the year.
LSL says this is because a large number of rental contracts come to an end at this time of the year but tenants' spending power is constrained by the extra cost of Christmas, so landlords are often inclined to reduce rents to ensure their properties are occupied again.
It's a bit early to say that housing benefit cuts are having any effect on rents - many of those in existing rental contracts will not yet have been hit by the cuts. And in London where the effect is disproportionately severe, landlords will simply let their properties to the numerous professional tenants who can't afford to buy their own homes.

3.09pm: More on rail fares. In response to Ed Miliband's comments at PMQs about some fares going up by as much as 11%, the Association of Train Operating Companies has put out this statement.

The average rise in season tickets is set by the government under a policy introduced in 2004 to reduce taxpayer subsidy to the railways. When setting fares, train companies are subject to strict rules that have been rigorously implemented by both this government and the last.

Within this highly regulated system, operators can vary the price of individual season tickets. But regulated fares that go up by more than the average must be balanced by others that rise by less than the average. These changes are weighted, meaning that train companies cannot put all the highest fare rises on the busiest routes.

3.22pm: The Tories have been fighting back in the Miliband/Cameron rail fare spate. (See 12.40pm.) They have released a contract signed by the Department for Transport and one of the rail companies showing that when Lord Adonis abolished the rule allowing fare to rise well above inflation, the contact said that rule would be re-instated in 2011. That certainly boosts David Cameron's claim that the decision was only temporary. My colleague Polly Curtis has the full details on her Reality Check blog. Here's her conclusion.

In the event it was the coalition that reintroduced the flexibility which allowed some rail fares to go up by 11% this year; at PMQs Miliband was technically right about that and Cameron was wrong. But if Labour would have done the same, their attack on the government is undermined. However, with such contradictory evidence - the word of a former secretary of state against a legal document albeit with no context and with only one of the train firms - it's very difficult to say definitively which party wins the political argument on this one.

3.30pm: Here's an afternoon summary.

• The Public and Commercial Services union has warned that there will be further strike action over the government's plans to cut public sector pensions. As the Press Association reports, the PCS has confirmed it rejection of the government's offer. The PCS also said unions representing around a million workers in the Civil Service, education, local government and health, had either rejected or refused to sign up to the government's offer. Mark Serwotka, the PCS general secretary, said: "We have consistently called for proper negotiations on the key issues of paying more and working longer for less, but the government has refused at every point, leaving us with no choice but to oppose what is nothing more than a political attempt to make the least culpable pay the highest price for the failings of the banks. We have told ministers we expect to be included in any future discussions. But we are clear that, with no significant movement since two million public servants took strike action together on November 30, further co-ordinated industrial action will be necessary to stop these unfair and entirely unnecessary plans."

• George Osborne, the chancellor, has told the Treasury committee that Britain was not seeking an opt-out from all EU financial regulation when David Cameron refused to sign up to a new treaty. "We were not seeking a UK opt-out from financial services legislation," he said. "In some cases we were wanting to impose stronger financial services."

That's it for today. Thanks for the comments.