Yesterday afternoon, David Cameron met with Iain Duncan Smith. According to a Downing Street source, IDS was offered the job of Justice Secretary. But the Prime Minister did make clear that the former Tory leader could stay at DWP if he wished.

I understand that there were three reasons for the proposed shift. The first was articulated by Danny Finkelstein on Newsnight last night, IDS is a visionary and welfare reform — and the universal credit in particular — is now moving into the implementation phase. It was thought that Chris Grayling, a former management consultant, would be better suited to that task. The second reason was identified by James Chapman in the Mail over the summer, IDS is one of the few people who could sell a penal policy that prioritised rehabilitation to the Tory party and the Conservative-leaning press.

Finally, it was thought that a new welfare secretary would be more prepared to make the additional cuts in welfare that George Osborne needs to limit the cuts required in other departmental budgets. Numbers 10 and 11 are acutely aware that IDS won’t go along with cuts of this scale and if both him and Nick Clegg are determined to block them, they won’t happen.

But having agreed to think about it at yesterday’s meeting, IDS informed Downing Street this morning that he had decided he wanted to stay at DWP.

Tags: Autumn reshuffle 2012, Chris Grayling, Iain Duncan Smith, Newsnight, UK politics