26/10/2011 Daily Politics

Morning, folks. This is the Daily Politics. Wednesday, 26th October,

2011, AD, the day that Europe dithered and delayed, while the

eurozone teetered on the abyss of financial crisis possibly leading

to further recession. At least that is what it looks like as the euro

leaders gather for another summit in Brussels. They were supposed to

agree a three-part rescue plan but much of the technical work has not

been completed. The banks are digging in against a Greek haircut

of debt, and Angela Merkel and Nicolas Sarkozy are still a part on

fundamental matters of principle. The in Italy, Silvio Berlusconi's

Government looks close to collapse. The chance of a deal looks ever

further off. Is some kind of financial and economic catastrophe

heading for us like a truck? David Cameron will face his own

backbenchers at PMQs in half an hour, the first time since he

failed to stop 50% of them voting for a referendum on our

relationship with Europe. And he will be sitting alongside

his deputy, Nick Clegg. He has been warning against any smash-and-grab

attack to claw back powers from Brussels. What is the coalition

policy on Europe, if anything? All of that coming up over the next

90 minutes. A very important day for the eurozone, the European

Union and the British colony. Throughout the programme we are

joined by the Cabinet Office minister Francis Maude, who always

likes to be reminded that under John Major he became the manner

that actually put his signature on the Maastricht Treaty. -- the man.

Not quite accurate. It was not his signature, it was a paw print! And

Rachel Reeves, the next leader of the Labour Party. Sorry, she has

been newly promoted to shadow chief secretary of the Treasury. But that

is the gossip among some, which will be the kiss of death of course.

How serious is it? Very serious. Nobody is under any illusion that

it is serious. The eurozone leaders need to sorted out. It is not easy.

When the situation is this bad, solution will not come along on a

plate. People like me say what I have just said, it is down to the

wire, and then suddenly we get free. Will this happen this time?

certainly hope so that nobody can predict exactly what will happen.

If there is a resolution, which I hope there will be, I don't think

that anybody is free. A price will have to be paid for this, in terms

of what is needed to recapitalise the banks, to have a proper

solution, a resolution for Greece. None of this is free, but the

penalty for not doing it is extremely severe. Not just for the

eurozone but for those of us, well, 40% of our trade is with the

eurozone and it would affect us gravely. The three-part deal was

supposed to be agreed last weekend at the European summit but that did

not happen. We have another summit today, two really. One for the EU

and one for the eurozone. Then they have to go in front of the G20 on

November 3rd. As I look at these things, and I try to look at them

closely, it doesn't seem to me that timetable will happen. You say it

always goes to the wire, but the backdrop for this summit is

different to any other summit before. It is being driven by what

is happening in the financial markets, what is happening to jobs

and the economy. It is more pressing than ever that we get some

answers. The problem with going to the wire and then doing as much as

you need to do and then carrying on for a bit, and then going to the

wire, and doing what you need to do, you know, we actually need some

proper answers for these problems. The problems of Greek debt, the

banks and their lack of capital, and the problems about the spill

overs. Unless there is a forensic and full deal in Europe, then what

we are going to see his contagion getting worse and it spreading to

Italy, as everyone is saying, and Spain and Portugal and other

countries. We desperately need a deal. It is not like a normal

summit. They may do as little as they need to do, rather than as

much. We will talk about this later in the programme as well. We have

been saying that lots hangs on the summer today, I should say summits.

-- the summit today. Jo has been looking at what happens when and

what is on the table. The euro horror story gets another

showing today. All 27 EU leaders will be at the first meeting this

afternoon. David Cameron will be absent from the next and most

crucial session, at the meeting of the 17 eurozone leaders tonight.

There are three issues on the agenda. Cutting the Greek debt

mountain, shoring up the banks to cope with losses, and boosting the

rescue fund. Will they reach a deal? The strong disagreement

between France and Germany over how to shore up the rescue fund, known

as the EFSF. There is also disagreement over the bondholders.

Germany wants to impose a 60% haircut on those holding great debt,

meaning they would lose 60% of everything they have learned. The

banks that hold most of that debt warn that anything above 40% could

further endanger the European banking system. The markets could

plunge if the leaders failed to reach a deal tonight and the crisis

could exact a political price as well. Silvio Berlusconi is through

-- rumoured to be stepping down. Let's go to Brussels. It has been

taught about the crisis can that has been kicked down the road for

months. -- talked about. Have we reached the end of the road today?

I don't think so. When I was here on Sunday, there was widespread

acknowledgement that they were finding it very difficult to come

to a fundamental agreement. You had that press conference with Angela

Merkel of Germany and President Sarkozy of France, trying to

present a publicly united front. They did look closer than they have

done in the past. There are differences between these two

countries, the two most important countries in the eurozone, over the

way forward. Angela Merkel has been addressing the German Parliament

ahead of a crucial vote which she is expected to win. But his today

the summit to end all summits? My instinct is that it is not. Thank

you. As we were hoping for some decisiveness at the summit today,

we heard that the Italian Government could be on the brink of

collapse. David is in Rome. What do you say to the rumours that

Berlusconi may be stepping down from the deal and that the

Government is on the verge of collapse? That the Government is on

the verge of collapse is a given here. Berlusconi has come under

terrible criticism in recent weeks for his dithering over the economic

measures that he has proposed to combat the eurozone debt crisis.

The Government has been talking for three months now about an austerity

budget, but implementing the austerity budget seems to be beyond

his capacity. He is coming to Brussels this afternoon with a

letter of intent in his pocket. More promises, in other words.

Whether the EU leaders will believe home is a matter for speculation.

Italy's credibility is at an all- time low, just as Berlusconi's

credit rating in Italy is at an all-time low.

Thank you. To discuss how the markets are likely to react to the

developments today, delays, dithering, call it what you want, I

am joined by Louise Cooper, a market analyst. It is a busy time

for you. Let's go through a couple of things before coming onto the

market reaction. At the moment they do not seem to have an agreement.

They have not been able to convince the banks holding the Greek debt

that they should take this haircut. They want it to be a voluntary

haircut, otherwise it counts as a default. And credit default swaps

and all these other things will trigger. They do not want that to

happen. If you are the CEO of a bank, you have a legal duty to do

the best for your shareholders. You cannot just do what Angela Merkel

tells you to do and ignore that legal duty. You can be personally

sued by your shareholders, depending on the jurisdiction, if

you are not doing a good job for them. The idea that the banks can

suddenly ignore that legal responsibility and do what the

politicians want them to do is a bit ridiculous. They have to

balance the two. Some of the markets may decide that you say

this is voluntary, but actually Chancellor Merkel has a gun at our

head, so we will take this not as voluntary but being forced, so we

will trigger the insurance policies on the debt. If it looks like a

duck, quacks like a duck, then it is a duck. The same with default.

Greece is already effectively in default. We have not got the banks

to agree to take their hair cut. At the weekend there was the partial

unveiling of the plan to recapitalise the banks. When I met

you on Sunday, you said writer weight that 100 billion was just

not enough. That -- right away. even close. The IMF said 200

billion was needed, even assuming Europe does not go into recession.

At this stage, it cannot be done on the cheap and it has to impress. I

know it is difficult because we live in a democracy. All of the

European countries are democracies and they have legal constitutions

that they have to obey. That is the problem. That is why many people

that I speak to do not think there is a solution. The EFSF, I love

this. The bail-out fund? I have so much trouble saying the acronym.

Effectively what it is doing is taking money from the eurozone

members, putting it into a pot and buying Government debt. Most of

that is coming from France and Germany, about half of that. So

what you have got is France putting money into a pot, guaranteeing that

money, potentially losing its highly coveted triple-A rating,

which means its borrowing costs go up. Why are they doing that? To

bring down borrowing costs in Italy. France's borrowing costs will go up

to bring Italian borrowing costs down. Has anybody explained that to

the French electorate? How do they feel about that? When you listen to

that, which is a widespread view in the City of London, but they do not

articulated quite so well, you get the feeling that even if a deal is

announced at 2 o'clock this morning, it will not take long for Louise

Cooper and her colleagues to rumble it. This has been a problem so far,

that Europe has done just enough to get through the crisis. Then it

plods along and the next crisis comes. We need an answer that deals

with the issue of contagion and spreading to other countries. On

the banks, if they do not take a haircut, and do not agree to that

voluntary, what is the alternative? The alternative is to default on

the debt. That is no good for the banks as well. They may get a 20%

haircut, and they may not get any of the money back at all. There is

something in the collective interest of the banks, the

different countries, whether they are the ones in crisis or the ones

that need to be bailed out, to get an answer, but it is about whether

that is enough. Downing Street have just issued a statement saying they

do not underestimate the difficulties that are faced in

Brussels today. It seems to me, Europe could try to fudge things

tonight. They will come out with a statement covering all of the

things that Louise Cooper has been talking about, implying process,

and progress, but when you scrape it away, the banks may still be

holding out against a haircut, and the recapitalisation of the banks

may still be unclear. The truth is that the longer this goes on, the

higher the credibility bar gets. So the more needs to be done to

achieve finality. This is the kicking the can down the road thing.

The road has come to an end. some stage it does. But the point

is that the longer you go on, the more you have to do. To achieve the

credibility with the markets, people will say, OK, that does it.

It has to be chunky, it has to be serious. There is a hell of an

abyss here and we are quite close to looking over their -- the edge

of it. When you talk about credibility, the borrowing costs of

eurozone governments are increasing rapidly. Italians had to basics %

this morning, which is massive. -- had to pay 6%. The ECB have said 6%

is not sustainable and too high. That brought them down to 5% when

they brought the bombs, but now it is back up to 6%. -- they bought

the bonds. They cannot afford to It is more than just Greece. It is

Italy, potentially other countries as well. The talk of defaults, or

the takes as we should call them, the Economist said you have to look

at a haircut for Spain, Italy, Portugal, maybe Ireland. There is

no talk of that on the table as I understand it. Is that right?

That's true. You are only talking about some of yen debt. They take a

writedown on sovereign debt, if Greek is going bust, what about

other debt? What about all the other layers of debt as well, which

I can assure you there'll need to be losses there too. The final

question for you at the moment. Given all you say, and no-one's

arguing with you here, and it is widely known, now it's on the Daily

Politics, the whole world knows about it, why have the markets been

so patient? I don't know. The calm before the storm. I'm glad you said,

that because neither do I! Clearly they are cheap but I look at this 5

00 point rally... Is it time to sell our eck witties before

tonight? The CBI said today the manufacturing industry is back into

recession. It is not great. I think we'll have you back soon. We can go

to Strasbourg and speak to Wolf Klinz, a German MEP. Thanks for

joining us. Angela Merkel is facing a vote in the Bundestag to have a

bolster to the rescue fund. Is it big enough to stop any contagion?

That's a very good question. As a matter of fact it is a vital and

very important first step. Future will tell whether this 1 billion-

plus rescue fund is going to be sufficient. I think the markets

certainly will try to test this out. And therefore I do not want to give

a prognosis. I hope it will turn out to be sufficient. Certainly it

is much bigger than anything else that's been put on the table so far,

so I'm rather optimistic that it will be the right recipe. Have we

got time for first steps? Do we not need to have a definitive amount

that will cover the cost, and has Germany been dragging its heels

over this? No, I don't think. So you could rightly say that we have

not used the last 12 to 18 months in an optimal way. We have lost

some time in the past year. This is certainly true and I would agree

with, that but I think now Germany is not dragging its feet. It is

very important that the Bundestag, as it looks the clear majority of

all parties is going to endorse this programme. I think that is

important, because after all, a lot of money is at stake. It is the

German taxpayers that will have to foot the bill to a very large

extent. Therefore I think it is important that the German Bundestag

is fully aware of whatlets voting for, is fully informed and defines

clearly what the red lines are. Wolf Klinz, whatever happens in the

next few days, in terms of sorting this crisis out, did you see closer

fiscal integration between the eurozone countries as inevitable?

do, as a matter of fact. I've been chairing the special committee

looking into the financial and economic crisis, and we have come

clearly to the conclusion and we are convinced that this is the

right conclusion that if the eurozone is going to stay, and if

the euro is to have a future, we do need much deeper integration of the

countries that are members of the eurozone. And therefore I think

what is being put on the table right now may be able to buy us

some time. But I think over the longer future, we will have to

deepen integration. We will have to have something that is close to a

European Treasury. We'll have to have a strong, competent

Commissioner that will play the role of a de facto Minister of

finance of the eurozone that will represent the eurozone as a single

person in international fora, so we need more than what is on the table

right now. OK. And this of course does require changes of the treaty

and of the institution and therefore we cannot have it

overnight. Wolf Klinz, thank you. I think we've worked out that in

Europe nothing comes overnight! We are coming up to Prime

Minister's Questions. It is just 48 hours after David Cameron watched

half his backbenchers vote against him on the referendum on Europe.

The Deputy Prime Minister, Nick Clegg, has been pouring cold water

on this new bout of euro concept cism. We are joined by Charles

Kennedy, who had a double act last night on Newsnight with James Rees-

Mogg. At least he's wearing his University of Glasgow graduate's

tie.. Thank you. Before we begin, should we maybe have 20 seconds

silence, a prayer of thank that the British people didn't follow your

advice and join the euro? I think with the benefit of hindsight a

moment's silence would be appreciate preected. That's honest

and you've -- preected. That's honest and you've taken the wind

from my sails. Those of us in the Conservative Party who argued we

should not join the euro, we were mocked. But we survived. And we

were right. I never mocked, Francis. What is coalition policy towards

the repatriating of powers from Brussels? Well, the clear policy is

what is set out in the coalition agreement. It doesn't talk about

repatriation of powers. That is the existing position. It zpblt mention

that at all? No, and the Prime Minister said in his statement in

the House ahead of the debate on Monday that he wanted to look at

this issue. Nick Clegg has made clear the lib deps are not

following an agenda that follows repatriation. Listening to the

debate it remains ill defined what individual Conservative politicians

mean by repatriation, far less a checklist of what they want to

repatriate. Francis Maude, it may be Conservative policy to

repatriate powers, although you didn't put that in your manifesto.

You've mentioned it sense, but it is not coalition policy to

repatriate powers, so why did Michael Gove on the Today programme

said say they had already repatriated some and think want to

repatriate more this this next Parliament? It is no secret. Shock,

horror, the Lib Dems and the Conservatives don't have an

identical view of Europe. That's not a world-shattering piece of

news. But it is important for people to understand what the

Government's policy is. Since you've but theed in, Rachel

Reeves, what is Labour policy? Is Labour policy that no powers should

be repatriated from Brussels? Labour's policy that right now,

when we've just been through the problems in the eurozone, that has

got to be the number one priority. Not repatriation of powers, not a

referendum but sorting out the mess in Europe at the moment. OK. I

understand that's the line. That's the line... Lit me finish the

question. -- let. It is your line too. There is consensus on this.

One way or another this eurozone crisis will be resolved, maybe bay

deal or a crisis. But it will be resolved. I'm glad you are so

confident! Down the road when this is over, in 2013-14, is it Labour's

view that no powers should be repatriated from Brussels?

believe that Europe needs to be reformed, things like the Common

Agricultural Policy, like the rules that don't allow us to support

British businesses like Bombardier. Things like that need to be

reformed. But if you are asking should things like maternity pay

and the rights for temporary and agency workers, should we get rid

of that, I don't think we should. Francis Maude, you are in

Government, it looks like the Germans, with French support, will

go for a fiscal union. A fiscal union will either scrolve a new

treaty or a redrafting of the existing treaties. When that is

done, will you go for a repatriation of powers? Look, we

don't know what is envisaged here. It could be a new treaty, or a

revision of existing treaties. We don't know actually what would be

involved in creating a fiscal union. The German MEP talked about

creating a European Treasury. What does that mean? Does it mean all

the tax revenue from the eurozone countries goes through Brussels and

is redistributed? That's the only way in which you could make

absolutely sure that there isn't overspending and excessive deficits

in member countries. That's how it works in Washington. We don't know

the full details but it looks as if we are going for some kind of

fiscal union, but in principle, is that your gateway into a

repatriation programme? It may be. We don't know the timescale. Is it

Government policy? The Government doesn't have a policy at this stage

on whether we'll seek to get or whether there'll be an opportunity

even to seek repatriation, so we don't even, I was going to say

shock horror, Conservatives and Lib Dems don't always have the same

views on Europe. I would suggest to Charles Kennedy that this has the

potential to cause a deep division in the coalition. If the

Conservative part of the coalition wants to use this fiscal union as

an opportunity, as they said in their manifesto if there is another

treaty change we'll have a referendum. They then said that

will involve bringing powers home, the Lib Dems aren't going to put up

with that, are they? Our position is clear. It is not moving on this

one. It was true of the - it was true of a slightly overlooked

statement the Europe Minister, David Lidington made, what is

happening about the repatriation, he was asked. He said work is at an

early stage. I think work began at half past ten on Monday night.

That's my impression. In other words, the Conservative

parliamentary party doesn't trust the lip on this issue. They are

scrambling about. There's a myriad of positions. We have to end it,

because PMQs won't wait. And Jacob Rees-Mogg is outside.

Just before Prime Minister's Questions, time for this week's

Apology for the loss of subtitles for 57 seconds

Guess The Year quiz. Let's see if Some of my former colleagues if

they are to be believed, I must be be the First Minister in history

who resigned because he was in full To be in with a chance over winning

a Daily Politics murks send your message to our special e-mail

address - to win a Daily Politics mug.

Let's look at Big Ben. It is my favourite shot of the week. It can

only mean one thing. Prime Minister's Questions is on the way.

The BBC's deputy political editor, James Landale, is here, and by

popular demand and much to Jacob Rees-Mogg's disappoint, Charles

Kennedy is sticking with us. We can't get him out! What we

haven't touched on yet, James, is this is the Prime Minister's first

appearance since the kick in the On Monday How will he handled that?

It is an open wound into witch Labour can pour a lot of salt.

There's a tendency for MPs when they've given their party leader a

dufg up, in the division lobbies there's a mixture of remorse but a

spurt of loyalty. I imagine there'll be a shaking of order

papers. There tends to be a bounce- back after these events.

Miliband, he has to go on Europe. Europe and the economy. The two big

issues. They are intertwined. Even though we are not in the eurozone,

everything hats happening there has ramifications for businesses and

families in Britain. I expect it will be a combination of the two

issues. The penny has dropped. Up until Monday of this week we were

all being circulated, make sure you are at PMQs because Cameron is away

at the Commonwealth conference and Clegg is doing it. Instead he will

be sitting beside the Prime Minister, having to study the Prime

Minister. Studied impasseivity. Maybe extolling a smash and grab

raid. A study in impasseivity. role of sitting next to to the

Prime Minister is difficult, because if you smile you irritate

one group and if you frown you Thank you, Mr Speaker. This morning

I had... At least they do not have to do it

in French! This morning I had meetings with

ministerial colleagues and others. This afternoon I will be travelling

to Brussels for further talks about the eurozone. Yesterday it was

reported that the Prime Minister compared the families of those that

died at Hillsborough to a blind man in a dark room looking for a black

cat that is not there. He complained he was not getting

enough credit for the release of the Government documents relating

to the tragedy. Will the Prime Minister take this opportunity to

apologise to the relatives and friends of the victims for these

offensive comments? What I would say to all the victims and their

families is that this Government has done the right thing by opening

up the Cabinet papers to help to try and find the closure for those

people that they seek. In view of the fact that Chancellor Merkel has

now called for money on the commission to produce treaty texts,

will he agree that the accumulated burden of the European Union has

become too great, and locating powers at EU level can undermine

democratic accountability, and the time has come to identify those

areas in which EU action is no longer workable? These words were

uttered by the Deputy Prime Minister more than 10 years ago.

have read the same pamphlet. It is very good and sound common sense.

We do not know when the treaty change will be proposed and how

great it will be. I am clear and the coalition is clear that there

will be opportunities to advance our national interest and that is

what we should be focused on. Miliband.

Mr Speaker, Mr Speaker... Mr Speaker, at the summit today does

the Prime Minister agree with me that we need not just for Greece

and Italy to sort out their problems and the proper

recapitalisation of Europe's banks, but also an agenda to help Europe

and indeed Britain to grow? What is absolutely necessary this evening

is to deal with the key elements of the eurozone crisis, which is

acting as a drag anchor on many economies including our own. The

key elements of that a decisive action to deal with the Greeks

situation, a proper recapitalisation of the banks which

has not happened in Europe up till now and the stress test has not add

credibility, but the most important thing is the construction of the

firewall in the European fund to prevent contagion a elsewhere. He

is right that a wider growth strategy across Europe is required

and that is what was debated on Sunday. That is where the

Commission proposals in terms of completing the services direct give

at liberalising the energy policy and cutting regulation, all of

those proposals could have been written right here in London.

are long-term measures but we also need immediate action for growth

and that needs to happen not just at European meetings but at the G20

next week. We know that his real focus has not been on sorting out

the eurozone crisis, unfortunately. It has been sorting out the

problems on his own side. He said on Monday that his priority was to

repatriate powers from Europe. Which powers and when? One serious

question and then straight on to the politics, how absolutely

typical. Led may just make his point. -- let me. When it comes to

the meeting receiving about the future of Europe, the idea that you

could go into that meeting arguing that Britain should at �100 billion

to its deficit is a complete and utter joke. -- should add. Let me

answer the question directly. The coalition agreement does talk about

rebalancing power between Europe and Britain. We are bringing back

one power, the bail-out power, that his Government gave away. He said

in this House on Monday, I remain firmly committed to bringing back

more powers from Brussels. But yesterday, the Deputy Prime

Minister, when asked about his plan, said and I quote, it will not work,

it will be condemned to failure. One day we have the Prime Minister

saying yes to repatriation and 24 hours later, the Deputy Prime

Minister says no. On this crucial question, who speaks for the

Government? What the Deputy Prime Minister said yesterday was there

was a perfect place to rebalance responsibilities between the

European Union and its member states. What a contrast with what

the leader of the Labour Party said. He was asked by Jon Sopel, yes or

no, has Brussels got too much power? Ed Miliband said he did not

think it had too much power. What we have is very plain. There is a

group of people on this side of the house that once some rebalancing, a

group that wants a lot of rebalancing and a complete mark

that once they rebalancing at all. -- mug. While that in not come

clean about the split between himself and the Deputy Prime

Minister? -- why doesn't he come clean? Is David Cameron wrong to

promise that some point the idea of another treaty to bring some powers

back? He said this. This Government, of which I am Deputy Prime Minister,

is not going to launch some kind of dawn raid, some smash-and-grab raid

on Brussels. It will not work and it will be condemned to failure. So

which is it? Who speeds for the Government? It is no wonder that

his back benches feel there is no clarity about his position. Is it

his position to get out of the social chapter, yes or no? It is

this coalition that has worked together to get us out of the bail-

out fund. To get us out of the Greek bail-out. To deliver this

year freeze in the European budget. That is what this coalition has

achieved. The split that we have is between the right honourable

gentleman and reality. We have the greatest proof of that. I talked to

the house about this on Monday but it is so good I have to do it again.

When he was asked if he wanted to join the euro he said it depends

how long I am Prime Minister for. That is the split. The Labour Party

and reality. Mr Speaker, he will be going to the council in December to

negotiate on behalf of Britain and treaty change may be on the agenda.

I ask him the question again. His Education Secretary said on the

radio yesterday morning, I think we should take back powers over

employment law. His Deputy Prime Minister disagrees. What is the

Prime Minister's position? I'd tell you what would be on the agenda if

he was going to the meetings in Brussels. We would not be

discussing Italy and Greece. It would be Britain handing out the

begging bowl, asking for a bail-out. Winnows the honourable gentleman

now wants to join the euro. -- we know. They may also want to leave

the IMF. There had the opportunity in his Parliament to vote for an

increase in IMF funds, which was agreed at the London Council by

their own Government. They rejected that. We now have the extraordinary

situation when we want to join the euro and leave the IMF. They do not

want to be like France, but Monaco. It is no wonder that he had a

problem on Monday because the truth is that he led his back benches on,

making a promise that he knows he cannot keep and which is ruled out

by the coalition agreement. We have a Prime Minister that cannot speak

for his Government. On the day of the eurozone crisis we have a Prime

Minister who has spent the last week pleading with his backbenchers,

not leading for Britain in Europe. I might have had a problem on

Monday, I think he has a problem on Wednesday. The truth is, Mr Speaker,

if he went to that meeting tonight his message to Berlusconi would be

to ignore the market and carry on spending. His message to the rest

of Europe would be that they think, Labour think, you spend another

�100 billion adding to our deficit. After they finished laughing there

would be no time for the rest of the meeting. Order. Order. Members

should calm down and listen. There was advised to leaders of the

opposition which meant they should not exist in a permanent state of

hysteria. As ever, nothing but wisdom from my right honourable

friend. Can the Prime Minister tell us whether any more projects have

been awarded Investment by the regional growth fund? Does the

tally still stand at two businesses helped by his flagship policy?

is completely wrong. 40 projects have had the green light for

funding. It is completely on schedule. 50 birds was successful

in round one, receiving a conditional allocation of �400

million, to deliver 27,000 a new jobs, including in its supply

chains. She should be welcoming that. My constituency of Rugby was

pleased to welcome Mary Portas as part of a review into Britain's

high streets. Does the Prime Minister agree with me that Rugby's

positive approach to new housing creating new customers for the High

Street is an effective way of supporting town centres? I am

delighted that Mary Portas has made it to Rugby. I agree that we do

need to build more houses and reform the planning system. But we

want to do it in a way that gives more control to local people so

that we can make sure we have thriving High Street in the future.

My constituency is in a state of shock following the brutal murder

of a local man, Stuart Walker, the very popular local man. Will the

Prime Minister join me in sending condolences to his family? And

among much unhelpful speculation about the motivation for this

murder, will he join me in calling on local people with any

information to go to the police to help with their inquiries?

certainly joined the honourable lady in sending condolences to her

constituent's family. She is right. It was once said that the police

are the public and the public are the police. They cannot solve

crimes without the help of the public and I hope everybody will

co-operate in the best way that they can. My 14 year-old

constituent Liam Groves was killed outside his home by a driver under

the influence of drugs. He was sentenced to just eight months in

jail and released after four. Will the Prime Minister meet with the

family to hear the case for a new law which would mean we'd take drug

driving as seriously as we take drink-driving? We really have got

to make sure that we start treating drug driving as seriously as drink-

driving. This issue has been raised repeatedly but not enough has been

done. One of the things that we are doing is making sure that the

police are able to test for drug driving and making drug-testing

equipment available. As we test that and make sure it works

properly, I think we can make sure we strengthen things further and I

am happy to look at that. The Bank of England have reprimanded one

commercial bank and there may be others that tried to manipulate the

gilt market to exploit quantitative easing. Can we have a report on

this matter? Can we explain to the bank is that we will use the full

force of the law against them if Send a message to all people in

financial services that there isn't something called white collar crime

that is less serious than other crime. Crime is crime and should be

investigated and prosecuted with the full force of the law.

Speaker, proposals before this House next week will see cuts to

legal aid funding for advice services which in the case of

Wiltshire CAB amount to �250,000 a year. I welcome the �20 million

stop gap the Government has found the replace this funding next year,

but will the Prime Minister ensure that the Government puts in place

lasting funding arrangements to sustain these services on which so

many people rely? My honourable friend makes an important point,

and it is no good people shouting down, every party this this House

has accepted the need to reform legal aid. The figures are... You

say, "No you haven't" but you have. We spend �39 per head in this

country on legal aid compared with �18 per head in New Zealand, and in

Spain and France the spending is as low as �5 per head. We are putting

in the �28 million additional funding for not for profit

organisations. We've rightlies raised the local councils that have

gone on funding Citizens Advice Bureaux. This is a very important

organisation that does vital work for all our constituents.

Speaker, I'm sure the Prime Minister will join me in

congratulating Sheffield University's advanced manufacturing

research centre, which celebrated its tenth anniversary yesterday and

today with a series of events at Westminster, organised in

partnership with Boeing and Rolls- Royce. Will he also join with me

and the Business Select Committee in endorsing the aim of growing our

manufacturing GDP from its current 12.5 % to nearer the 20% enjoyed by

most of our competitors? And will he mitt the Government... THE

SPEAKER: That's enough. We've got the drift. I agree very much with

what the honourable gentleman said. The Deputy Prime Minister hosted

Sheffield University at Downing Street to celebrate their success.

We are seeing pive signs of rebalancing our commitment recently

I was at the big investment BP are making in the North Sea, the

opening of the new Airbus factory at Broughton in Wales. Our auto

industry, whether Nissan, Toyota or Jaguar Land Rover, all these

companies are expanding and bringing more of their production

and supply chain onshore. We start from a low base and sadly

manufacturing production declined so much over the past decade.

Would the Prime Minister join me in welcoming nearly �1 million that's

been received in Redditch for the pupil premium and will he persuade

the Secretary of State for Education to push for a national

funding formula as soon as possible? Discussions about a

national funding formula are ongoing. It's a difficult issue to

resolve because of the historic patterns of funding around the

country. Die think the pupil premium is a major step forward. It

is up to �2.6 billion by the end of this Parliament. The report says

we've made spending on education much more progressive by the action

we've taken. We've taken the decision to protect the schools

budget and per-pupil funding and on top of that to add the pupil

premium to make sure that we are looking after the less well off in

our country. Last month a leaked Downing Street report says, "We

know from a range of polls that women are significantly more

negative about the Government than men." Why does the Prime Minister

this this is? When you are making difficult spending decisions and

you have a difficult economic situation and household budgets are

under pressure from petrol prices and food price and inflation,

clearly that impacts women. The Government wants to do everything

it can to help women. That's why we've listed 1 million people out

of tax, the majority of whom are women. That's why we are putting

much more money and time into the free nursery education for 2-year-

old and 3-year-olds. Women working less than 16 hour as week will get

childcare. We don't just care about this issue at home. Because of what

we are doing in international aid we are going to save 50 ,000 women

in childbirth around the world. The IPC have made one decision,

which is to grant planning permission for the American waste

giant company for 650 tonnes incineratoror in Mid-Bedfordshire.

Thousands of people responded to the consultation process saying

they do not want this. In the small print of the decision it says this

decision is subject to special parliamentary procedure. Will the

Prime Minister please let the people of Bedfordshire know that

this Government is not like the previous Government? That we listen

to local concerns and that we will ensure that this monstrous rubbish-

guzzling atmosphere-polluting incinerator will not be imposed

upon the people of Bedfordshire? honourable friend makes an

important point, there are difficult planning decisions that

have to be made. But what this Government has done is make sure

that the planning decision is more democratic and reports to

Parliament, and Ministers have to take decisions and be accountable.

I can't speak for how Ministers have to make the decisions, but

we've ended the idea of the vast quango with absolutely no

accountability, as she rightly says. The Prime Minister has warned

African countries that unless they improve gay rights he will cut

their aid. Yet in many African countries where we pour in millions

of pounds of aid, Christians face great persecution. Destruction of

churches, lives and property. Here in the UK if you display a Bible

verse on the wall of a cafe you face prosecution. Was Ann

Widdecombe right when she said that in the 21st century hedgehogs have

more rights than Christians? Widdecombe is often right. The way

we judge our aid decisions to look at human rights across the piece

that. Does mean how many people are treating Christians and the

appalling behaviour that some African countries treat people who

are gay. In Eastbourne we recruited recently 1881 apprentices in 100

days. My local training provider, Sussex Downs, tells me that 91% of

their hospitality apprentices go into full-time jobs. Will he agree

that apprentices work and in Eastbourne they work particularly

well? I'm happy to agree with my honourable friend about this. We

did find funding for an extra 50 ,000 apprenticeships last year and

achieved almost double that because of the enthusiasm there is amongst

the business community and young people to take on these apprentices.

We are running at about 360,000 a year and hope to achieve 250,000

more apprentices than were planned under the last Government. It's a

really important development in our country. We want to make sure the

the schemes are really aimed at young people who need work and

aimed at the higher level, people going on to get degree-equivalent

qualifications, so it is not seen as a second best. For many people

it's the right career path. There are companies like Rolls-Royce

where many people on the board started with an aplenty isship.

reflection is now the right time for the Prime Minister a to scrap

Labour's indeterminate sentences, as the Justice Secretary wants to

do, to save violent criminals from damaging the British public? Does

he agree this shouldn't be about prison places but protection of the

public? My honourable friend will be making an announcement about

this shortly, but I think what he will find is we are going to be

replacing a failed system that doesn't work, that public don't

understand, with tough, determinant sentences. People have always

wanted to know that when you get sent to prison for a serious

offence you don't, as currently, get let out halfway through. We

want to end that scandal and I expect lit have widespread support.

If women were to start businesses at the same rate as men we would

have 150 ,000 more businesses we are year this this country. I have

exceptional female entrepreneurs in my constituency, such as Kath kid

stofpblt what can the Prime Minister do to encourage -- Cath

Kidston. In the last budget there were a series of steps like the

enterprise finance schemes that we've established, like the changes

to capital gains tax. The biggest change is a change in culture, in

encouraging people to take that first step and supporting them

along the way as they go. Last week this House, to its great

credit, supported unanimously full transparency from Government of all

document relating to the Hillsborough disaster. Will he now

join me in calling on the South Yorkshire Police to follow the

example of the honourable member for Sheffield South East and commit

to exact same openness and ensure the Hillsborough independent panel

has unredacted access to all paper s? I will certainly look at the

issues. I think the Government has done what it should, in terms of

the Cabinet papers, but I'm happy to look at the points she raises

and come back to her. Would my right honourable friend join me in

praising all those adopt ers and foster carers for the fantastic

work they do, to encourage others to come forward and foster and

adopt and to recognise during National Care leaves Week that we

can do much more to provide the support that they often need

anduals deserve? I agree with my honourable friend. His own parents

I think helped to foster around 90 children over the last few decades.

Ats magnificent example. I think we really need to attack every aspect

of this issue. It is a national scandal that there are 3 ,660

children in the care system under the age of one. Last year I think

there were only 60 adoptions of those children. We've got to do a

lot better. Part of it is bureaucracy, part of it is culture,

but a lot of it is encouraging good foster and adoptive parents to come

forward and give them the security and knowledge that the process

won't be as bad as it is now. My honourable friend is Children's

Minister is leading this work. I'm confident we can make real

breakthroughs in this area. On 11 August the Prime Minister told this

House there would be a report to Parliament on cross-Government

activity relating to gangs. Where is that report and when will we

see? We are working across Whitehall on the gang issue. I

think in the past this was something that was dealt with in

the Home Office but there wasn't the same input from other

departments. When we are ready for a report to Parliament, we will

make it. When I worked in the private sector

I benefited from statutory maternity leave. Can the Prime

Minister remind the House how this Government is making work more

flexible and more family friendly? How typical of the party opposite

if someone talks about the private sector or job creation, all they've

got is a lack of respect and sneering. It is just absolutely

typical. My honourable friend speaks from great experience. We do

want to be a family friendly Government. That's why we are

putting the extra hours and help into nursery education, into the

child tax credits, increasing it by �290 for the least well-off

families, and we'll be introducing proper help for flexible parenting.

Westminster police command are now required to lose 240 police

community support officers, slash by two thirds the number of PCSs

doing security and counter- terrorism work, and further require

every police community support officer in the borough to reapply

for their own jobs. What message does the Prime Minister thinks this

sends to the public who want to see visible patrol-based policing on

their streets? Well, the point I would like to the honourable lady,

we are asking the Metropolitan Police Authority to find a cash

reduction over four years of 6.2%. We face an enormous deficit in this

country, because of what we inherited from the party opposite.

We do have to make difficult decision. I don't think it is

impossible to find a 6.2% cash reduction while keeping frontline

policing at the same time. I'm confident Boris Johnson will do

exactly that. Is the Prime Minister as enthusiastic as I am for the

Localism Bill. Does he agree the best way to tackle disengagement is

through local accountability? think my honourable friend makes a

very good point. We all know we are not building enough in this country,

in terms of houses for our young people or to end the scandal of

overcrowding for people on housing lists. The best way to get that to

happen is to make sure that local people feel they have a say and

control over development in their own area. That's the way to square

the circumstancele. The top down targets of the last Government

didn't work. The localist approach will work. The Prime Minister

pledged to fight bare knuckled against hospital closures will he

guarantee that for as long as he is Prime Minister there'll be no

hospital closures on his watch? pledge I can make is we are

expanding and funding the expansion of his hospital.

Can I congratulate the Prime Minister and thank him forual the

work this the Department for Education regarding free schools?

And can he please give encouragement to the two sets of

parent groups who are looking to build two free schools, a junior

and a secondary one, in south Derbyshire? I can certainly give

the honourable lady that encouragement. I think the free

schools policy is a great success. We see a number of high-quality

the opposition towards this policy. What we had was a new Education

Secretary who in the first plushs of the job -- flushs of job, said

he would support free schools but as soon as Unite picked up the

phone to him, he had to drop that altogether. If you want to know

what their policy is now, he said we oppose the policy but some of

them are going to be really, really good schools. Run by really good

people. And we must not put ourselves in a position as a Labour

Party of opposing these schools, so they opposed the policy but they

support the schools. What a complete bunch of hypocrites.

Can the Prime Minister explain why his Secretary of State for Health

was able to make concessions to the liberal del on the Health Bill in

the other place but was unable to recognise if need for these change

when they were debated here? Isn't this more about doing political

deals instead of what's right for our NHS? We are doing what's right

for our NHS. That's why average waiting times for inpatients are

down, for outpatients are down, hospital infections are at their

lowest level ever. We've got mixed sex wards down 91% under this

Government. The number of managers is down The number of doctor sups.

If she wants to see further improvements to the Health Bill

there'll be plenty of opportunities. Two thirds of the young people

involved this the riots had a special educational need. Does the

Prime Minister agree that this underlines the need for complex

solutions which tackle educational underachievement, rehabilitation as

well as punishment? Of course, as I've said many times, we have to

look behind the statistics and what happened and ask ourselves how

we've allowed so much to go wrong in our society. Clearly education

and special education needs play a role in that. I do think it is

important and the public want to see swift justice and punishment

handed out when people break the law. We did see that at the same

time of the riots and we should see PMQs comes to an end. The exchanges

were dominated by Europe, as we predicted. Not a difficult

prediction. Mr Miliband trying to get some clear blue, or even pink,

Cameron over the matter of whether power should be repatriated. The

Prime Minister falling back on the word that Nick Clegg had used,

rebalance. Charles Kennedy reminded us that was in the coalition

agreement so they are using that word. The dog that did not bark.

Not a single backbench MP got up and raced the matter on which

almost 100 of them voted against a three-line whip on Monday night,

which was of course Europe and the referendum. They prefer to talk

about incinerators and localism, or anything but Europe, in fact. We

will find out what this means in a moment but first we want to know

what you thought. Some viewers have picked up on the row over Europe

and the referendum. There seems to be widespread disappointment from

both leaders, about both leaders I should say, in terms of being

pinned down on Europe. "At they were both poor today. Ed Miliband

had an open goal on Europe but like Fernando Torres he blew it." 2 and

another one, David Cameron is acting like he is in opposition

rather than answering questions. And Ed Miliband has a poor

performance at PMQs, failing to paint David Cameron down -- pin him

down on Europe. This is the most evasive performance from David

Cameron, failing to answer the questions. But Helen says that

David won by a knockout. The EU is too important to keep trying to

score political points. And Ian Whitely says no answers to clear

questions. The Government is divided at the top about Europe.

David Cameron quotes Ed Miliband but never answers the questions.

And finally, from Damien in Manchester, why does Ed Miliband

waste is questions on pointless and obvious differences between David

Cameron and Nick Clegg from two different parties? Because that is

what we do! That is the kind of thing we do! What does it all mean,

James? We saw two things, the beginning of a pattern where Europe

will be the running injury that Labour will grind salt into, and

the question of repatriation. We will hear more on that. Until

something happens, that question cannot be answered. MPs will not

get clarity on that before the next election because it will be a

dividing line with the Liberal Democrat. We saw the new realities

of coalition Government. It is possible within the coalition

Government to have two parties that disagree on a policy, and you just

park the issue. That is OK when there is no political pressure

either way. There is now a huge political pressure on the

Government from the backbenches, and the Government is under

pressure to do something, which will lead to tensions. There are

already discussions going on among MPs about the implications that

this has for the and stitching of the coalition before the general

election. -- unstitching. Timing and method. This may be true of

both sides of the house. When backbenchers stage over Bellion and

give their own side a bloody nose, -- stage a rebellion, there next

instinct is to rally round the leader. Other than one question,

not a single difficult question from his own side. I think they

feel they have made their point because they made it forcefully

earlier this week. Politicians are tribal. When they have to put

policy before party, as they do sometimes, as they have done many

times before, they get uncomfortable. They then retrench

and tried to rejoin. The issue will not go away. They are looking for

other issues, to bring this up as a vote. They are forming a little

committee to a cat which powers should be repatriated. -- to look

at which powers. The desire to try to get the Tories away from Europe,

that is not going to happen. Europe is an important issue. What is the

big issue of the day? It is what is going to happen in the eurozone

particularly, but that is the European Union issue. The idea that

it can never be talked about some how is absurd. There are very

strong views about it. The question that Bernard Jenkin asked was

actually not particularly unhelpful. It was making the point that Nick

Clegg has in the past made the case that there may be some powers that

we should look at repatriating. I am not aware that the Lib Dems have

never said we could never contemplate any powers coming back.

That has never been the case. There is a huge amount to discuss here.

Is that the case? That is the case. You are not keen on it. I on the

fisheries policy you have said you could repatriate that. We have

always said that about the fisheries policy. You represent

lots of fisheries seats. That is partly it and we had lot of

expertise in that issue. Perhaps when you get expertise in other

areas you might change your opinions on them as well. I think

we are changing your views. But coming back to vocabulary,

repatriation versus rebalancing. The other phrase that I noticed you

jotting down was in response to Bernard Jenkin, which was a telling

question, that they will use it as an opportunity to advance the

national interest. The Liberal Democrats and the Conservatives

apparently agree about this. I detect the sense of a masterclass,

which will hold for a few months. - - as sense of sticking plaster.

defy repatriate something from Brussels to London, I have

rebalance the power arrangement. And if I rebalance something by

moving something from Brussels to London, I have repatriated

something. Do you understand the difference? I think the difference

is a political difference and they have to find wording that they

agree on. I think the Government are in a difficult situation. We

all know that the Lib Dems and Tories have different views on some

issues, but people do want to know what the Government things. I think

that is where people feel what is the Government delivering? And

should we repatriate the social chapter, making those decisions in

Britain? What would be wrong with making those decisions in Britain?

The fact is they did not come from Britain. They didn't. But why

should they not? Your party could have made those decisions when in

Government. Lot of them came in when the Conservatives were in

power because the Conservatives did not make those decisions, they came

from Europe. Do you have a problem... You have lost the power

to make decisions for ourselves. Why can we not be grown-up enough

to make our own decisions? Do you have a problem with the maternity

bill? That is not the point. Should we be able to make those decisions

ourselves in relation to Britain's particular circumstances? We have

different demographics and work force. Why do we need to aggregate

our response? Are there things you do not like? There may well be lots

of things in it that we would want and should have, and others we do

not want, but that should be for Westminster to decide rather than

Brussels. Can you answer that? do not know what these things are

that David Cameron or Michael Gove want to bring back to Britain.

was not what I asked, but never mind. James, you want to batten.

think the honest truth is that the treaty changes will be relatively

minor. The Government will use those, we understand, to argue the

case for protecting the City of London and the markets. It will not

be massive repatriation of powers, which is something for a later date.

All the MPs say that his election issue and it will not happen now.

Unless they can find a couple of issues around which Conservatives

and Liberal Democrats can agree. The Conservatives have already

persuaded the Liberal Democrats that there should be movement on

work tribunals, extending the period from one year to two. There

is a possibility that the Government will make unilateral

repatriation on a couple of things, and that is where the debate will

focus. Is it your understanding, but the eurozone create a fiscal

union without the approval of the for EU? -- could be eurozone.

don't know. That is why I am asking! You need to ask somebody

with knowledge in the law and they do not know if that is possible or

not. You said earlier that I signed the Maastricht Treaty as Norman

Lamont's deputy. I was not the Europe minister. That was clever!

He said he was very busy and it was my chance to put my foot print on

something. Here is a mug! We do have to move on. If Ed Miliband was

going to Brussels today as our Prime Minister, would there be in

substance any real difference in British policy? I think the big

difference is whether we think that cuts alone will get us out of the

current crisis. Wait a second. It is a big issue. Unless you have got

jobs and growth, and Greece has been in recession for four years

with an implement over 50%, it is hard to service the debt without

employment and growth. That is why we have seen the problems in Greece

growing. We need a strategy for jobs and growth across Europe

because that helps to get the economy back on track and it helps

the deficit as well. But would there be any difference at the

summit today? It is about whether this issue is on the agenda. If you

take the G20 summit, that was about dealing with the immediate problems

with the banks. But also about getting the economy moving again.

That is what we do not have at the moment. We need jobs and growth

across Britain and Europe if we are going to get the economy back on

track and pay back the deficit. That has to be on the agenda

because it is important to the solution. I am not sure how you

would sue hornet into today's agenda but it was just a

hypothetical question. -- shoehorn. Ever since the phone hacking

scandal, we have been putting the boot in to the Police Complaints

Commission. Ed Miliband have described them as a toothless

poodle. Poor thing. But Sir Christopher Meyer, chairman of the

PCC when the scandal hit the headlines in 2006, things that the

commission has been made a scapegoat.

The victims of the great phone hacking scandal have been queuing

in their dozens to receive generous compensation from News

International. But there is one victim that is more likely to be

punished, even liquidated. That is the Press Complaints Commission.

The PCC. I was its chairman when the phone hacking affair first

broke in 2006. It is a bad rap, it has been politically expedient to

make the PCC the whipping boy for the failures of a police

investigation. Phone hacking is a criminal offence. It is not the job

of the PCC to enforce the criminal law. Clive Goodman and Glenn

Mulcaire were found guilty under the Regulation of investigatory

Powers Act. That is why they went to prison. Of course the PCC also

bans phone hacking, unless the public interest justifies it. But

when its code of practice overlaps with the law, it is the law that

must take precedence. That is why the PCC could make no investigation

of its own until the legal process The PCC's report published in May

2007, soon after the imprisonment of Messrs Goodsman and Mulcaire,

focused on the lessons to be learned and new and tighter rules

for the agents. That is what the PCC is for - to raise standards.

And people forget that the report was widely welcomed by the

Government, by MPs, and, pass the smelling salgts, by the Guardian. -

- smelling salts. And yet today it is not good enough. It should have,

say the police, quasi powers of enforcement. But that's a further

erosion of our liberties. The commission should have known what

was going on, but that would have needed a commissar in the newsroom

with telepathic powers and X-ray eyes. Or the PCC should be

disbanded. Well, then, so should the police, because they can't stop

crime. The pity of it all is that phone hacking is a distraction from

what needs to be done to strengthen self regulation. Meanwhile the PCC

has never been more used by the general public than it is today.

What an irony that Lord Justice Leveson should be questioning its

very existence. Sir Christopher Meyer joins us.

Good to see you. You said what you said there, but isn't the harsh

truth that when British journalism was faced with its greatest crisis

of modern times, in terms of standards and ethics, the phone

hacking, the PCC was missing in action? Absolutely false. I

explained it as succinctly as I could in that television film. The

people who needed to be in action when a crime is committed are the

police, the Crown Prosecution Service and the courts. And they

were. Once they were out of the way, within days the PCC went into a.

And this is the way it should be. When the PCC looked at this first

time round, it gave the News Of The World a clean bill of health. And

when it was asked to look at it again, not only did it accept a

letter from the editor of the News Of The World giving it another

clean bill of health but it attacked the Guardian for daring

the raise the issue all the time. Well, Mr Neil, I will answer for

the PCC for the time when I was its chairman 2006, May 2007, the report

that we did, did not give by anyway or means a clean bill of health to

the News Of The World. We said that the police investigation and what

we had been told by the new editor of the News Of The World, Mr Colin

Miner, did not disclose further information beyond the fact that it

seemed to be a rogue operation. We reflected what we had been told.

And the subsequent attack on the Guardian and acceptance of the

letter from the News Of The World? You must summon to this bar here

the following chairman of the Press Complaints Commission, Lady

Buscombe. We had her on here and I don't think she will be back, can I

tell you! The problem was not that the PCC is fine as long as Sir

Christopher Meyer is chairman, but that the PCC is fine, that was your

argument. No, my argument is that the phone hacking scandal is not

particularly useful nor particularly relevant to what needs

to be done to strengthen self regulation. What about the other

issue on privacy? I know phone hacking was in some ways privacy

but it was the illegality and criminality. The culture and media

committee said if if PCC was more balanced and effective it is more

likely people would want to use it on privacy matters, but they don't.

I find that completely lunatic, flying in the face of facts. The

PCC does 300 privacy cases in a year. The courts do, I don't know,

five, ten? Something like that. Overwhelmingly the general public,

these are the people who we should be concerned about, not whinging

MPs in Westminster, the general public flock to the PCC while

celebs and footballers and, I won't mention other people, go to the

courts. Go on, mention another person. You know who I'm talking

about. The fact of the matter is that thousands of people come to

the PCC. Think would not do so if it were a failed organisation.

me bring in a couple of whinging MPs, as you described them. Is it

not the Government's view now that this voluntary regulation, that

game is over for the media? No, I don't think it is necessarily, but

it does need to be effective. would you do that Look and see at

Lord Justice Leveson comes up with. I'm not going to pre-empt his view.

So the matter's been kicked into the long grass until the report

comes out? We know it is going to take a long time. There is no point

coming up with knee-jerk solutions here. I think Sir Christopher Meyer

is right that much of what the PCC has done is effective. Do you think

it behaved well in the phone hacking scandal? I'm not going to

make that judgment here at all. I think Christopher's point that

phone hacking was illegal, that it whereas a criminal offence, it is a

Press Complaints Commission. It is about dealing with complaints that

people make. I think we should be pretty sceptical about statutory

regulation of the press. A free press, if you are a Member of

Parliament, a free press is often a massive pain in the neck but it is

a crucial pillar. Even if you are a part of it it's a massive pain in

the neck at times. Does Labour have a policy towards press regulation?

Well, fine with self regulation... So you are? Well, if it works.

it? What we heard from Sir Christopher is the editor said that

things were OK and then it was give an clean bill of health. The PCC

didn't work and it let people down. We were right to set up an inquiry

but we need (Inaudible) at the end of it. Like Francis, we asked for

an inquiry to be done, so the fact that Lord Justice Leveson is

reporting, and that's the right thing to do. Clearly we can't go

back to business as usual in terms of regulation of the press.

wouldn't bet on it. A on that note of consensus between

the two front benches, we'll move on. Sir Christopher Meyer. Thank

you. It is the middle of the half- term holiday but for many teachers,

rather than relaxing they are in Westminster lobbying against plans

for their pension. 130,000 have signed, so what are their concerns?

My main concern is as a primary school teacher the energy that it

takes to be a primary school teacher and just the difficulty

then if you are to go on to be 66 or 68 years of age have that energy

to keep the standards and the standard of teaching and learning

up. I feel we've been left out on a limb and we are not being, that

they are not accountable to what they said they would do, and we are

just going to be down the road with hardly any money when we retire.

didn't enter the profession to make a lot of money. However, we are in

a pension scheme which was already altered in 2007 to make it

affordable. According to figures it is still affordable. And now the

Government is threatening to hit us several times, raising the

contributions and reducing the pension which we will get. It is

not fair. Mary Bousted is General Secretary

of the Association of Teachers and Lecturers. Francis Maude is here,

who has been in discussions with the public sect ore unions, what

would you like him to do? I boo like him to give us cost ceiling

for pension, give us an amount we can negotiate with and make it a

reasonable one. We've waited nine months for a cost ceiling. The

amount the Government says it can spend simply wraps up all the

savage cuts it is proposing to make to teachers' pension, making us

work to 68, paying up to 50% more for our contribution. Francis

Maude? My response is. This we want there to continue to be decent

pensions for teachers and other public sector workers. The truth is

these are good pension schemes. After the reforms they will

continue to be. We want to be in a position where for most people in

the public sector they will be able to retire on a pension that's as

good as they have now. We announced cost ceilings a month ago. We had a

very good meeting on Monday with the TUC, where we exchanged views.

It was a full and frank exchange of views. So you just agreed! We made

an agreement that these people will still be able to retire on a

pension at least as good as they retire on at the moment. Why are

these negotiations not getting any more? Life expectancy is ten years

longer, which is great, than in the 1970s and is rising by three months

a year. It is not unreasonable to expect, the majority of taxpayers

who don't have access to pensions like this, a guarantee of a pension

index linked and inflation proof after the reforms. People are

living longer why. Should all taxpayers bear the burden of trying

to keep going and maintaining public sector pensions? Are you

getting anywhere with these negotiations? These are the same

arguments you've been using for the last years is. There any progress?

There is progress. For the first name the scheme discussions unions

have come forward with specific concerns, specifics counter

proposals which have been helpful. I pay tribute to the unions for the

way in which that's been done. We've been consistently making an

offer, saying what we think the right outcome is, but getting very

little back. There is now positive and scrubtive engame one of the --

constructive feed-back. It sounds like there is progress. We hope

there'll be progress. On the age or the contributions for type of

scheme? We are not quite there yet. We've waited nine months for the

Government to say what the cost ceiling will be. We've got it. We

are looking at it. He a meeting with the Department for Education

yesterday and we said electronically to the officials we

are prepared to negotiate but this cost ceiling isn't good enough. We

can't negotiate within this. So we've sent them back, the officials,

to say we can present very strong arguments about why the cost

ceiling needs to be improved and we are going to do that. Reach reach

reach, whose side are you on here? I think we need an outcome --

Rachel Reeves, whose side are you on here? I think both sides need to

give a bit. The Government commissioned Lord Hutton to produce

a report but pre-empted that with the increase in contributions. The

unions need to give on things like moving to a career average pension

scheme. Would you do that? Retirement age does need to

increase as people live longer. Both sides need to give and have

frank discussion. At the moment we've had megaphone diplomacy from

the Government. No, we've been making proposals. Upping the

rhetoric doesn't help get the solution that people in the public

sector need and people who rely on public services need. Yes or no to

a negotiated deal? You've got to have a negotiated deal. The speaker

has ruled he doesn't want the hear the words hypocrite or mug used

again. Unparliamentary. But you can always talk about this mug. The