Conference Special Daily Politics

Morning. Welcome to this two-hour conference special. Has Ed Miliband

got it in him to kick-start the economy? The Shadow Chancellor

thinks he has. No surprise there. As if to underline that, he's been

showing off this morning his football prowess in a match. He's

only found the back of the net, but found a way to spend an extra �3

billion or so on affordable new homes. Mr Balls addresses

Conference just after midday. We will take his speech live and

uninterrupted. You may have heard Ed the geek, now meet Ed the human.

He's like you and me - even went to a comprehensive. Can ordinary Ed

carry Labour to victory in the next election? It has been dominated by

foreign policy so far. Would Labour support a referendum on Europe?

Here we go, here's a former minister. He should know. I've got

to answer a phone call. Boring! Boring! Was he talking about us?

All that in the next two, yes, two hours this morning. Two for the

price of one! Don't you dare complain about the license fee to

me! With us for the duration Graeme Leach from the Institute of

Directors and Duncan Weldon, chief executive of the TUC. Two chiefs!

Welcome to you two. In a moment we will head up to Manchester to check

out the mood at the Labour conference. Let's hope it's not as

wet up there as it is down here. First this morning, let's talk

about a whole host of Government measures which come into force

today. The national minimum wage rises from today by a whole 11p.

Don't spend it all at once. There'll be VAT on alterations to

listed buildings and on hairdressers' chairs. And on some

hot food snacks which led to the great pasty tax backlash. Remember

that? I do! Another one to do with pensions.

People who own small businesses now will be signed on - they may opt-

out at a later stage. Is this something we should welcome?

should reverse decades of falling pension provision. It is something

we, in the TUC, will be welcoming. Unlike the CBI, you have a lot of

businesses and small and medium- sized businesses, are they worried

about the bureaucracy or the cost? They'll have to contribute to this,

won't they? They are worried about mission creep here. What starts out

as a low employer contribution will escalate over time. Even with a

full whack of contributions now it is still not enough to give you a

pension you need in retirement. much at the moment, to begin with,

how much will employees put in and employers put in? At the moment 3%

for the employer. That goes up over time as well. To how much? 8%.

it a combined 8%? That's right. used to have some of the best

private pension provision in the world. That has gone down the swany.

Isn't this an attempt to rebuilt it over time? When it is an attempt to

rebuild a pension system which is a decadeal shift. It will not move in

the next two years. You have to start somewhere though, don't you?

There is a problem that at the end of the day that employees putting

their money in may actually in many instances be better off staying on

the outside. We are quite concerned on a range ofishs here. At the

moment you are saying it is all right. If you are in your mid-

twentys or early 30s, you will now see a chunk come out of your income.

Do you think some people will say, I want the money to spend now?

would encourage people to go into the system. The earlier you start

saving, the less you have to save as a percentage of your income. We

have some concerns as well that already some employers are trying

to put extra costs into the schemes, they are saying complying with

autoenrolment means consultants. We don't want any back-sliding. At the

moment the Government has set out the contributions and that is clear.

Why do you need a consultant? key thing is not so much back-

sliding by the employer, it is also by the employee. Where we only have

1.5% earnings growth, where it will be more pension contribution....

That was the input of my question to the chief economist of the TUC.

It is easy. As the employer, you have to put in X per cent into the

pension and the employee gets Y per cent deducted to go into the

pension pot. Even I can work that out! There are a lot of

bureaucratic issues. Companies are worried about that. A lot are not

aware, on the small firm side, that this is coming in. On to the

important issue. What kind of pasty is going to be taxed and what

isn't? If you buy a pasty now, it is fine, you can put it into a

microwave. I am not sure the Chancellor can tell us. Chickens

today will be up 20%. I stocked up yesterday. If you brought them

yesterday you wouldn't have to pai. You can see the hot chicken market

falling out! To Fleet Street, where two of the

finest were waiting to speak to us. We have Jackie Ashley from the

Guardian and parsz Parris from the Times. What -- Matthew Parris from

the Times. What a sight! There was this head of Come puss, who said

over the weekend, he had never seen a more lazy, less dra maltic --

dramatic build-up to a Conference. He's wanting to make a name for

himself. We don't hear you very well. We heard something about hot

chickens some time ago. We wish you were here. In fact, you should have

come here. Matthew, what is the mood of the conference? Well, they

are not on fire. That's perfectly fire. They are not on fire. On the

other hand, I think the mood is fairly steady. Last year, there was

a lot of murmuring about Ed Miliband's leadership. I think that

murmuring has gone away. They are in a muted, subdued mood. There are

no rebellions, no mutinys. Everybody is looking forward to

hearing Ed Balls later this morning. All this money that nobody knew

anything about - very good news! The speech is the highlight of the

day. The papers this morning and the blogs, they are full of already

what he's going to say. Now every major leader now does this. Do you

think it is wise that they tell us what they are going to say before

they say it? Not really. It is a tradition which has gone on for

years now. They have the briefing about 3pm or 4pm the evening before

and the news paper journalists write it up. Why do we bother to

list on the the speech? Maybe one day they'll do it differently. I

don't think he will say much more about what he would do if he were

Chancellor after the next election. I think it is sensible. It is too

early to do that. By the time he makes the speech, the Tories will

have their rebuttal in. It's a curious business this

preannouncement. We were just wondering on the Times whether bals

ball bals has discovered that -- Ed Balls has discovered that and he

has sneaked in first. It is possible. The whole license thing

is tied up in a legal mess at the moment. Mr McCluskey, the biggest

union baron in the country, saying he wants a purge of Blairites. Mr

Miliband yesterday saying he's wrong, "I'm not going to do that."

Are the union militants n the end, are they helpful to Mr Miliband, or

is there a problem coming down the pike? I think the unions are being

very unhelpful. Mr McCluskey is. I don't think there's this Great War

starting up in the party that some people are trying to characterise

it as well. There were the Blairite people last night and they were

supportive of Ed, all saying the right things T unions are making

the rumbling noises in the background, but are not that

influential any more. They are not that influential any more. They may

pay the bills, but not that influential. Len McCluskey said his

party would stop funding Members of Parliament who did not toe the line.

The put down on the Ma'arra programme was remarkably sharp.

Maybe -- on the Marr programme was remarkable sharp. Maybe he has done

him a favour by showing who is in charge. All the people around Ed

Miliband are saying this will be his best speech yet, it is a good

one. They say this will be fantastic. We will see. Talk about

managing expectations! I think they are doing it the wrong way around.

They are meant to say he's mediocre, then we are all surprised. How is

this Ed the human project going? Well, it is a work in progress,

shall we say! It is good. He has stopped trying to be image-made.

There was an effort to fix his nose and fix his voice. They are given

up now and said let Ed be Ed. Before he was leader he was a

natural, dare I say a charismatic performer. He was good with an

audience. He needs to rediscover that old self. Recent polls only

show 3% of the country think he is charismatic. You must be one of the

3%. As I say, work in progress. I am not too pessimistic. Stpwh

think very often complaining about the nose or the voice is a toe tum

for people not knowing what the party stands for. I don't think

there's anything wrong with Ed Miliband, the way he looks, talks,

stands. He has stature, he has dignity. He has intelligence. He

has to have something to say. Once he has something to say, then all

these problems of personality and grooming will cure themselves.

it comes to something to say, I assume we're not going to get a

range of policies which might not be the sensible thing for Labour to

do any way. What we are looking for, what we expect is a sense of

direction. Is that correct? I think he is starting to sketch that out.

He has made it clear his position on the bank - he will be tougher on

the banks. Responsible capitalism. I think we are seeing a reform of

the public services. We are seeing some policy ideas coming out. You

will not get chapter and verse of things. That would be silly at this

stage. We'll have a clearer sense by the end of the week about what

kind of Prime Minister he would be. I very much doubt it. The big

question Ed Miliband has to answer, it has become dull, but, what is

the point of a Labour Government, when there is no money to spend?

That is what he has got to show us. Maybe more 4G licenses is the

answer! Thanks to you both. Time for our

daily quiz. The question for today is: What does Ed Miliband say he's

done in response to text from Vince At the end of our show the guests

will give you the correct answer, won't you?

I know, you probably don't. Later in the week, the nation will be

treated, as I said there, to Ed The Movie. It is a party political

broadcast, which will attempt to banish the idea of Ed Miliband as a

geek with a Rubik's Cube and paint him as a family man and a project

of an ordinary London comprehensive. He denied he was having a makeover.

Why the focus on selling the party leader rare than the policies? Well,

his party is having no problem, according to voters. They are

enjoying a 10-point lead over the Conservatives, according to a

survey this week. Ten points are ten points. That would be enough to

send Mr Miliband to Number Ten, if it translated into votes in 2015.

The mid-term opposition, they usually fade as we get close tore

the general election. More concerning for Labour is the fact

that David Cameron is still seen by the public as a stronger leader.

They also think the Prime Minister is a r more decisive, more likable.

Has a clearer vision for Britain and has the better strategy for

getting the country out of recession. The only areas where Mr

Miliband has the lead is being seen Miliband has the lead is being seen

as more in touch with ordinary people and slightly more

trustworthy. While his personal ratings remain

poor, the polls say he's a much more appealing figure than Ed Baps

or his wife, Yvette Cooper. -- Ed It is pretty much accepted by all

commentators like me that indeed Ed Miliband will lead Labour into the

next General Election. Well this is what Ed Miliband had to say about

it all on the Andrew Marr programme yesterday. Ideas a matter in

politics but I am not embarrassed about that. Let me be clear about

this. I gave a speech last year at the Labour Party conference, it was

controversial. I talked about predatory behaviour. I do not

regret it. Over the last year people have said, maybe he is right

about that. I am clear about this. I am my own person and I will do it

my own way. In the end people respect somebody who has

seriousness of purpose, a clarity of ideas. People will always know

where I stand, and that is the most important test of leadership. And

the real test of who will be next Prime Minister will be who can

stand up and rebuild Great Britain and rebuild the economy. I think we

can win this election. And joining me from Brighton are

Dan Hodges, he used to work for the Labour Party and now writes for the

Telegraph. And Andrew Harrop of the Fabian Society, that's a Think Tank

affiliated to Labour. Andrew, let me come to you first, why don't the

voters think Mr Miliband is made of Prime Ministerial stuff? I think

the first thing voters thing about Ed Miliband is they don't know much

about him. It is not necessarily they dislike him, but they don't

know what he stands for and what he would be like as a leader. The most

important thing for him is to define himself rather than let the

Conservatives define him in a negative light. People have said

this week, the way to do that is set out some big signature policies

and say how he would make Britain different from the coalition if he

was in power. Is it the absence of policy that makes people

circumstance about Mr Miliband, or is it what they see on the

television screens? I think it is substance rather than style. I

don't have by Avis, if he was a wonderful, charismatic leader,

everybody would be putting Ed Miliband posters on the wall. It is

a combination of the policy and a lack of policy that is feeding into

the negative ratings. What people want to see in a leader is someone

who is prepared to take hard and difficult decisions. That is what

the polling is demonstrating in relation to Ed Miliband. It seems

he is not prepared to do that. The strategy he pursued to become

leader was to go with the grain of his party and its thinking. That

sadly is not going with the grain of what the country is thinking. I

have been hearing for two years, people saying, they don't know what

Ed Miliband stands for and when they get to know him, they were

like him. I think they do know who he is now, and the direction he is

taking the party in, and they don't like it. Andrew? Ida -- disagree

with that. We have been the research and the way they are

reshaping the economy and the future of the welfare state is very

much what Labour has been saying. Does Labour have a policy on

welfare reform, I think I miss that? -- missed that. You say how

Labour Reform gels with what the British people were thinking, I'm

not sure what that is? There is a lot more to come. It wouldn't

reverse the cuts that have been made. That his coalition policy.

has been said Ed Miliband is being timid and plain to the left, but he

is taking on people saying they won't be a reverse because Labour

cannot afford it. We have heard Ed Balls will be making a big

announcement on housing later. That is the sort of thing, housing, jobs

for young people were Labour needs to stand out and show it is

different to the coalition. But it is money he does not have. Dan

Hodges, the party is ahead in the polls, why don't you just get

behind the party? Apparently if I'd shut it, Ed Balls would be -- Ed

Miliband would be soaring ahead. If you look historically, and you

pointed this out before, the Labour's leader in the polls is not

high enough. It is averaging 10 points in the polls in the middle

of a double-dip reception -- recession and with all of the

Government's problems. It is at a time when the Lib Dems aren't 8%

and UKIP of bouncing around on nine or 10%. I don't think anybody

seriously believes the Lib Dems will get 9% at the next election or

that UKIP will get 10%. Were the Lib Dems to shift the leader and

would David Cameron to make some policy announcement, as many expect

him to do in relation to Europe, will bring those UKIP people back

to him. That is Ed Miliband's lead gone without anything being done of

significance on either side. That is before the situation of

everybody thinks everybody is on a gradual economic recovery. And that

is it the Tories get their act together. And Ed Miliband and his

party, as we get closer to the General Election, will come under

some very vigorous scrutiny. My have not seen much from Ed Miliband

that encourages me to be able to resist that scrutiny. Andrew, do

you think people will buy this part of Ed Miliband to sell him as an

ordinary boy from north London? He may have gone to a comprehensive,

but we both know he is north London Labour aristocracy, he is not

ordinary at all? We need to get over the personality politics. He

has obviously been within the political world for most of his

career. All of it! He does stand out from David Cameron in terms of

the sort of issues he talks about, who he cares about. The one thing

he does poll very well on his he is in touch with people and cares

about everyone in the country and not just delete the David Cameron

is linked to. I want to pick up down on what he said on the polls.

Fabian has just been doing some research which challenges this myth

that has gone around that Labour's lead in the polls is very soft. We

look at how many people who say they are certain to vote Labour at

the next election, and it is 8 million people already. He only

needs 11 million to win and a majority. Some Liberal Democrats or

will go back, but there are awful lot of Lib Dems who have not made

up their mind. The same goes for the Conservatives. Very few

Conservatives have shifted from the Tories to Labour. Actually, Ed

Miliband's support, those who say they want to vote for him, is

immune to then go and support David Cameron later. Do you buy that, it

sounds dodgy to me? I was just going to ask, I looked at some of

that and your research shows Ed Miliband is still 2.5 million votes

short of where he was meant to be. If he has not secured those 2.5

million votes in the middle of a double-dip recession, and this

summer shambles which turned into an almost Ultra shambles, why is it

those people who are not convinced about him now, suddenly start

flocking to him? I lot of people are considering voting for Labour.

I understand the considering voting Labour, we are in the middle of a

double-dip recession, the Government has been in a shambles,

Tories are fighting amongst themselves. If people under that

background are not saying they are convinced about him, why will they

be convinced in two years? A lot of them are. You just said they were

not, we were talking about the people who have not made their

minds of. Why if people have not made their minds up about him now,

against that background, why would they make their minds up closer to

the election? The state people are in his desperate. Why aren't people

embracing Ed Miliband? The chances of Ed Miliband getting a majority

Government are far higher than David Cameron. I am sorry to

interrupt you, I was enjoying that. Dan Hodges, what is it like to be

the most unpopular person at the Labour conference? It is wonderful,

I love it. I embrace it, Andrew, as you know. Ben Shore and you will

look after you and act as your bodyguard. I will try. -- I am sure.

Thanks for joining us from Manchester. We are always being

criticised about dealing in personalities. He took about the

man, the woman and not the policies. But his Labour conference, they

want to give us more of an idea of what Labour stands for, its policy.

But equally, they are trying to do something about Mr Miliband's image.

They are talking about personality? I agree with that Matthew Parris,

it is not about personality, it is about policies. Ed Miliband, in the

last two years we have not had much about specific, individual policies.

But we have had the direction of travel, responsible capitalism last

year. That agenda is resonating with people. It is important in one

way, the easiest thing for Labour to do now, is we are in a double-

dip recession, we need more demand in the economy, get over that and

we will be fine. But Ed Miliband is saying there were problems in our

economy before the crash. Too many rewards in Arbroath were going to

people at the top, it was unbalanced. -- in growth. It is an

interesting direction to be moving in. Policy may give Ed Miliband a

different persona to the public, but as I understand it, Ed the

movie is not about politics, it will show him about the lad from

the local comprehensive. The son of immigrants fleeing Nazi journey. It

is not policy? It is not. But all the party leaders have their own

connection with the general public. If you look at some of the positive

measures for David Cameron at the moment, you could say before the

last election, Gordon Brown had the same positive ratings against David

Cameron and it did not give him the election. They have the same

connection, but I would agree, it is about the economy. That is what

will decide it. Actually, it helps Labour in the sense that a don't

think the economy will do the Government any favours in the short

term. If it was all about policies, that is what they would be

concentrating on. If they had a series of policies they thought

would game changes, that is what the political broadcast would be

about. But it is not, it is about Ed Miliband the man, the human, not

be geek? In terms of specific policies, it is not the wisest

thing three years before the election. We have had some

interesting things, last year at the conference we have support for

a state Investment Bank, National Investment Bank, which did not get

a lot of attention, but Vince Cable announced he is going to do it. It

is a policy Labour were supporting, TUC were supporting. Lots of

businesses supported it and now it looks as though it is making it to

the statute. But a lot of people won't have much to invest so it

might not even be a bank. When we talk about connection, it isn't

just one party political broadcast... It is a programme, you

are right. At the last election, everyone was in love with Nick

Clegg, and he lost seats a week later. Personality is quite an

unstable basis on which to build political appeal? If it is more fun

for people like yourself to talk about personalities instead of the

case for Estate Investment Bank. I'm much more at home talking about

Let's see what Danny Alexander had to say.

Stop the modern world, we want to get off. -- Douglas Alexander had

to say. Stop the modern world. We want to get off. Conference,

Britain exists in a modern world, in which everyone is connected to

everything. A world of quite unimaginable interdependence and

the fundamental flaw of the Conservatives' aprosh to foreign

policy that that two -- approach to foreign policy is that two years

into office they remain unreconciled to that truth. Let's

take the most pressing example - of course it's Europe. Does it matter

to Britain? Absolutely. Does it require fundamental reform?

Certainly. Does this Conservative Government have a clue how to

affect that reform in Britain's national interest? Absolutely not.

Now, we all know that change is coming to Europe. That is why,

under Ed Miliband's leadership, Labour will argue for reform in

Europe, not exit from Europe. Why... APPLAUSE

Why will we hake that case for Britain? We make that case because

British jobs, British exports and yes, British influence in the wider

world benefits from Britain's continued membership of the

European Union. Now, of course next week, we will no doubt hear some

boosts and some blusters from David Cameron about Europe, as he tries

to assuage his Everested backbenchers. Let's be honest about

high that is happening, it is happening because if you start with

a bunch of them on your backbenchers, you end up with the

fiasco of the non-veto last December, where the Conservative

front bench managed to unite the whole of Europe. The only problem

is they managed to unite them against the United Kingdom. So,

when you hear David Cameron next week, remember this truth - the

real tragedy t national tragedy is that the Conservatives have

marginallised Europe's voice in Britain just when it matters most.

Two years into office, Conference, that is David Cameron in a nutshell.

Out of touch at home, out of his -- APPLAUSE

Conference, let's try and figure this out - what is the

Conservative's strategy on Europe? Nothing. What is their strategy for

the G20? It is a blank page. What is their strategy for the World

Trade Organisation today? Nothing, it is a blank page. Even as we

heard in the defence part of the debate, their defence strategy for

NATO - nothing - it is a blank page. The Conservatives don't get it.

They don't understand that in the modern world Britain's citizens are

stronger and safer when we co- operate and collaborate with our

international partners. And that blindness to the need to network in

the modern world is at times damaging and at times dangerous.

When David Cameron became the Prime Minister of the country in May 2010,

he said this, and this is a direct quotation." Afghanistan will be my

Government's number one foreign policy priority." Conference, that

is as it should be, with thousands of young British men and women

still in harm's way in Afghanistan they deserved nothing less. Now, we

have heard again from some members of the British Armed Forces on this

platform in this debate, they are quite simply the best of British

and they deserve, once again, our thanks and appreciation.

APPLAUSE But, conference, the young men and

women in harm's way in Afghanistan deserve something more than our

public applause. They deserve from the British Government a political

strategy worthy of their military heroism and their military efforts.

And yet, David Cameron, the self same Prime Minister, who told us in

May, 2010, that Afghanistan would be his number one foreign policy

priority has now not made a single speech on Afghanistan to the House

of Commons in 14 months. Conference, that is shameful.

That was Douglas Alexander, the shadow Foreign Minister. We will

speak to the Shadow Defence Secretary in a few moments. Let's

get a flavour of his speech to the Labour Conference in Manchester

this morning. We face an enormous challenge. From

a Tory Party that behaves like it is born to rule and a Liberal

Democrats party determined not to die, we have to address some of the

issues in opposition that we would have to address if we were in

Government. That's why myself and the shadow defence team have been

really clear about the fact we would have to make savings when it

comes to defence. That is why I can announce today that the future

Labour Government would subject the Ministry of Defence budget to

independent expert, external review of all the decisions we take. No

smoke, no mirrors, no delays on the big decisions A culture of

consequence - no miss match between resources and global ambition. Ours

will be a defence-economic policy, alongside a industrial strategy,

that proudly celebrates the contribution of 300,000 skilled

British workers and the contribution they make to the

defence of our country. Now, as we debate all of this, and we discuss

our own policy, we should also be clear that politics of course is

about emphasiss the -- emphasising the differences between the parties

but also about making a difference. While we are out of Government we

are not totally out of power. That is why we have launched the

campaigns to support and end discrimination against our Armed

Forces. Why we are campaigning so hard to support veterans, carers

and why we are campaigning to extend the Armed Forces kove

vernapblt. It is why we have introduced the veterans' interview

programme, you have heard of. It is trying to deal with a very real

difficulty. It is simply wrong that a man or woman who served in

Afghanistan, who served our nation so ferociously and so bravely, that

they come back from Afghanistan to a hero's welcome, to a public

parade in their town, city, and there's flag-waving, only to be

sacked thereafters by their Government and told as well to take

the place at the back of the queue in the local Jobcentre. I tell you,

it's wrong. It's unfair, it's unjust. It should not be happening.

I give you a guarantee, under the next Labour Government it will not

happen. APPLAUSE

That's why I can announce today that the Labour Party will be the

first and only party to adopt a procedure, the principals of the

Armed Forces kove ver napbt because nobody, no member -- covenant,

because no member of the Armed Forces should face discrimination,

in employment, housing, health or any other walk of life, including

in politics and in the Labour Party. Social justice and human rights are

the very reason for our existence. They are why we are Labour. For

this movement now and through history, social justice has no

borders, only new front years to be conquered. That's why I am

delighted to announce the party which created Sure Start in Britain

will also be the party which champions the case for prioritising

early years development across the world.

APPLAUSE I have asked the founder and First

Minister for Sure Start and architect of our Olympic success to

lead a global campaign to ensure an integrated approach to early years

is at the new post of the 2015 global framework. I am delighted

that Sarah Brown, patron of the White Ribbon Alliance, who has done

so much, has agreed to sum port Tessa in her new -- support Tessa

in her new role. If all the evidence demonstrates investment in

the earliest years makes the most difference to our children's lives,

the same evidence must apply to the health, education and parenting of

the poorest children in the world. Conference, as staunch defenders of

development, we must be reformers. Like any department, who is not

immune to resources. The greater the risks we are taking. We should

be honest about that. My value for money test will be

what difference is our spending making to the poorest? And whether

it is country bueting to an end to The last time Labour was in

opposition it came up with the idea of an ethical foreign policy. It

went on to commit British troops into Kosovo and Sears and of course

invade Afghanistan and Iraq. It was not what most of us thought was

ethical. What can Labour do to create a foreign policy for the

The architect of an ethical foreign policy. The advocate of the case

for foreign wars. The most pressing foreign policy problem we face,

therefore, is to identify the circumstances in which we should

get actively involved in other people's conflicts. And its logical

conclusion. New Labour foreign policy - designed in opposition,

forged in the real world. New Labour turned out to be one of the

most interventionalists of Governments. Its legacy can still

be felt. According to one of the key players, maybe not as you would

imagine. Is a continuity between Tony Blair's Chicago speech in 1999,

which proceeded our Kosovo intervention and from what David

Cameron is arguing for in Syria. What David Cameron has been arguing

for, not least in his speech to the UN General Assembly has been

liberal intervention. Putting into practise the concept of the

responsibility of the international community to protect. Maybe. Iraq

was the moment many people inside and outside the party broke faith

with Tony Blair and new Labour, which must have a profound effect

on how it designs foreign policy for the future. Labour is trying to

get back to liberal intervenalism, as Tony Blair outlined in 1999.

Iraq and Afghanistan have left us with a bit of a downer in terms of

foreign policy and defence policy. Labour is trying to get its

confidence back, saying a more ethical world is a world which will

be better for British foreign policy in general. How much can a

party in opposition really do about future foreign policy? The only

thing you can do in opposition is make as many contacts as you can

with leaders and potential leaders around the world. Opposition

parties find that difficult to do, partly because it is expensive and

it runs the risk of looking as if the front bench team are on junkets

all over the world. There's a good point to that - it is really

important to establish personal relationships. Time and time again

in foreign policy it is when people know each other than they -- that

they establish a rapport which becomes a positive piece of foreign

policy. You should avoid labels which may come back to haunt you.

understood why Robin branded his foreign policy as ethical. He was

against the "arms to Iraq" scandal and so on. I would not have done

knit the same way, because it has - - it was hung around Robin's neck.

I quietly abandoned the label, without abandoning a sense I was

acting in an ethical way. He could not predict that new Labour would

oversee five conflicts. Opposition parties can design foreign policy.

Ultimately events dictate it. Well the Shadow Defence Secretary, Jim

Murphy, he is in Manchester. We can talk to him now. Good morning Mr

Murphy. Good morning, Andrew. defence cuts would you make that

are not being made at the moment? Well, we have identified billions

of pounds of savings it would make. I will not put a percentage on it.

We are working through that now. We will look at the process the

Government should have gone through - a proper security and Defence

Review. As you know, and it has been said, the Government came in

with a question in mind, which is how deeply can we cut we are going

through a process, which says what is Britain's role in the world?

What size defence budget do you need? That is why the announcement

I made at the conference today, well, it might sound technical, it

is important, which is we're going to, the Labour Government at the

next election, we'll have a ten- year defence budget, so over two

Parliaments. There'll be real-time, expert review of the decisions we

make in defence. As you know, as you watch these things closely,

what happens is a Defence Secretary gets asked what happened 10-12

years about his or her predecessor five times removed. We want real-

times scrutiny. Some of the things which are affecting Labour and

affecting the Conservatives today are not repeated. I think that is a

good thing. You said you have identified billions of pounds of

defence cuts which could be made. We said we would bring troops back

from Germany earlier if it would save money. We said we would accept

some of the cuts in the Navy and some of the freeze in the

allowances of the armed forces. Get rid of some of the top heavy armed

forces, very top-heavy in terms of the size of the armed forces in

comparison to the numbers of the numbers we need at the top in terms

of senior ranks. As we go through our defence policy review process,

we will keep identifying savings we would make. A lot of these are cups

that the Government is making that you say you support. -- cuts. What

I'm asking is, what cuts would you make in the Defence the Budget of

that are not already been made? are identified one in my earlier

answer. We itch one was that? will look at it in much more

forensically in the amount of senior officers we have. The amount

of cuts in the junior ranks across the armed forces, we have not had

the same process in the senior ranks. It would be important.

Things like Nimrod, we do not like the decision, we accept it, we

wouldn't reverse it. It is a list. I am looking for new cuts. It was

clear throughout the Labour years, and long before that the British

military was top-heavy, we had more admirals than Royal Navy ships.

Even if you were to put that right, and you did not in 13 years, it is

peanuts, not billions. Let me have one final go, I am trying to get

you to tell me what cuts in defence you would make that it would be

substantive and save billions that are not already been made? We are

going through that process at the moment. I know what is behind the

question, and it is a fair enough approach. We will go into the

election with the aid costed policy on what cuts we would make. You

wouldn't expect me to announce in the middle of a second recession

what the defence budget would be like in 10 years' time. It is not

how a family runs its home finances and it is not how the Ministry of

Defence runs its finances. A know when I am beaten. But let me see if

I can get an answer on this, are you in favour of British Aerospace

merging with the 80 s, are you in favour of them being the big Airbus

manufacturer? A I am meeting both of the companies in Manchester and

making -- meeting to trade unions. Our approach is how does it affect

the UK defence sovereignty? Will we be able to manufacture a

capability? But importantly, what does it mean for the workers in

this country? How many redundancies would there be? It is clear as the

changes in defence budgets across the world in recent years, US at

the moment, Germany, France and Europe, we will have to find

different ways of doing it. So this potential merger has the chance of

creating an industrial giant with a very big UK footprint. So you are

in favour of it? As you would expect, things have got to change.

The companies themselves are coming to see me at Manchester to make

their case. I hope to be the Defence Secretary, but there is

another important issue, the UK has a golden share in BAe at the moment.

What would it means that these two companies for the UK tax perk and

that industry? -- tax payer. Staying with us Mr Murphy, I want

to move on to the issue of Europe. Now there's a whispering in

Westminster circles that the PM is toying with the idea of a

referendum on Europe, should the Conservatives win the next election.

I suggest that is what he wants his backbenchers to think. Would Labour

support the idea? We sent Adam out with an awful lot of balls to find

out. Let's find out what Labour Party members think of this idea

about offering a referendum on the EU. I have got the balls, and there

is the box. There is no point asking a question about backing out

of Europe. I am a European and I am happy to be European. A Yes. Why is

that? I think it is a waste of time at the moment. There are far more

pressing issues we should be spending our time on. Why did you

say yes? The legitimacy of the opinion has come under questioning

from the right and the left. It is about time people from a new

regeneration should have the opportunity to say if they should

support it. It is my favourite subject. I would happily take 1000

of them balls and put them in the No box. Someone has just given me

this, five reasons why the EU is better for Britain. The situation

at the moment it is good. It is good? In the EU? It's works for us.

I understand whether people would understand the issues properly.

They are not Democratic people, they vote on other reasons, whether

they hate in Nick Clegg, for example. Hitler favoured

referendums. This is a former minister, what does he think?

have to answer the telephone. Boring. Definitely not. Why not?

have one, decided to become members and that a referendum was passed

with a more than two thirds majority. I wasn't even born then!

But I was. Why have a referendum on EU membership and up the UN

membership, the United Nations? person in the street would be

saying, how come these guys in prison are getting a vote? How come

they are getting human-rights when the mice had just murdered somebody.

When they have done an inhuman act, why should... Because of Europe?

Yes, because of Europe. Katie, D match used -- do you wear shoes to

match the balls? The people like the idea of referendums, but we're

having a referendum in Scotland in two years on independence. We don't

want to be a country where we have referendums every five minutes, but

at some point we need to have that debate. We have been celebrating

the Olympic Games. We applauded all the other competitors from other

countries and recognised there was good from other countries even if

we didn't win everything. It is clear, the big majority voting

against. The only referendum happening around here on the EU is

this one. Let's go back to Jim Murphy who has

been waiting patiently in Manchester. Under what

circumstances, if any, would Labour give the British people a

referendum on Europe? I think there will have to be a referendum on the

European Union. In Scotland, we have tussled with the issue over

the Scottish relationship with the United Kingdom. I think it will be

settled when we have a referendum on Scotland's membership of the

Union, the United Kingdom. A relationship with de you will be

settled once we have a referendum on the union of Europe. It won't

stop the argument. The day after the referendum and the decision,

people were still argue for independence. And if the s campaign

wins, the argument will continue to be fixated by Europe. It is

important, but in terms of the time line, it is not for me to announce.

But it is important we have that referendum. I don't think it is

today, all within the next year, but it should happen. You say at

some point, it should happen. Can you give us any indication at what

that means? What referendum will it be? Will it be an inch out

referendum? David Cameron, as you said, is toying with the idea

because he has to go to this conference next week. I'm asking

about you? Of course, but we're not under that sense of pressure within

the party. We have a view that it is good for the United Kingdom to

be engaged in the Europe. Not in the euro but engaged in Europe. In

terms of the timescale, we can work through that. But it shouldn't be

in the midst of a financial crisis that is affecting the globe. We

need to get through this recession, get through the Euro crisis before

we do that. There is big change coming to Europe, the 17 nations of

the Euro themselves are going to have a closer union. At the end of

that, Europe will look different. If we come through that and the

financial crisis, after that the time for a referendum would be upon

us. You cannot give me any idea when it would be, or whether it

would be an in or out referendum. It is not a policy to me? I did not

give you a proper answer, I think it should be and in or out

referendum when the time comes, the same of Scotland whether they want

to be part of the Union. It is a sensible way to do it. I don't have

a calendar with a date circled, we will do it when the time is right,

which means getting through the financial crisis and having a

potter -- proper debate and referendum. If you look at, not

your timescale because you have not given be one, but the debate coming

up in Europe, it looks like the eurozone countries will be moving

to a more federal type Europe, which I assume we want to be part.

Because at night the you or the Conservatives think we should be

part of Europe. Should we joined the eurozone in a federal type of

Europe, but stay out of it, but stay in the European Union, under

new terms, or should be get out altogether? Unlike in Scotland it

seems to me you may have A3 to his question? I am not a fan of eight

pick-and-mix, multiple-choice referendum. You end up with the

option which may only gain 40% support. Any referendum should be

set by Electoral Commission. But instinctively, I am more inclined

to and in and out referendum rather than a multiple choice of voting

system, that leads to a few choices. There is a Maltese be Europe

already. It is already with us, we just happen not to be in the

vanguard of that European politics, because we are outside the Europe -

- Europe. Whenever the referendum comes, almost everyone in the

Labour party, probably along with the Lib Dems, British business and

unions will argue we stay part of the European Union because it is

good for the economy and good for Britain. If I thought it was bad

for Britain, I wouldn't want to be part of it. Mr Murphy, thanks.

We are expecting Ed Balls to begin his speech about 12:10pm, and we

are told the subject is rescuing the economy. The Chancellor Best

Shadow Chancellor said he wouldn't reverse any coalition spending cuts

at the 2015. But that wouldn't stop Ed Balls offering George Osborne

advice on how to handle the economy. And now he's going to announce a

housebuilding plan using the proceeds from the sale of the 4G

phone licences. Does it make sense to build a housebuilding policy on

a sale of Spectrum which we don't even know is going to happen yet?

It makes sense to get something to move the economy pulls stop

building 100,000 homes is a sensible policy. It is a short time

boost to the economy. We have lost thousands of construction jobs over

the last few years. He get people back in work and the economy moving.

And there is a long-term effect, it is something back gets the economy

moving now and give you long-term benefit. I understand the case for

investing in the housing, people go back to the 1930s and say it helped,

the recession then. Which was shorter than the one we are having

now. But financing it with the spectrum auction which hasn't

happened, and you do not know what it is going to be, which is tied up

in litigation, it does not sound like the sound basis for Keynesian

He wants to be able to show it is a costed policy. I think the

estimates are �3 billion-�4 billion. This policy seems well costed, even

using the lower estimate. This has been in litigation for four years -

these 4G licences. I am suspicious that it suddenly produces 100,000

homes. Why? It is a nice round number, isn't it? At the end of the

day, this is peanuts. This is trying to distinguish Balls' fiscal

policy from Osborne's fiscal policy. �3 billion will not impact on the

economy. It could impact on the economy, couldn't it? Use it for

deficit reduction if and when this money materialised. Let's use it

for infrastructure, let's use it for digital infrastructure. A lot

of small businesses in the construction - house building and

providing the fixtures and fittingings. Wouldn't members like

to see... There is land designated to build 300,000 homes. Wouldn't

this get towards a third of this figure? It could do. When we are

spending the Government's money or public money, the Government is

spending that, we have to focus on what will boost long-term growth.

Isn't housing infrastructure, when you have to build sewers, roads and

ditches. We all now the key challenges we all face in the UK.

That is a huge issue. We are not allocating the resources to that

that we need. The 4G money, if it materialises, would be better

putting in that direction. The fundamental problem with the UK

construction industry - yes there is a demand problem, but there is a

supply problem. We talk about people not getting on the housing

ladder. The big reason is... What do you say to that? What do you say

to his members? We have to step back and look at the last two years.

The long-term picture of the UK economy of the last two years is of

stagnation. We had a little growth - too weak. We fell back into a

double-dip recession... So the picture is two years of stagnation.

There is a terrible squeeze on living standards. Banks are not

prepared to lend. There is what is happening in the eurozone. There is

the contraction. I am not saying austerity alone is to blame for two

years of stagnation, but it has contributed to it. When you have a

global crisis, you have a squeeze in living standards, banks which

cannot lend - that is the time the Government should be stimulating

the economy, stimulating demand, rather than pulling in the wrong

way. You think Ed is the solution there, I think Meryvn is the

solution. I think the monetary policy is a bazooka. We've had �375

billion. Andrew we would have had a depression without quantitative

easing. That is a lesson from the '30s. Thanks to Mr Bern bern and Mr

King in London, it has not stimulated the economy. It has

prevented things from being worse.... It is the stimulus bit we

are arguing about! We don't have quantitative easinging to the level

the blang want it. They want money -- Bank of England want it. They

want money supply grow up to 6%. We are nudging 3% at the moment.

prize of the Antiques Roadshow. He has just passed his Grade I piano

exam. He is regarded as a bruiser and likes to bake cakes. I think he

likes to bake cakes. Paul Kenny from the GMB union thinks he would

give an aspirin a headache. I am not sure how that would work, but

there you go. In a few moments the Shadow Chancellor will take to the

floor of the Conference. The second biggest speech of the week. The

other being Mr Miliband tomorrow. What is he like? We sent Adam to

find out. A brilliant mind, lazy at carry yolk I can. Have you ever had

one -- Kareoke. Have you ever had one of his cakes? No. People in

politics have strong opinions. Speaking as I found him, when I had

to work closely with him when he was Education Minister, I was

Justice Minister, I found him a very, very good minister. He gets

under the skin of David Cameron like nobody else. When he sits

there and he's muttering and flat- lining hand signals and things like

this, part of the theatre of Parliament is personality and he

has a personality. This cafe is full of the rank and file. Let's

find out what ordinary party members think about him. He is reg

-- He has recognised we need a policy for growth and demand in the

economy is critical. That is something in both respects that the

coalition Government have neglected. I also saw him dancing at the

Diversity night. Is he a good dancer? He S What sort of moves?

Good moves. He is an excellent person. I think people are warming

to him. He's very approachable and also, of course, he's got the

ability to see through on detail. That is what his party think of him.

What is his reputation with the press?

I just think Miliband has to show that he's master of his own

finances while Balls is there, it ain't possible. I quite like him. I

never, ever thought I would say that. If you said that to me two or

three years ago, I would have laughed in your face. He is a

likable individual. He has a side to his personality, he needs to be

doing something outside politics to give him a challenge. He ran the

marathon. He is now learning to play the piano. Goodness knows what

he has lined up next. Nick Robinson joins us live. The main bit of the

speech, this 4G licence, it has been well trailed. He's had a

kicking from Mr McCluskey of Unite, on public spending squeeze. Is this

going to be a tougher speech than he might have thought? I don't know

if it will be tougher. It is not the backdrop, in one sense, he

would have wanted. If you are Ed Balls fighting the unions about

being too tough on public spending, is not a bad place to be. Len

McCluskey, the General Secretary of Unite, who started this con--

Conference by saying he wanted to kick the Blairite birds out after

the nest, he has spoken on this floor and opposed the policy of

backing public pay restraint. 1% over the next two years. He said it

is a false choice to trade lower pay for more jobs. Precisely what

Ed Miliband and Ed Balls have said. He used a lively phase about saying,

"it is time they came out of the shadows," he said. They were

nervous the men from Unite. When he had a go at Ed, people might think

he was going at Ed Miliband. No, we are told he meant Ed Balls, the

Shadow Chancellor. Since they share the policy it adds up to the same

thing. Let's hear what Len McCluskey had to say. He's the

union leader of Unite. It is the biggest union in the country. He

seemed to have a go at Ed Balls here and it went down very well

with the faithful. No more false choices, please of jobs or wages.

Low wages, paid by big companies... APPLAUSE

Conference, low wages paid by big companies depress demand and jobs.

We end one the taxpayers subsidising poverty pay. So I say

to Ed, a public spending squeeze while the City continues to let rip

is simply not acceptable. APPLAUSE

Conference, asking the poorest for further sacrifices for a crisis

that they did not cause is the road to political ruin and to defeat at

the next general election. It is time for Labour to want -- for once

and for all to turn their back on the neo-liberalism of the past,

reject the siren voices, Ed, from those whose policies and philosophy

have been discredited and embrace the radical alternative the country

wants and which is the only way, the only way Conference, Labour

will return to power. I move. Well, Nick, there comes a time,

even in today's well-controlled disciplined Conferences of all the

parties, suddenly someone says what the party faithful are thinking,

which is not what the party leadership is thinking. Did we just

see an example of that? Yes, I think a lot of people are like that.

It took a while to warm up. It is a rather dead Conference hall. A big

hangar of a place. They there are fewer people in the hall. There's

less of an atmosphere, less of an tispaigs that there'll be trouble.

The motion that Len McCluskey was pushing was originally designed to

be a motion that tweaked the tail of the Labour leadership by

opposing calls for public sector pay restraint. In the end, through

this odd bolting bits of motions from different people, it ended up

noting the policy. No problem for the Labour leadership if the motion

goes through. As you say, Andrew, actually from the hall to the

pleasure of quite a large percentage, my guess would be and

it is only a guess, it felt to me in the hall half or two-thirds of

the hall were warmly applauding Mr McCluskey, did hear a call for a

radical alternative rather than a pale shadow of coalition austerity.

Mr McCluskey is the biggest union leader in the land, in terms of the

numbers in his union. His union has given �6 million to the Labour

Party. He gave an interview to the Sunday Times at the weekend beating

up on the Blairites. There he was making a speech to the Labour

conference and then the cut away, as he walked away, as our viewers

saw there, there were empty seat after empty seat, after empty seat.

They cannot turn up for the biggest bank rolling union leader in the

land? No. It is because there is an understanding that the debates

don't matter any more. Essentially what you are doing if you go into

that hall is you are hearing a series of people lining up to

compete to condemn the coalition or praise whatever idea they are in

favour of. Many are seeking a career in politics. They are

showing off in front of the people who might promote them. The more

junior ministers are trying to make a good show in front of them and in

front of journalists. There are rare moments in which you feel

something is being decided. That was a rare moment, if not decided

there was an actual debate taking place. Even Len McCluskey, who has

been willing to cause trouble for the leadership said no, when I

attack Ed, I am not attacking that Ed, I am not attacking that Ed. Ed

Balls's policy, which was to say that public sector pay restraint

was right now, does not tell us what he would do in office. A

series of things we will hear from the speech beg the question - yes,

you would spend this 4G spectrum sale, in other words when you sell

off the spectrum made freebie these 4G phones, you would have raised

money. Of course that would happen if Labour got into office by 2015.

What does it actually really tell us about Labour's priority? All it

tells us is that by instinct the Labour leadership have decided they

still think it is right to say to the public that you can spend your

way out of some of the economic problems. They think the coalition

will soon be proved wrong in their claim that austerity is the route

to getting the deficit down and therefore the route to getting

growth. Mr Balls has a complicated message, because it seems his

position is, yes, he's saying the deficit is too big, but in the

short-term we'll make it bigger and then later on we'll make it smaller.

I think instinctively that is a hard concept for people to gasp?

is a hard concept, but if you put it in a different way it is easier.

If you say, he will use words not dissimilar, look, if you put people

out of work and they are not paying taxes, then the tax-take of the

Government stkpwos down, then the - - goes down. Then you are in a

spiral where it gets worse. In a sense, you and I and many other

people watching, those classic economics, The View that you have

to spend in bad times in order to get the economy moving again. What

is striking when you look at the market research and I have talked

to people on both sides and the BBC does its own market research, to

see how our broadcasts are understood, the wording you use

drastically changes people's response. If the Tories point out

the deficit has fallen by 5% since they have fallen to office, their -

- 25% since they have fallen to office, their confidence will soar.

If Ed Balls points out something which is true, which is this year

borrowing has gone up 20%, Labour's representation for economic

competence goes up and the Tories go down. Both are part of the

debate. It is a sense and illustration of the fact that the

public are anxious but don't know which way to turn. There must be

concern, is there not, that in the Labour high command, that at a time

when there's been no economic growth since the coalition came to

power, real living standards have been squeezed, worse than at any

time since the 1920s, as you say, the deficit which is kind of the

reason the coalition is rising again in this financial year and I

could go on and on with the economic gloom, that the polls

suggest that the coalition or more Cameron and Mr Ostoss still -- Mr

Cameron and Mr Osborne still have more credible than Mr Miliband and

The country is still giving the new Government the benefit of the doubt.

Of course people are still angry and frustration about what happened.

The inclination of the people is to say, let's give this new lot a try.

What they are banking on is when the Chancellor stands on November

5th, what he does his he publishes a forecast, an independent forecast

from the Office for Budget Responsibility, about whether he

will meet his own rules. He has two rules, and he's likely, not

definite, but likely to miss the first one and quite likely to miss

the second one as well. They are hoping and believing the electorate

will look at that and say, it isn't working, we must go down the route

of the Labour alternative. But the Government accounting on it or not

happen at all and if it is debt that is the problem, the coalition

is the answer. Ed Balls is now on his feet at the coalition.

We all know what is supposed to happen when -- political parties

lose elections, Akram may, division, the party turning in on itself and

out of touch with the views of the country. Conference, two years on,

in this generation we have booked the that trend.

I cannot remember our party being so United, so determined to win

back the trust of the people again with our economy in recession and

the unfairness of this Tory lead coalition, now laid bare. Let us

show we are the people to rebuild Britain, strong and fur for the

future. And conference, making a case for

change, setting the agenda on reform of our media, banks and

responsibility in the economy from top to bottom, showing the strength

of purpose and moral conviction which won him the job and get him

to Downing Street. Let us pay tribute to my friend, our leader,

the next Prime Minister of our country, Ed Miliband.

I am proud to serve in his shadow cabinet. Now, with more than 40%

women, the first time that as ever happened in British politics.

And what a contrast to David Cameron's cabinet. Where the men

get the jobs, the women get the sack and only the chaps get the

knighthoods. Let me ask you this, what does it take to get sacked

from David Cameron's cabinet? Swear at a police officer, call him a

pleb and you get defended to the hilt. Get caught red handed texting

market sensitive information to News International and you get

promoted. Flat line the economy, deliver the most shambolic budget

in living memory and you stay in your post. More than that, you are

allowed to stay part time. Do all of those things and David Cameron

will let you keep your job. But not if you are a woman. What kind of

Prime Minister thinks it is fair to sack a 54-year-old woman in his

Cabinet because she is to old and then give the job to a 56-year-old

man instead? Let Me Tell You, a Prime Minister

who only a point five women in the first place, sacks three of them,

demotes the of the two, and attacks the Labour leadership for not being

bought enough! Porsche! What ever did he mean. If David Cameron is

the you see Ch, where does that leave George Osborne? Perhaps this

is why George Osborne will never be sacked. A Prime Minister and a

Chancellor going down fighting together, and this time, let's see

them ride off into the sunset, but Cameron and the flat line kid.

And doesn't it feel good to be back in Manchester. Or should I say to

be back in Labour Manchester. Four Labour MPs, three world-class

universities, two world-beating football teams, one Labour council

and not a single Tory councillor in the whole city, not a single one.

And, let us pledge today to keep it that way. And elect the brilliance

Lucy Powell as Manchester's first ever, Labour woman MP.

I can think of no one better to be Manchester's first ever police and

crime Commissioner and the wise and respected Tony Lloyd.

And conference, at the time of such tragedies for policing in this City

D, our whole country remembers two brave officers who lost their lives

doing their duty. We paid tribute to all those public servants up and

down the country, police officers, firefighters, armed forces, who

every day put their lives on the line to keep us safe.

And conference, as we rightly praised the success of London 2012,

let's not forget it was Manchester's hosting of the 2002

Commonwealth Games which showed the way and proved Britain was ready to

stage the biggest international sporting events. And conference, we

salute Graham Stringer and so Richard lease, and all those who

made it possible. We salute those who brought the Olympics to London

and made it such a success, Tony Blair, Prince William, Ken Lou

Vincent, Gordon Brown, Lord Coe and too many others to mention. None of

them would have been able to play their part it not for the one

person who made it possible, conference please join me in

thanking Dame Tessa Jowell. Conference, it was Tessa's

officials who told her it would be a disaster to host the 2012 Games.

It would cost too much, the stadiums wouldn't be ready,

Transport could not cope, she and she could have listened to those

concerns, but she didn't. She persevered, we won and the rest is

now part of our national history. There is a lesson we should learn

from this. With wise leadership, a long-term vision and a strong

partnership between Government and citizens, we can do great things.

We can lead the rest of the world, we can rebuild Britain for the

future. But, if you listen to the doubters, if you never take a risk,

if you flinch when obstacles are in the way, you'll never get anything

done. It you spend your whole time fighting short term, political

battles, Dave verses Boris, Boris the verses for George, George

verses of Ince, you'll never rise to the long-term needs of the

country, and in the end you let people down and you lose their

trust. And no where is it more obvious than in our economy. Thank

goodness the Olympics has given us a short-term shot in the arm that

might be enough to take us out of recession this quarter. But that is

no substitute for a long-term strategy. Not when families are

struggling to make it ends meet, not when fuel and food prices are

going up and wages are frozen and tax read its cut. When so many

young people have been unable to find work and stay on in education.

Not when so many businesses are struggling to raise the finances to

survive until the year end. Not when so many working people in the

public and private sectors are worried about their jobs and

pensions, the human cost of this Government's economic failure.

Remember what Dave Cameron, George Osborne and Nick Clegg promised two

years ago. Tax rises faster, deeper spending cuts are faster would

secure the economy and make Britain a safe haven. That theirs was the

only credible plan to deal with the deficit. And, we were all in this

together. Conference, the recovery secured, we are just one of only

G20 countries in recession. De long as double-dip recession since the

Second World War. A credible plan to deal with our deficits, because

we are in recession, the deficit is not going down, it is going up. Up

by 22% so far this year. Rising borrowing not to invest in the jobs

of the future, but to pay for the mounting cost of this Government's

economic failure. There is nothing credible about a plan that leads to

a double-dip recession, to thousands of businesses going bust,

to a million young people out of work, businesses and -- billions

wasted on their welfare bill. That is not credible, it is wrong.

And as for we are role in this together, we don't hear that line

any more. -- all in this together. Not from a Chancellor who presented

the most unfair and unpopular budget in a generation. It

generation -- Chancellor who tried to raise taxes on pasties,

churches... Who tried to raise mansion tax. It used six months'

time would try to raise tax from pensioners on the same day he cuts

the tax for the riches, a �3 billion tax cut giving �40,000 a

year to a millionaire. �40,000 a year! Conference, what kind of

Government asks pensioners to pay for a tax cut to millionaires? What

kind of Government believes a low- paid women will only work harder if

you take away their tax credits and make them worse off, but

millionaires will only work harder if you give them a tax cut to make

them better off? Isn't this the truth, we know what

kind of Government this is, failing on the economy, failing on the

deficit and hitting the many to help the privileged few. Arrogant,

complacent and out of touch. It is the same old Tory Government. That

is what it is. David Cameron, George Osborne, Nick Clegg, the

same old Tories, every one of them. But you know what the worst thing

is? The two years they have told us all this pain will be worth it in

the end. It will be short-term pain for long-term gain. What we are now

seeing a short-term pain doing long-term damage in our economy.

Look at the facts, over 33,000 companies gone bust since the

General Election. Investment plans cancelled or averted overseas,

economy is weaker, capacity lost, more prone to inflationary

pressures when the recovery finally comes. Child poverty, used

unemployment becoming entrenched and damaging them for the rest of

their lives. Conference, if we carry on like this, divided

coalition muddling through, no vision, waiting for something to

turn up, the danger is that two last years become three and four,

and we slipped into a lost decade of slow growth, high unemployment

and stagnation. Last Investment, lost output, lost jobs, lost

exports, a decade when we fail to make investments and reforms we

need to make our economy stronger for the future. It does not have to

Last year, private investment in Germany rose by 7%. One million

extra students enrolled in university in America. China is

building 80,000 miles of roads a year and is now planning 70 new

airports. Here in Britain, private investment, down 2%. More students,

no, over 50,000 fewer and not one of the road projects David Cameron

announced last year has even started in construction. When you

look at this picture of stagnation and inaction, is it any wonder the

deficit is now going up? We warned two years ago that drastic spending

cuts and early tax rises, too far, too fast, risked choking off the

economy and risked making a difficult situation worse. We

warned either learn the lessons of history or repeat the mistakes of

history. This is the fundamental truth. If more people are on the

dole, not paying tax, you cannot get the deficit down. If businesses

are going bust, not hiring new workers, you cannot get the deficit

down. If the economy is not growing, you cannot get the deficit down.

That is why we must act now, to kick-start the recovery, to tackle

rising borrowing, to make our economy stronger. A year ago, in

Liverpool, we set out five actions the Government should take then and

now to boost growth - tax, bank bonuses and use the money to create

jobs for 100,000 young people and 25,000 more homes. Bring forward

long-term investment in our infrastructure. Reverse the

damaging VAT rise. Give every small firm, taking on extra workers a

one-year national insurance tax break. Cut VAT to 5% for a year on

home improvements. Conference, since last year, David Cameron's

Government has done next to nothing. Their economic plan is failing.

They don't know what to do. Plan A, plan B, plan A plus. With this

Government I don't see any plan at all. That is why it is so urgent we

kick-start the economy. We must go further and we must act now. With

119,000 construction jobs lost in two years, a 68% fall in the number

of affordable homes being built, we need bold and urgent action now.

With Hillary Benn and Jack Dromy, the Government is anticipating a

wind fall of up to �4 billion from the sale of the 4G spectrum. In

good times Labour used every penny of the �22 billion from the sale of

the 3G licences to repay national debt. In difficult times, we

urgently need to put something back into our economy. So, with this

one-off windfall from, the sale of the 4G spectrum, let's cut through

this Government's dither and rhetoric and actually do something.

Not more talk, but action now. Let's use the money from the 4G

sale and build over the next two years, 100,000 new homes,

affordable homes to rent and buy, creating hundreds of thousands of

jobs. Let's get our construction industry moving again.

Add to that a stamp duty holiday for first-time buyers, we can

deliver real help to people aspiring to get on to the property

ladder. Conference, this is a clear and costed plan to kick-start the

recovery and get people back to work, building the homes we need

now and for the long term. Building our way out of recession and

rebuilding Britain for the future. APPLAUSE

We also need reform, to boost long- term investment and skills. The

only rise to living standards for working people. We need a modern

industry policy to support long- term wealth creation, with

strategic support for advanced manufacturing and service

industries. We need to work and campaign together to tackle tax

avoidance and bogus self-employment and prevent the race to the bottom

through regional pay. We need to enforce the minimum wage.

We need to help parents balance work and family life and make sure

our labour market is genuinely flexible and fair for working

people. Let's go further and promote the living wage too.

APPLAUSE We also know our banking system

needs cultural change and radical reform. Reform which this

Government is only interested in watering down. That is why Ed

Miliband and I are clear - we do need a full and independent inquiry

into the practises of the banking industry. We need radical reform to

separate retail and investment banking. We need active support for

mutuals and co-operatives. We need a proper investment bank - this one

properly backed by the Treasury. APPLAUSE

Conference, let me also say this about the hundreds of thousands of

working people, earning ordinary salaries, who work hard every day

behind the counters of our high street banks - they were shocked

and dismayed at the gross irresponsibility and greed of a few

millionaire bankers at the top, who caused such damage and gave their

industry a bad name. Working people who want tougher regulation, who

want banks to work for the long- term interests of our economy and

who do not deserve to be pilloried for their hard work and service.

Conference, the financial crisis did expose deep-rooted problems in

our economy. It was always going to be difficult to get the deficit

down. Even if we get the economy growing again, even if we reform

our banking system we will face tough choices in the years ahead.

The longer this Government staggers on, with a failing economic plab, -

- plan, the worse it will get. Hard times will last longer than any of

us hoped. We cannot promise to put everything right straight away.

Which is why however difficult this is, when we don't know what we'll

inherit, we cannot make any commitments now that the Labour

Government will be able to reverse spending cuts. Unlike Nick Clegg,

we will not make promises we cannot keep.

Of course we will make different choices. We'll do things in a

fairer way. Conference, as I said to the TUC, we have to be up front

with the British people, that under Labour there would have been cuts.

On spending, pay and pensions, there'll be difficult decisions in

the future, from which we will not flinch. Before the next election,

when we know the circumstances we face, we will set out for our

manifesto tough new rules to get our current budget back to balance

and national debt on a downward path. Not a meaningless fiscal rule

like George Osborne, a promise to balance the book in five years'

time, with that period moving forward year after year. Schools

will be monitored by the Office for Budget Responsibility. We will take

the action required to meet them. When we sell off the Government's

shares in the banks, every penny will go to the national debt. That

is what we need by fiscal responsibility in the national

interest. And because... APPLAUSE And because we all know there

cannot be a post election spending spree, in our first year in

Government we will hold a zero- based Spending Review, to look at

every pound spent by Government. Looking at what the Government can

and cannot afford. Boosting productivity. Building on the work

that Rachel Reeves is leading, but we will do things differently to

this Government. Not slashing budgets without a care in the world,

damaging the economy, but also hitting women harder than men.

Instead we will assess every pound of taxpayers' money, including for

its impact on growth and fairness. Not opting for short-term cuts that

look easy, which end up costing more in the lefrpl, like deep cuts

toed a -- long-term, like deep cuts costing more. Not ducking the

issues we know we have not properly faced up to yet as a country.

Issues which transcend parties and Parliaments where we need a cross-

party consensus. Let us get a long- term plan to support the most

vulnerable in our society. Look after children and adults needing

special care. -- social care.

APPLAUSE Conference, this is not just about

policy, it is about the kind of country we want to be and the way

we do our politics. Where we faigs important long-term challenges we

must -- face important long-term chal enings we must face a

consensus which put politics aside and put the national interest first,

just as we did a decade ago. Nowhere is such a consensus more

essential than on our national infrastructure.

As we approach major projects in a long-term way and build a cross-

party sense of national purpose, we can deliver. And yet, it took 13

years, after the opening of the Channel Tunnel to complete the

high-speed train link to London. Crossrail was delayed for years and

years, for decades. Why is it so often the case in our country? Yes,

our cumbersome planning system. Yes, proper and legitimate concerns for

the environment. Too often in the past Governments have assumed vital

infravubgure can only be funded by public investment and then bulked

at the bill. Above all, success sieve Governments, including our

own have ducked or delayed decisions on our national

infrastructure. Sometimes allowed politics to come first. Just look

at this Government in the last few months. Will Boris or Dave win on

Heathrow? Will Conservative MPs block high-speed rail? Will George

see Zac off on renewable energy? What a ridiculous way to run a

country. No wonder business is fast losing confidence in this

Government's ability to make long- term decisions. But this is not

just a problem with this Government. We have to be the party to break

that cycle, because if we don't, if we put off major decisions for

another generation, it will be our children and grandchildren who will

pay the consequences. Let me give you a few examples. We must decide

how and when we are going to deliver super fast broadband across

the whole of the UK and avoid a two-tier Britain.

APPLAUSE We must decide whether we need to

replace our antiquated National Grid or risk more power cuts in the

future. We must decide, as a country, on a clear plan, to invest

in nuclear power, wind and tidal power and other renewables, so we

can lead the world in delivering clean energy and green jobs. We

must decide how we will protect our country from rising sea levels and

exceptional rainfall, including whether we need to re-enforce the

Thames barrier, to prevent London from flooding. We must decide,

alongside decisions on rail and airport capacity, how we'll get

more freight off our roads and on to railways. It will not help our

grandchildren if they are all driving electric cars but they are

still in gridlock on the M6 or the M25.

On all these issues, if we don't start to plan now, what will we say

in 30 years' time? When our children ask, why didn't you act

when there was still time? That is why we need a comprehensive, long-

term plan to rebuild Britain's infrastructure for the 21st century

and a cross party consensus to deliver it. It is why when budgets

are tight we must think innovatively about how to finance

these coming projects, drawing on the private sector and pension

savings. So Ed Miliband and I have asked the chair of the Olympic

Delivery Authority, Sir Jon Armet, to consider how long-term

infrastructure decision-making, planning, delivery and finance can

be radically improved over the coming decades. I can announce

today that Sir Jon has agreed to lead this work and draw up plans

for a commission or process, independent of Government, which

can assess and make proposals on the long-term infrastructure needs

of our country over the coming decades and help build that

consensus. Not repeating the mistakes of the

past, but learning from them. Building a consensus that crosses

party lines without chopping and changing want Parliament to the

next. This is what we mean by building a consensus to rebuild

Britain for the future. And conference, there is another lesson

we must learn from our history. Many people have said over recent

weeks, this has been written's greatest ever summer. -- Britain's.

But let me remind you of a greater summer still. The summer of 1945,

the end of six years of war, when our nation welcomed its he wrote

home from the battlefields of Asia, Europe and America and celebrated

the defeat of fascism. Confidence are predecessors were elected that

the year to rebuild the country ravaged by conflict. They faced

even greater talent is than we face today. An economy weakened by war,

and national debt double the size of ours today and they make tough

and unpopular decisions to continue with rationing, to cut defence

spending and to introduce prescription charges. But that the

Labour Cabinet also remained focused on the long-term task ahead

and they learned from history and they rejected the failed austerity

of the 1930s. And that meant they could put in

place a long-term reforms end during achievements, vital to a

country's future. The Beveridge Report, new homes that he rose, the

school leaving age raised, and an NHS free to all, based on not an

ability to pay, over 60 years later celebrated in our Olympics opening

ceremony for the world to see. Still today the greatest health

service in all the world. Conference, they were very

different times. But it is our task to recapture the spirit and values

and sense of national purpose of that time. It just think of the

people in whose footsteps we follow. Working men and women who in the

years before had seen a hardship that many of us would never

experience. But they are suffering did not teach them selfishness, it

taught them solidarity. And that is why they never settled for second

best in their battle Education's all, free health care and proper

rights at work. And we owe it to them, but more

than that we owe it to our children and their children to come, to

learn from that example, make the tough decisions but not sacrifice

their futures. Because, when our grandchildren look back at us, what

will they say? Will they say we cast a generation of young people

on the scrapheap of unemployment? Will they say we as a generation

dismantled the NHS and made it harder to go to university? Will

they say we plunge Britain into a decade of economic stagnation while

other countries raced ahead? Will they say it we left Britain a less

prosperous, more unequal and unfair? All, will they say even as

we made tough and painful decisions, that ours was the generation that

got a record number of people into apprenticeships and university?

Ours was the generation that safeguarded the NHS and started the

rebuilding of our national infrastructure? Ours was the

generation that tackled our debt by growing and reforming our economy

and making sure the banking crisis that caused it could never happen

again. Ours was the generation that broke from the cycle of political

short-termism and started to rebuild Britain a new in the long-

term interest. Let us go forward, not flinching from tough decisions,

giving our young people hope, rebuilding Britain for the future.

That is a challenge, that is our mission, let us go forward and do

it together. Thank you. STUDIO: Ed Balls finishes his

speech to the Labour Party Conference. He then moved on to his

brief, the economy. He announced what is called a zero based

approach to public spending. It means a root-and-branch study of

all public spending before deciding what to do next. He announced new

fiscal rules, although they were a bit vague and would be monitored by

the Budget -- the Office for Budget Responsibility and he talked about

better infrastructure delivery which it is not very controversial.

He also was most keen of the need to kick-start the economy. And we

got the announcement of using the proceeds from the 4G spectrum sale.

And we are joined in the studio And the Economic Secretary to the

Treasury, Sajid Javid, is with me now. And the Shadow Chief Secretary

to the Treasury, Rachel Reeves, is waiting to speak to us from

Manchester. When the deficit starts to rise again, the economy needs a

kick-start? We heard more of the same, which is what I expected,

more borrowing, spending and more debt. More debt than there would be

otherwise. He talked about the 4G spectrum and use the proceeds, what

ever there may be to try it and invest affordable housing. It also

shows he is not consistent with what he says. Almost exactly this

time last year, he said he would use any future proceeds from the

sale of bank proceeds to pay down the debt. Now he said anyone for

the Government gets he wants to spend, so therefore increase the

debt. Just on the 4G, what would you do with the proceeds of 4G?

don't know what the proceeds will be. This say they are three or 4

billion? We will boost jobs... would you do with it? We will

decide at the time. You do not know yet. The us is not about what we

will do, it is analysing what he said because he wants to be the

future Challen -- Chancellor. don't know exactly how much, it is

stuck in litigation. I have made that point several times on this

programme. If and when it comes, Labour has said they would like to

spend the money on affordable housing. It is legitimate to ask

you, if and when it comes what would you do? When the man comes

and we know the amount and timing, we will decide then the best way to

spend the money. What is more important is what Ed Balls said

today. Let's look at their policy on affordable housing. During their

period in Government, the number of affordable housing in terms of

twirling fell by a net 200,000. The people on the waiting list went up

from one million up to 1.8 million. That is their policy, and what he

has announced today won't make any difference. Your policy is to cut

the deficit, why is the deficit rising? It is not, it is down by a

quarter. How big is the deficit in the first five months of this

financial year compared to the same five months last year? If you pick

a few months that are selected to illustrate your point. It you look

at the time period from when we entered Government as a coalition,

determined to deal with the bad inheritance, the national deficit

has fallen from 156 billion to 119 billion, of the last set of

accounts we have. If you take the first few months of this fiscal

year and we have most of the year to go, I would rather make a

comment on whether deficit is when we have proper estimates. I had

taken the first five months because that is the only time I have

figures for. Is it still your claim the deficit this year will be

smaller than the deficit last financial year? It you have taken

the deficit for the first five months this time last year, asked

the same question, you would have looked at those numbers are still

for the deficit wouldn't pick the Government's target. If you look at

the ONS numbers published last week, the deficit is down to 119 billion

the Last Post newcomer 25% lower than where it was. -- 25% lower