31/01/2014 Daily Politics

Afternoon, folks. Welcome to the Daily Politics. French President

Francois Hollande pops across La Manche to meet David Cameron. Later

on, they are off for a pint in a pub. On the agenda, energy, defence.

And the future of Britain in the EU. The Prime Minister suffers another

large-scale backbench rebellion with 86 Tory MPs voting against

government policy. We'll discuss Mr Cameron's party problems. Danny

Alexander tries to bowl Ed Balls a googly over his plans to reduce the

deficit. Labour say it is just not cricket. In our latest look at

influential political thinkers, financial journalist Louise Cooper

tells us all you need to know about Friedrich Hayek. This Austrian

upstart trick on Keynes. For that committee is incredibly brave. --

took on. All that in the next hour. And with us for the duration, Zoe

Williams. She writes a column for the Guardian and describes herself

as a bon viveur, so she's taking us for lunch after the show. And by Tim

Shipman, he writes for the Daily Mail but is soon off to be political

editor of the Sunday Times. It wouldn't have happened in my day.

First, today, let's talk about the Immigration Bill. We throw the word

farce around fairly liberally here at Westminster. But it certainly

applied to events in the Commons yesterday. It all centred around an

amendment to the bill by the Tory backbencher, Dominic Raab. He wanted

to stop foreign prisoners using the right to family life, enshrined in

the Human Rights Act, to stay in Britain. Now here's where it gets

complicated. The Government said Dominic Raab's amendment was illegal

and unworkable. But ministers said they would rather abstain on the

vote rather than risk unecessary confrontation with backbench rebels.

In the end, the bill itself passed easily, thanks to Labour and Lib Dem

votes but 86 Tories rebelled on the Raab amendment. So, is this a case

of the Tory backbench tail wagging the dog? Let's have a look at the

debate. Is the Government going to vote for it, against it or abstain?

I would say that what I am doing is indicating a few comments I have in

relation to this. I would like to hear my honourable friend speak on

this issue and here indeed whether he does intend to move this

amendment. You really do have to study the case law of the

immigration Tribunal to appreciate the extent to which these cases walk

the moral balance of British justice, endanger the public and,

frankly, for many people outside of this place, make Newman writes dirty

words. I recognise the concerns my friends have about inability to the

port foreign criminals. How could she tell the Prime Minister, I

propose the Government should not support the amendment because it

should not be compatible with the easy HR and counter-productive. The

Home Secretary, responsible for enforcing law and order in Britain,

is sitting there. It is a shambles. Is anyone watching? It is a real

shame. It is a shame for me. I always thought Dominick Raab was

normal. He is intelligent. He seemed to be quite smart. This seemed to be

quite unworkable on any basis. He knew it was not a real issue. He

knew it was just a way of getting the Government on the back foot.

There is a terrible mismanagement. If he is trying to force a wedge

between... He is trying to highlight that, it is a long game. It is not

just between the high command and the backbenches, it does not look as

if the Prime Minister promised to tell the Home Secretary how they

would vote or not on this matter. Number ten web easy breathing people

like myself that they were going to abstain. -- Number ten was busy

briefing people. The whole situation, he has avoided a massive

confrontation with backbenchers and avoided splitting the party. He has

shown he is cared about what they were thinking about. The alternative

was to back an amendment he believed was illegal. That is what they say

about Cameron. The way to deal with rebels is either to grout them or

give in to them. He freezes them out and then gives into them. There is

no question that it raises real problems about his party management

skills, which he has had from the start they seem to be accumulating.

I come back to the question, does anyone outside 500 yards off here

care? The one thing we noticed more and more, we get e-mails and

tweets, the machinations of Westminster are of no interest to

the country at all. It is a tragedy that people out there do not care.

They will have to thought about this. The Tory party is divided and

things at the centre are vaguely shambolic, which they are. Neither

of those things is something that David Cameron wants the public to

have in its mind. All you need is a general perception of division and

then it does matter. The press has no import in telling people how to

vote, whatever we think we can do. We can make a government pay united

or divided. That is a huge difference. This government makes

itself appears so divided. The thing with Cameron, we say this has no

connection to normal people but it does. They are trying to bring UKIP

defectors back into the fold. Anything that sets up a fight

between the more UKIP against the less UKIP plays to some level to

that faction. That is a huge deal. There have been a number of voices

saying it is time the backbench Tories stop this death wish, there

is an election looming. It is time he showed more loyalty and

discipline. Mr Michael Howard was on the radio earlier this week saying

the same thing. Here is a question. Even in the Spectator. You can see,

as the election approaches, that will have some weight because they

want to win, most of them anyway. Doesn't the headless chicken

tendency get a new lease of life when the Tories get lumped in the

European elections? What is interesting about what happened

yesterday is that Cameron decided not to pick a fight with the Dominic

Raab group of backbenchers. As Tory backbenchers go, he is normal. The

other amendment which caused a problem, the Nigel Mills amendment,

that was clearly illegal. It was also much more from the wing of the

party that wants to have a fight about Europe. Dominic Raab is seen

as an international lawyer who wants to make a serious point. A lot of us

think he will end up as A Minister. He says, when you look at the case

law, everyone looks at the case law. The -- it is not like the ban

against torture which has no caveat. He was simply trying to get some

guidance to the judges that they have given too much weight to the

caveats, sorry, they have not given any weight to the caveat. We can

ignore the right to a family life. Their body has to take any notice of

that. That is not right. Legally, it would not stand up. He did not pick

this fight. He could have picked a fight. You go back to the prisoner

voting issue, he voted against them. Yesterday he told them he agreed

with them and he abstained. Does he come out of this enhanced or

diminished? I think he is marginally menaced. -- diminished. We were

never going to vote for him anyway. He does not care about me. Amongst

his peers, he made an argument which they think had merits. He persuaded

Downing Street it had merit. The Prime Minister did not come down

like a tonne of bricks. Now, it's time for our daily quiz. The

question for today is, Shadow Home Secretary Yvette Cooper has told a

magazine she has to shout at her husband, Shadow Chancellor Ed Balls,

as they get their children ready for school in the morning. But what's

the reason? Is it: a) Because he's reading the Treasury red book at the

breakfast table, b) Because he's practising his hand-gestures for

PMQs in the bathroom mirror, c) Because he's playing the piano, or

d) Because he's watching the Sound of Music again? And crying, as he

does, because that is what he told us. At the end of the show, Zoe and

Tim will give us the correct answer. President Francois Hollande is in

the UK working hard with David Cameron on the next phase of the

intent called Gal. That is what a lot of us think. Where else would

the Prime Minister take such a distinguished head of state than the

traditional British boozer? He can look forward to pork scratchings and

a pint of pale ale. What will be on the menu when the two men at their

head to head? There will be plenty of cooperation plans. Such as

dealing with defence, nuclear energy and the space industry. After that,

things may get a little frosty. It is well known that Mr Cameron wants

to renegotiate the European Union treaty to create a more flexible EU

ahead of the promised referendum by the end of 2017. That is assuming he

wins the election in 2015. Partly because of his own faith in a

referendum in a Eurosceptic France, French officials have warned that

President Francois Hollande will say no. His election is in 2017. He may

have a thing or two to say about the Conservatives mocking his economic

policies, especially when comparing them to those of Ed Miliband. Grant

Schaap said President Francois Hollande has put his countrymen back

into the dust. I did not know they came from the dust. In the last few

minutes, the two leaders have been speaking to the media in a joint

press conference in the beautiful Brize Norton in Oxfordshire. Our

partnership is as close and important as ever. We are two

leaders determined to keep our citizens safe and to secure a better

future for them all. That has been the focus of our discussions today.

First, on defence and security cooperation, we are both similar

sized countries with similar Armed Forces and similar ambitions. We

both see the link between domestic prosperity and being active players

on the global stage. With us now as always on these occasions, the

member of the French parliament representing Northern Europe,

including the UK. Welcome back. Will President Francois Hollande where

his helmet? I suppose so. In case Mr Cameron wants him with a baseball

bat! How would you categorise Anglo French relations at the moment? Icy

it as entente amicale. -- I see it. The reality shows that we do agree

on many issues and important and strategic ones. It is close

cooperation are probably closer than with any other country in Europe,

except for the Germany. In life, you have discussions, splits and

agreements. ER going to go into space today. Apparently so. -- we

are going. Stay quiet, sit and watch the oceans together. Here is the big

question... Am I right in thinking that the president has no real

interest in a major renegotiation of these issues? I think you are right

in thinking that. Not that he agrees on the fact that Europe needs to be

reformed but he disagrees on the methods and the means that David

Cameron wants to use for that. We have had enough of treaty

negotiations. People want to see what Europe brings them. He wants to

push an agenda on youth unemployment, on growth and how to

create jobs, innovation in Europe. You do not need treaty changes for

that. You do not need treaty changes to work closer with countries

belonging to the Eurozone. We, in France, think that what David

Cameron is asking us is actually down to his own domestic political

agenda and that should not take any role at all in the discussions

taking place between 28 member states.

The last thing the president wants is a referendum on Europe. This is

something which is never, ever discussed in French politics. You

have had a referendum. The pro-Europeans have lost it. Exactly.

At the moment, the economic situation is critical. We are

focusing on trying to create jobs. It is not an issue. Believe me, it

is not something we ever discussed in Parliament. I understand that. Mr

Cameron has got problems with UKIP. The French mainstream parties have

problems with the right of the National front, and they are

anti-Europe. Do they want to pull out of Europe altogether? Just euro.

You have got the hard left as well who are anti-euro. It is hard to see

how Francois Hollande... I can't see anywhere the friends can give Mr

Cameron even a fraction of what he is looking for. You are right. We

don't really know what he is looking for, to be honest. He hasn't put any

precise demands on the table. We know the direction he wants to go

in. Probably something to do with financial services. He was to be

part of the decision process when it comes to City regulations. It is

already the case. I am not sure that a stronger euro zone integration

will have any impact on the City. The National front, it is rising. We

are worried, it is true. It is not so much on an anti-EU agenda. It is

a lot about immigration and a lot on social issues. It is probably

broader than what UKIP once. This will be covered by the diplomatic

niceties. I am told that Francois Hollande doesn't want many questions

so it would be a quick press conference. I wonder why! The mood

music from the French, to be blunt, Mr Cameron... The whole strategy has

almost collapsed before it has left the box. Arguably, he would say he

needs to get Angela Merkel onside. She now has the social Democrats to

deal with, who have the same view as the French president. That is right.

We don't know what David Cameron once, precisely. People in his own

party would like to know that. There is no way that Francois Hollande is

good to have a referendum before his election. Here, Cameron is wanting

to make the argument that Francois Hollande and Ed Miliband are the

same disastrous socialist experiment. That is another issue.

That is using France in British domestic politics. Where does Mr

Cameron go from here? I am baffled by the use of the word strategy. He

is wandering from one place to another. On paper, I don't think his

renegotiation is to do with financial services. I accept that

might be what it looks like. He probably would like to present

himself as the person who curtails free movement between different

countries, between Labour forces. That seems to be where he is coming

from, if only we could make sure that people couldn't move around,

the mobile poor is his big problem. I don't see what on earth he could

do about that, whether he renegotiate the treaty or not. His

main thing is to look like the person who is strong on that. Where

do we go from here? The mobility of workers in Europe, the president has

really pushed that issue in brush off because he wanted to renegotiate

a directive to put more control into companies that do not apply laws and

pay salaries of the country of origin, which is called social

dumping. It is paying somebody from Poland at the Polish rate here in

England. David Cameron opposed that. He didn't want it. He was one of the

leaders in that confrontation are posing that. He didn't want any more

control. I don't get it. It is paradoxical. As this year goes on in

the grand Coalition takes control in Berlin, with major social Democratic

influence, will is not become apparent that although there is a

general will in Europe to reform - there always is - it will become

clear there is no appetite among the leaders of the EU to give Mr Cameron

any kind of repatriation. It is looking like that. The other

problem, with the German government having changed, ministers here made

a big effort to get to see the guys in Germany and now they are dealing

with a whole different bunch of people with his priorities. They

don't yet understand what the Coalition partners are about on what

they are after. They are having to get to know these people ahead of

European elections which are going to be disastrous for the Tory party

and there will be more pressure on Cameron to do and say more about

what he wants back after that. There are not the Allies out there. There

are a few. The Germans will say to Britain, we will do what we can for

you but don't ask us to choose between you and Europe and don't ask

us to choose between you and the French, because you would like the

answers. How is the former first lady doing? It is a difficult one to

answer. You know that the split has been made official. Since then, the

president has been very neutral. I think he wants to protect himself.

He wants to protect his family. She has been to neutral. Is she going to

turn nasty? We don't to that. Her nickname is the Rottweiler. The

French are now keen on supporting her. She had an 89% disapproval

rating and now it has changed! TNI on it for us. -- keep an eye on it.

I know what you are thinking. What is happening with the EU bill?

Haven't heard about it for at least a week. The private members bill,

which is trying to put a referendum in 2017 into law, it is back in the

law survey, now at committee stage. It is the -- only being supported by

the Conservatives. Still paying attention? I hope so. This morning,

Michael Dobbs, the author and peer, he is the Bill's sponsor, aerated

the operation for holding it up. -- aerated. They take advice from

Strasberg and Japan and yet they are failing to convince anybody they are

keen to take the advice of the people. If we pursue these

amendments, my Lords, we are doing only one thing. We're turning around

to the people and saying that their voice, there will come in the

instruction, isn't enough. -- there will, then struck.

This is why we need a referendum, to cleanse the stables. We have been

joined by the Conservative peer, patients Wheatcroft. Is he ever

write? Is this bill a dead parrot? It is apparent that may be

resurrected. Why? It is a bill that the public want to see made law.

What has the public to do with it? The laws will do their best to get

it through. There is a lot of opposition, not just from Labour but

from our Lib Dem colleagues. It is not dead yet. Is it close to being

dead? Is it in intensive care? Yes, but miracles happen. We are not

writing off the bill. When was the last miracle? When the lid Dems do

as well as they did in the election. -- the Lib Dems. Last Friday, there

were lumber of amendments to the bill. Are the acceptable to your

fellow Conservative peers? We don't think we need those amendments. The

bill as it stands is quite straightforward. If anybody were to

ask you, should the UK be a member of the EU? You would understand what

the question meant. Is it not all a bit of a waste of about five Fridays

in a row? Shouldn't you be out in your country estates enjoying

yourselves? We know this is going nowhere. We know now that Francois

Hollande is not going to agree to any major treaty change. He may not

have a say in it. Probably will. He will be there until 2017. That is a

position at the moment. Things change. Now, the French have fixed

the terms for their president. He will be there. You'll agree his

position looks difficult at the moment, I would suggest. -- his

position looks difficult at the moment. It is true that the British

people do want a vote in the EU. At the moment they say they would

leave. If it would be the same after debate, that is another matter. This

parliament can't bind the next parliament. Even if they got the

next bill, it doesn't mean there will be a referendum. Are the wheels

coming off the whole Camerin strategy on your rug? This is the

less do something to get to summer ploy. -- let's do something. By

throwing his weight behind it and saying this is a good thing, it

means he doesn't have to come up with anything concrete about what he

would like to negotiate. He is not going to get away with that after 22

May. What about Labour? Will Ed Miliband maintain his anti-reverend

opposition? It is maddening. The amount of time we have spent talking

about it, we could have held the referendum and put it on YouTube.

The only intelligent thing about this is that... The only intelligent

thing about suggesting a referendum is that anybody who says no is

somebody who doesn't want to know what people think. That is not a

good look for anybody. Will Labour maintain its anti-referendum

position? I think they will maintain. If your question is,

should they? I wonder whether the smart money would be on having

courage and saying, we believe fervently in the EU but we are

prepared to make our case. Their courageous behaviour was to waive

the bill through in the Commons. Neither the Labour Party nor the Lib

Dems were able to oppose the bill there. They encouraged their members

in the Lords to struck it at every turn. That is not a very courageous

approach. Thing is, this is bicameral politics. You get perverse

result that nobody wanted because the only way people can

realistically postings is through the kind of back doors. The Lib Dems

are tabling amendments. They don't want to divide the whip but they

want to look at -- like they have made an amendment. The government is

pretty much of the view that what is happening in the Lords is not going

on against the wishes of Ed Miliband. The camera position is

that he hopes, contrary to what we have been saying, that he will get a

major repatriation of powers and that he will campaign to keep in

Europe on this new basis, which he has renegotiated. Does it not follow

that if he fails to get the repatriation come he still has to

have the referendum and he has a campaign against staying in the EU?

He has left that position open. Most people think he wants to stay in. He

has painted itself into a position where he may have to campaign for

out. I agree with Zoe about Ed Miliband. It is a test about whether

he things you can win the next election. At the moment he thinks he

is doing to be the next Prime Minister. The strongest line you

will have if this bill falls is that you will campaign, I presume, saying

Labour won't give you a referendum. Absolutely and we know the public

want a referendum. If the choice was between staying in, largely on the

existing status quo terms, or coming out... That won't be the question.

But it could be the choice. It won't be because David Cameron will

negotiate. What happens if he doesn't get much? I would be in

favour of staying in but in a more effective EU. We have already seen

they would Cameron get the first cut in the budget. There is scope for

change here. Last week, the comedian Rufus Hound

caused a bit of a stir when he announced his intention to stand as

a candidate in the European elections this May, for the National

Health Action Party. Mr Hound accused the Conservative Party of

wanting to sell off the health service to party donors. The NHAP

campaigns against what it says is the privatisation by stealth of the

NHS. The Government is upfront about wanting more private companies to be

involved in the NHS but says its reforms are designed to give health

professionals more control over budgets and improve services. Here's

how David Cameron described the reforms back in June 2011. The

fundamentals of our plans, more control to patients, more power to

doctors and nurses, less bureaucracy in the NHS, those fundamentals are

as strong today as they have ever been. He wanted us to make clear

that competition is not therefore its own sake but to make life better

for patients. Done! You wanted us to get specialists and nurses, not just

GPs to commissioning groups, done! You wanted us to join up the

different parts of the NHS, to put integration right at the heart of

reforms. Again, done! And we've been joined by Dr Louise Irvine, who is

standing in the euro elections in May for the National Health Action

Party. Welcome to the Daily Politics. Your campaign group says

that the Government is threatening free at the point of use health

care. Where? At the moment, we are hearing stories of services that

were once available on the NHS being rationed. Today there was an item in

the news about that. The health service is always rationed. That is

why there are queues. What was previously free and where are they

having to pay for them? People cannot get cataract operations. They

get one I'd done because that is what they need to see with. Many

health groups say people have to wait until they are extremely

disabled before they can get a hit or knee replacement. You are saying

we are having to pay. Give me an example of where patients are

painful care which they have revisited got free. We are

predicting the construction of a publicly funded health care service

will lead to people having to pay. People are taking our health

insurance to cover the possibility they will not be able to get the

kind of care they need. This is happening already. The health

insurance sector is desperate to get more customers. The way to do that

is to start to shrink down what the NHS provides. That is what we are

seeing. Private companies are providing health care and procedures

free at point of use. The private sector has always been involved in

the NHS. The private sector has always been used in a small way in

the NHS. Now it has a growing role. The private sector wants to cherry

pick the most profitable services and remove them but that will mean

they will be removed from NHS hospitals, which would destabilise

the financials of NHS hospitals. Also the cost of turning the NHS

into a market means at least ?10 billion, ?15 billion a year in

transaction costs. The costs of lawyers and accountants managing

that market. One study has been done by the Kings fund and it is quite

useful. It talks about providing services free at the of use. It says

they were no worse than the NHS and, in some cases, superior. We are

going to go from a publicly provided system to one which is fragmented.

Greater competition will undermine the collaboration and cooperation.

David Cameron said it is important to provide good health care. The

gains we have made in health care in the last ten years, in cancer care,

stroke care and heart care, have all increased no end. The independent

sector treatment programme was established. What was wrong with it?

Labour, I think, has lost its way. It has some very good policies but

it also brought in to much of the private sector. Independent

treatment centres where paid more per case. You are a GP, aren't you?

We are not a company. We are not driven by shareholders. You are not

employed by the NHS. This is a historical situation brought about

at the beginning. We are part of the NHS. Why can't we have services

provided on the same basis as you? GPs do not disappear when they can

no longer make a profit, unlike virgin and care UK or United health.

We are there for the long haul. Our patients can well see the difference

between a local GP and the big, private, profit driven corporations

which are circling the NHS to make profit at the People's illness.

There is a huge difference. It is interesting you're going to stand in

the European elections. Will it be quite tough, given that your

personal to do with the health service? They will all be arguing

about repatriation of powers and the euro and UKIP at all the rest of it.

How will you get the health service onto the agenda? There is one really

important aspect of Europe which people need to be aware of. That is

the EU-US trade agreement, which is currently being discussed. If the

NHS does not get an exemption from that agreement, it would make all

privatisation irreversible because it would be possible for foreign

corporations to sue the British Government no matter what decisions

they made, even with the democratic mandate. Also Europe does legislate

on many other health issues to do with health and public health. I'm

struck by the fact we're talking about structures within the NHS

rather than front-line patient care. The Government made a big mistake by

dimming its top reorganisation in terms of the public. -- doing its

top-down reorganisation. Jeremy Hunt has desperately tried to make it

about patients again. I am intrigued that someone is coming along and

talking about structures again. Can I raise the issue about private

companies. Companies are given 1.5 million in donations to the

Conservative Party. They have 70% of contracts. Have you got that figure?

Have you got the background... ? Lots of things are said by MPs that

are not true in Hansard. Have you got the detail of the 1.5 million

days I have been trying to get it? I think it was the European register

of contracts which were given out. They surveyed it all and added it

all up. That sounds true to me. Sounded true and being true are not

the same. I want to get the fact. Andy Burnham has made the point to

me and I want to get the facts to put the Secretary of State for

health when I interview him. That is why I am looking at it. Can I ask

you one final question? Your candidate in the European elections

said, David Cameron wants your kids to die, do you regret that? I do

not. I think David Cameron, as a man, does not want children to die.

As a Prime Minister in his political role he is presiding over a system

which will lead to deaths. The faculty in public health has said

that. He said, David Cameron once your kids to die. Wanting your kids

to die, was not a regretful thing to say? Is someone is driving a car

recklessly you say, do want to kill someone in this car? He is being

reckless. You think the Prime Minister is a killer. I do not think

he is a killer. It is a rhetorical statement. It is not about

structures, it is about patients. The money that has been taken out

into funding this big market has been taken from front-line care. We

have lost 6000 nurses, 8000 beds, A departments have been closed,

ambulance stations have been closed. It is affecting people 's health.

And we did ask for an interview with a health minister but none were

available. Over the past few months, we've been taking a look at some of

the political thinkers who have influenced British politics. We've

discussed Karl Marx, Tom Paine, John Stewart Mill and several others.

Today it's the turn of an Austrian economist born in 1899, the choice

of financial journalist Louise Cooper.

You know, I think it is fair to say that these days, most others have

enough trouble managing our own bank accounts let alone an economy. For

the people in this building, the Treasury, and those outside who are

economists, that is their job. I will meet a financial analyst and

blogger who you cannot use that job unless you have studied the work of

Frederick Hayek. Louise, nice to meet you. Nice to meet you as well.

We are in the Institute of economic affairs. We are sat at his kitchen

table, having a cup of tea. It is exciting to be here. I imagine he

would not have drank tea. Why do you like him so much? He was an Austrian

immigrant and his family suffered deprivation between the wars. He

took on Keynes full stop wealth, privilege, education, establishment,

Cambridge. This Austrian upstart took on Keynes. For that, he was

incredibly brave. When it became apparent the world fell in love with

Keynes, he stuck to what he really, really believed in. It was an

unpopular message but he kept saying it. For that, you have to admire

him. ) he starts his lecturing career and he is of a British

economic journey. -- he starts his lecturing career. So, we're in the

London School of economic old theatre where Frederich Hayek used

to lecture. It is astonishing they gave him a job. His earlier attempts

were turgid. Incomprehensible is also a good word. He had a strong

Austrian accent, he spoke in long sentences with lots of subclauses

and through triangular diagrams that few in the audience understood. I am

honoured to stand on this stage but his entry here was not great. Can

you explain what he is trying to tell us? He believed firmly in free

markets. He thought that economies were highly complex and therefore

government interference would always end up badly. In fact, when they did

interfere, and the outcome was worse than if they had done nothing at

all. Does he have anything at all to do with monetarism? Yellow matter

you can affect an economy by changing interest rates. The initial

work was done by Frederich Hayek. It was not for another 50 years that

someone really adopted him. We have come to what is now Europe

house in the heart of Westminster. Back in the days of Margaret

Thatcher, this was Conservative Central office. She is crucial to

Hayek's story. Absolutely. Hayek was ignored the decade. Everybody went

mad for Keynes. Then we had the economic crisis of the 1970s. Keynes

was maybe not such a great solution to the world's problems. What

Thatcher did was go back to Hayek, and in particular this book.

Apparently she came into this building, slammed it down on the

table in a very Thatcher way and said, this is what we believe!

Fabulous. It is all about rolling back the state, privatising

state-run businesses and introducing competition as much as possible.

Even Bill Clinton, a Democrat, famously said, this is the end of

big government. You don't get much more Hayek than that. So everybody

starts to study him. The real question is, is he relevant to

today? Doctor Elizabeth Fraser thinks that to answer that you need

to look at Hayek's view of politics versus economics. For Hayek,

politics is bad. Whether the we think of it as politicians doing

their best or as them being snakes, the him, both ways, politics is

bound up with coercion and it has always got that element of violence

in it. For Hayek, economics is the realm of freedom. Hayek died in

1992, never seeing the financial spectacular knock-down of 2008.

Having written the book on one economic theory, does he have

something to offer today? I have brought us back to the Treasury,

because it seems relevant to me that they are trained to lay up the mess

if they can. Does Hayek have anything to teach them? Without a

shadow of doubt. If you took Hayek to an extreme, most of the

government buildings behind us would be ripped down. I am not suggesting

that. None of them, none of the big economists, have all the answers.

They all have something well done to save. -- to say full stop what's

interesting in this case, in Britain we have chosen to cut spending and

impose austerity. That is wrote much of principle after Hayek. -- very

much. Many of his quotes 80 years ago, such as, if you want to avoid

the excesses of the business cycle, banks should keep a close check on

their lending. Oh, if only they had here in the UK! We would have saved

?80 billion of taxpayers' money. That is the reason you should all

vote for Hayek. That has told you! And Louise joins us now. I didn't

know he was standing for election. Is he in the European elections?

Doubt it. He's dead. I know. Am I right in thinking he was influenced

very much by the experience of Nazi Germany and the rise of Stalinist

Russia? Yes. He was, as all great men are, flawed. One of the things

he predicted was that the prediction of a more welfare state would create

dictatorships in Europe. That hasn't happened. His initial coming up

against Keynes was quite personal and vitriolic. The liberally sought

the job in the University of Arkansas to get the cheap divorce

from his first wife. He got things wrong. He must really wanted a

divorce if he was prepared to go to Arkansas. What is sad about that is

that the man who brought into the NFC didn't talk to him for 20 years

because he basically left his first wife and child for a cheap divorce.

He was deeply flawed but also to be brave in his view. He was ridiculed,

held in contempt, the decades. Everybody went crazy for Keynes and

hit back at Hayek. 1979 as seen as the end of the post-war Keynes

consensus. Since the crash, it has been tougher for the Hayek

followers. Some would say the reason the crash happened was because we

didn't go enough Hayekian. There were still some control over

interest rates. Extreme Hayekians would say you shouldn't have a Bank

of England or federal reserve. Isn't that like iron Rand? -- Ayn Rand? He

is not as extreme as some of his supporters. He did believe there is

some sort of level. It is the line, it is difficult. Where do you draw

the line between complete anarchy of free markets and where do you

believe in state planning? It is where you draw the line on that

spectrum, whether you are Keynes or Hayek. Nobody quite knows the

answer. If you look at the size of government, it has got artificially

high after the crash, a cyclical thing. Roughly, it is smaller

government at around 40%. France is the exception. It is 57%. Would he

have been happy with a government that was about two fifths of the

overall economy? I can't believe he would have been. But he did have

this concept that he believed that too much government involvement

would lead to dictatorships. That hasn't happened in Europe. He was

wrong on that. I don't think he believes the level now is right.

Some of his thinking was actually flawed. You have got to love a man

who comes up with a reason why you shouldn't buy way should be wary of

buying a second-hand car from a car salesman. He came up with that

original idea. I think we knew that already. He called it... Go on. The

economic term is asymmetry of information. Hayek was a

micro-economist. He looks at the individual decisions people make.

That is what he was into. That is where he got the sense of where the

economy was going. He said, when you buy a car, the seller has more

information than you do and that is why you should be wary. Asymmetry of

information. Before that, everybody thought it was fine. I've dabbled. I

think most people have Milly Dowler in his books. We micro most

Hayekians are on the side that -- I think most people have dabbled in

his books. I think most Hayekians are on that side. He gets a lot of

that logic from people who are in favour of propping up the banking

system, which is really weird. It is easy to write an academic book

saying, you shouldn't save the banks. It could have been anarchy

not to. That is politics. The interesting thing is, this guy is

still a rock star in the Tory party. Among the new intake... Do you think

Mr Cameron has read Hayek? I think it is unlikely. Too busy playing

Angry... Birds, with the NSA looking in. Here is that we give 62

seconds. If some parts of the country have

been under will the weather, other parts have been underwater. The Lib

Dems try to exit the eye of the Lord Rennard storm by choosing a new

deputy leader. Not one of their seven Baroness is sore the light of

day. -- Baroness is. Ed Balls permit Labour would bring back the 50p tax

rate. David Cameron said his government were the real Robin

Hoods. I want the richest to play more tax. -- pay more tax. Mark

Carney tossed his cave into the Scottish independence debate. A

durable currency union requires some seeding of national sovereignty. The

Immigration Bill was back on the borders. Conservative rebels pushed

or even tighter laws to deport foreign criminals. But their

amendment was sent back where it came from.

Danny Alexander is doing the rounds, saying, oh, Labour, they

would borrow much more. That is true. But we don't know by how much

they will spend on capital spending. It has just been made up. The

interesting thing is the weight Danny Alexander has gone about

trying to put a figure on it is by protecting government spending for

two more years. The Lib Dems are not signed up to do that, by the way. It

is interesting that Danny Alexander is making this case. One part of the

Lib Dems want to go with Labour on the economy, and the other doesn't

want to do that all -- at all. He has also said he would bring down

the national debt. If he is going to balance the current budget, but

spend a deficit on the capital, in the national debt will continue to

rise. It will continue to rise as it has for the whole of this

government. The projections are 0.7%. Nobody can say they were

earth-shattering. I am disappointed by how much they are not

earth-shattering. Danny Alexander reminds me of somebody who is

playing world of war craft and he has found some tiny technical thing

and he is really excited about it and he has lost the crowd. It is

certainly the Tory narrative that the recovery is underway, growth is

back. If you had it back to Labour, they will just spend, spend, spend

again. What does the public take away from this? Ed Balls has tried

to do two things, to say, I'm going to be responsible on spending and I

am going to put the 50p rate back. The public body takes away from this

sum doubts over whether Labour will be responsible, which means job done

for the Tories and Lib Dems. The interesting thing is the flagship

measures they take on whether it is the 50p rate or bedroom tax, those

are the smallest amount of money you can conceive of government. 100

million quid on one side. They are irrelevant to deficit reduction.

They sell themselves on these policies which make no difference to

the comic reality of the country. The reason polls are shown as

narrowing... Do the Tories expect, not hope, do they expect the polls

to narrow as the recovery gathers pace? I think they do. People are

realising that the cost of living thing is working for them. It will

only work if they all stay skint in the country. A member of Yougov says

there is a new incumbency factor for MPs. OK, we shall see.

There's just time before we go to find out the answer to our quiz. The

question was: Shadow Home Secretary Yvette Cooper has told a magazine

she has to shout at her husband, Shadow Chancellor Ed Balls, as they

get their children ready for school in the morning. But what's the

reason? I think it is playing the piano. It is playing the piano.

Interestingly, Yvette is better than Ed on the piano. You heard it here

first. That's all for today. Thanks to Tim

Shipman, Zoe Williams and all my guests today. I'll be back on BBC

One on Sunday from 11 with the Sunday Politics. Do join me then.

Bye bye.