17/03/2014 Daily Politics

Afternoon, folks. Welcome to the Daily Politics.

The new boss of High Speed two says he wants a more ambitious scheme,

with work on the project accelerated, so the north of England

can feel the economic benefits sooner.

Labour look as if they're backing the project, but are calling for

more savings to be made to the ?50 billion scheme.

I've taken over Jo Coburg's big board today. I'm not trying to take

her job. Just explaining how the government's creating lots of them.

European Union foreign ministers are meeting today, to decide what kinds

of sanctions to impose on Russia, in the way of Crimea's overwhelming

decision to break away from Ukraine. And, is this man worth ?300,000 a

week? Ed Balls thinks so. But, do you?

All that in the next hour. And, with us for the first half of the

programme today is the Mayor of Liverpool, Joe Anderson. Welcome.

Now, first today, let's talk about Liverpool because, when Joe was last

on the programme in November, he was telling us how he was trying to

engage the public in how to cut the council's budget. Joe has to make

?156 million worth of savings, over three years. Joe launched an APP,

asking Liverpudlians where they would like the cuts made. -- an app.

So, how did it go? Yes, we have had a lot of people

interested, probably about 8000 people participating, a good return.

Only about 80 people completed it, some give up half way. It was a

useful means. When you say useful, how is it proving to be useful? 80

people completed the task. How many came up with the requisite amount of

cuts? More important was getting people

used to the fact we have to make these cuts. We did get some useful

comments about how to do things differently. But, really emotional,

not anywhere where we need. But it was useful to engage people. To get

their ideas. But as important, to let them know the challenges. They

know how hard it is to make those sorts of cuts. But does it have any

impact on your decision making, if the idea was to make those sorts of

cuts. But does it have any impact on your decision-making, if the idea

was abused to ask them for solutions? In fairness, most were

emotional, they didn't make any revealing changes. We got a lot of

credit for doing it. A lot of plaudits for making that information

available. Prioritising children's spending, but your budget is cutting

61% of its budget, so this was a central issue. People participating

took a large chunk out of adult's care. They did actually take large

chunks out of them. You didn't agree with that? We did to an extent, we

have had to take 25% out of those services, our mandatory services.

Which you have to provide. We have taken 50% out of our discretionary

services, libraries... In fairness, the vast majority of people who

participated didn't want any cuts at all. Do you think the findings say

more about perceptions as to how and where counsel spends money, and what

they want is it not spent on your wages and staff, or corporate

services? We put -- we do people a disservice, people do understand the

challenges we face. We have also explained only ?180 million out of

the ?1.2 billion we spend comes from council tax. People understand 76%

of the money we spend comes from central government grants. If they

take 51% of that away, they know our challenge is how to manage that

budget. They are not stupid. People are quite wise and understanding, if

you provide that information. Have you cut as much as you can from

staff cuts Gracnar costs, so you could use those wages to put into

other things? Last year, we took 176, ?176 million. The next three

years, it will be ?153 million. A 58% cut. We have lost 1600 jobs. We

will be reducing libraries are 50%. Leisure centres closing. Reducing

children's centres, youth services, voluntary sector services cuts,

violence, teenage pregnancy. This is a result of the government reduction

in grant given to us. What about you generating more income? We are doing

that, investing in working with the private sector. We have spent ?60

million, borrowing money, to invest, because we get cheaper rates, to

build a new convention centre, to support our exhibition Centre and

our arena. 300 jobs are being created. We are using investment to

help sustain the city. Would you do the simulator again? We would, it is

important to keep that contact with the public.

Now it's time for our daily quiz. As Joe well knows, Liverpool was the

European City of Culture in 2008, and holds the Guinness Book of

Records title for being the Capital of Pop Music. But which of these

musical acts is not from Liverpool? Atomic Kitten.

Elbow. Cast.

Gerry and the Pacemakers? A little later, Joe will hopefully

give us the correct answer! Now to the second of our Celebrity

Big Boards. I use that term loosely. Last week, Liberal Democrat MP Tim

Farron told us about his party's plans to raise the personal tax

allowance. Well, today it's the turn of Conservative Party chairman Grant

Shapps, who has this message on jobs.

Ed Miliband and the Labour Party have tried to attack the long-term

economic plan by claiming it would lead to the disappearance of a

million jobs. But it is wrong. By backing small business and reducing

taxes, this government has helped our economy to create more jobs than

before. There are now a record-breaking 30 million people

working in Britain. More women than ever in work. Recovery is helping

more regions in the UK with new jobs bringing up. The majority of these

jobs are full-time. In the last year, nine out of ten have gone to

British citizens. This is what the budget on Wednesday will be all

about, cementing in the recovery. Sticking with the long-term economic

plan, and making sure the whole country feels the benefit. 25

million hardworking people will get a tax cut next month, and the

minimum wage will rise to ?6.50 later this year.

How did I do? Brilliant performance, Grant. Come and sit down.

You say that it million people are working in Britain. How many of the

jobs being created under your time... Well done! How many of those

jobs are part-time? Can we still not hear you, back with you in a moment.

The government says it is creating jobs for the whole country, is that

true in Liverpool? That is not true, 8% of the jobs are being created in

the south. I do not buy into that. -- 80%. We have lost 1600 jobs in

the public sector. But we are creating jobs. 1200 jobs recently

announced. A lot of that is round things we are doing. The government

has negotiated with us. We wish we had more opportunity. It is not as

simple, that government is creating these jobs. There are things that

are good which the government is doing but we need more. Governments

do not create jobs. You may argue those jobs have been created because

of government policy. Specifically at the jobs which have been

created, 1600 jobs lost in the public sector. We hear from you how

that has been made up in the private sector, but not in the North West.

You asked and the jobs are full-time? The answer is three

quarters since 2010. Nine out of ten have gone to British people. It is

the case that fresh implement has been created everywhere. It is a

contrast from what was predicted. We have worked together on all sorts of

things. It is the case that Liverpool has got the city deal

undergoing a big regeneration. The fact people are in jobs means that

is security for people and their families. The opposite to what was

predicted by the Labour Party. For every public sector job loss, three

times as many private ones have been created. But is it even? In the

North West, and in London, there is a two tiered jobs scene. In the

North West, up by 20 4000, 200 and 3000 in the East. Nothing is

happening in the same way. Price Waterhouse says their busiest

officers are in the Midlands and the North where there is more activity.

There is a lot of activity up there, and you are seeing more people, a

net increase. The fact there are more people in work means your city

has the chance to regenerate. And a government prepared to work on

things like the city deal giving proper choice over how money is

spent locally. That helps people locally. Is that your experience?

Have you got the power? You say you don't have as much power as you

would like to spend the money? City deal was a Labour concept, by the

way. But, I am glad, the reality is I am glad the Conservative Party is

working with cities like Liverpool. In reality, it is a small fraction

of what is needed. 95 -- 95% of tax, car tax, VAT, and so on, what

we argued for is more than that. If you look at European cities, that is

the case. We could do so much more if we were given the opportunities

to do it. Why did you let people in Liverpool... You are all about

decentralising, supposedly, but you were let somebody who knows best how

to run his city, he would argue, let him do it? We have the city deal.

You have said that. With business rate attention, half of business

rates stay locally. We have a lot more apprenticeships, doubled the

numbers. More people in work. Of course not everything is perfect. We

are working in the right direction. The long-term economic plan is

working to give families security that they never would have had. What

about part-time workers? Lots of polls show that people want to work

more hours. It is very insecure, in fact. Again, we want to work with

the government to reduce a welfare to work programme. Discussing with

Whitehall how to do that. Zero hours contracts and part-time work is not

secure. The Prime Minister said a question

Time last week, he compared with the inn is own constituency, compared to

Liverpool. Liverpool has council tax income that equates to ?180 million

a year. West Oxfordshire Council, 135 will impound more a year in

council tax they get the mass. Just let me finish the point. It is

ignorant of senior politicians to say Liverpool get equal the same

amount as West Oxfordshire. We don't. We would have 135... Let him

answer. What Liverpool does get is a lot more money per head of

population given to it through central Government than an area like

West Oxfordshire. There's a lot of agreement between us, you might be

surprised to hear this, and with the zero hour contracts, it is

unforgivable exclude people from taking on other jobs. On one hand,

people are being told you must not get any work this week, but you

can't work anybody else. That's completely wrong and we will do that

abuse. There has not been an increase in zero our contracts from

the previous administration. Let me just return, he batted out into the

long grass. The ?135 million West Oxfordshire is better off than

Liverpool, because they have the highest level of council tax paid to

them because they have quite well off people living in higher band

properties in Liverpool. 17 times more people in band F paid council

tax than in Liverpool. We have 17 times more... You have made that

point and then we must move on. Let's be clear. The fact of the

matter is, in the areas which get the least support from Government,

public areas like West Oxfordshire, they may get ?250 support a year,

but areas like yours public in ?1000 per head. And going to leave that

there. Very briefly, before we move on, why is productivity so low? We

have seen an interesting recovery to the recession. Unemployment went as

high as it went. The question is about productivity. We've ended up

with more people in work. What has happened in that process, people

have been prepared to accept a job, maybe over time, it had some

surprising impact on productivity full for the good news is, a lot

more people are in work, but you are absolutely right, we need to make

sure long-term productivity is high to secure the future of the country.

The economic indicators are not great. How much spare capacity is

left in the economy? One thing I can say... Does it worry you you have a

bigger structural deficit? There are figures coming out today in terms of

the production of the economy, things like supplies indexes, more

positive economic news today is I think the economy is recovering. I

don't think we are there yet. That's why we want to make sure... But

trade figures were terrible, weren't they? We have cut the deficit,

created jobs, let's give the keys back to the people who crashed the

car in the first place. But that doesn't say what you're going to do.

You are here a lot more this week. I understand that. We will hear more

about it on Wednesday. Now, High Speed Two has a new boss. He's

called Sir David Higgins and he's been doing a round of media

interviews this morning. Sir David, who previously ran the Olympic

Delivery Authority, wants HS2 to go further in its first phase and he

wants the job done more quickly so that the economic benefits are felt

sooner in the North of England. Here's what he had to say a little

earlier on BBC Breakfast. The most important thing I've done is look at

the first phase, that's London to Birmingham, and extensively review

that cost and then look at scope. Really important to get scope right.

All my experience on major projects, if you do that properly, so the

decision on the High Speed One link, on Euston, doing it properly, and

then potentially getting that kick-start of going to Crewe six

years earlier, that's all a case of saving money by getting scope right

at the start. How much will be saved? Well, the contingency is ?7.4

billion in Phase one which is a lot of money. It might sound a lot of

money but you can spend that if you waste it, so time is money. We could

lose time in the legislative programme. We don't know the full

extent of when that will be finished but that could also cost money. And

with us now is the Conservative MP and former Cabinet Minister, Cheryl

Gillan. She is opposed to HS2. We're also joined by Labour's Shadow

Transport Secretary Mary Creagh. And Grant Shapps is still here. Let's

come back to you, he wants to speed up the HS2 product so the benefits

will be felt in the North of England more quickly. Is he right? I think

so. People like, who was fought vigorously and got a good deal for

her constituencies, like Cheryl Cole we need to decide is the future

bright and head of us and we don't allow our children to benefit from

it? We haven't built the railway line since the Victorian era. I

think doing it faster is a good idea. You have lost this battle,

because now we have labour sounding more positive about it than they

were. The Government is pushing this for the you're not going to get your

way. No, I think if we had a budget stimulator as they have in

Liverpool, I think people would vote against HS2. I don't think there is

universal support for this project at all. What is interesting today,

after four years, two governments and four transport secretaries, we

still haven't got the answer. David Higgins is just come in with eight

weeks of studying this project and decided that he has got the golden

answers. I think this project has been doomed from the start. I think

it has been run badly, and I think now we are touching -- clutching at

straws. The price will go up and up. We don't know that. That is your

prediction. You could start to the West Coast and east coast when they

were built. Is that Labour's fault? Ed Balls, when he said we're not

going to hand over a blank cheque, he seemed to beat rowing back from

Labour's can image to the project which led to the uncertainty which

David Higgins said will ultimately lead to higher costs. I think the

delay has been caused by this Parliament. Channel messed -- Cheryl

mentioned the four transport secretaries. They published some of

the assessment strongly, which led to a delay. What we have seen today,

it's a very positive report, a thorough report, and Sir David talks

about the environmental and emotional and financial impacts of

HS2 and it's important we remember that, but it's also important, we

have built Crossrail, a Labour Government. That took forever. East

West London, North London, a ?6 billion upgrade. ?6 million spent a

dreading. We've not had anything north of Watford. OK for them is

Labour behind it fully? No more criticising? You ask really behind

this deal? We will vote in favour of this. We will keep an eye on it to

make sure the costs are kept low, and we link it with a connectivity

in the North, looking at Liverpool, Manchester, Leeds, Hull. And looking

at how to maximise the benefits of that phase two links. How fed up

where Labour leaders in the North when they heard Ed Balls saying,

actually we have got doubts about this? I think he was right to say

there is no blank cheque. But, for me, there has to be a genuine

enthusiasm for this. Politicians of both sides, progressive politicians,

who talk about the need to rebalance the economy, let's remember that

phrase, it's not just rhetoric full we have to do something about it for

the one way to do that is by making sure cities in the north are

connected to each other and to the south. In Liverpool, we are

investing ?150 million in a super port, where we will bring in lots of

freight from the Middle East, and we need to get it out, so it's

important to connect Liverpool the east coast of the country. I agree

with that. We do that. I agree with that entirely. He came to see me a

few weeks ago, David Higgins, and said, why don't you start this in

the North? If you're going to rebalance the economy north-south,

and I'm sure Mary and Grant Wood group this if you would listen, you

should start this in the North and get connectivity across the

Pennines. You would reduce the likelihood that the economy being

sucked down into London, by this Birmingham London face. You would

wait for the Howard Davies review to see with the airport capacity is

going to be in the south, and get that connectivity that Sir David is

waiting for. Why can't you build north to south and son of South to

North? He said the city of crew should be built first and I think

that's a good idea. I do just want to say, I'm very grateful because

there was a time at the conference, Mary was a difficult position when

Ed Balls turning against it, and Joe and his Labour colleagues came down

from many different cities and made it clear this is not acceptable.

High-speed rail is required and can only be done with cross-party

agreement and I think the cross-party spirit that council

leaders showed is very important. You have got the agreement but is it

going to be passed before the next election? I think the bill continues

through. So there is delay, isn't there? We are practically in the

fifth year of this Government and that still waiting for the bill, a

proper process. Just to be clear, it would be easier... They can petition

Parliament and have their say for the committee of MPs can look at

those petitions and I think that's right that due process is followed

but I want to correct something. The Government statement has just come

out and they have just said any extension or fast building to Crewe

would be phased two. This is a risk you introduced by dropping it in

half. By dropping it in half. Only console taking on half the project

you have built a delay into this project. Let a grant answer. Just

very quickly. During the parliament we have enabling legislation. The

biggest thing is to be absolutely clear from the north side Labour is

fully behind it. We have said that. And Ed Balls no longer going to

block this project. In terms of a delay, what does that mean to you?

Let me just say, the enabling legislation was a little cover a

bill to make sure the Government had some coverage for the money was

spending. The hybrid Bill and Parliamentary process is really

important and, to get the process up to Crewe you have to have an

environmental statement and if you wanted to do it in this bill, it

would be wrong, so what the Government ought to do, if they're

going to listen to David Higgins, they should suspend the bill, look

at including Crewe or started in the north and think carefully about how

it's going to connect down. Some politics is getting played here. On

the finance issue, it's going to cost over 35 years, just roughly

over ?1 billion a year. The UK has to invest in infrastructure in

transport like other cities around the world. It's coming online in

2033. My point is, what the report says today, we have got to get on

with it, starting the North, that's what I'm interested in. That's what

Northern leaders are interested in. And that's what we hope both parties

can agree before now and the general election that they are committed to

this and it will happen. Let's say ?50 billion, if it goes beyond that,

what will you do? We are confident, we have delivered an Olympics, an

enormous project on time, Crossrail coming through on time into budget,

there's no reason, this country is very capable of delivering projects

on time, to budget, and a bit ahead of budget full we have to make

decisions. Do we think our brighter future is in the future or do we

think it's basically all over and were no longer going to build

infrastructure? In the last 15 years alone, we've had twice as many

journeys going on. Let's look at that. We need to build some

railways. The capacity problem will not go away and will only get worse

particularly if this is not built. And particularly for voters in the

south-east, he's busy concerned about, they will not understand how

the transport priority is to spend ?50 billion on something which is

going to ease some of the commuter congestion coming into Euston,

because that is, in fact, one of the least congested lines coming into

London. Commuters in the south-east, if you're going to free up the

economy and put investment into infrastructure, they should look at

the lines I come in from the south of the country. They are a major

problem for people. And we're going to be left, the Labour Party is in

pole position to play politics with this project in the run-up to the

election and then they can deliver for the North and leave us dangling

in the South. That may happen. It's worth remembering, although this is

a big investment, three times as much will be spent on rail in the

next Parliament as on High Speed two, so there's still lots of

investment. OK let's leave it there. Now we're going to find out the

answer to the quiz. Can you render which one is not from Liverpool?

Elbow. I think they are from Manchester. They are. Thank you very

much to the guests. Well done. Now, let's take a look at the coming

Westminster week. We kick off the week with a reception in Number Ten.

The PM is hosting one for Sports Relief Fundraisers. On Tuesday don't

forget to set a reminder in your diaries. It marks six months exactly

to the Scottish Referendum. Then, get ready for the fiscal event of

the year. That's right, folks, it's The Budget. Will the Chancellor be

pulling rabbits out of the hat? The Public Accounts Select Committee

holds a session on Personal Independence Payments on Thursday

And on Friday, it's day one of the Scottish Labour Party conference in

Perth. Joining me now to discuss the week

is Rafael Behr of the New Statesman. And Isabel Hardman of the Spectator.

It is a great Westminster set piece. Ultimately, George Osborne has a

dilemma, there is a much money, he needs people still do think there is

more work to be done, we can't trust the Labour Party. It is a year

before the election so he wouldn't mind people thinking things are

going well and there may be some treats for him. He has two navigate

that path. Labour, their dilemma is they don't want to look as if they

wish things were worse. If they can see the economy is picking up, then

why would you have a Labour government? The issue on raising the

40% tax rate. There is some momentum. George Osborne has

indicated it is an aspiration to be in that tax bracket. He was trying

to say people are more likely to see the case for smaller government

wants they understand a higher tax rate -- the case for a lower tax

government. He believes the low paid Nimes -- need more help. If more

people are paying in that 40p tax bracket than before? It is important

for them to support their core constituency, every party has two.

In of terms the way wealth and reward are distributed, the core

constituency isn't big enough to deliver a Conservative majority. He

has two reach out to those people whose pockets RMT. They are

sensitive to the charge that the Tories look after their rich friends

-- whose pockets are empty. So we have seen the campaign on the bingo

tax is perfect for a good front page of the Sun newspaper.

On the issue of leadership and replacing David Cameron after the

election, is there a campaign to stop Boris being his successor?

There is a very strange campaign. There is a leadership contest.

People are working themselves up into a state. Boris was gaining more

traction with Conservative MPs. George Osborne's group worked harder

so Boris panicked, sending agents to arrange meetings with them. They are

setting a bad example to backbenchers who are obsessed with

this anyway. To see people at the top becoming delirious with the idea

of a leadership contest. Some Conservative MPs without a high

profile want to get on with their job, and they are astonished. When

people are at the heart of it seemed to be abetting this process, they

are tearing their hair out. Labour love this. It means the conserved --

it means the conversation has been diverted.

Let us turn to Ukraine, is there anything realistically that can be

done by the EU before the Crimea is pulled back into Russia?

Are the sanctions that the EU is working on, are they enough to

challenge Putin, or are they a token? And are we doing it at a cost

to ourselves. Many of those sanctions, these restrictions, asset

freezing, one of those will have any impact? At some level, there will be

some bone fide catalysts in Moscow who don't like this. Russian foreign

policy has said at a strategic level, talking about annexing a

territory of another country. If you go into that kind of business in

foreign policy, you would sweat over Visa restrictions. You have taken a

catfish Western countries are more interested in the supply of energy

-- give have taken a strategy that. So far, it looks like it is coming

off. You suspect he will get to keep Crimea, and redraw the boundaries.

There will be hand ringing in the West but not much more than that.

And we're joined now for the rest of the programme by the Conservative MP

Jesse Norman. The Labour MP Catherine McKinnell. And by the

Liberal Democrat MP Nick Harvey. Welcome to you all.

Now, let's kick off with the Budget. But first, here's George Osborne on

the Andrew Marr Show yesterday. I am in no tax Conservative, I want

our working people on all of these incomes to keep more of their income

tax-free. You can only begin to do something like this if you have got

a grip on public finances, if your economy is growing, if you are

creating jobs. This is because we have been able to do these things

that we can afford this increase. Why is he doing more to help people

who have either slipped into the 40% tax bracket? It is misconceived.

Most people have done better in the past few years. It is right for the

Chancellor to focus on the area where most attention is needed, the

well-being of the least well off. Why is there a campaign from the

likes of prominent peers and backbenchers? Is it they don't

understand the message that people are better off? Or do they feel

there is a narrative going awry for the Conservatives? What is happening

is that they want future clarity to be brought to this issue as with

national insurance, personal allowance. A direction of travel as

regards thresholds or marginal tax rates. The key point is we are

broke. It is easy to think because mortgage rates have stayed no,

economic problems have been sold. We are rashly halfway through the

process. The idea we can write large cheques. All raising thresholds. It

looks as if the threshold will go up a little but not as much as

inflation. Those people are already doing incredibly well through the

personal allowance. It would be another seven years of austerity,

and probably beyond. I do not think voters are ready for this. Whoever

wins the election, the reality is there is an awful long way to go to

get the deficit under control. Even then, there is the hangover, we will

have debts to pay off from the years of deficit. Although the economy is

improving, it will be quite a challenge for the next government to

explain why austerity will have two continue. It was easy to explain

that while the economy was on the floor. As it picks up, it will be a

subtle argument as to why austerity will continue for more. Do you agree

another ?12 billion of cuts to welfare will also be necessary? No,

that is one where you could do it but not one I would choose. You

could look at taxes across the board. And hope the economy will

approve -- improve. Do you accept austerity stays, the Chancellor has

followed the right path. We have had growth returning, and the

indicators, some of them are pretty good? He is following the right

approach. We have had three years of a flat-lining economy which has set

the country back. The people paying the price that are ordinary people

who are working and are still not able to make meet. The choice --

childcare costs have gone up 30%. People are struggling with energy

bills. It sounds complacent to talk about this being something people

have to accept and live with, when this is an opportunity for George

Osborne to do something about it. To help those people. What would Labour

do at this point? We would introduce the 10p starting rate of tax, so

when people come into the tax system, it intensifies as them to

increase their income. And raising the threshold? We are not disputing

that. This is an additional measure. We have said it would be

funded with a tax on mansions. We wouldn't bring in this antiquated

marriage tax which will benefit 84% of men and only a third of actual

married couples? -- married couples. It shows the argument is not

working. More is being done to people on low incomes than any

government. The tax-exempt personal allowance will go up to ?10,000. 2.7

million people will not pay tax at all after April, 25 million will

have received a tax benefit. I can't see why that could be an

objectionable policy. And the people above that? Arguably people have

been helped at that level. People just above that are being hit by the

cost of living issues. They say they are eating into wedges which haven't

kept up. What about them? Those people are included in the 24

million. The thing is, if you hadn't had the combination of policies at

the moment, if taxation had gone up with inflation, those above the 40%

rate would be giving -- would be receiving twice the amount. It is

fairer to do it this way. If things are as bad, why is consumer spending

on its way up? Responding to that, speaking of fair, this government

brought down the 50p tax rate, giving a ?3 billion tax cut to the

highest earning people in the country. Explain my consumer

spending is up? If we have got less money and there is a cost of living

crisis. The economy is starting to recover, we are seeing those signs.

It doesn't mean ordinary people are feeling better off. Why are they

spending more money? From a clear poll this weekend showing it doesn't

matter how great times George Osmond says this, people are not better

off. And in your constituency? People are beginning to get the

benefit of a couple of years of wages going up slightly. Certainly

that. Combine that with the income tax-free threshold which has been a

tax cut for 24 million people, taking 2.7 million out of tax

altogether. All of that has given people a little bit of breathing

space. But everybody is still finding it difficult and will for

some time. Isn't the worry that what is happening is a return to a

recovery led by that consumer spending, trade figures were pretty

bad. House prices are going up in central London and outer areas, not

elsewhere. We are returning to the very conditions that led us into the

problems we had in 2008? You want a balanced recovery across all parts.

We're not getting it. Not yet because there is a lag in industrial

investment and overseas sales. The difficulty is, who would not want to

have some form of growth, and in the High Street it is a valuable

contributor to this. The difficulty is, reports that the Financial Times

think there is little spare capacity, means we could be left

with a bigger structural deficit, even if growth continues, which will

put plans to ruin. The truth of the matter, it's really

contested of theory. It is being run in the past. I don't think there's

any reason to suggest it will be wrong in the future. -- it has been

wrong in the past. Where will the Lib Dem fingerprints be on this

budget? We are keen to continue the flagship Lib Dem policy from 2010,

pushing up the threshold. We are confident we'll get up to 10,000 we

started out making our objective but by the end of Parliament, we want to

get up to 10,500. Let's leave it there. Ministers from across the

European Union are expected to agree further sanctions against Russia,

after a referendum in Crimea backed a split from Ukraine. 97% of voters

in the region where pro-Russian forces are in control are said to

have supported joining Russia. But the referendum is being condemned as

illegal by the Government in Kiev, as well as by the EU and the US.

Here's the Foreign Secretary, William Hague, speaking a little

earlier today. What to look to Russia to do is to enter into a

diplomatic process and framework that brings Russians, the Russian

leaders, into direct contact and negotiation with Ukrainian leaders.

That is what we have been pressing for over the last two weeks. It can

be provided through an international contact or co-ordination group,

supported by many other countries. We are all ready to do that. And, of

course, they need to take their own steps to de-escalate the situation

that Russia's actions, including proceeding with the referendum

yesterday, other acts of provocation, the presence on the

border of large numbers of Russian troops, they haven't done anything

to de-escalate so far. It looks as if Crimea will be reabsorbed into

Russia before the EU has time to agree on sanctions. Yes, it probably

does, and, Vladimir Putin, having gone out on a limb this far now, I

don't think any sanctions taken by the EU or anybody else is going to

change his mind. However, I think it's worth the EU and the Americans

and the international community dressing ahead with some sanctions

in order, please, to get him to stop Crimea and not encroach into

mainland Ukraine. Is that your fear, it won't stop Crimea? If you look at

the whole way he set it up on the pretext it's to defend Russian

speakers inside Ukraine, you look at the exclusion zone, and wonder

whether he will go further in? I desperately hope he won't. He

certainly made a point and served himself well doing this, but there

is a clear danger of going further, and therefore, it's worthwhile

taking some action to prevent that. Although, it looks as if it will

have little impact, these restrictions, travel bans, freezing

certain people 's assets. Would Labour go for economic sanctions?

Well, we have said this can't go unpunished, ignored. Everyone agrees

with that. Russia are a hugely fast-growing economy, but part of an

international economic community, and they sit in the G8, and Douglas

Alexander says we should push them to exclude them from that group.

That is unlikely to have much impact. Economic sanctions as well.

What economic sanctions? To make them understand the consequences.

Which ones? The Foreign Minister is today are discussing the Visa

restrictions, and travel restrictions and freezing assets. I

think those, in themselves, will have an impact economically on the

people impacted, but ultimately, I think they are discussing it today

and it's important we don't turn a blind eye. I don't think there will

be a turn a blind eye situation, not the dramatically, at William Hague

has said we will continue efforts to make a diplomatic breakthrough. What

does that mean? We're not to reverse what happened in Crimea. They're not

going to do the referendum again, are they? No, but there could

potentially be a coming together and a conference which allows a better

understanding of both sides and their positions, and it could lead

to some benefits. Let's be clear, there's not a lot of options on the

table. One option slightly underestimated, it's easy to think

travel Visa restrictions are inconvenient, but that large numbers

of senior Russian oligarchs who live in this country, who have assets,

and asset freezes, the impact of foreign exchange markets... That

would have an impact, of course. The price of the ruble dropping, but

it's recovered. It wouldn't be a result of what the EU might do. What

will it fundamentally change about what has happened critic Mark Crimea

is common to all intents and purposes, going to be part of

Russia. --? The question at this point is to arrest that situation

and see if some more lawful arrangement can be brought to the

situation of the Ukraine and, therefore, and they should be

allowed to develop. What about Ukraine's response? I've interviewed

the ambassador and a diplomat in London, and wasn't going to give

away any trade secrets, but the indication is, publicly, they will

never accept Crimea going back to Russia. Ukraine, building up its

military in the east part of the country, they say it's up to

readiness, soon, so how worried are you there may take some military

action? I believe don't think they will. I have seen the interim Prime

Minister speaking in the media about this. I think he realises the scale

of what he is tangling with. It's highly unlikely that they will do

that. I suppose you can't rule it out entirely. I don't think they

will accept in principle Crimea going to Russia, but in practice,

it's difficult to stop it. What the Russians care about their naval

bases. This is their attitude towards Syria, the only

Mediterranean base. The critical thing for them is Sevastopol, which

has governed the Russian action. They're not going to take notice of

sanctions we are talking about, but actually, they might do if the whole

international community got together to stop them going further because I

haven't fully got the same strategic interest going further that they had

in securing this naval base. Do you think there should be an acceptance

that Britain's role and influence in the world has changed and is

diminishing in terms of what it can do to affect these things? Perhaps

not helped by the vote on a motion in Syria? I think it's very

important that Britain continues to play a role, as we have been doing

in speaking up on behalf of the rule of law, the international dialogue.

That's not the question I asked. Do you think the votes, like the one

about Syria, but Labour post, do you think that diminishes people 's view

of Britain as a foreign power or not? I am answering the question

because we have a very important diplomatic role to play. And I think

we are playing that in these circumstances, and giving an

important voice to the international rule of law and the economic and

political consequences that may flow from an abuse of that. I think

Britain needs to stand shoulder to shoulder with our international

allies in order to give a very strong unified voice that says we

won't stand by and allow this to go and responded to, and allow Ukraine

to be alone in this issue. And I think we play an important role

within the G8, and within the UN Security Council, so I think, you

know, the stereo vote was a different matter, a particular

circumstance, -- Syria vote, and that was a particular conflict which

was very difficult. This is a different circumstance. And again,

one Britain plays an important tip article role at present in, and it

will continue. OK, let's leave it you. Is anyone worth ?300,000 a

week? Well, according to Shadow Chancellor Ed Balls, footballers

like Wayne Rooney might be, but the same can't be said for bankers.

Here's a bit of what he had to say on Pienaar's Politics yesterday. I

guess there's only one Wayne Rooney and he plays for Manchester United

and he could go anywhere in the world and maybe that is genuine

talent getting paid. And somebody who has a great idea like Steve Jobs

and invents an iPhone, and they get sold all around the world, in the

end we can't say we'll cut you off at some point. On the other hand,

we've got all these bankers, and here Vince is right, bankers all

getting paid... The guy from the Co-op before he stood down, ?3.5

million salary. When they get asked, why do you get paid millions of

pounds, they say because anybody else does and therefore, we have to

too. Maybe people should say let's stop this merry-go-round going round

and get back to a bit of rationality. That is Ed Balls

talking about a move. Is he worth ?3000 a week? I don't have a view on

that. He operates in a competitive market and there are many people

operating in the financial sector who don't. My only desire on this

would be that the premiership, the FA and the players, did more for

non-league and grassroots football because, actually, teams like

Hereford United, my team, are absolutely broke, and a tiny

fraction of Wayne Rooney's salary would keep them out of trouble. The

same as two other clubs across the country. Ed Balls says he's worth

it. Is he? I think in the context of the bankers bonuses, I think you can

understand why it's pretty galling for people out there who are

struggling. But why should Wayne Rooney be paid ?300,000? Bankers are

still failing to land a small and create jobs. But, you know, I think

you can compare him to international artists, musicians, they are unique

individuals that are unique to give. And I think, the market dictates

what is paid and what is worth. The market is the market and if Wayne

Rooney is worth ?300,000 a week in the mind of Ed Balls, bankers should

be allowed to earn as much as they like as well? Manchester United kill

you think is worth that. Accommodation at what they can get

in television money and six, show they want to pay him that otherwise

a continental club could sign him. As far as the bankers are concerned,

it's different, because it's not a competitive market. They are taking

everybody is money, and we haven't really got that much control over

what they're doing with it. I think footballers, by the finish, they are

a free, and the bankers are not regulated as well as they should be.

Vince Cable says he doesn't understand why anybody needs to earn

?1 million salary. Is he right? The general rule is always the same, if

someone is built something with nothing existed before in a

competitive environment, then they should be entitled to take the

benefits of what they have created, and if they have sat in a

franchise, and they are in a big bank with little challenge in the

big markets, you should ask question about that. I think, whilst Vince

Cable says that, he did vote through the tax cut for the highest earners

and the millionaires to boost their incomes, rather than pay more in tax

to bring down the deficit. I think we've taken with a pinch of salt, as

well. Our MPs are humble bunch. They don't need to blow their own

trumpets, apart from Jesse, last week at the Parliamentary variety

show. Maybe you should give up the day

job? I wouldn't say I was so great, but thank you for that. Did you

enjoy that? It's one of the most wonderful things I've ever done,

pick up a trumpet at the age of 41 and start playing it. I started very

late. It gives rise to all these mad jokes, but actually, it's a

wonderful thing and I would encourage anybody to do it. Good for

you. That's all for today. Thanks to our guests. I would back tomorrow. I

buy.