Browse content similar to 18/03/2014. Check below for episodes and series from the same categories and more!
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Good afternoon, and welcome to the Daily Politics. It's the eve of the | :00:36. | :00:40. | |
Budget and today the coalition's talking about childcare. They're | :00:41. | :00:44. | |
going to give working parents state help worth up to ?2,000 a year per | :00:45. | :00:49. | |
child. It's a big offer, but it won't kick in until the autumn after | :00:50. | :00:55. | |
the general election. And I want to know what George Osborne will have | :00:56. | :00:58. | |
in his budget tomorrow for ordinary working people. A mansion tax? A new | :00:59. | :01:03. | |
10p rate of tax? I'm not holding my breath. | :01:04. | :01:06. | |
The referendum on Scottish independence is only six months | :01:07. | :01:11. | |
away. What does it mean for people on Orkney and Shetland, who might | :01:12. | :01:14. | |
have more in Common with the Vikings than the Celts? | :01:15. | :01:17. | |
And did we mention it's nearly time for the Budget? We'll talk about | :01:18. | :01:21. | |
what it's like to be in the Treasury before one of the biggest political | :01:22. | :01:28. | |
events of the year. All that in the next hour, and who | :01:29. | :01:32. | |
better to join us the day before a Budget than a man who knows a thing | :01:33. | :01:36. | |
or two about being chancellor in tricky times and during a recovery. | :01:37. | :01:40. | |
Norman Lamont held up the famous red Budget box three times, and on at | :01:41. | :01:44. | |
least one occasion all it had in it was a bottle of whisky. More on that | :01:45. | :01:49. | |
later, but for now, welcome to the show. | :01:50. | :01:53. | |
First, let's look at what could only be described as a bit of an Eton | :01:54. | :01:57. | |
mess in the Conservative Party. Over the weekend, Education Secretary | :01:58. | :02:00. | |
Michael Gove said it was "preposterous" that so many members | :02:01. | :02:03. | |
of the Prime Minister's inner circle were old Etonians. David Cameron, | :02:04. | :02:08. | |
who's not exactly fond of the continuing focus on his alma mater, | :02:09. | :02:12. | |
was apparently furious. According to the Spectator, he told Gove he was | :02:13. | :02:20. | |
"bang out of order". Sounds like he was channelling an episode of the | :02:21. | :02:24. | |
Sweeney there. Well, last night the Tory peer Sayeeda Warsi chipped in | :02:25. | :02:27. | |
to the debate, and hasn't exactly calmed things down. Here she is on | :02:28. | :02:34. | |
ITV's the Agenda. Mine is this one, which is the story that we had | :02:35. | :02:39. | |
earlier this week. About Michael Gove talking about people at the | :02:40. | :02:46. | |
top, at the top of cabinet. So it is Number Ten takes Eton mess off the | :02:47. | :02:51. | |
menu and replaces it with bread and butter pudding. So that business | :02:52. | :02:55. | |
about looking for a new job on Wednesday. Michael was making an | :02:56. | :02:59. | |
incredibly serious point, it can't be right that the 7% of kids who go | :03:00. | :03:04. | |
to independent school end up at the top tables not just of politics but | :03:05. | :03:09. | |
banking and law and every other profession, what Michael wants to | :03:10. | :03:12. | |
create is a first class world class state system, which means in future | :03:13. | :03:19. | |
years you will have more pupils from state schools round the Cabinet | :03:20. | :03:22. | |
table. With that was a helpful intervention? I am not sure. It | :03:23. | :03:27. | |
sounded cur you but the basic point is right, that what Conservatives | :03:28. | :03:33. | |
believe this is a society lifting up the ladder for everybody to be able | :03:34. | :03:36. | |
to get to the top in whatever profession, you don't do that by | :03:37. | :03:40. | |
making private education illegal or something like that, or taxing them | :03:41. | :03:45. | |
out of existence, you ought to be proud of the fact we have good | :03:46. | :03:50. | |
private school, but the object is to increase the state system, and make | :03:51. | :03:54. | |
it better and better. But issue -- is she right that the appearance of | :03:55. | :04:01. | |
a number of old Etonians round the table at Number Ten will David | :04:02. | :04:05. | |
Cameron reinforces a fact, really, that the top jobs in politics, and | :04:06. | :04:10. | |
other industries and ways of life are dominated by the small number of | :04:11. | :04:16. | |
people who go to the top Private And public schools. I don't think every | :04:17. | :04:21. | |
time people look at David Cameron or Boris Johnson, they think went to | :04:22. | :04:25. | |
Eton, Boris is one of the most popular politician -- politicians in | :04:26. | :04:30. | |
the country. Thinks company Tays to and politician who are obsessed with | :04:31. | :04:33. | |
this. What people really want to know is that the people who have the | :04:34. | :04:38. | |
jobs are competent and can do a good job. I read the Michael Gove | :04:39. | :04:44. | |
interview, and although he said it was preposterous, I understand why | :04:45. | :04:47. | |
he says that, it is an extraordinary coincidence, really, but he was | :04:48. | :04:52. | |
saying how he thought all the people who were old Etonians in Number Ten | :04:53. | :04:57. | |
were good at their jobs, Should he not have said it? I think perhaps | :04:58. | :05:02. | |
the word preposterous wasn't too helpful. In context it was | :05:03. | :05:05. | |
reasonable. What about looking ahead, I mean there have and has | :05:06. | :05:09. | |
been speculation that one of the reasons that Michael Gove has been | :05:10. | :05:14. | |
talking about let us not have another old Etonian at the top is to | :05:15. | :05:18. | |
in some way prevent Boris Johnson becoming the next leader, would it | :05:19. | :05:24. | |
be preposterous if another old Etonian became leader of the can't? | :05:25. | :05:29. | |
I don't think that is what he had in the Conservative Party. I think he | :05:30. | :05:34. | |
is Education Secretary, was making the point as about how you need to | :05:35. | :05:39. | |
improve the state system, so that this situation doesn't keep | :05:40. | :05:42. | |
happening. Right. I mean, is it now time for people to stop talking | :05:43. | :05:47. | |
about the schools that various politicians went to, you say it | :05:48. | :05:51. | |
doesn't impact the public, it is more of a media or a political | :05:52. | :05:58. | |
invention, but do you think it has a subliminal message to voters? I | :05:59. | :06:01. | |
don't think it has very much impact. I really don't. As I say, Boris | :06:02. | :06:05. | |
Johnson, I don't think the people think what school he went to, I | :06:06. | :06:09. | |
don't think they think that with David Cameron. What school did you | :06:10. | :06:13. | |
go to? I went to a Scottish school a rival of Tony Blair's school. A | :06:14. | :06:22. | |
rival of Fettes. Now, regular viewers of the Daily Politics, is is | :06:23. | :06:26. | |
there any other kind will know we are keen to cut costs, and so we | :06:27. | :06:30. | |
have been auditioning for an MP to join me an a -- and Andrew in the | :06:31. | :06:35. | |
studio and take care of the hard bits. Have a look at how Tim Farron | :06:36. | :06:41. | |
and Grant Shapps got on. Back in 2010 one of Nick Clegg's key | :06:42. | :06:45. | |
election promises was to raise the income tax threshold to ?10,000 a | :06:46. | :06:50. | |
year. A tax cut of ?700 for 25 million people. Now at the time, | :06:51. | :06:55. | |
David Cameron said the idea was unaffordable, but from next month | :06:56. | :06:58. | |
that idea becomes a reality. In fact, the Conservatives like the | :06:59. | :07:01. | |
policy so much they like to pretend it was their idea in the first | :07:02. | :07:04. | |
place. Ed Miliband and the Labour Party have tried to attack the | :07:05. | :07:08. | |
Government's long-term economic plan, by claiming that it would lead | :07:09. | :07:13. | |
to the disappearance of a million jobs. But Ed Miliband's prediction | :07:14. | :07:17. | |
was wrong. By backing small business, and reducing jobs taxes | :07:18. | :07:22. | |
the Conservative-led Government has helped the economy to create more | :07:23. | :07:26. | |
jobs than ever before. Well, that was Liberal Democrat | :07:27. | :07:30. | |
party President Tim Farron, followed by Grant Shapps, talking about the | :07:31. | :07:33. | |
economic policies is of their respective party, next up, to have a | :07:34. | :07:37. | |
go at the Daily Politics's big board, it is a very difficult job is | :07:38. | :07:42. | |
Shadow Energy Secretary Caroline Flint. Here she is talking about | :07:43. | :07:46. | |
Labour's plan for the economy. Tomorrow, millions of people will | :07:47. | :07:50. | |
want to know how the Chancellor will help to make life easier. Labour has | :07:51. | :07:54. | |
always wanted people to get on in life. That is why we introduced the | :07:55. | :08:00. | |
national minimum wage. So what should George Osborne do? I believe | :08:01. | :08:05. | |
he should bring in a new 10p starting rate of income tax. It is | :08:06. | :08:09. | |
not a new idea, it was first introduced by the last Labour | :08:10. | :08:12. | |
Government, and it was a mistake to remove it. | :08:13. | :08:17. | |
A 10p rate would say 24 million taxpayers ?100 a year. It is a small | :08:18. | :08:23. | |
affordable measure to help off set the cost of living crisis. So how to | :08:24. | :08:28. | |
pay for it? Labour would introduce a mansion tax for properties worth | :08:29. | :08:32. | |
over ?2 million and we would get rid of the marry couples tax allowance, | :08:33. | :08:38. | |
this daft policy will help one third of marry couple, 84% of the gainers | :08:39. | :08:43. | |
will be men, and just one in six families with children will benefit. | :08:44. | :08:47. | |
And what is more, people don't get married or stay together for the | :08:48. | :08:54. | |
sake of ?3.85 a week. At tomorrow's budget David Cameron and George | :08:55. | :08:56. | |
Osborne will probably try to do another victory lap. But working | :08:57. | :09:02. | |
people are 16 hundred Mourinho a year worse off than in 2010. -- | :09:03. | :09:11. | |
?1400 a year. -- ?1600 a year. | :09:12. | :09:16. | |
Well, cue the applause, you did a marvellous job, like you two | :09:17. | :09:19. | |
predecessor, come and sit down an join us for a discussion on what you | :09:20. | :09:24. | |
talked about in that big board. Are too many people in your mind 5.3 | :09:25. | :09:31. | |
million says HMRC paying the higher 40 pence tax rate? I think, you | :09:32. | :09:34. | |
know, people are concerned about that, but I think it is about having | :09:35. | :09:38. | |
a fair policy at the low and middle-income level. That is why we | :09:39. | :09:43. | |
believe the 10p starting race should be reintroduced and on top of the | :09:44. | :09:47. | |
extension of the personal allowance, in these difficult times, it is | :09:48. | :09:51. | |
about making difficult choice, what I wouldn't be doing is giving a ?3 | :09:52. | :09:57. | |
billion tax cut to people everyone over 150,00 pounds a year. I could | :09:58. | :10:00. | |
think of other things to do with that. We will come to the 10p | :10:01. | :10:06. | |
starting rate of tax and that being Rhone produced. On the 40 pence, | :10:07. | :10:08. | |
there has been discussion about that, is it something that you think | :10:09. | :10:12. | |
Labour should raise the threshold on? Our priority is in terms of the | :10:13. | :10:17. | |
place we are in at the moment, with the recovery not being a recovery | :10:18. | :10:21. | |
for people on low and middle-incomes is toed a dress at the bottom end. | :10:22. | :10:25. | |
Those people up to the higher rate, also benefit from the extension for | :10:26. | :10:29. | |
the personal tax allowance. Wouldn't be a priority. What would be a | :10:30. | :10:35. | |
priority for is getting the 10p tax rate reintroduced but cutting the 3 | :10:36. | :10:40. | |
billion give away. That is our priority. Why should the 40 pence | :10:41. | :10:45. | |
tax rate by a priority for a number of people in the Conservative Party? | :10:46. | :10:48. | |
We heard from Nick Clegg that overall, even people who have been | :10:49. | :10:53. | |
taken into that tax rate pay less tax overall? When it was first | :10:54. | :10:57. | |
introduced by Nigel Lawson it applied to one in 20 people. It was | :10:58. | :11:01. | |
intended to be the top rate of tax. It is now dragged in more and more | :11:02. | :11:07. | |
people, so it is now one in six, it is forecast that next year, it will | :11:08. | :11:11. | |
be six million people paying this tax rate. That includes nurses, | :11:12. | :11:17. | |
teachers, tube drivers, Warrant Officers in the army, policemen as | :11:18. | :11:22. | |
well. So there many people not remotely wealthy who are affected by | :11:23. | :11:26. | |
this. It also has a long-term structural problem, that you are | :11:27. | :11:29. | |
taking people out of tax, and financing it by making people higher | :11:30. | :11:34. | |
up, but who are not wealthy, pay more. In the long run with that is | :11:35. | :11:41. | |
not sustainable. What about the fact it could be aspirational. The | :11:42. | :11:44. | |
indication from George Osborne people who get pulled into that are | :11:45. | :11:48. | |
more likely to vote Conservative? Well, I think he denied what was | :11:49. | :11:53. | |
attributed to be saying to him, if the argument was put it would mean | :11:54. | :11:56. | |
that higher taxes were saving people's lives because it was | :11:57. | :12:00. | |
causing them not to work too hard. I don't believe he said anything like | :12:01. | :12:04. | |
that. Do you accept that in the current state of play, people in | :12:05. | :12:07. | |
that tax bracket overall, because of the raising of personal allowances | :12:08. | :12:12. | |
are paying less tax overall? They are benefitting compared with how | :12:13. | :12:16. | |
they otherwise would have been. Obviously, we started off with a | :12:17. | :12:20. | |
system that we thought was fair, people paying 40% at a particular | :12:21. | :12:25. | |
band of income, it has been lowers twice, since the coalition came to | :12:26. | :12:29. | |
power, that is the problem. No-one is saying that it isn't right to | :12:30. | :12:34. | |
raise allowances, merely there ought to be a balance between the two. | :12:35. | :12:39. | |
Right. Isn't it dangerous for Labour to revisit this idea of Rhone fro | :12:40. | :12:43. | |
Tuesdaying the 10p rate of tax when it was a disaster when it was | :12:44. | :12:47. | |
scrapped. It wasn't a disaster, it was a good policy and we were wrong | :12:48. | :12:51. | |
to get rid of it. What it is about is making sure once you leave your | :12:52. | :12:55. | |
tax free personal allowance, instead of going on a cliff edge to pay 20 | :12:56. | :12:59. | |
pence in the pound we suggest you pay 10p in the pound for the next | :13:00. | :13:04. | |
slice. That is a good thing. It recognises the needs of those, if | :13:05. | :13:07. | |
you like the bottom of our income ladder, but as an incentive to get | :13:08. | :13:11. | |
into work and carry on working, and that is a good thing. How beneficial | :13:12. | :13:15. | |
would it be for the average working person? What it would mean, we pay | :13:16. | :13:20. | |
for it through the married couples allowance which the estimates are | :13:21. | :13:23. | |
round 700 million and the estimates round a tax on properties over 2 | :13:24. | :13:29. | |
million is round ?2 billion. That what would do is ensure that roughly | :13:30. | :13:34. | |
round, if you were earning ?1,000 over the personal allowance you | :13:35. | :13:40. | |
would get ?100 back a year. We think we can do it within those areas. It | :13:41. | :13:45. | |
is a small. It is quite small. I want to ask, because increasing the | :13:46. | :13:49. | |
penal allowance to sok, because increasing the penal allowance to | :13:50. | :13:52. | |
so,000 which is what is going to be proposed will be worth ?112. But | :13:53. | :13:58. | |
that would be more beneficial This is Addington that, it is about | :13:59. | :14:01. | |
recognising about the personal allowance and building on it so when | :14:02. | :14:07. | |
people start paying tax they pay 10p in the pound instead of 20 pence. | :14:08. | :14:12. | |
This is something we can afford through the measures I have outlined | :14:13. | :14:16. | |
to pay force, it is says let us help work pay and encourage people at the | :14:17. | :14:21. | |
bottom of the labour mark to go into work and carry on. What is your | :14:22. | :14:26. | |
response to that? It is marginal. It is shuffling the deckchairs round | :14:27. | :14:30. | |
but not making a significant difference. It is an added | :14:31. | :14:35. | |
complexity, that is why Gordon Brown got rid of it in the first place. | :14:36. | :14:39. | |
It's a crude measure. It is simpler to take people out than to have a | :14:40. | :14:44. | |
lower rate, frankly. I am not violently against it. But, I mean, | :14:45. | :14:48. | |
in the end is it is worth going through that amount of pain, and | :14:49. | :14:53. | |
work and complexity, for what what is ?104 a year, instead of raising | :14:54. | :14:57. | |
the allowance further, which gives people more? I know you will put it | :14:58. | :15:04. | |
on top If I am given a choice, between giving a 3 billion tax cut | :15:05. | :15:08. | |
to those earning over 150,000 and doing something to help those at the | :15:09. | :15:13. | |
sharp end I would go for the latter. Labour is goes going to go on | :15:14. | :15:19. | |
ability it until the next election, has the coalition shot themselves in | :15:20. | :15:24. | |
the foot over that? No, the mansion tax will be another disaster for the | :15:25. | :15:28. | |
Labour Party. It's a dangerous tax, the mansion tax, because I think a | :15:29. | :15:32. | |
lot of people will have great difficulty in paying it it. It could | :15:33. | :15:37. | |
have a big impact on the property market in the south, and lead to a | :15:38. | :15:42. | |
chain reaction, I think you will find if it comes to it, it is a | :15:43. | :15:53. | |
disastrous policy. We are consulting on the mansion tax and the | :15:54. | :15:57. | |
fermentation of it. There are some issues that you are referring to, | :15:58. | :16:03. | |
where people have a property worth ?2 million but no income coming in, | :16:04. | :16:08. | |
and we are looking at that. But the truth is that anybody, in London or | :16:09. | :16:12. | |
elsewhere in the country, if you have a property worth ?2 million, | :16:13. | :16:17. | |
that is a major asset. This is about being fair but we are consulting on | :16:18. | :16:21. | |
the details to get the implementation right. I think it is | :16:22. | :16:25. | |
a fair balance of meeting different interests. I don't think it is fair | :16:26. | :16:34. | |
to tax people on a liquid asset when they don't have a high income. We | :16:35. | :16:37. | |
are having a consultation on that. Not many people live in ?2 million | :16:38. | :16:41. | |
properties without an income. Have you got any idea about the numbers? | :16:42. | :16:46. | |
Old people left in a house that they bought themselves and they are still | :16:47. | :16:51. | |
there with no income? Not many people sit on ?2 million properties | :16:52. | :16:56. | |
with a small income, not like the pensioners in my constituency. | :16:57. | :16:59. | |
People looking at this are talking about tens of thousands. A working | :17:00. | :17:05. | |
figure, and this is why we are consulting further, says that we | :17:06. | :17:10. | |
could raise ?2 million a year. Why shouldn't people living in an asset | :17:11. | :17:16. | |
rich way, and probably with a large income, and we are talking about | :17:17. | :17:20. | |
London and the South East, why shouldn't they pay more? If | :17:21. | :17:25. | |
democracy consists of trying to rob Peter to pay Paul, there is no doubt | :17:26. | :17:31. | |
that Paul will not vote for that. But you cannot go on and on doing | :17:32. | :17:35. | |
this and moving just in one direction. We are moving to a | :17:36. | :17:40. | |
nonsensical tax system, where a very high proportion of income tax | :17:41. | :17:45. | |
revenue is coming from a very small section of the population. The OECD | :17:46. | :17:51. | |
warned about this the other day. The tax base in income taxed terms is | :17:52. | :17:58. | |
coming becoming too narrow. The tax breaks for married couples, is that | :17:59. | :18:02. | |
really a good idea for the amount of money people get? When I was | :18:03. | :18:06. | |
Chancellor I abolish the married couples allowance but there seems to | :18:07. | :18:10. | |
be a move to bring it back. You agree with Labour on this one? I | :18:11. | :18:14. | |
think if there is a married couples allowance, you have to answer one | :18:15. | :18:18. | |
awkward question. Why should a couple with no children get the tax | :18:19. | :18:23. | |
allowance that is designed really for people with children? I think | :18:24. | :18:28. | |
the better route is actually to target children. All right. Thank | :18:29. | :18:33. | |
you, Caroline Flint, for doing the big board. | :18:34. | :18:39. | |
David Cameron and Nick Clegg have been visiting a nursery this morning | :18:40. | :18:42. | |
to announce the coalition's big new plan to help families with the cost | :18:43. | :18:46. | |
of childcare. So what are they offering? The Government said a year | :18:47. | :18:49. | |
ago that it would provide support of up to ?1,200 per child. That has now | :18:50. | :18:53. | |
increased, so parents paying ?10,000 a year on childcare could get ?2,000 | :18:54. | :18:57. | |
from the state. Up to 1.9 million families with children under 12 will | :18:58. | :19:01. | |
be eligible. They can claim the cash as long as both parents work and | :19:02. | :19:04. | |
they earn less than ?150,000 a year each. Labour says this policy is too | :19:05. | :19:12. | |
little too late. Their own plan is to extend school hours and increase | :19:13. | :19:15. | |
the number of free childcare hours per week. Let's hear what Nick Clegg | :19:16. | :19:19. | |
had to say earlier today. David Cameron and Nick Clegg have | :19:20. | :19:22. | |
been visiting a nursery this morning to announce the coalition's big new | :19:23. | :19:25. | |
plan to help families with the cost of childcare. In the help that we | :19:26. | :19:28. | |
are giving to people who face high childcare costs, and the worst thing | :19:29. | :19:31. | |
to do is to raise people's hopes that they will get support for | :19:32. | :19:35. | |
childcare costs, though we think it is better to say to people that we | :19:36. | :19:40. | |
have looked at this carefully and say this is a total change in the | :19:41. | :19:45. | |
way we provide support. Basically tax free childcare support and 2 | :19:46. | :19:49. | |
million families will be helped. Politically we could rush to get it | :19:50. | :19:53. | |
implemented this September but our fear is that it would not work in | :19:54. | :19:56. | |
practice if we did that and we want this to work in practice so that | :19:57. | :19:59. | |
millions of people feel they have more help with high childcare costs | :20:00. | :20:05. | |
than they do today. The plan is to introduce it next autumn. We are | :20:06. | :20:11. | |
joined by the Lib Dem MP Lorely Burt and Caroline Flint is still with us. | :20:12. | :20:17. | |
Is it fair that this benefit would be available for couples who can | :20:18. | :20:23. | |
earn up to ?150,000 each? I think it is unequivocally good news. Not my | :20:24. | :20:27. | |
words but the words of the Child poverty action group. If they think | :20:28. | :20:31. | |
it is a good thing, we are on the right track. In the narrative about | :20:32. | :20:36. | |
austerity and they're being not much money, and no giveaways, why is it | :20:37. | :20:43. | |
that a household income of ?300,000, the people living there | :20:44. | :20:47. | |
deserve that kind of tax break? That is the absolute maximum that you | :20:48. | :20:52. | |
have identified. At the other end, the measures we are doing are | :20:53. | :20:59. | |
specifically targeted to the most disadvantaged children and the | :21:00. | :21:02. | |
families with the least income. For example, universal credit. Fantastic | :21:03. | :21:07. | |
that we are going to find 85% of childcare for anyone striving to get | :21:08. | :21:12. | |
off benefits and into work. It is a generous offer in cash terms, if you | :21:13. | :21:16. | |
want to look at it that way, at a time when there is not much money. | :21:17. | :21:24. | |
You support it? It is up to ?2000 per year and those with the highest | :21:25. | :21:28. | |
childcare costs will probably hit the top end. I am not against it but | :21:29. | :21:34. | |
what worries me is that over the last four years, families with | :21:35. | :21:38. | |
children have lost ?1500 per year from child support. This policy has | :21:39. | :21:42. | |
been announced before. A classic Budget situation, not coming in for | :21:43. | :21:47. | |
another year. It is on a wish list for tomorrow. We have seen for the | :21:48. | :21:51. | |
last few years that the cost of living has gone up and childcare has | :21:52. | :21:56. | |
gone up as well. In some areas, childcare has disappeared because it | :21:57. | :22:00. | |
has not been a viable business because parents cannot afford it. | :22:01. | :22:04. | |
This is a massively important area. We believe our policy to provide | :22:05. | :22:10. | |
extra powers for working parents for four -year-olds is a good one but | :22:11. | :22:13. | |
really people with children have missed out over the last you years. | :22:14. | :22:20. | |
I would prefer it to be more targeted. We wonder if we are giving | :22:21. | :22:25. | |
too much by upping the threshold for the 40p rate. That applies at an | :22:26. | :22:34. | |
income of ?41,000. You know, I welcome the policy, but I think in a | :22:35. | :22:38. | |
way it should be more targeted. What are you doing for stay at home | :22:39. | :22:45. | |
mothers? Well, lots of things. As far as income is concerned, we are | :22:46. | :22:50. | |
raising the threshold at which the partner will start to pay income | :22:51. | :22:55. | |
tax. This wouldn't help stay at home mothers. Well, no, but staying at | :22:56. | :23:00. | |
home is a choice. This policy is specifically targeted at women who | :23:01. | :23:05. | |
want to go out to work. I applaud the fact that we are helping in this | :23:06. | :23:11. | |
way. If you have got two children under the age of 12, you could get a | :23:12. | :23:17. | |
maximum of ?4000 with childcare. The cost of childcare has been | :23:18. | :23:23. | |
identified as a huge challenge to parents who do want to work. What | :23:24. | :23:28. | |
about looking at the childcare itself and childminders? There was a | :23:29. | :23:33. | |
proposal that was sidelined or dropped for childminders to take | :23:34. | :23:38. | |
care of more children. Why not look at that? The Liberal Democrats are | :23:39. | :23:43. | |
not very keen on expanding the number of children that one | :23:44. | :23:50. | |
childminders can look after. We feel that each child deserves a minimum | :23:51. | :23:55. | |
quality, and amount of time and attention. That is why we were not | :23:56. | :23:59. | |
particularly keen on pursuing that policy. And that will not be looked | :24:00. | :24:05. | |
at again? I don't know. It is above my pay grade to comment on that! You | :24:06. | :24:11. | |
mentioned the wraparound childcare that your party is proposing. How | :24:12. | :24:15. | |
would you pay for it? It is about making sure that in our schools, the | :24:16. | :24:19. | |
ideal community to offer before and after childcare, that there is an | :24:20. | :24:24. | |
obligation to provide it. They do already. Not all of them. I met | :24:25. | :24:32. | |
someone whose primary school opens at 7am in Mansfield. That allows her | :24:33. | :24:37. | |
to drop off her son and get to work. That is not the case in every | :24:38. | :24:42. | |
school and we wanted to be a statutory responsibility for every | :24:43. | :24:46. | |
school to provide it. It is not necessarily about paying for it. On | :24:47. | :24:49. | |
the payment side, we have said we want to extend and pay for it | :24:50. | :24:53. | |
through the childcare levy, extending 15 hours to 25 hours where | :24:54. | :24:58. | |
both parents are working. That is helping the supply side. OK, but | :24:59. | :25:05. | |
first of all you want to make sure state provision is there in the | :25:06. | :25:08. | |
first place. Then you want it to be paid for? You can provide through | :25:09. | :25:15. | |
these allowances or other means support for childcare but we have to | :25:16. | :25:18. | |
stimulate the supply side as well. One of the ways to do that, schools | :25:19. | :25:24. | |
is the ideal place to provide for school-age children and to make that | :25:25. | :25:27. | |
happen. How much does the levy give you to spend on this? We have worked | :25:28. | :25:33. | |
out it gives us enough to provide ten hours a week extra for working | :25:34. | :25:39. | |
parents and we have been working on that. Around 700 million or | :25:40. | :25:43. | |
something like that. Unfortunately we have been counting how many times | :25:44. | :25:48. | |
Labour have spent the bankers' levy and we are up to 11. You have said | :25:49. | :25:56. | |
you will spend it in different ways. You have no way of actually paying | :25:57. | :26:00. | |
for it right now. It is economic league incoherent. Just to be clear | :26:01. | :26:05. | |
for you and anyone watching, the banking levy will just pay for the | :26:06. | :26:09. | |
extended childcare. The banking bonus will go towards the jobs | :26:10. | :26:14. | |
guarantee. And those are the only two commitments? The banking bonus | :26:15. | :26:19. | |
and removing tax relief for those earning over 150,000. And the | :26:20. | :26:26. | |
banking levy for the extension for three and four-year-olds, and the | :26:27. | :26:29. | |
mansion tax will pay for the 10p starting rate. So those promises | :26:30. | :26:34. | |
that you have accused Labour of making without costing them, they | :26:35. | :26:41. | |
have gone? If they have all gone, what are they going to do to restore | :26:42. | :26:45. | |
the economy? They have no way of paying for all the other things that | :26:46. | :26:49. | |
we have counted as costing up to ?30 billion. They have no way of paying | :26:50. | :26:55. | |
for all of that. I don't want to keep repeating myself. These are | :26:56. | :27:00. | |
proposals that we have said we will have and we will pay for and we have | :27:01. | :27:05. | |
identified how we will pay for them. Moving to the general election, we | :27:06. | :27:12. | |
will look at other matters, but we will stay within spending limits. | :27:13. | :27:15. | |
Thank you. Tomorrow there will be full coverage | :27:16. | :27:19. | |
of the Chancellor's statement on BBC Two from 11:30am. If you want to | :27:20. | :27:27. | |
comment you can text your views to 61124 or use the hashtag budget2014. | :27:28. | :27:30. | |
Crimea has always been part of Russia. That is the message from | :27:31. | :27:34. | |
Vladimir Putin at a speech at the Kremlin. He has been speaking two | :27:35. | :27:41. | |
days after a referendum in Crimea on Sunday. The vast majority opted to | :27:42. | :27:49. | |
leave Ukraine. Now they are exploring possibilities for Crimea | :27:50. | :27:52. | |
to join the Russian Federation. This is a flavour of what Putin had to | :27:53. | :27:58. | |
say. On the 17th of March in Crimea, there was a referendum in | :27:59. | :28:07. | |
full correspondents with democratic procedures and legal norms. 80% of | :28:08. | :28:13. | |
voters took part in the referendum. More than 96% voted for | :28:14. | :28:17. | |
reunification with Russia. These figures are more than convincing. | :28:18. | :28:25. | |
Norman Lamont, it has happened. The referendum has happened. Crimea is | :28:26. | :28:28. | |
to all intents and purposes annexed back to Russia, if you like. What | :28:29. | :28:33. | |
can the West do now? I don't think there is a huge amount of the West | :28:34. | :28:38. | |
can do but it must be seen to do something. The sanctions that are | :28:39. | :28:42. | |
being put forward are at least something. It is a start. Listening | :28:43. | :28:47. | |
to what Vladimir Putin was saying, he was saying that the figures were | :28:48. | :28:52. | |
convincing. I don't personally doubt that the majority of people in | :28:53. | :28:56. | |
Crimea want to join Russia. But I think the criticism is that it | :28:57. | :28:59. | |
should have been done in an orderly, very transparent way. It | :29:00. | :29:04. | |
was rushed. There was no actual register of voters. There was also | :29:05. | :29:10. | |
probably a certain amount of intimidation from the presence of | :29:11. | :29:14. | |
Russian troops being on the streets and not in their barracks. It is | :29:15. | :29:18. | |
rather chilling and the great worry is about what will happen in other | :29:19. | :29:23. | |
parts of eastern Ukraine, where there are Russian minorities. That | :29:24. | :29:26. | |
is the fear of some Ukrainians and Western politicians. Do you think | :29:27. | :29:32. | |
that the posturing, has some Russian commentators have called it, by | :29:33. | :29:36. | |
Western leaders of denouncing what Vladimir Putin had done, that the | :29:37. | :29:40. | |
troops were going into Crimea, actually forced his hand. If he had | :29:41. | :29:47. | |
said that you have some legitimate claim to Crimea, let's negotiate on | :29:48. | :29:50. | |
the future of the semi-autonomous region, then that might have | :29:51. | :30:12. | |
de-escalated things a bit more. 300 warships there and a large number of | :30:13. | :30:16. | |
aircraft as well, so it is very central to their defence, but this | :30:17. | :30:24. | |
isn't the way to go about it, in a rushed referendum like that, I think | :30:25. | :30:29. | |
we have got to be clear too, that ethnic Russians in Ukraine will be | :30:30. | :30:33. | |
well treated. That has not always been the case in the Baltic, you | :30:34. | :30:39. | |
know, some have not beenel treated. There will be genuine Russian | :30:40. | :30:43. | |
anxiety, what is needed is communication and an understanding | :30:44. | :30:47. | |
on both sides. Let us leave it there. It is one of the issues which | :30:48. | :30:51. | |
rightly or wrongly is seen as something of a Conservative | :30:52. | :30:55. | |
obsession. Europe. They took us in, but appear to have been fighting | :30:56. | :31:00. | |
about it ever since. With the row of dominating the Premierships of | :31:01. | :31:04. | |
Margaret Thatcher, John Major and perhaps David Cameron too. So just | :31:05. | :31:07. | |
what is it about the Tories and Europe? We sent David round the | :31:08. | :31:10. | |
corner to find out. We should warn you, there is some flash photography | :31:11. | :31:20. | |
in this report. The old Conservative Central Office, | :31:21. | :31:23. | |
the scene of Tory triumphs and tear, the power base of leaders whose | :31:24. | :31:27. | |
times in office were often dominated by a single issue summed up in a | :31:28. | :31:32. | |
single word. Europe. The Iran anyis that this place has | :31:33. | :31:40. | |
been renamed Europe house and is the UK... Perhaps in a strange way that | :31:41. | :31:44. | |
is quite appropriate, because from Ted Heath to David Cameron, Europe | :31:45. | :31:48. | |
has been a touch stone issue, some might say a raw nerve for the | :31:49. | :31:53. | |
Conservatives. Ted Heath took us in, Margaret Thatcher we'lled her | :31:54. | :31:57. | |
handbag and said no a lot. John Major was driven to industrial | :31:58. | :32:00. | |
language and David Cameron wants to stay in a reformed Europe while | :32:01. | :32:06. | |
under pressure to get out. Michael Dobbs has had a ringside | :32:07. | :32:11. | |
side. In central office under Thatcher and Major and with a key | :32:12. | :32:16. | |
role in the EU Referendum Bill All parties are coalition and the | :32:17. | :32:20. | |
Conservative is also a coalition, various interests in it. It has a | :32:21. | :32:24. | |
tricks interest, a radical aspect to it. All of those it is happy | :32:25. | :32:30. | |
together and most issues, but Europe does manage to bring out the | :32:31. | :32:36. | |
different aspects of that coalition. John Major was hamstrung but people | :32:37. | :32:41. | |
we might callure resceptics but he called something not suitable for a | :32:42. | :32:48. | |
family show. Have they won the war? I think Euro-sceptic -- sceptics who | :32:49. | :32:51. | |
are now running the Conservative Party, in the main, were of course | :32:52. | :32:55. | |
correct. We rightly said that the euro would be a disaster and we | :32:56. | :32:59. | |
helped others which that battle, so that Britain is not in the euro, now | :33:00. | :33:04. | |
we are saying very clearly that we want a new relationship with the | :33:05. | :33:07. | |
European Union and that is the view of our leader and Prime Minister | :33:08. | :33:10. | |
David Cameron, so we are happy. There are happy to claim Margaret | :33:11. | :33:18. | |
Thatcher as a Euro-sceptic champion. She got what she wanted, she took | :33:19. | :33:22. | |
her handbag with her and I think we have achieved a huge amount under | :33:23. | :33:27. | |
her Premiership for Europe. Let us remember that she was there at the | :33:28. | :33:33. | |
forefront, voting, pushing us in the referendum in the '70s, to have a | :33:34. | :33:37. | |
role in Europe, so I don't see her as a Euro-sceptic, I see her as a | :33:38. | :33:42. | |
euro realist. So what would Mrs T tell Dave to do | :33:43. | :33:48. | |
now? I think that Margaret Thatcher would probably be very supportive of | :33:49. | :33:52. | |
the idea of a referendum. I think that she would be arguing that | :33:53. | :33:57. | |
Europe has to change in the EU has to change radically, but I think | :33:58. | :34:01. | |
that she would also not be saying right now, under any circumstance, | :34:02. | :34:04. | |
no matter what happens to Europe, that we must get out. | :34:05. | :34:10. | |
The party might live elsewhere, the times maybe different but Europe and | :34:11. | :34:16. | |
the Conservative also have an interesting relationship, no matter | :34:17. | :34:22. | |
whose name is above the shop. Laura Sandys joins us now. She is | :34:23. | :34:27. | |
part of a group of pro European Conservative MP, behind the relaunch | :34:28. | :34:30. | |
of the European mainstream group Yesterday. Welcome to the programme | :34:31. | :34:34. | |
and lament is still with us. Why has Europe been such a thorn in the | :34:35. | :34:38. | |
flesh for the Conservative Party, in a way it hasn't been for Labour? I | :34:39. | :34:44. | |
think it is partly because Europe has become so integrated. When | :34:45. | :34:49. | |
people originally supported our membership they didn't foresee it | :34:50. | :34:55. | |
could become in ind greated, it would more towards becoming a | :34:56. | :34:58. | |
political Europe rather than an economic idea. Side by side with | :34:59. | :35:02. | |
that, and this I think is the real issue, it is a question of | :35:03. | :35:07. | |
democracy, and accountability. Yes, as Laura says, and she puts things | :35:08. | :35:13. | |
persuasively. Margaret Thatcher was good at getting deals, but we are | :35:14. | :35:19. | |
more and more having regulations and laws that are the result of bargains | :35:20. | :35:24. | |
done by Governments, behind closed doors, and the ability of Parliament | :35:25. | :35:29. | |
to amend, to respond to voters' concerns is limited. Democracy is a | :35:30. | :35:34. | |
bit of a one way street in Europe. You pass something after a lot of | :35:35. | :35:39. | |
negotiation, you can never amend or reverse. On the regulation issue I | :35:40. | :35:44. | |
think it is fascinating being half French. I see that the French don't | :35:45. | :35:49. | |
implement EU regulations in the same way at all. That is a responsibility | :35:50. | :35:53. | |
of what we in this country do. I think we have got to look at Europe, | :35:54. | :35:57. | |
and I think we have to say to ourself, those people who want to | :35:58. | :36:00. | |
come out, this would be the first time in modern history, that Britain | :36:01. | :36:05. | |
would say we want less influence in Europe. We see where Europe is going | :36:06. | :36:09. | |
at this moment. These are crises we have to be sitting round the table, | :36:10. | :36:13. | |
we have got to be exerting our influence and Norman, you are right | :36:14. | :36:18. | |
I think that Europe has become very internally focussed. We need to have | :36:19. | :36:24. | |
ambition, externally beyond Europe to make sure we Powell weight. In -- | :36:25. | :36:31. | |
pull our weight. In your group, only round 18 members are prepared to | :36:32. | :36:34. | |
acknowledge their position publicly. No, no, no. Many more. 45 people | :36:35. | :36:42. | |
have been explicit... Some people... Are they ashamed? Not at all. 62 | :36:43. | :36:49. | |
backbencher, so there are more within the ministers as well. I | :36:50. | :36:53. | |
think one has to say that this is a moment when you know, it is not | :36:54. | :36:57. | |
always the most fashionable thing to be pro European in the Conservative | :36:58. | :37:02. | |
Party, and I think we have an imme sieve group, cross section | :37:03. | :37:07. | |
particularly of 2010 intake of MPs who are making the care, we need | :37:08. | :37:10. | |
reform but we need to know our future is within Europe, and making | :37:11. | :37:15. | |
and shaping Europe. Do you think the Eurosceptics have won the battle in | :37:16. | :37:19. | |
the Conservative Party? I think that have won a lot the -- arguments but | :37:20. | :37:24. | |
they will go on. Europe continues to evolve. More and more measures have | :37:25. | :37:29. | |
been taken within the eurozone to shore up the euro, and some of | :37:30. | :37:34. | |
those, the dangers is, dangers are, may apply to Britain, and yet | :37:35. | :37:38. | |
Britain can be easily outvoted because it is not a member of the | :37:39. | :37:43. | |
eurozone, it constitutes a majority, so we need at the very least to see | :37:44. | :37:48. | |
measures taken for the euro, that have no relevance to us do not apply | :37:49. | :37:54. | |
to us, so that is a minimum thing. I don't think there this is just about | :37:55. | :37:58. | |
economic, I really do think the central question is actually about | :37:59. | :38:05. | |
the reverse built of legislation, making things responsive so what | :38:06. | :38:09. | |
electorates want. Do you think it is achievable? There are two things you | :38:10. | :38:15. | |
can do. One you can have a red card system where national Parliaments | :38:16. | :38:19. | |
say this soul not pass f you get more than one or two. Secondly a pet | :38:20. | :38:27. | |
idea of my own, I think European legislation should all possibly have | :38:28. | :38:31. | |
a sunset clause, it should be time limited, so that it has to come back | :38:32. | :38:35. | |
to Governments, come back to national Parliamentments. That is | :38:36. | :38:38. | |
the wish list. It is whether that can be renegotiationed. I agree. | :38:39. | :38:44. | |
Your report is supportive of the Prime Minister's position, Shetland | :38:45. | :38:47. | |
out a list of seven things hat the weekend. Are you happy with each | :38:48. | :38:52. | |
one? New controls to stop vast migrations? The overall picture is | :38:53. | :39:00. | |
very positive. Specifics though? What Norman says about sunset | :39:01. | :39:03. | |
clauses I agree. I think we should do that in the UK as well. What we | :39:04. | :39:08. | |
need is we need to have this debate. The Germans are very very interested | :39:09. | :39:12. | |
in what David Cameron is saying, and is listening and responding | :39:13. | :39:16. | |
positively. But not interested as Angela Merkel said in actually | :39:17. | :39:21. | |
reversing treaties or having complete wholesale change to push | :39:22. | :39:25. | |
them through. I am sure it matters to us, what we need to see is we | :39:26. | :39:31. | |
need to see a more ambitious Europe in terms of external trade, the | :39:32. | :39:34. | |
economic opportunities. Let us talk about that specific, vast migration, | :39:35. | :39:40. | |
do you agree with him, there need to be new controls to stop vast nigh | :39:41. | :39:44. | |
integration, presumably from new member states to established ones | :39:45. | :39:49. | |
That would be something common. We have the controls over Romanian, | :39:50. | :39:54. | |
Bulgarian, the Polish situation, we were one of the few countries who | :39:55. | :39:58. | |
didn't put control, we have to look at them in terms of what creates and | :39:59. | :40:03. | |
sustains those economies if they come into the EU, what we don't want | :40:04. | :40:08. | |
do is be a brain drain any way. You can't, the Government can't hit | :40:09. | :40:11. | |
immigration target, not because of new states, but because of the | :40:12. | :40:15. | |
existing EU member, you accept that? What we are doing is putting in | :40:16. | :40:19. | |
measures that curbing immigration, we are not... Not EU. You can't do | :40:20. | :40:25. | |
anything about it. When he talks about new controls, he can't do | :40:26. | :40:27. | |
anything about the existing member, that is true. That is where we are. | :40:28. | :40:31. | |
He continue control a vast part of the migration. It is about being | :40:32. | :40:36. | |
honest. I think those are things that David Cameron is talking about | :40:37. | :40:40. | |
into the future, when we look at new, if there are going to be | :40:41. | :40:45. | |
accession country, it is far away, as a proposition. Do you think David | :40:46. | :40:49. | |
Cameron is a Europhile or Euro-sceptic? I think he is a euro | :40:50. | :40:54. | |
realist. Like Margaret Thatcher. The point is we have a voice in Europe. | :40:55. | :40:58. | |
Any Prime Minister who wants to reduce their voice in Europe would | :40:59. | :41:02. | |
find, would not be working in Britain's interest. Do you agree | :41:03. | :41:06. | |
with that? I hesitate to disagree with anything Laura says. Do. I do | :41:07. | :41:12. | |
slightly. I would say about David, David as you may recall used to work | :41:13. | :41:16. | |
for me, he used to write my speeches and I know he is Euro-sceptic. | :41:17. | :41:21. | |
Right. Then that has put settlement to that argument. We are hear to | :41:22. | :41:27. | |
persuade him. Thank you. The referendum on Scottish | :41:28. | :41:31. | |
independent is six months away today. But what does it mean for the | :41:32. | :41:35. | |
outlying regions of Scotland, in particular OK anyand the Shetland | :41:36. | :41:39. | |
Islands? There have opinion called for greater autonomy. The shelters | :41:40. | :41:44. | |
are a famously independent bunch, with many claiming to have more in | :41:45. | :41:49. | |
common with Scandinavia than Scotland. In the Shetland village of | :41:50. | :41:55. | |
Gulberwick hundreds of locals lit flaming torches to burn a especially | :41:56. | :42:00. | |
built Viking long boat. It is one of a number of fire festivals that | :42:01. | :42:08. | |
Shetlanders stage annually. Shetland is different from | :42:09. | :42:12. | |
everywhere in the world. We do Viking events, we sell Brit it every | :42:13. | :42:17. | |
year, and that is what we are here today doing. And by fortunate | :42:18. | :42:25. | |
coincidence our guest of the day Norman Lamont was born in Shetland. | :42:26. | :42:31. | |
Joining us from Shetland is the Vic Scot. What do you see as Home Rule | :42:32. | :42:37. | |
for Shetland and OK anyislands? We want to make sure out of this big | :42:38. | :42:43. | |
constitution at be bait we decide what we want. Edinburgh doesn't pay | :42:44. | :42:47. | |
much attention to the island, the SNP have removed powers from all the | :42:48. | :42:51. | |
Scottish islands over the past seven years while they have been the | :42:52. | :42:54. | |
Government. Therefore, in this period, we are going to make sure we | :42:55. | :42:58. | |
decide what is in our interests, and I think that includes a range of | :42:59. | :43:03. | |
economic and social powers where we feel we can better take decisions | :43:04. | :43:08. | |
about our future than having them imposed from Edinburgh. How would | :43:09. | :43:14. | |
you do that? Well will work out some plan, there is a positive, our | :43:15. | :43:21. | |
islands future initiative being taken forward, and they are looking | :43:22. | :43:26. | |
at the kinds of powers we would like to see in Lerwick, and Stornoway and | :43:27. | :43:31. | |
we will do that in a positive way. We will challenge both the UK and | :43:32. | :43:36. | |
London and Edinburgh Governments to respond positively to that, because | :43:37. | :43:41. | |
if we don't make our case, if we don't shout loudly about what we can | :43:42. | :43:44. | |
do, they don't take any notice of us. We have been negotiating with | :43:45. | :43:48. | |
the oil industry for the last 40 years with some success. Norman | :43:49. | :43:52. | |
Lamont, if your experience, have these islands being treated badly, | :43:53. | :43:59. | |
are they doing badly as a result of having self devolution in Holyrood. | :44:00. | :44:04. | |
Can I say hello. I hope the island is looking beautiful, as it always | :44:05. | :44:09. | |
does. I think what he is saying makes a lot of sense, that the | :44:10. | :44:15. | |
islands could ask for more autonomy in the event of Scottish | :44:16. | :44:19. | |
independence, that is what the Faroe Islands have, what the Channel | :44:20. | :44:23. | |
Islands have, but the Faroe Islands are part of Denmark but at the same | :44:24. | :44:27. | |
time have more self rule, more control over the Home Affairs. Of | :44:28. | :44:33. | |
course as he knows better than I, there is a degree of control over | :44:34. | :44:38. | |
the oil development that Scotland, Shetland has, it has special powers, | :44:39. | :44:45. | |
it benefits from the oil revenue. The ironic point in this, a large | :44:46. | :44:51. | |
part of The Verves of oil that Scotland say -- the reserves of oil | :44:52. | :44:56. | |
Scotland have becomes because of the position of Shetland on the map. If | :44:57. | :45:03. | |
Shetland declared independence, if it declared complete independence | :45:04. | :45:05. | |
Scottish oil would go out the window. How much claim do the | :45:06. | :45:16. | |
Shetland and Orkney islands have? We have some claim to the oil reserves. | :45:17. | :45:20. | |
We can find the odd constitutional lawyer very happy to make that | :45:21. | :45:27. | |
argument. Lawyers did so back in the 1970s when Scottish local Government | :45:28. | :45:30. | |
was reorganised and when oil was discovered. We can have that again. | :45:31. | :45:37. | |
The real point about oil and gas is that the developments West of | :45:38. | :45:42. | |
Shetland are really important to the UK Exchequer. Alex Salmond does not | :45:43. | :45:45. | |
have an economy of oil and gas does not happen, which gives Shetland | :45:46. | :45:51. | |
some leverage over those negotiations, which Alex Salmond | :45:52. | :45:55. | |
would happily not concede to us in any way whatsoever. And that is the | :45:56. | :46:00. | |
point. And we are not arguing for independence. Territorial waters are | :46:01. | :46:05. | |
defined as the midpoint between the outlying coastal points. If Shetland | :46:06. | :46:09. | |
were not part of Scotland, a large part of the Scottish oil reserves | :46:10. | :46:13. | |
would go. I am not suggesting this is what Tavish Scott is advocating | :46:14. | :46:18. | |
or that it would be likely to happen. But it illustrates the | :46:19. | :46:22. | |
fundamental selfishness of some of the arguments put forward for | :46:23. | :46:31. | |
Scottish independence. They are saying, we have got this oil so we | :46:32. | :46:35. | |
can run off and do what we like and make ourselves wealthy. Someone else | :46:36. | :46:37. | |
could run off and make themselves wealthy. But they are carrying out | :46:38. | :46:40. | |
negotiations already with London and Edinburgh probably to get the best | :46:41. | :46:45. | |
deal. Yes, and we have done that over many years. It was said in the | :46:46. | :46:50. | |
1970s that the leader of the then County Council was the only local | :46:51. | :46:54. | |
Government leader who could walk into the Scottish Secretary's office | :46:55. | :46:58. | |
in Whitehall and get a meeting. Funnily enough, that could be | :46:59. | :47:01. | |
repeated in due course! All right. Thank you. | :47:02. | :47:06. | |
Here at the Daily Politics we rarely ever stop thinking about the big | :47:07. | :47:10. | |
questions. Where is the Higgs boson? If a tree falls in the forest and | :47:11. | :47:14. | |
no-one is there to hear it, does it make a sound? Whatever happened to | :47:15. | :47:17. | |
Friends Reunited? But the one that's been bothering us this week is what | :47:18. | :47:20. | |
exactly is the output gap? Economists largely agree it's a | :47:21. | :47:24. | |
crucial way of judging the state of the nation's economy, so we thought | :47:25. | :47:27. | |
we'd better send Adam off for a mental work-out. | :47:28. | :47:31. | |
Apparently this place is called a gym. And I am told it is an | :47:32. | :47:35. | |
excellent place to explain one of the concepts for measuring the | :47:36. | :47:39. | |
fitness of the economy. And that is the output gap, which is the | :47:40. | :47:43. | |
difference between where the economy is now, and where it could be if it | :47:44. | :47:49. | |
was firing on all cylinders. A bit like the gap between me and them. | :47:50. | :47:55. | |
And this is why it matters. If the output gap is closed and the economy | :47:56. | :47:59. | |
picks up as much pace as it possibly can, but the Government still can't | :48:00. | :48:03. | |
raise enough revenue through things like taxes, then we have got what we | :48:04. | :48:07. | |
call a structural deficit and the coalition has pledged to eliminate | :48:08. | :48:12. | |
that. So the output gap is a pretty major element in any Government's | :48:13. | :48:19. | |
economic calculations. This calculation uses this equation, and | :48:20. | :48:29. | |
this equation. Or we can use another method. Whatever that is! Put it | :48:30. | :48:35. | |
this way, it is tricky. Like measuring my biceps, something that | :48:36. | :48:39. | |
does not exist in the real world. Though there are very different | :48:40. | :48:43. | |
opinions about how big or small the output gap is, meaning people of | :48:44. | :48:47. | |
different political persuasions can use it to sell their particular plan | :48:48. | :48:50. | |
for getting the economy back to full health. | :48:51. | :48:57. | |
Joining me now is the crossbench peer and biographer of John Maynard | :48:58. | :49:00. | |
Keynes, Robert Skidelsky. Welcome. Before we get onto the output gap, | :49:01. | :49:05. | |
do you maintain that the coalition's austerity programme was | :49:06. | :49:09. | |
unnecessary and has done permanent damage to the economy? I do. I think | :49:10. | :49:14. | |
the big giveaway here is the Chancellor's consistent failure to | :49:15. | :49:18. | |
meet his Budget targets. He has failed to do that and you should | :49:19. | :49:21. | |
have been borrowing 60 billion by this point. He is having to borrow | :49:22. | :49:28. | |
over 100 billion and moreover having to increase the cuts to meet its | :49:29. | :49:33. | |
revised targets by about 60 billion over the next four years. That is | :49:34. | :49:38. | |
failure to me. The argument would be that without austerity and the plans | :49:39. | :49:43. | |
to make some cuts, we would be in a worse situation. Of course you can | :49:44. | :49:47. | |
always argue that but to my mind his whole strategy was based on the | :49:48. | :49:50. | |
wrong theory of economic policy, which was that the cuts would cause | :49:51. | :49:55. | |
the economy to grow faster than it did. That is why essentially it has | :49:56. | :50:00. | |
not grown faster than it did and he has failed to meet his targets. What | :50:01. | :50:05. | |
do you say to economists looking at this Budget, looking at here of | :50:06. | :50:10. | |
austerity to come, the fact we still have a vast amount of spending cuts | :50:11. | :50:15. | |
to go according to the Chancellor, and that he has missed his targets | :50:16. | :50:18. | |
and we are not going to have a balancing of the books until 2018. | :50:19. | :50:24. | |
He was wrong. Austerity has choked off demand in the way Labour said | :50:25. | :50:27. | |
and he has not done what he promised. I don't think that is | :50:28. | :50:33. | |
right at all. The fact is we had a huge crisis which led to an | :50:34. | :50:36. | |
extraordinarily large annual deficit, 12% of GDP. It was not open | :50:37. | :50:41. | |
to a Government in that situation with a deficit of that size and the | :50:42. | :50:46. | |
national debt is exhilarating to go in for a traditional, as Robert | :50:47. | :51:00. | |
would see it, came the solution. -- Keynsian solution. This has been a | :51:01. | :51:04. | |
gradual process and that is why it will extend beyond the next | :51:05. | :51:08. | |
Parliament. But the benefit is that the British economy is now | :51:09. | :51:12. | |
recovering, despite the fact there was a huge black hole. If you want | :51:13. | :51:17. | |
to see austerity, look at the eurozone. The cuts were real cuts. | :51:18. | :51:21. | |
Civil servant salaries were not restricted to a 1% increase, they | :51:22. | :51:27. | |
were actually cut. Pensions and benefits were cut. Where it has been | :51:28. | :51:32. | |
too severe, I would argue, and I agree with Robert's analysis | :51:33. | :51:37. | |
partially, if it is applied to the eurozone. But George Osborne has | :51:38. | :51:42. | |
quite rightly judged it as a gradual process. You don't think you should | :51:43. | :51:47. | |
have gone further? He got it right. Then why did he set himself those | :51:48. | :51:52. | |
targets? It is all very well to say my approach as to be gradual because | :51:53. | :51:56. | |
of the issues we have inherited and so on and because we know what the | :51:57. | :52:02. | |
effect of the economy will be on to drastic measures, but then why say I | :52:03. | :52:06. | |
will achieve these targets over this period of time when he has | :52:07. | :52:13. | |
completely failed? He has failed to achieve them. He accepts that. That | :52:14. | :52:20. | |
is why he lengthened the period. The major reason that the period of | :52:21. | :52:24. | |
consolidation had to be extended out was because of the sharp | :52:25. | :52:27. | |
deterioration in the condition of the eurozone. At the very beginning | :52:28. | :52:32. | |
of this crisis for the first couple of years, the eurozone was saying it | :52:33. | :52:37. | |
wouldn't affect us. The problems of America and the Anglo-Saxon world | :52:38. | :52:41. | |
don't apply to us. Then it suddenly hit them and it has had a huge | :52:42. | :52:45. | |
knock-on effect on our exports and economy. That is the major reason | :52:46. | :52:56. | |
for the extension of the time period. There was no double-dip | :52:57. | :52:59. | |
recession in the end, as was widely predicted. Triple the recessions | :53:00. | :53:00. | |
even. Unemployment never reached those higher than predicted levels. | :53:01. | :53:05. | |
It was not as bad as Labour said. The Budget projections were based on | :53:06. | :53:10. | |
estimates of economic growth over 2011 and 2012, which just didn't | :53:11. | :53:14. | |
happen. In fact we flat lined for two years. I would say that was | :53:15. | :53:20. | |
partly the result of the austerity policy. We haven't got much time but | :53:21. | :53:25. | |
on the output gap and spare capacity, the worry for some | :53:26. | :53:29. | |
economists is that we are close to capacity, and in other words the | :53:30. | :53:33. | |
structural deficit, the bit that will not disappear even if we have | :53:34. | :53:39. | |
continued growth, is far bigger. Do you agree? The output gap concept is | :53:40. | :53:44. | |
tricky. The Office for Budget Responsibility reckoned it was about | :53:45. | :53:49. | |
2.2%. That is the gap between actual output and what we could be | :53:50. | :53:55. | |
producing at full employment. I think that is tricky in this way. It | :53:56. | :54:01. | |
is an average. I think the country doesn't have the same output gap in | :54:02. | :54:06. | |
each part of it. In fact I think London could be overheating. The | :54:07. | :54:11. | |
North East has a larger output gap. That poses a challenge for policy | :54:12. | :54:15. | |
because policy is very blunt on these matters. You have a one size | :54:16. | :54:23. | |
fits all interest rate. And you don't differentiate in fiscal policy | :54:24. | :54:28. | |
between different regions. I think we have to rethink this. We have big | :54:29. | :54:32. | |
output gaps in some parts of the country and zero in other parts of | :54:33. | :54:37. | |
the country. How do we deal with that? I can't answer that but thank | :54:38. | :54:44. | |
you for explaining it! It's said to be one of Whitehall's | :54:45. | :54:47. | |
toughest briefs, and as Chancellor few things are more nerve-wracking | :54:48. | :54:51. | |
than Budget day. The wife of one former Chancellor described it as a | :54:52. | :54:54. | |
little bit like having a baby. So how do they calm their nerves? Take | :54:55. | :54:58. | |
a look at this. As you offer the media one last photocall, they will | :54:59. | :55:01. | |
now be assessed by what you plan to drink during your long Budget | :55:02. | :55:04. | |
speech, the one occasion in the year when alcohol is allowed in the | :55:05. | :55:08. | |
chamber. One of his minders had already asked Geoffrey Howe what he | :55:09. | :55:14. | |
wanted. I say probably some gin. He said, what, neat? Thank goodness he | :55:15. | :55:20. | |
asked the question because I would have been lolling flat over the | :55:21. | :55:26. | |
dispatch box! I chose whiskey. The parliamentary secretary is expected | :55:27. | :55:30. | |
to lay on the whiskey with some water. One reason was because of the | :55:31. | :55:35. | |
Scottish whiskey association, which was one of the most persistent and | :55:36. | :55:40. | |
attractive lobbyists of me in the run-up to every Budget. I always | :55:41. | :55:44. | |
drank a moderate amount of lunch -- at lunch. I had the white wine | :55:45. | :55:50. | |
spirits up. Orkney whiskey with Highland water. Water with a dash of | :55:51. | :55:58. | |
brandy. Everybody is obsessed with what they used to drink. That was a | :55:59. | :56:03. | |
clutch of former Chancellors ending with Nigel Lawson, Norman Lamont and | :56:04. | :56:07. | |
Denis Healey. I am joined by Kitty Ussher, former Labour Treasury | :56:08. | :56:11. | |
minister who now works with Tooley Street Research. Was it an enjoyable | :56:12. | :56:19. | |
ordeal? Or just an ordeal? Something you are on autopilot for. As you | :56:20. | :56:23. | |
deliver the speech, and maybe there is snorting and shouting here and | :56:24. | :56:27. | |
there, you think, they didn't notice that. That didn't go down too badly. | :56:28. | :56:33. | |
What will be the reaction to the next bit? You outside yourself, | :56:34. | :56:37. | |
watching yourself, because you have rehearsed it so many times in your | :56:38. | :56:43. | |
mind. A surreal experience. Will you, different circumstances. You | :56:44. | :56:46. | |
worked for Alistair Darling when he was Chancellor just before the | :56:47. | :56:53. | |
banking crash. What was that like? Quite intense. We had some days when | :56:54. | :56:57. | |
we were a few hours ahead of the market and making tentative choices | :56:58. | :57:00. | |
at the beginning of the day that were implemented by the afternoon. | :57:01. | :57:05. | |
It was a time of extreme focus. Panic? Not quite. In Alistair | :57:06. | :57:11. | |
Darling's memoirs he said there was one moment when he considered | :57:12. | :57:15. | |
panicking but because he is such a stable personality, I think he was | :57:16. | :57:18. | |
the best possible person we could have had in that place at that time. | :57:19. | :57:23. | |
And what about the run-up to Budget day? By the day before, it is | :57:24. | :57:28. | |
execution mode. Not everybody knows everything that will be in it but | :57:29. | :57:33. | |
you are talking about who is ringing whom and doing what media and | :57:34. | :57:40. | |
rehearsed -- rehearsing the speech. I suspect the Chancellor will be | :57:41. | :57:44. | |
locked up with his closest advisers and making sure he knows his speech | :57:45. | :57:49. | |
well enough to go into the autopilot you have described. Sometimes the | :57:50. | :57:53. | |
most unexpected things happen. I remember on one occasion Nigel | :57:54. | :57:56. | |
Lawson was delivering a Budget speech and there were some pages | :57:57. | :58:01. | |
missing! He just carried on. Then suddenly one was conscious that he | :58:02. | :58:08. | |
was ex-temporising. There was a flurry on the backbenches and | :58:09. | :58:10. | |
suddenly from the box where the civil servants were sitting a whole | :58:11. | :58:15. | |
lot of pieces of paper came along. The whole House cheered when he | :58:16. | :58:20. | |
finally got them! But Nigel did a great job of ex-temporising and then | :58:21. | :58:24. | |
returning to the script. One of the things with a Budget, you have to | :58:25. | :58:30. | |
stick to the script. Do you? The detail on tax is being watched by | :58:31. | :58:35. | |
accountants, lawyers, will be carried into law. You can't say this | :58:36. | :58:39. | |
tax will be raised at 20% when it should be 15. That would not go down | :58:40. | :58:45. | |
well. And the real deadline is the printing of the documentation, which | :58:46. | :58:48. | |
is probably happening right now and you cannot make any decisions after | :58:49. | :58:53. | |
that. That is it. From all of us, goodbye! | :58:54. | :58:56. |