08/03/2017 Newsnight

This is the spreadsheet bit, but bear with me,

because I have a reputation to defend!

Disruptive technologies like biotech, robotic systems

and driverless vehicles are technology I believe the party

Under the last Labour government, Corporation Tax was 28%.

By the way, they don't call it the last Labour

The right honourable gentleman opposite, who is now so far down

the black hole that even Stephen Hawking has disowned him!

But behind the partisan gags, he's broken a manifesto pledge not

The main rate of class four Nics for the self-employed

will increase by 1% to 10%, with a further 1%

Overall, it felt like a new era in Budget policy-making -

a marked change in style, but with a certain

We'll hear from the Government and the opposition as to

And here in Brentwood in Essex, what's the reaction been

on the street where Philip Hammond grew up?

Do you remember James Bond in Die Another Day?

Everyone loved the gimmicks at first.

And then they thought, it's all gone way too far -

and they went to Daniel Craig in Casino Royale, and it was all

Well, the Budget today is a kind of Casino Royale.

It was in a new, plainer style, fewer gimmicks.

Deadpan Phil delivers them rather well.

But in line with the plainer style, the substance, too,

Some have argued that lower borrowing makes a case for more

unfunded spending. I disagree. Britain has a debt of nearly ?1.7

trillion. Almost ?62,000 for every household in the country. So the

only responsible course of action, Mr Deputy Speaker, is to continue

with our plan. So, no big change of direction,

this isn't the time. And interestingly,

while George Osborne's last Budget had 145 pages and 77 different

measures in it, Philip Hammond's had Many would say it is a non-Budget -

bar one big controversy, First, this really was some

moment to celebrate. Because, borrowing is officially

more or less back in the range of normality for the first

time since 2009. Yes, we're back at levels

of borrowing Gordon Brown And, just in time for Brexit,

we are at last meeting Overall, public sector net borrowing

as a percentage of GDP is predicted to fall from 3.8% last year

to 2.6% this year. And, for those who care

about such things, it means that we are forecast to meet our 3%

EU Stability and Growth Pact target this year for the first

time in almost a decade. But I won't hold my breath,

Mr Deputy Speaker, for my congratulatory letter

from Jean-Claude Junker! Now, before you crack open

the Prosecco, the bad news was not It's all about the planned austerity

over the next few years. Now, here's the drop,

this is what is meant to happen This is spending per head,

and it dips several The big gamble is whether those cuts

can really be delivered. It's whether we'll stomach them

when borrowing is no But there's a funny

thing about Budgets - they can become overwhelmed

by an argument over one It happens a lot, and it's happening

more quickly than it used to. We haven't quite heard the first

cuckoo, but spring will soon be upon us, as the buds slowly sprout, it's

time to prepare for future crimes, both Sunni and Chile. -- for future

climates, both sunshine and Chile. The Budget was and expectant and a

list of their, prepared for troubled times. It actually turned out that

Spreadsheet Phil is so comfortable in his dream job that we witnessed

gag a minute Phil as he cracked a joke about the last Chancellor, who

announced the demise of the spring Budget. The Treasury has helpfully

reminded me that I am not the first Chancellor to announce the last

spring Budget. 24 years ago, Norman Lamont also presented what was

billed then as the last spring Budget. What they fail to remind me,

Mr Deputy Speaker, was that ten weeks later he was sacked!

LAUGHTER So wish me luck today! A Chancellor

who thinks he can deliver a deadly serious Budget whilst lightening the

mood with some gags at the expense of, well, almost everyone. What

could possibly go wrong's when a Chancellor faces a continuing hole

in the public finances and pressing demands for extra spending, they

have to take the tricky step of raising taxes. So why not ask the

self-employed to pay a little more in National Insurance contributions

to bring them into line with the rest of the workforce? All so

simple, given that they will be benefiting from the new state

pension. All so simple on a Treasury spreadsheet. Not so simple when you

general election manifesto said decisively the opposite. The

alternative to that plan is actually putting up taxes, and I don't want

to do that. Note National Insurance rise, that is our vow. I read the

manifesto, as you would expect, since the Budget, to have a look at

the precise wording and to try and see if there is any way of getting

out of the pledge, and as far as I can tell there isn't. It didn't take

long for the sleuths of Westminster to turn up Tory election tweets

pledging no increase in National Insurance contributions and talk

about how Labour was bound to do just that. They have quite blatantly

broken their manifesto pledge. Let's remember, they've got form for this.

They told us before 2010 that they weren't going to reorganise the NHS,

and as soon as they got into power by Jorgensen rated the biggest

reorganisation that the NHS has ever seen. -- they orchestrated. I was

flabbergasted at today's announcement doing Chris National

Insurance the self-employed people, I think it is catastrophic. One of

the traditions of Budget Day briefing by Treasury officials

outside the Commons chamber shortly after the childless is down. In its

heyday, a young Ed Balls -- shortly after the Chancellor sits down.

Today's briefing was a less confident of that as the Chancellor

's staff struggled to explain how he had not breached a Tory election

manifesto. They attempted to justify the move by saying that legislation

implementing the election tax commitment had pledged not to raise

National Insurance contributions or Nics in the jargon on employees. It

was silent on the self-employed. The Nics shambles was coined not by me

but in our office. It is clearly a betrayal of many people who

supported the Conservative Party, people who are self employed,

whatever age they might be, people perhaps who after the crash in 2008

found themselves out of work from an employer and chose to make their own

lot and set up their own business. And they are the kind of people who

the Government should be thankful to. They kept the unemployment

figures lower than they were going to be. Budget they would not be

complete without protesters complaining that arms have not been

met. Any grief this Chancellor experiences with tax rises will

illustrate his central dilemma. In an uncertain time, he still needs to

raise revenue. The new cash will help as he injects an extra ?2

billion into social care. It is extremely welcome and very

important. I was absolutely astonished by the Chancellor's

figure of I think 2.5 million more people aged over 75 cents 2010. 2010

isn't that long ago. I really didn't know the scale of the problem was as

big as that. Label was unimpressed. The most worrying thing today was

that the Chancellor proposed a ?2 billion injection into health and

social care over three years. That isn't going to even touch the sides.

We have an NHS and social care system in a state of extreme crisis,

and we have been told that needs between ?8 billion and ?15 billion

by 2020s. It is when the days are closing in that he will do the heavy

lifting in his first autumn Budget, by which time he can assess the

first state of the Brexit talks. Spring may appear a long way off by

then. And our Political Editor

Nick Watt is here. Nick, this kind of erupted into

quite a controversy through the afternoon, this National Insurance,

this Nics thing. You have detected unease among ministers. Tim Farron

was very proud of his joke of the day. Eynon non-2 subtle reference to

George Osborne's omnishambles Budget and the fuss over pasty tax. I don't

think we are at that level of a shambles. Nevertheless there is

concern among ministers. One minister said to me that the

Chancellor had been too confident in all of those gag that he was making.

Also this minister said to me, look, the Chancellor has really undermined

the Tories' traditional reputation as the party of the entrepreneur,

the party of the self-employed. This minister said to me, we are shooting

our own people. I was told this idea is going down like a lead balloon on

the backbenches. There will be blowback, this minister told me. I

was told the Government really needs to do a better job in admitting that

it broke its election manifesto, concede and move on, and then there

might be some space for the Government to explain the merits in

this change. Thanks, Nick. Daivd Gauke, the Chief Secretary to

the Treasury, is with me. Do you concede you broke the pledge in the

manifesto? No, I don't. You run through the history of this. In the

March Budget before the general election, the then Chancellor George

Osborne said that we were looking to abolish class two Nics and reform"

rope Nics. Yes, there was the manifesto which talked about --

class four Nics. The manifesto talked about not increasing, but you

have got to remember that by value, 93% of Nics is class one, that is

employers and employees' Nics, those are the main rates, that is what we

focus on and legislate. White that is not what you said in the

manifesto. Do you regret putting it in the manifesto, in the words that

you did on page three, we will not raise VAT, National Insurance

contributions or income tax. Or, as you put on page seven, we commit to

know increases in VAT, National Insurance contributions or income

tax. I will go on to explain what we have to support this. We focused on

the main rates, employers and employees... It didn't say main

rates. We have said contributions. It implied you will not more. It is

a on page 27, you said it quite a few times. A Conservative government

will not increase the rates. That time you said rates, previously you

said insurance. Nowhere did use a class one. You had it in the front,

the back and the middle, but you did not say, by the way, we may reform

class two and class four, but the class one rate will not change. We

were staying at the time that we were not going to abolish. The

reason why, in a way it is a surprise that there is a controversy

over this, we took the legislation through, and at that point the

legislation was absolutely explicit. We were talking about class one, the

93% of Nics. We did not include class last two or class four. The

Labour Party said, you have enacted your Nics pax. Mike we are entitled

to look at what was in the manifesto and not to say, you retrospectively

changed what you meant in the manifesto. As I say, it was an

ongoing point, it was well-known. Do you think that the pledge got you

some boats when you won the election in 2015? Was part of that because

you made some pledge on no tax rises? I think in terms of a

commitment that we were not going to be increasing VAT, income tax or

National Insurance. All contributions. 93% of value is about

class one. Did it help you win the election? In terms of... It is very

difficult to say. Look, I think in terms of the fact that we have said

that we are not a government that is going to be increasing income tax,

VAT, all of those, most people, when we had this debate, we would talking

about employees' National Insurance. You said it five times in your

manifesto. The Labour Party did not have any objection, did anybody in

Parliament. Will there be a U-turn on this? There is unease among your

colleagues and backbenchers, a lot of people don't like it. Can you see

this, as in the omnishambles Budget, it will be reversed? No, and the

reason why, people do understand the fairness point. At a time, unlike

what has happened in the past when essentially the benefits that the

self-employed receive for their contributions, are largely the same

as employed people do. It is wrong that employed people pay a lot more

in National Insurance contributions. That gap should be married. --

narrowed. And I think that fairness margin is one that we obviously need

to make and we need to go out there, there will be people who need to be

persuaded. You know, this is not about being anti-self-employed, we

have done a lot for the self-employed. For example, the

self-employed now get the full state pension, the new state pension is

worth ?1800 per year. That will require saving something like 50

?50,000 worth to benefit from that. That was not the case in the past.

We are looking at paternity and maternity.

Most of the experts you here will say it is a perfectly sensible tax

change, but this is about the principle of the manifesto. In many

respects, your manifesto was criticised at the time for

unanswered questions about how you were going to deliver the cuts and

the balanced budget that you promised. At the time, when you put

in the manifesto, we can make this commitment on VAT, income tax and

national insurance. Our approach is focusing on reducing wasteful

spending, making savings in welfare and cracking down on tax evasion.

That is how you were going to achieve balanced budgets and all

these things. You have failed to do it in these respects. And people

said you were going to fail. They said, you haven't got a plan, and

you didn't have a plan. And what are we meant to do now when your own

government on the basis of a manifesto was undeliverable? I don't

accept that. We talk about tax evasion, and as a Government we have

done a lot in terms of... But you are not close to where you wanted to

be. You were saying in the election campaign that we are five days away

from the national debt started to come down. It is not coming down, we

are still 370 days away from that coming down. Runs through the

three... You promised a balanced budget by 2018. We don't need to go

back to the manifesto and look at the national insurance pledge to see

the whole thing was a Charente. What are we meant to do with parties that

are going to elections saying stuff that sounds good and then not

delivering? If I may answer, run through the particular elements. I

accept that there are some challenges we face in the public

finances, and we discussed last time I was on this programme why the OBR

downgraded some of the tax receipt numbers they had the growth and so

on. But if we look in terms of what we are getting an tax evasion,

actually we are delivering... So you claim that you have delivered on the

manifesto? Those elements. When it comes to delivering on welfare

reforms, we have found ?12.5 billion on welfare. And when it comes on

public spending, Evan, actually in the last parliament we delivered on

our public spending. So your manifesto said from 2019 after a

surplus has been achieved, spending will grow in line with national

income. Can you make that pledge no? Know, the pledges to cut spending in

2019 and to do so quite severely. There have been changes in the

economic circumstances which you and I discussed in some length when I

was here in November after the Autumn Statement, and that has

created challenges for the public finances. There are also some

longer-term structural issues with tax receipt and getting that money

coming in, which comes back to some of the measures in today's budget,

which we are seeking to address, so we have got sustainable tax base, so

we can afford to pay for the public services that we need. Economists at

the time of your tax pledge criticised, hit out at the proposals

to ban tax rises as undermining fiscal credibility and leaving

little flexibility to deal with shocks. You have just described a

load of shocks. And you didn't have the fix ability to deal with them.

You now to say that pledges like, we are not going to raise any major tax

like you gave in the last election, those are thing of the past, they

were a mistake? We will revisit that issue as we get closer to the next

general election. What are we meant to do if you say it next time? That

is a matter for some time down the line. I think it was pretty clear

that when we fought the last general election, our opponents would have

been much more willing to raise taxes... If you come back in 2020

and say we are not going to raise taxes and national insurance, can we

believe you? What are we meant to do? I come back to the point that we

legislated for these measures, we complied with that legislation. I

come back to the point, last time I was here, you were saying, you are

failing to cut spending this year. One of the things that has come

through from today's numbers is we are succeeding in reducing spending

this year, and if we can continue at that rate, we will meet our spending

plans in this parliament in the same way that we met them in the last

Parliament. Thank you very much indeed.

Well, let's see how the Budget is going down outside Westminster.

Just some background here: One reason for the buoyant economy over

the last year is that households have carried on spending,

notwithstanding the warnings of economists them about how bad

So, are people confident about their own finances?

And is the Chancellor seen as a safe pair of hand?

A thriving suburban town just outside the

London commuter belt, edged with rolling countryside.

59% of whom voted for Brexit last year.

This is the street Philip Hammond grew up on, and we

are here to find out if those locally think their boy has done

good with his first, and last, spring Budget.

And whether today's announcements will help make their

Christine Bennett, a teaching assistant and local school

She used to live next door to the man who now holds the red

We walked to school together, we walked home together.

Yes, it was fun, just a fun childhood.

I'd like, well, I said education, a bit more money into

Today, he has said that he will put doctors, GPs,

into the A departments, and that would help, I suppose.

But that's not going to go in for a year.

We're short of GPs anyway, so I don't know

There's more confidence in the Chancellor a few doors down.

Thinks Mr Hammond is the right man to steer the UK economy.

I know they call him, is it Spreadsheet

Which is not a bad idea for a Chancellor.

You actually want somebody who's good with numbers.

He's done a sensible Budget to start with,

with room to manoeuvre if

things keep going as they do to give tax cuts in the future.

More money for the NHS, that kind of thing, I'm

But he has to have his war chest for the Brexit,

and then who knows, we might get more money from that if we don't

I think there was a lot of pessimism after Brexit.

And I think there were a lot of things said that were

And actually as a country we've shown that it's not

I know we haven't reached the deal and we

haven't arrived there, but we're going into it in a very positive

way rather than, oh, you know, we're leaving, everything is going

No, it hasn't and it won't, because we're a great country.

Just a few streets away, Lynn Mitchell, a publican for 12

of a strain to manage the rising cost of being in business.

So we haven't really personally got any benefits

I can't see that he's done anything for us as business people.

You don't think it's a fair Budget for businesses?

And it won't just be me, it'll be everybody that

Because, you know, there's a lot of small businesses

out there that are trying to make a living, and all the time you try

to make a living, somebody is having a little dig at you,.

Yes, we work hard, everybody who's self-employed that I know,

they all work hard to make an average living.

And that is what it is, an average living.

And then the first time somebody's, you know,

business goes down and they say, right, they are on the goal.

But sometimes you're better off on the

Yes, you get people, they are on the dole

and they turn round and they get this benefit, that benefit, they are

You ask many self-employed people how many times

the year they go on holiday, not many.

While there is uncertainty ahead of Brexit, stability is key.

There are promises of growth, but what Philip Hammond's former

neighbours are wondering is how soon will they feel it.

Let's look at some of the other things in the Budget -

Our Policy Editor Chris Cook is with me.

We haven't talked much about social care. It feels like we have been

going round in circles on this front while. What we have today is ?1

billion bailout. We have efforts to reorganise the local NHS and local

governments, but fundamentally, you can do jazzy things with social care

in the medium term, and the Government is coming forward with

proposals for what it is going to do soon enough on this topic, and we

have had dozens of ideas on how to fund social care coming out over

decades. But it is actually quite a simple question in the short term.

In the short term it is a question of, you have this many old people,

they need this much care, and who is going to pay for it? It is too late

to ask them to save for it. Absolutely, you could in 20 years

ask people to put money away like a pension, but you can't do that now.

So another review at another bit of money. Another area that feels quite

radical, further education, vocational qualifications.

Vocational education is quite different social care. It is

actually very complicated as to why we are not good at it as a country,

big cultural and social reasons as to how we regulate the labour

market, but Philip Hammond announced today basically half ?1 billion of

funding for 16 to 18-year-olds to do technical qualifications. We

announce them on a 10-year lease I call and get rid of them, so this is

I have to say, I already feel like I have heard some of this before, but

there is money there. This is also coming as the Government is putting

through 3 million people into an apprenticeship over this Parliament,

and that is going to be quite radical. There is a big tax rise on

business coming in next month, the apprenticeship levy. We are going to

have a lot more emphasis on technical education in the next few

years. Businesses who have never had apprentices before are basically

going to have to pay that tax or lose it if they don't take on an

apprentice, so big things ahead for further education, and whether it

works or not, I am sceptical. Chris, thank you very much. The budget gags

were mostly at the expense of labour, and it wasn't a good day for

them as it came after Prime Minister's Questions.

But there is a pattern in politics recently,

in which the Conservatives mock Labour for wanting to borrow too

much, and then in power implement something closer to the Labour plan

And right now Labour has a fiscal credibility rule that would avoid

most of the painful cuts to come over the next few years.

I'm joined by Peter Dowd, the Shadow Secretary to the Treasury.

The Labour equivalent of David Gordon. -- David Gauke. Your fiscal

plan, you would still aim at a balanced, not a balanced budget but

a balanced everyday spending budget? Yes, we would. At its simplest, yes.

The golden rule, quite clear, that we would spend money, day-to-day

money, on day-to-day money, we wouldn't be borrowing. And I think

if you look at the figures today, it means you would probably have to

find something like up to ?10 billion, much less than the

Conservatives have to find that their plans, because they are more

ambitious, so if you have to find ?10 billion of extra spending cuts

or tax rises, what is Labour's big idea for making

The Government have made choices in relation to tax cuts, Corporation

Tax, bankers levy, in heritage stacks, corporate gains tax. That is

a choice we have made in that. We would not have made the same

choices. You put that back? They have made choices, and when we get

into a situation, we will make that decision. That is an example of

choices. You have got to find by ?8 billion to ?10 billion. That is one

of the ways of doing it. You want more spending from where we are now?

The other thing, it has to sort of, you know, the reset button in this

one is the whole question of productivity. Productivity in this

country, we are 36% less productive than the Germans, 20% less

productive than the French, nine 9% less productive than the Italians. I

have got productivity next on my list. You are not going to change

productivity in five years, that is a 30 year plan. Of course, but at

the end of the day, the Government have said they are going to get rid

of the deficit in five years, then it went to ten years, now it has

gone to 15 years. But what are you going to do? You are being very

clever here about not saying what you are going to do. With the

greatest respect, the Government had 15, they have had 15 years to get

rid of the deficit, for you to push us into, what are we going to do in

five years? It is your fiscal credibility plan, not mine. You said

you will balance the books in five years' time. I am not going to lay

it out in advance. They are examples that I have given you that Labour

would get into. OK, what is your productivity plan? The longer term

thing about getting the British nation being more productive.

Interestingly enough, the Government has a national investment plan of

?480 billion, almost ?500 billion. The point that you made before is

the opposite. When the Tories coming with a plan that is ?480 billion,

half of it paid for by the private sector, Labour come up with the same

plan and we get told that we are being irresponsible, how are we

going to pay for it? We would be doing in a way what the Tories are

doing, we will be investing. Right, Nics has been the controversial

issue of the day, National Insurance contributions going up for the

self-employed. It is progressive, isn't it? It is taking from the

lesser of, giving to them and taking from the rich. It may well be, but

there is sort of a contract here with the taxpayer. They said they

weren't going to raise National Insurance contributions, and they

broke the contract. The issue at the end of the day, there is a

difference between unilaterally breaking the contract and deciding

through a review process where you engage with people how that might

alter and change. The other thing is, it seems to me that they are

taxing people on low paid and not necessarily taxing the companies

themselves. I want to finish with a word about your reader. In the

Commons today, it did feel quite a lot of the time that ridicule was

kind of the mood of the occasion -- your leader. I just wonder what it

felt like to use it in there, with the other party laughing at your

party -- to you sitting there. In a sense laughing at the party because

it doesn't feel credible as an opposition. We have have a perfectly

sensible conversation. What outrages me is that they are all laughing

today, and that the same time they are increasing factors on people,

they are not sorting out the social care problem -- increasing taxes.

They aren't sorting out the skills problem or the NHS, and they can sit

there and laugh when that sort of situation faces the country, it's

absolutely disgraceful point Peter Dowd, thank you.

Let's have a dissection of the day with a large panel who are each

going to give us one paperweight from the Budget.

I'm with Rupert Harrison who is Portfolio Manager

of Multi-Asset Strategies at Black Rock Investments,

Marianna Mazucatto Professor in the Economics of Innovation

The Financial Times' Editor Lionel Barber,

co-founder of a Eurosceptic campaign group. Good evening, all. OK, you

have one takeaway each. Rupert, let's start with you was. If I'm

allowed to, I think Philip Hammond continued to get it spot-on, he is

in an incredibly difficult position. Your takeaway, come on! When it

comes to caution on public finances and investment in the long term, he

is making the right judgment. A lot of the focus on the front pages is

going to be this National Insurance rise, that is the risk he has taken.

I think it is a sensible change. You can defend the fact that the world

is changing, more and more people are choosing to be self-employed,

the margin between employment and self-employment is much less

well-defined than it used to be so it doesn't make sense to have

different rates. He has made it progressive, so I think you can

defend it. The one thing we can definitely take away, it is unlikely

we are facing a snap election. If you are planning a snap election,

you don't tend to do sensible but difficult tax changes. Is there

anybody here who wants to say, forgetting the manifesto breach, say

that this is the wrong thing to do? Or is it the right thing to do,

Marina? It depends how you do it. Companies pay 13.8%, you know, for

National Insurance for non-self-employed workers and the

self-employed workers would have been one way to do that as opposed

to hitting the workers themselves. And also, you know, we have the

lowest rate of capital gains, corporate income tax, when there is

no evidence whatsoever that those rates affect business investment,

they affect profits. Where is the FT on the National Insurance change? We

have come out in the economic principle of raising the Nic charge

because we do think, we buy the fairness argument. We also think, if

you look at the way that the labour market is changing, you can

understand it. But the politics is a different question. My one

takeaway... I haven't asked you your takeaway, I'm going to go to Ruth

first! We will get to all of you. My takeaway, basically the overall

Budget was right in its fiscal strategy. It was not a giveaway

Budget, it was a neutral Budget. I think to be cautious at this moment

is correct. My real takeaway is yet again these forecasting bodies have

got it wrong. I remember, I actually wrote something for the Financial

Times after the Autumn Statement saying that forecasters have been

too pessimistic about the reaction of the economy to the Brexit vote.

And so far, I'm right, but I maybe wrong further out. What is

interesting is that the OBR has actually obviously upgraded Isgrove

for 2017 from 1.4% to 2%. And they have downgraded it for the rest of

the period. That is perfectly valid. You know, as the recovery is getting

a little bit long in the truth, we have had this recovery since 2009,

unless there is a real spurt in productivity growth think the

economy will down, nothing to do with Brexit. The short-term forecast

bounces up and down. The medium-term forecast, we are going to be where

we were going to be, isn't that right? The forecast is steady as she

goes until 2020. Sticking to the judgment that there is a longer term

impact of Brexit, that is still there in the numbers, we might

disagree but the OBR sticking to that judgment. They have had to make

random assumptions about all of that. Marina, we have mentioned

Brexit as a takeaway. What is your takeaway? Well, first of all we

should be caring about the sources of growth. Whether growth goes up or

down by half a percentage point is less important than what is actually

driving it, and what continues to drive growth in the UK is

consumption. And that consumption, as your programme showed before,

what, you know, how the spending is being financed is through credit

cards, personal debt. So the ratio between personal, not public,

everybody talks about public debt, but the ratio between personal,

private debt and disposable income is back to record levels before the

crisis. The big question with Brexit is will it help or hurt that was

Mike and the investment, the investment that will fall by from

the private sector, when Brexit happens, it hasn't happened, by the

way, but when it happens, the fall in public investment that has been

coming from the European Union to the figure of between eight and 9

billion between 2007 to 2014 just coming from the research money that

now we are starting to gradually increase, you know, we need to

figure that out. The investment is your main thing, isn't it? The

recovery of the economy... The sources of growth are what matters,

it is not investment driven. Business is not investing enough,

and they will invest less after Brexit. We don't even hear the word

Brexit. You don't know that. Let me have one more bike on the

self-employed. Just say, the problem is that the Government hasn't really

reconciled, they haven't given a good account of how it is that they

are praising in effect the great British drops revolution, where you

have got 40% or more of the new jobs created since the global financial

crisis being self-employed jobs. If we are going to move, we are

threatening to talk about turning Britain into Singapore on the

Thames, it doesn't quite match. That is what we would like to see. Big

takeaway... I want you to respond to this one about investment. I will

let you have yours. I don't want to rush through. Do you agree that

investment is a problem, it is a Brexit effect was grown there are

other countries apart from European countries that are coming to Britain

and creating jobs, not least Japan, China and others. But, where Marina

is right is that there are some signs that, yes Mike household debt

is rising quite quickly, especially over the last 12 months. Whereas

business investment by contrast is sort of slowing down. And that's a

worry. That is the pessimist's Tate. If you look at unsecured consumer...

I am an optimist. There is data out there, you can look at it. You know

what, I look at it! And I'm going to tell you some data. On the unsecured

consumer credit is not back at the levels of 2008 yet. It is certainly

growing quite quickly, 10% year on year, and I accept the fact that

that is partly driving consumption growth, which is perhaps not all, it

is not the Holst Ory but it is part of the story. A lot of that is

because of what is happening in the car industry. If you look at total

consumer that including all of the secured debt, I don't regard that...

This is quite important, because we have changed the way that we buy

cars and we read them now instead of buying them, it counts as debt -- we

went them now. The assets look in good shape. This is unsustainable at

consumption, it can't go on forever but it can go on for quite a long

time. When you have real incomes that have not been increasing, you

have to take out that, just in order to stay put -- take out debt. Lionel

has been desperate to get his takeaway, what is it? The wisdom

that Chancellor Hammond showed last year in ditching George Osborne's

this goal frame, which was very smart politics, boxing the Labour

Party into the position where they look, you know, show your fiscal

responsibility, but not good economics, it didn't make any real

sense to aim for a surplus at the end of parliament. Now, having

ditched that coming he's got some room. So it is good economics, much

better economics, and that's why we are in a better position and why

will have ?26 billion by the end of the parliament as an insurance

policy. That is based on a lot of state spending cuts. Rupert there

with Lord Osborne, making those plans. Did you agree it was the

right thing? I think it was the right thing for full apparent to do.

I think it is the right thing for a country like the UK because we have

high levels of debt and a large banking system and we are dependent

on inflows of capital to sustain the way that we live, and therefore it

is complacent to say that we can just afford to get that debt down

very slowly. In normal times, you would want to be doing that a bit

more quickly, that is what running a surplus means. Right now, we are

facing a very uncertain time in the next two years. The lip am and was

right to push that we. We are sailing around with no physical

view, target or anchor at all. What should it be? Labour's policy... He

wants to achieve a surplus as soon as is, that is what everybody seems

to be contending with. He has gotten anchor, but it is not very tough. He

is talking about cyclically-adjusted and borrowing, 2% of GDP by 2020, I

have been pressing that all night. That is a very loose target. And of

course, because the OBR is forecasting it will only be 0.9% of

GDP, it gives him... None of this actually matters, there is no

empirical evidence. The debt to GDP ratio in the UK is not abnormally

high compared to advanced countries, what matters is what you are

investing in. The US after the prices in 2009 had a 10% deficit but

invested that in areas that today is producing growth. The difference is

what you are doing. We can grow at the same rate as the US will stop we

need to leave it there. We have got to go.

Banks, all, -- thank you, all. That's it for tonight,

on the day of a Budget speech heavy on gags and light on the traditional

rabbits out of hats. And it baffles millions,

this, you know. When you get the rabbit,

it does, anyway. hello. Springlike weather and

sunshine more widely spread across the UK tomorrow than today. There