16/03/2014 Sunday Politics East

Morning folks. Welcome to the Sunday Politics. George Osborne's fifth

Budget will offer more tax relief for the lower paid but not for

middle income earners being thrust into the 40p tax bracket. That's our

top story. Ed Balls says millions of people

aren't feeling any benefit from the recovery. We'll discuss the economy

with big political beasts from Labour, the Conservatives, and the

Lib Dems. Now that Ed Miliband has effectively ruled out an in/out EU

referendum, how does UKIP deal with Tory claims that a vote for UKIP

means no Here in the east, unlocking growth

and creating jobs. What will the government

restoring confidence in the safety of cycling. The three areas of

London getting a cash boost to try something different.

And with me as always our top political panel - Nick Watt, Helen

Lewis and Janan Ganesh. They'll be tweeting their thoughts using the

hashtag #bbcsp throughout the programme. So, just three months

after his last major financial statement, George Osborne will be at

the despatch box again on Wednesday, delivering his 2014 Budget. The

Chancellor has already previewed his own speech, pledging to build what

he calls a "resilient economy". The message I will give in the Budget is

the economic plan is working but the job is far from done. We need to

build resilient economy which means addressing the long-term weaknesses

in Britain that we don't export enough, invest enough, build enough,

make enough. Those are the things I will address because we want Britain

to earn its way in the world. George Osborne's opposite number, Ed Balls,

has also been talking ahead of the Budget. He says not everyone is

feeling the benefit of the economic recovery, and again attacked the

Government's decision to reduce the top rate of tax from 50 to 45%.

George Osborne is only ever tough when he's having a go at the week

and the voiceless. Labour is willing to face up to people on the highest

incomes and say, I'm sorry, justifying a big tax cut at this

time is not fair. We will take away the winter allowance from the richer

pensioners, and I think that's the right thing to do. George Osborne

might agree, but he's not allowed to say so. That was the Chancellor and

the shadow chancellor. Janan, it seems like we are in a race against

time. No one argues that the recovery is not under way, in fact

it looks quite strong after a long wait, but will it feed through to

the living standards of ordinary people in time for the May election?

They only have 14 months to do it. The big economic variable is

business investment. Even during the downturn, businesses hoarded a lot

of cash. The question is, are they confident enough to release that

into investment and wages? Taking on new people, giving them higher pay

settlements. That could make the difference and the country will feel

more prosperous and this time next year. But come to think of it, it

strikes me, that how anticipated it is, it's the least talked about

Budget for many years. I think that is because the economy has settled

down a bit, but also because people have got used to the idea that there

is no such thing as a giveaway. Anything that is a tax cut will be

taken away as a tax rise or spending cut. That's true during the good

times but during fiscal consolidation, it's avoidable. --

consolidation, it's avoidable. - unavoidable. There is a plus and

minus for the Conservatives here. 49% of people think the government

is on roughly the right course, but only 16% think that their financial

circumstances will improve this year. It will be a tough one for the

Labour Party to respond to. I agree with Janan. Everyone seems bored

with the run-up to the Budget. The front page of the Sunday Times was

about fox hunting, the front page of the Sunday Telegraph was about EU

renegotiation. Maybe we are saying this because there have not been

many leaks. We have got used to them, and most of the George Osborne

chat on Twitter was about how long his tie was. Freakishly long. I

wouldn't dare to speculate why. Anything we should read into that? I

don't know. For a long while there was no recovery, then it was it is a

weak recovery, and now, all right, it's strong but not reaching

everyone in the country. That is where we are in the debate. That's

right, and the Conservative MPs are so anxious and they are making

George Osborne announcing the rays in the personal allowance will go

up, saying it might go up to 10,750 up, saying it might go up to 10 750

from next year, and Conservative MPs say that that's OK but we need to

think about the middle voters. People are saying the economy is

recovering but no one is feeling it in their pocket. These are people

snagged in at a 40p tax rate. The Tories are saying these are our

people and we have to get to them. He has given the Lib Dems more than

they could have hoped for on raising the threshold. Why is he not saying

we have done a bit for you, now we have to look after our people and

get some of these people out of that 40% bracket? Partly because the Lib

Dems have asked for it so insistently behind-the-scenes.

Somebody from the Treasury this week told me that these debates behind

the scenes between the Lib Dems and Tories are incredibly tenacious and

get more so every year. The Lib Dems have been insistent about going

further on the threshold. The second reason is that the Tories think the

issue can work for them in the next election. They can take the credit.

If they enthusiastically going to ?12,000 and make it a manifesto

pledge, they can claim ownership of the policy. The Liberal Democrats

want to take it to 12,500, which means you are getting into minimum

wage territory. It's incredibly expensive and the Tories are saying

that maybe you would be looking at the 40p rate. The Tories have played

as well. There have been authorised briefings about the 40p rate, and

Cameron and Osborne have said that their priority was helping the

lowest paid which is a useful statement to make and it appeals to

the UKIP voters who are the blue-collar workers. And we are

right, the economy will determine the next election? You assume so. It

was ever that is. It didn't in 992 was ever that is. It didn't in 1992

or 1987. It did in 1992. Ed Miliband's announcement last week

that a Labour government would not hold a referendum on Europe unless

there's another transfer of powers from Britain to Brussels has

certainly clarified matters. UKIP say it just shows the mainstream

parties can't be trusted. The Conservatives think it means UKIP

voters might now flock back to them as the only realistic chance of

securing a referendum. Giles Dilnot reports.

When it comes to Europe and Britain's relation to it, the

question is whether the answer is answered by a question. To be in or

not to be in, that is the question, and our politicians have seemed less

interested in question itself but whether they want to let us answer

it. Labour clarified their position last week. There will be no transfer

of powers without an in out referendum, without a clear choice

as to whether Britain will stay in the EU. That seems yes to a

referendum, but hold on. I believe it is unlikely that this lock will

be used in the next Parliament. So that's a no. The Conservatives say

yes to asking, in 2017, if re-elected, but haven't always. In

2011, 81 Tory MPs defied the PM by voting for a referendum on EU

membership: the largest rebellion against a Tory prime minister over

Europe. Prompted by a petition from over 100,000 members of the public.

The wrong question at the wrong time said the Foreign Secretary of a

coalition Government including selfie-conciously-pro European Lib

Dems, who had a referendum pledge in their 2010 manifesto, but only in

certain circumstances. So we have the newspapers, and the public

meeting leaflets. UKIP have always wanted the question put regardless.

But Labour's new position may change things and The Conservatives think

so. I think it does, because, you know, we are saying very clearly,

like UKIP, we want a referendum, but like UKIP, we want a referendum but

only a Conservative government can deliver it because most suffer

largest would say it is possible in the first past the post system to

have a UKIP government -- sophologists. And then it's easy for

as to say that if a UKIP vote lets in a Conservative government, then

they won't hold a referendum. UKIP seem undaunted by the clarifications

of the other parties, campaigning like the rest but with a "tell it

how it is, just saying what you re how it is, just saying what you're

thinking, we aren't like them" attitude. They seem more worried

about us and what we want, and I don't see that in the other parties.

In parts of the UK, like South Essex, it's a message they think is

working. They are taking the voters for granted again and people have

had enough. People are angry, they see people saying they will get a

vote on the European Union, but then it just comes down the road. They

were quick to capitalise on the announcements, saying only the

Conservatives will give you say, so does it change things? Not really.

We have been talking about a referendum and having a debate on

the European Union for years, and the other parties are playing catch

up. They have a trust issue. Nobody trusts them on the European Union

and that is why people come to us. Who the average UKIP voter is, or

how they voted before is complicated, and what dent they

might make on Conservative and Labour votes in 2015 is trickier

still, but someone's been crunching the numbers anyway. We reckon it is

between 25 and 30% of the electorate broadly share the UKIP motivation,

so to top out at that level would be difficult. That's an awful lot of

voters, but it's not the majority, and this is the reason why the main

parties can't afford to just openly appealed to the UKIP electorate too

hard because the elections are won and lost amongst the other 70%, the

middle-class, the graduate, the younger, ethnic minorities. An

appeal to the values of UKIP voters will alienate some of the other

groups, and they are arguably more significant in winning the election.

Whatever, the numbers UKIPers seem doggedly determined to dig away at

any support the other parties have previously enjoyed.

Giles Dilnot reporting. UKIP's leader, Nigel Farage, joins me now

for the Sunday Interview. Nigel Farage, welcome back. Good

morning. So the Labour Party has shot a fox. If Ed Miliband is the

next by Minister, there will not be a referendum customer there's a long

way between now and the next election, and Conservative party

jobs and changes. We had a cast-iron guarantee of a referendum from

camera, then he three line whip people to vote against it, and now

they are for it. What the Labour Party has done is open up a huge

blank to us, and that is what we will go for in the European

elections this coming year in May. I think there is a very strong chance

that Labour will match the Conservative pledge by the next

general election. There may be, but at the moment he has ruled it out,

and if he does not change his mind and goes into the election with the

policy as it is, the only chance of a referendum is a Tory government.

If you think the Tories will form a majority, which I think is unlikely.

Remember, two thirds of our voters would never vote Conservative

anyway. There is still this line of questioning that assumes UKIP voters

are middle-class Tories. We have some voters like that, but most of

them are coming to us from Labour, some from the Lib Dems and a lot of

nonvoters. But it come the election you failed to change Mr Miliband's

line, I repeat, the only chance of a referendum, if you want a

referendum, if that is what matters, and the polls suggest it doesn't

matter to that many people, but if that is what matters, the only way

you can get one is to vote Conservative. No, because you have a

situation in key marginals, especially where all three parties

are getting a good share, where we will see, and this depends a lot on

the local elections and the European elections, there are target

constituencies where UKIP has a reasonably good chance of winning a

seat, and that will change the agenda. Every vote for UKIP makes a

Tory government less likely. Arab voters are not Tory. Only a third of

the UKIP boat comes from the Conservative party -- our voters are

not Tory. -- the UKIP vote. It was mentioned earlier, about blue-collar

voters. We pick up far more Labour Party and nonvoters than

conservatives. On the balance of what the effect of the UKIP boat

is, the Tories should worry about us, they should worry about the fact

they have lost faith with their own electorate. Even if there is a

minority Ed Miliband government, electorate. Even if there is a

minority Ed Miliband government it minority Ed Miliband government, it

means no referendum. Labour and the Liberal Democrats are now at one on

the matter. The next election is in a few weeks time, the European

elections. What happens in those elections will likely change the

party stands and position on a referendum. The fact that Ed

Miliband has said this means, for us, our big target on the 22nd of

May will be the Labour voters in the Midlands and northern cities, and if

we do hammer into that boat and we are able to beat Labour on the day,

there's a good chance of their policy changing. One poll this

morning suggests Labour is close to you at 28, the Conservatives down at

21, the Lib Dems down at eight. You are taking votes from the

Conservatives and the Liberal Democrats. We are certainly taking

votes from the Lib Dems but that is comparing the poll with one year ago

when I don't think most people knew what the question really was. You

seem to be in an impossible position because the better you do in a

general election, the less chance there will be a referendum by 2020.

there will be a referendum by 2 20. No, look at the numbers. Only a

third of our voters are Conservatives. When we have polled

voters that have come to us, we asked them if there was no UKIP

candidate who would you vote for, less than one in five said

Conservative. Less than one in five UKIP voters would be tempted to vote

Conservative under any circumstances so the arithmetic does not suggest

we are the Conservative problem it suggests we are hurting all of the

parties and the reason the Tories are in trouble is because they have

lost their traditional base. Why do you think Nick Clegg is debating

Europe? I think they are in trouble, at 8% they could be wiped

out, they could go from 12 to nothing and I think it is a chance

for Nick Clegg to raise their profile. They are fringe party with

respect to this contest so I see why he wants to do it. One of our big

criticisms is that we have not been able to have a full debate on

national television on the alternatives of the European Union

so I am looking forward to it. How are you preparing? I think you can

be over scripted with these things. Are you not doing mock debates? No,

I am checking my facts and figures and making sure that I can show the

British people that in terms of jobs, we would be far better off not

being within the European Union, not being within its rule book, not

suffering from some of the green taxes they are putting on the

manufacturing industry. The idea that 3 million jobs are at risk,

manufacturing industry. The idea that 3 million jobs are at risk I

that 3 million jobs are at risk, I want to show why that is nonsense.

Who do you think is playing you in their mock debates? They probably

went to the pub and found someone! We will see. You have promised to do

whatever it takes to fund your European election campaign, how much

has been given so far? Just give it a few weeks and you will see what

Paul is planning to do. He has made a substantial investment in the

campaign already. How much? I'm not answering that for now. We are well

on our way to a properly funded campaign and our big target will be

the big cities and the working vote in those communities. Your deputy

chairman Neil Hamilton is another former Tory, he says so far we

haven't seen the colour of his money. Exactly two weeks ago, and

things have changed since then. Mr Sykes has written a cheque since

then? Yes. This morning's papers saying you will be asking MEPs to

contribute ?50,000 each, is that true? Over the next five years, yes.

Not for the European campaign. So lack of money will not be an excuse.

We will have a properly funded campaign. How we raise the kind of

money needed to fund the general election afterwards is another

question. What is UKIP's policy on paying family members? We don't

encourage it and I didn't employ any family member for years. My wife

ended up doing the job and paid for the first seven years of my job She

is paid now? Until May, then she comes off the payroll am which

leaves me with a huge problem. In 2004 you said, UKIP MEPs will not

employ wives and there will be no exceptions. An exception was made

because I became leader of the National party as well as a leader

of the group in European Parliament. Things do change in

life, and you can criticise me for whatever you like, but I cannot be

criticised for not having a big enough workload. No, but you didn't

employ your wife when you had told others not to do it your party.

Nobody else in my party has a big job in Europe and the UK. We made

the exception for this because of very unusual circumstances. It also

looks like there was a monetary calculation. Listen to this clip

from a BBC documentary in 2000. It is a good job. I worked it out

because so much of what you get is after tax that if you used the

secretarial allowances to pay your wife on top of the other games you

can play, I reckon this job in Stirling term is over a quarter of

?1 million a year. That is what you would need to earn working for

Goldman Sachs or someone like that. I agree with that. More importantly

the way you really make money in the European Parliament is being their

five days a week, because you sign in every day, you get 300 euros

every day, and that is how people maxed out. The criticism of me is

that I am not there enough so whatever good or bad I have done in

the European Parliament, financial gain has not been one of the

benefits. There have been allegations of you also employing a

former mistress on the same European Parliamentary allowance, you deny

that? I am very upset with the BBC coverage of this. The ten o'clock

news run this as a story without explaining that that allegation was

made using Parliamentary privilege by somebody on bail facing serious

fraud charges. I thought that was pretty poor. You have a chance to do

that and you deny you have employed a former mistress? Yes, but if you

look at many of the things said over the last week, I think it is

becoming pretty clear to voters that the establishment are becoming

terrified of UKIP and they will use anything they can find to do us down

in public. Is an MEP employs his wife and his former mistress, that

would be resigning matter, wouldn't it? Yes, particularly if the

assumption was that money was being taped for work but was not being

done. Who do you think is behind these stories? It is all about

negative, it is all about attacks, but I don't think it is actually

going to work because so much of what has been said in the last week

is nonsense. A reputable daily newspaper said I shouldn't be

trusted because I had stored six times for the Conservative party, I

have never even stored in a local council election. I think if you

keep kicking an underdog, it will make the British people rally around

us. Is it the Conservatives? Yes, and the idea that all of our voters

are retired colonels is simply not true. We get some voters from the

Labour side as well. Would you consider standing in a Labour seat

if you are so sure you are getting Labour votes? Yes, but the key for

UKIP is that it has to be marginal. Just for your own future, if you

fail to win a single soul -- single seat in the general election, if Ed

Miliband fails to win an outright majority, will you stand down as

UKIP leader? I would think within about 12 hours, yes. I will have

failed, I got into politics not because I wanted a career in

politics, far from it. I did it because I don't think this European

entanglement is right for our country. I think a lot of people

have woken up to the idea we have lost control of our borders and now

is the moment for UKIP to achieve what it set out to do. Will UKIP

continue without you if you stand down? Of course it will. I know that

everyone says it is a one-man band but it is far from that. We have had

some painful moments, getting rid of old UKIP, new UKIP is more

professional, less angry and it is going places. Nigel Farage, thank

you for being with us. So, what else should we be looking

out for in Wednesday's Budget statement? We've compiled a Sunday

Politics guide to the Chancellor's likely announcements.

Eyes down everyone, it's time for a bit of budget bingo. Let's see what

we will get from the man who lives at legs 11. Despite some good news

on the economy, George Osborne says that this will be a Budget of hard

truths with more pain ahead in order to get the public finances back

under control. But many in the Conservative party, including the

former chancellor Norman Lamont, want Mr Osborne to help the middle

classes by doing something about the 4.4 million people who fall into the

40% bracket. Around one million more people pay tax at that rate compared

to 2010 because the higher tax threshold hasn't increased in line

with inflation. Mr Osborne has indicated he might tackle the issue

in the next Conservative manifesto, but for now he is focused on helping

the low paid. It's likely we will see another increase in the amount

you can earn before being taxed, perhaps up another ?500 to ?10, 00.

perhaps up another ?500 to ?10,500. The Chancellor is going to flesh out

the details of a tax break for childcare payments, and there could

be cries of 'house' with the promise of more help for the building

industry. The Help To Buy scheme will be extended to 2020 and there

could be the go-ahead for the first Garden City in 40 years. Finally,

bingo regulars could be celebrating a full house with a possible cut in

bingo tax. And I've been joined in the studio

by the former Conservative chancellor Norman Lamont, in Salford

by the former Labour Cabinet minister Hazel Blears, and in

Aberdeen by the Lib Dem deputy leader, Malcolm Bruce. Let me come

to Norman Lamont first, you and another former Tory Chancellor,

Nigel Lawson, have called in the fall in the threshold for the rate

at which the 40p clicks in. I would have preferred an adjustment in the

Budget but I agree with what you are saying, it sounds like the

Chancellor will not do that. My main point is that you cannot go on

forever and forever increasing the personal allowance and not

increasing the 40% tax threshold because you are driving more and

more people into that band. It is an expensive policy because in order to

keep the number of people not paying tax constant, you have to keep

adjusting it each year. When this was introduced by Nigel Lawson, it

applied to one in 20 people, the 40% rate, it now applies to one in six

people. By next year, there will be 6 million people paying base. Why do

you think your Tory colleagues seem happy to go along with the Lib Dems

and target whatever money there is for tax cuts rather -- on the lower

paid rather than the middle incomes? They are not helping the lowest

paid. If you wanted to really help the lowest paid people you would

raise the threshold for national insurance contributions, which is

around ?6,000. Is it the Lib Dems stopping any rise in the 40p

threshold? We are concentrating on raising the lower threshold because

we believe that is the way to help those on lower incomes. Whilst they

haven't benefited as much as the lower paid they have participated

and I think people understand right now, if you were going to prioritise

the high earners, when we are still trying to help those on lower and

middle incomes who haven't enjoyed great pay increases but have got the

benefit of these tax increases, that is why we would like to do it for

the minimum wage level. But the poorest will not benefit at all. The

poorest 16% already don't pay tax. Why don't you increase the threshold

at which National Insurance starts? You only have two earned ?5,500

before you start to pay it. You ve got to remember that the raising of

the threshold to ?10,000 or more was something the Tories said we could

not afford. Why are you continuing to do it? If you want to help the

working poor, the way would be to take the lowest out of national

insurance. The view we take is they are benefiting, and have benefited

from, the raising of the tax threshold. You now have to earn

?10,000, we hope eventually 12, 00, ?10,000, we hope eventually 12,500,

and that means only people on very low wages. If you opt out of

national insurance, you're saying to people that you make no contribution

to the welfare system, so there is a general principle that people should

participate and paying, and also claim when they need something out.

We thought raising the threshold was simple and effective at a time of

economic austerity and the right way to deliver a helpful support to

welcoming people. -- working people. With the Labour Party continue to

raise the threshold, or do they think there is a case that there are

too many people being dragged into the 40p tax bracket? If Norman

Lamont thinks this is the right time to benefit people who are reasonably

well off rather than those who are struggling to make ends meet, then

genuinely, I say it respectfully, I don't think he's living in the world

the rest of us are. Most working people have seen their wages

effectively reduced by about ?1600 because they have been frozen, so

the right thing is to help people on modest incomes. I also understand

that if the 40% threshold went up, the people who would benefit the

most, as ever, are the people who are really well off, not the people

in the middle. The Conservatives have already reduced the 50p tax on

people over ?150,000 a year, and we have to concentrate on the people

going out to work, doing their best to bring their children up and have

a decent life and need a bit of help. I think raising the threshold

is a good thing. We would bring back the 10p tax, which we should never

have abolished, and do things with regard to childcare. At the moment,

childcare costs the average family as much as their mortgage, for

goodness sake. We would give 25 hours free childcare for youngsters

over three and four years old. That would be a massive boost the working

families. We are talking about nurses, tube drivers, warrant

officers in the army. There are many people who are not well off but have

been squeezed in the way everybody has been squeezed and they are

finding it continuing. I am stunned by Malcolm's argument where

everybody should pay something so you should not take people out of

national insurance, but the principle doesn't apply to income

tax. You can stand that argument on its head and apply it to income tax.

Most people don't see a difference between income tax and national

insurance, it's the same thing to most people. It is true that it

isn't really an insurance fund and there is an argument from merging

both of them. But we have concentrated on a simple tax

proposition. Norman is ignoring the fact the people on the 40% rate have

benefited by the raising of the personal allowance. To say they have

been squeezed is unfair. The calculation is that an ordinary

taxpayer will be ?700 better off at the current threshold, and about

?500 better off at the higher rate. It is misleading to say the better

off we'll be paying more. I agree with Hazel, if you go to the 40%

rate, it's the higher earners who benefit the most, and we won't do

that when the economy is not where it was before the crash. How much

will the lower paid be better off if you reintroduce the 10p rate?

Significantly better off. I don t have the figure myself, but they'd

be significantly better off and the Budget should be a mixture of

measures to help people who work hard. That is why I think the

childcare issue has to be addressed. ?100 a week of the people

with childcare payments. It is a massive issue. We want the job is

guaranteed to get young people back into work. There's been hardly any

discussion about that, and we have nearly 1 million people who have

been out of work for six months or more, and as a country we need to do

something to help that. 350,000 full-time students, so it is a

misleading figure. It is not a million including full-time

students. All parties do this. It sounds to me, Malcolm Bruce, you

have more in common with the Labour Party than you do with the

Conservatives. You want an annual levy on houses over ?2 million, so

does Labour. A lot of your members want to scrap the so-called bedroom

tax and so does labour. You think every teacher should have a teaching

qualification, and so does Labour. Your policy on the EU referendum is

the same. Let me go on. And you want to scrap the winter fuel allowance

for wealthy pensioners. We want to make sure we get the public finances

in order and we have grave reservations about the Labour Party

promises. But they followed your spending plans in the first year.

The point we are making is we can make a fairer society and stronger

economy if you keep the public finances moving towards balance. We

finances moving towards balance We don't think the Labour Party will

take a stand that track. It is interesting that the Labour Party

want to introduce the 10p rate that Gordon Brown abolished. We consider

that before we can -- committed to the 0% rate -- we considered that.

It makes a complicated system difficult and we think it's better

doing it that way. As a fiscal conservative, why are you talking

about any tax cuts when the deficit is over ?100 billion, and

effectively, anything you propose today can only be financed by more

borrowing. I totally agree with you. I said that this week. I thought the

best thing would have no Budget. I said that this week. I thought the

best thing would have no Budget The best thing would have no Budget. The

main thing is to get the deficit down. My argument is is that you

have an adjustment in tax rates it should be shared between the

allowances and the higher rate, but I don't think that the progress on

the deficit is something we can give up on. This is still a very long way

to go. We're only halfway through. Hazel, does it make sense to borrow

for tax cuts? I am reluctant to do this, but I agree with both Norman

and Malcolm. Malcolm Bruce wants to borrow for tax cuts. We absolutely

need to get the deficit down and get finances on a strong footing. But we

also have to think about having some spending in the system that in the

longer run saves us money. We all know we need to build new homes I

know we need to build new homes. I don't think it's necessarily the

right priority to give people in London mortgage relief in terms of

?600,000. We have to get the balance right. Sometimes it is right to

spend to save. I'm afraid we have run out of time. There will be

plenty more discussion in the lead up to the Budget on Wednesday.

It's just gone 11:35am. You're watching the Sunday Politics. We say

goodbye to viewers in Scotland who leave us now for Sunday Politics

Scotland. Coming up here in 20 minutes, Frances O'Grady, the

General Secretary of the TUC, joins us

Hello and welcome to the part of Sunday politics just for us here in

the East. Coming up: the government's plan for prosperous

government's plan for prospdrous cities. It is called the city deal

but what difference can rem`ke? cities. It is called the city deal

but what difference can rem`ke? If it was not for the city deal then

business would be different, it would be owned half the sizd.

business would be different, it would be owned half the size. And

would be owned half the sizd. And after a recession and cutbacks to

the arts, is there a glimmer of hope for our regional theatres in the

budget? Our message to George Osborne is that more investlent in

the arts need a better experience for audiences and the greater

for audiences and the greatdr cultural economy for the UK.

Lets meet our guests. Mark Lancaster the Conservative MP for Milton

Keynes North, a part`time soldier and former company director and now

a government whip. And Simon Wright represents Norwich South for the

Liberal Democrats, he was a maths teacher and political agent before

the entered Parliament in 2010. Welcome to both of you. Let's begin

with a big boost to the region 's with a big boost to the reghon s

school budgets because the government has announced th`t local

government has announced that local authorities with long`term

underfunding will now get whnd authorities with long`term

underfunding will now get wind of underfunding will now get whnd of

pounds extra. Nine councils across the East will receive nearlx ?7

the East will receive nearly ?70 million more every year. Thd biggest

million more every year. The biggest beneficiaries are Cambridgeshire

with 20.5 million and Norfolk with 16 million. It is all additional

16 million. It is all addithonal money. The authorities that did not

get more will not face any cuts. Simon, you are a former teacher.

Doesn't this prove that dec`des of Doesn't this prove that decades of

pupils have been missing out? Absolutely it does in this

announcement is very important for announcement is very important for

schools in Norfolk, a colle`gue schools in Norfolk, a colle`gue

Julian Huppert has been campaigning very hard to redress the balance

where our areas have been ldt down where our areas have been ldt down

by underinvestment, underfunding compare to the national average

This extra money will mean that headteachers can put the wee

This extra money will mean that headteachers can put the wed sources

into the classroom that can make a real difference. Mark, is it a real

difference? ?8 per pupil? Yds, real difference. Mark, is it a real

difference? ?8 per pupil? Yes, we difference? ?8 per pupil? Yds, we

are fortunate in Milton Keynes where we are already packed ?4500 per

pupil across the country. We have a pupil across the country. We have a

different problem, we are a rapidly growing city and that is having a

spare school places is so that when people move into the city we

spare school places is so that when people move into the city wd can

actually find a place for them. We must find this infrastructure before

expansion so we have places for pupils before they come in. That is

why I am pleased that the government has announced this funding. Simon,

if the money is spent on teacher if the money is spent on te`cher

salaries is that enough? 's I think it depends on how house choose to

spend it. They will now how this will make the biggest impact in

their schools. If they use the money to attract the best teachers to the

schools that will clearly h`ve to attract the best teachers to the

schools that will clearly h`ve an enormous possible impact. ``

enormous positive impact. They could spend it on development or training.

Whatever the needs of the schools, headteachers will have to have a

flexible at it. Here is a qtestion. flexible at it. Here is a question.

`` flexibility. Do you remelber the `` flexibility. Do you remelber the

East of England development agency? It was abolished in 2012. The

Coalition wanted everything more local and centralised. They brought

in local enterprise partnerships and more recently the city deal. Under

this programme individual chties more recently the city deal. Under

this programme individual cities bid this programme individual chties bid

for money to create jobs and infrastructure in their loc`l

for money to create jobs and infrastructure in their local area.

infrastructure in their loc`l area. In the East five cities put

themselves forward, Norwich, Ipswich and Southend have had their bid is

accepted. The Cambridge deal is expected to be confirmed in this

week 's budget. There is a slow progress on the Milton Keynds bid.

progress on the Milton Keynes bid. Our political correspondent has been

to Nottingham where the city deal is to Nottingham where the city deal is

already up and running to sde if it has made any difference.

E 70 men and women treats their jobs with the enthusiasm... 100 years ago

this is what Nottingham was famous for. Text fails. Particularly late.

`` textiles. Today, a completely different industry is prettx

different industry is pretty Nottingham on the map. In the old

textile factories dozens of high`tech companies are sprhnging

high`tech companies are springing up. This firm is apps for

smartphones. Just two years old it already has 2000 clients on its

books and hopes to be emploxing 50 books and hopes to be emploxing 50

staff in the next three years. If it was not for the city deal we

staff in the next three years. If it was not for the city deal wd would

was not for the city deal we would be around half the size and not on

the project as we are in terms of growth. Key to setting up, a

the project as we are in terms of growth. Key to setting up, ` grant

of ?150,000. The order said the business would not have gond off the

business would not have gone off the ground without it. If this loney

business would not have gond off the ground without it. If this money had

not been available he would have found it somewhere? Absolutdly, we

found it somewhere? Absolutely, we would probably be in London or

Berlin but certainly not Nottingham. They call this area of the creative

quarter, he plans to regenerate this part of the city have been `round

for a while but city deal status made it all happen. A series of

financial incentives is attracting new firms and encouraging those

already here to grow. Any help you already here to grow. Any hdlp you

can get to nudge forward in terms of doing something positive is a

tremendous help, gives you ` doing something positive is a

tremendous help, gives you a spring tremendous help, gives you a spring

in your step and you can sed, rather than battling against red tape,

people are actually giving us something to help us drive the

business forward. With ?60 million business forward. With ?60 lillion

of money from the government the council has been able to set up a

venture capital fund to help new businesses and install superfast

broadband. Old warehouses have been broadband. Old warehouses have been

transformed into office space. More than 700 jobs have been cre`ted

transformed into office space. More than 700 jobs have been created, ?22

than 700 jobs have been cre`ted ?22 million of private investment

brought in. ?1 million has been spent creating eight skills and

apprenticeship, help young into apprenticeship, help young into

jobs. Last year it placed 520 apprentices, but 80% among `` above

the national average. We are clear the national average. We ard clear

about what we wanted to do, develop infrastructure, skills, bushness

infrastructure, skills, business support. What we have managdd

infrastructure, skills, bushness support. What we have managed to do

is get in place and certain things. For example a ?50 million venture

capital fund. That is something we have never had. It is something most

cities have never had and it makes it an attractive place to come to as

the city. Critics will point out that we used to have regional

development agencies for thhs that we used to have region`l

development agencies for this but development agencies for this but

the Coalition did away with them because it's not them too

bureaucratic and unfocused. City deal status is seen as the new way

to help areas grow economically. to help areas grow economic`lly

There is one other big benefits, There is one other big benefits

local councils are allowed to keep all of the business rates is

collected in the creative quarter. The extra money is used to fund an

extension to the Khan network. The council says ?760 million is being

invested in the city infrastructure. But it is not all going to plan.

But it is not all going to plan There is a lot of frustration that

many places still do not have superfast broadband. The Cotncil

superfast broadband. The Council complains about weight being slow to

make decisions and release loney. We make decisions and release money. We

have not seen the progress from city deal is that I wanted to see. There

is an awareness of that but ministers will have to take all the

their weight machines and ensure that localism is delivered on the

ground because that is what delivers growth. `` Whitehall machinds. Where

Nottingham leads, Norwich, Ipswich, Nottingham leads, Norwich, Hpswich,

Southend and soon Cambridge will follow. It will be a fewer years

follow. It will be a fewer xears before the full impact of city

follow. It will be a fewer years before the full impact of chty deal

status can be assessed at the feeling here is that it is working.

We are joined by Richard have it the Labour MEP for the East of England

Labour MEP for the East of Dngland who fought hard to retain the

development agency which used who fought hard to retain the

development agency which usdd to development agency which used to

access lots of funds from Etrope. We were feeling there that this is

working well in Nottingham, so it will be a big boost for the region?

It is certainly important in cities like knowledge and Ipswich run by

Labour councils, of course they're Labour councils, of course they re

going to embrace any money that is going. Councils have been hht by

three times the level of cuts converge to central governmdnt

converge to central government departments. But those councils are

seeking to provide leadership to seeking to provide leadership to

help the business community to provide for the future. What about

the other cities and towns hn the region that used to get access

the other cities and towns in the region that used to get accdss to

region that used to get access to the national and European money

through regional development agencies? What about London? Their

time will come, wanted? `` what about Luton. It is slight of hand.

They were spending ?100 million per year. The comparison is difficult

cause there is a lot of slehght hand cause there is a lot of sleight hand

by the government trying to be present things. You are seehng

by the government trying to be present things. You are seeing next

week in the budget we hope Cambridge will get it. Nick Clegg was in

Cambridge six months ago. Isn't it better to let the individual cities

represent themselves, decidd for represent themselves, decidd for

themselves rather than having one agencies thinking what is best

themselves rather than having one agencies thinking what is bdst for

agencies thinking what is best for the whole region? Yes and Ed

Miliband unveiled Labour 's task force for local government last

week. We would go much further in terms of whole place budgeting,

terms of whole place budgethng, getting as much public money

terms of whole place budgeting, getting as much public monex being

spent together in the interest getting as much public money being

spent together in the interest of communities. You have heard from

Nottingham in Andrew 's piece that they are experiencing the government

holding them back. I know from speaking with the councils that have

been successful that the original proposals in terms of powers and

budgets where will what are bound by this government. Isn't it good to

have healthy, petition betwden the various NAS? `` healthy competition.

The unemployed people in a region do not want to compete with other

cities for sparse amounts of money, they want to be successful

everywhere and anywhere. What about everywhere and anywhere. Wh`t about

the role all areas? The only money coming in as European Union money

that I am helping to get for our rural communities. Before you have a

system whereby the money av`ilable national and European was available

to anyone and everyone in a transparent way with the needs could

transparent way with the nedds could best be met. I am glad for the

cities and good luck to them for cities and good luck to thel for

doing it, I think there is ` big problem about Milton Keynes two

years late and ?70 million short in their budget so even with the

programmes in our region discovered is. Briefly, if Labour get in

programmes in our region discovered is. Briefly, if Labour get hn in

2015 would you bring somethhng similar to the regional development

similar to the regional devdlopment agency back? I think we should build

on what is there. I have worked with local enterprise partnerships and

many are doing the very best job possible. We are hoping to deliver

very significant European ftnding very significant European ftnding

programmes that I have worked hard programmes that I have worked hard

for in Brussels to them so H programmes that I have workdd hard

for in Brussels to them so I think the voters are not that intdrested

the voters are not that interested in redesigning the architecture,

what you are interested in his results. People come back to you

soon. Mark Lancaster we have heard soon. Mark Lancaster we havd heard

that in Milton Keynes the city soon. Mark Lancaster we have heard

that in Milton Keynes the chty deal that in Milton Keynes the chty deal

has stalled, what is going on? There is a hard negotiation between Milton

is a hard negotiation betwedn Milton Keynes and the government, we are

very clear that we are keen to build new homes. We have 20,000

outstanding planning applic`tions and once he gets the money as they

and once he gets the money `s they are built for the new infrastructure

but tends to lag behind is the revenue. The deal with government is

that the revenue will be brought forward. What I must say is that the

concept that it is only for the cities, their constituency

represents nearly 35,000 rural electorates in the are all part of

Milton Keynes and they will benefit from the city deal. Equally the deal

stretches into Central Bedfordshire so it is not just the ardent

conurbations. Mark rate, but you feel the rural areas are missing

out? Watch this package means is that the city deal, the citx will

that the city deal, the city will have the freedom and flexibhlity to

have the freedom and flexibility to capitalise on what we do so well and

ensure we have the ability to capitalise on the jobs we know the

city can deliver. This is expertise based on the research Park and the

creative sector and aviation skills. Knowledge has an awful lot but it is

a local community and local councils that know how best to delivdr that.

that know how best to deliver that. `` Norwich has an awful lot. This is

a local bodies that know wh`t is best to deliver for the economy. And

want to talk about Cambridgd best to deliver for the economy And

want to talk about Cambridge because that is a special case, we `re

that is a special case, we are expecting a big budget annotncement

expecting a big budget announcement this week about the Cambridge city

deal. In December the Deputy this week about the Cambridge city

deal. In December the Deputx Prime deal. In December the Deputx Prime

Minister came to sign a memorandum of understanding, the deal hs

of understanding, the deal is expected to bring in millions of

pounds of training, transport and housing schemes so Cambridge

pounds of training, transport and housing schemes so Cambridgd already

the economic powerhouse of the Eastern region, in a way our version

of London. Mark, don't other cities need The Stig? It is no good putting

all your eggs in one basket. `` need boosting. We must recognise that

each city is unique, and face different challenges. What the city

deal process does is allow individual communities to see what

individual communities to sde what their priorities are. You simply

their priorities are. You shmply cannot treat each community in the

same way and I am pleased that from the earlier comments Labour seem to

be embracing localism. Isn't Cambridge is success damaging

knowledge? We can feed off each knowledge? We can feed off each

other and feed their own economies so we are both prosperous and

successful in future. Both Cambridge and Norwich have significant

expertise in the science and research communities and we can

support one another to ensure the tyre region prosperous. Richard,

tyre region prosperous. Richard what about the European money

implications? Will it come through in the same way? As far as Cambridge

is concerned according to the Labour group leader who I hope will be the

leader of the council, it is only about half the money that Cambridge

about half the money that C`mbridge needs, as far as the European

funding is concerned the danger is that because we do not have the

people or expertise or capacity to claim the funds to help the big

school and then we will losd money school and then we will losd money

to Europe. We have seen signs of that and I have spoken with local

enterprise partnerships including the one concerning greater

Cambridge, helped host visits from Cambridge recently in Brussdls. We

Cambridge recently in Brussels. We are doing our best. Irrespective of

politics, we are doing our best to help our local areas clean these

funds. Unless you get expert people on the ground with sufficient

capacity to be able to do that work then we might see you looking

funding goal. I am not just saying that as a Labour member of the

European Parliament, that is what the business people who are members

of the boards of these local at a price partnerships are saying to me

and to government. Richard, thank you for pointing that out. Couldn't

let it all without mentioning the sad death of Tony Benn. What did he

mean to you? Issued installation. sad death of Tony Benn. What did he

mean to you? Issued install`tion. I mean to you? Issued installation. I

first met him when he `` whdn I was first met him when he `` when I was

a student. `` huge inspirathon. I a student. `` huge inspiration. I

saw him two years ago at at the TUC march against the cuts. He was there

with his picnic box. I remelber his with his picnic box. I remelber his

late`night chats over a cup of tea in the Labour Party conference,

which were phenomenal occashons I remember him saying in politics we

must be teachers and I think that is a lesson I have taken into

politics. But most of all for us in East Anglia he used to come very

regularly to the rallies, the trade union rally we hold each September

and many hundreds and thousands union rally we hold each September

and many hundreds and thousands have come to listen to him there and the

fact that I will never hear a speech again by one of the greatest orators

in the history of the Labour Party is one greater sadness. Thank you.

Our theatres are hoping that the budget might help them, too. The

government has promised a consultation into tax breaks for

touring productions. The arts Council wants to strengthen funding

outside London where art investment pierhead is ?44. `` art invdstment

pierhead is ?44. `` art investment per head.

This is the Mercury Theatre in Colchester where the production of

table eyes as just opened before table eyes as just opened bdfore

going on tour, first to Ipswich and then to knowledge. Reductions like

this benefits the theatre and the local economy. The sets were built

local economy. The sets werd built in the local workshops and local

restaurants enjoyed trade from theatre`goers. More investmdnt in

the arts means we have opportunities for new talent, that we can be more

ambitious and put on great shows. We are hopeful after the budget that

regional theatre will see more funding, the investment in the east

as part of the load anywherd in England the arts Council could

England the arts Council cotld definitely be investing more

England the arts Council could definitely be investing mord in

England the arts Council cotld definitely be investing more in the

definitely be investing mord in the East of England but our hope is that

East of England but our hopd is that it will not be at the expense of

London and other parts of the UK. Our message is that more investment

in the arts means more opportunities for new talent, bigger ambitions for

regional theatre, which experiences regional theatre, which expdriences

for audience and a greater cultural economy for the UK. Both of you have

successful theatres in your regions, but this is about spreading the

benefits? Absolutely, we must do that more effectively. Arts Council

England has been biased towards England has been biased tow`rds

London with spending, 86040 split where most funds are allocated to

London. You get just 7%! Indeed and it is not good enough. In the past

few years the split has been more like 70/30, but there must be

further measures to identify this further measures to identifx this

and support theatres across the region so they are able to compete

in a `` and attract good tr`ding companies and put on innovative

programmes. Is it important that we support theatres? Vital, Milton

Keynes Stater is at the heart of our cultural community in the chty.

Keynes Stater is at the heart of our cultural community in the city. It

is not just the activity in the theatre but the whole area `round

is not just the activity in the theatre but the whole area around it

theatre but the whole area `round it from Milton Keynes Gallery to the

shops and restaurants. If wd look at shops and restaurants. If wd look at

a similar model with the government introduced credits for the film

industry, we can see the success that has had over the past three or

four years investing in indtstry four years investing in indtstry

fourfold, it is a good model to use and the same that this is sensible.

So this could make a differdnce So this could make a differdnce

Absolutely. An enormous difference. We must support the areas where

investment has been hard to come by. Touring companies have found it

harder to attract investment and introducing tax credits would go a

long way to worse helping that. You will have heard of the Valley

long way to worse helping that. You will have heard of the Valldy of

long way to worse helping that. You will have heard of the Valley of the

will have heard of the Valldy of the Kings in Egypt, but what about the

village of the Kings closer to home? The case to be open the Bralley line

to Wisbech was taken to Westminster by local politicians and as those

leaders who were told it has priority. Eli is there, working on

this track does not interfere with other parts of the network and so

this track does not interfere with other parts of the network `nd so it

is something we can move quickly is something we can move quhckly

on. Hertfordshire has been named the least affordable place to lhve

on. Hertfordshire has been named the least affordable place to live in

the region, according to thd the region, according to thd

National Housing Federation house prices and rents are among the

highest in the country. In the flagship three school run bx a

flagship three school run by a Swedish company in Suffolk has been

put into special measures bx Ofstead put into special measures by Ofstead

just 18 months after it opened. The school in Brandon has been

criticised for teaching and bad behaviour from pupils. Steps must be

taken to turn around this school and the school has started on that

journey but there is a long way to go and more to do. Norwich council

has been named as the most hmproved has been named as the most hmproved

in the country but it cannot compete with Rendlesham in Suffolk where

baseless treasures suggest ht was baseless treasures suggest it was

the village of the Kings. Mark, let's talk about houshng. Your

Mark, let's talk about housing. Your government has failed to address the

problem. We have 28,000 outstanding planning applications in Milton

Keynes, have proved more new homes and are building at a faster rate

than in the past six years. Milton Keynes is one place where wd are

building and not only that with the government Help To Buy schele in the

government Help To Buy scheme in the right to buy scheme we are helping.

Isn't happening quickly enough? It is speeding up dramatically. Simon

Wright, the scene in Norwich? Yes, we must continue to increasd

we must continue to increase house`building, there is a big

deficit in terms of need versus supply. There is a turnaround now

and we are seeing the revitalisation and we are seeing the revitalisation

of the construction sector but we were left with an enormous challenge

and if you were that social housing in particular, under 13 years of

Labour there were 420,000 fewer Labour there were 420,000 fdwer

social homes when they came out of office than when they went hn

social homes when they came out of office than when they went in so

office than when they went hn so that is a shocking problem that we

are picking up the pieces of. I am pleased that this government will be

the first from 30 years to leave office with more social homes at the

office with more social homds at the end than the beginning.

Thank you both very much. That is all for now. You can keep in touch

through a website for and for industrial action is a sign of

failure marked success. -- not success. Andrew, back to you.

Has George Osborne got a rabbit in his Budget hat? Will the Chancellor

find a way to help the squeezed middle? And how do Labour respond?

All questions for The Week Ahead. And joining Helen, Janan and Nick to

discuss the budget is the general secretary of the Trades Union

Congress Frances O'Grady. Welcome back to the programme. I know the

TUC has a submission, but if you could pick one thing that you wanted

the Chancellor to do above all, what would it be? We want a budget for

working people, which means we have to crack the long-term problem of

investment in the British economy. Certainly I would like the

Chancellor to merit that title they want of the new workers party, and

take action on living standards but take action on living standards, but

if they're going to do that it's got to be about unlocking investment. In

the period where the economy has been flat-lining there has been

little business investment, but there are signs towards the end of

last year that it is beginning to pick up. But a long way to go. The

problem is we have key industries like construction and manufacturing

that are still smaller than they were before the recession. The

government itself, of course, has slashed its own capital investment

budget by half. There is plenty of good and important work that needs

to be done from building houses to improving the transport system, to

improving our schools. And the government really needs to pick up

that shovel and start investing in our economy to get the decent jobs

we need, the pay increases we need, and that in itself will help

stimulate demand. It was Alistair Darling who cut in 2011, and it's

interesting that Ed Balls in his plans for the next parliament would

run a current budget surplus by the end of the parliament as opposed to

George Osborne who would have an overall budget surplus. That gives

Ed Balls or -- more wriggle room to do what you talk about, but he is

reticent to talk about it. He does not want to say that he has an

opportunity to spend on investment because he fears if he says it he

will be attacked by the Conservatives for being

irresponsible. Why is business doing this? The recession was deeper than

any since the war and the recovery was slower than almost any since the

war. The lag, the time it takes to get over that is longer than anyone

expected. I read the same evidence as you towards the end of last year

pointing to money being released, and it depends what it is released

on, whether it is capital investment or bringing in people on higher

wages. The one surprise in the downturn is how well the employment

figures have done, but they have not invested in new capacity and they

are sitting on a lot of dosh. I looked at one set of figures that

said if you took the biggest company in Britain, they have about 715

billion pounds in corporate treasury -- the biggest companies. I think

it's reduced a little but they are sitting on a mountain in dash of

skills. Yes, but they're not investing in skills, wages, or

sustainable jobs. The new jobs we have seen created since 2010, the

vast majority of them have been in low paid industries, and they are

often zero hours, or insecure, or part-time. So it's not delivering a

recovery for ordinary working people. Government ministers, as you

know when you lobby them, they are anxious to make out that they know

the job is not done and the recovery has just begun, but the one bit they

are privately proud of, although they can't explain it, is how many

private-sector jobs have been created. A lot of unions have done

sensible deals with employers to protect jobs through this period,

but it's not sustainable. The average worker in Britain today is

now ?2000 a year worse off in real terms than they were. On a pay

against price comparison? It doesn't take into account tax cuts. The

raising of the personal allowance is far outweighed by the raising VAT.

Does the raising of the threshold which the Lib Dems are proud of and

the Tories are trying to trade credit for, does it matter to your

members? -- take credit for. It matters that it is eclipsed by the

cuts in benefits and know what is conned any more. We're going to hear

a lot about the raising of the allowance, but as long as the real

value of work, tax credits, things like that, people won't feel it in

their pocket, and they will find it harder and harder to look after

their family. When you look at the other things that could take over

from consumer spending which has driven the recovery, held by house

price rising in the south, it is exports and business investment, and

you look at the state of the Eurozone and the emerging markets

which are now in trouble, and the winter seems to have derailed the US

recovery. It won't be exports. Indeed, the Obie Eich does not think

that will contribute to growth until 2015 -- OBI. So the figures we

should be looking at our business investment. And also the deficit.

The deficit is 111 billion, and that is a problem, because we are not at

the end of the cutting process, there are huge cuts to be made. I

understand we are only a third of the way through. That will

definitely affect business confidence. It is clear that the

strategy has failed. Borrowing has gone up and it's not delivered

improved living standards and better quality jobs, so cutting out of the

recession is not going to work. The structural budget deficit was going

to be eliminated three weeks today under the original plan. They missed

target after target. Every economist has their own definition of that. I

think Mark Carney is right when he says that fundamentally the economy

is unbalanced and it is not sustainable, growth is not

sustainable. But if it clicked on, it would be more balanced. It is not

just north and south and manufacturing a way out with

services, but it is also between the rich and everybody else. What do you

make of the fact that there will effectively be another freezing

public sector pay, or at least no more than 1%? Not even that for

nurses and health workers. But they will get 3% progression pay. 70%

nurses and health workers. But they will get 3% progression pay. 70 of

will get 3% progression pay. 70% of nurses will not get any pay rise at

all. They get no progression pay at all. I think this is smack in the

mouth. Smack in the mouth to dedicated health care workers who

will feel very, very discontented about the decision. Danny

Alexander, I saw him appealing to health workers do not move to strike

ballots and said they should talk to their department. But about what? Is

that real pay cut has been imposed, what are workers left with? So do

you expect as a result of yet more tough controls on public sector pay

that unrest is inevitable? I know some unions will be consulting with

their members, but ultimately it's always members who decide what to

do. It does seem to me insulting not to at least be honest and say that

we are cutting real pay of nurses, health care workers, on the back of

a ?3 billion reorganisation of the NHS that nobody wanted and nobody

voted for. Their long-term changes taking place here that almost talks

about -- there are long-term changes. It is how lower percentage

wages have become of GDP on how big the percentage of profits is. It

seems to me there is a strong case for some kind of realignment there.

The biggest event of my life, in this world, is the entry of a couple

of billion more people into the labour supply. At the end of the

Cold War, India and China plugged into the global economy. If there is

a greater supply of that factor of production, logically you conclude

that wages will fall or stagnate and that has been the story in this

country and America and large parts of Western Europe in the last

generation. What is not possible is for governments to do much about

it. They can ameliorate it at the margins, but the idea that the

government controls living standards, which has become popular

over the last six months, and the Labour Party have in establishing

that, and I don't think it's true. George Osborne's options are

astonishingly limited compared to public expectations. If wages have

reached a modern record low as percentage of GDP, who is going to

champion the wage earner? We have lost Bob Crow, Tony Benn passed

away, so who is the champion? The trade union movement is the champion

of ordinary workers. We need those larger-than-life figures that we

will mess. Have you got them yet? We have a generation of workers coming

through. One thing about the loss of Bob Crow is that the whole union

movement has responded strongly to that, and we want to say that we are

strong and united and here to stand up for working people and we will

fight as hard as Bob Crow did. Whoever replaces Bob Crow or Tony

Benn, we can be sure they will not come from Eton because they all have

jobs in the government. I want to put up on the screen what even

Michael Gove was saying about this coterie of Old Etonian 's.

He's right, is he not? He's absolutely right. We have the idea

of the manifesto being written by five people from Eton and one from

Saint Pauls. A remarkable example of social mobility that George Osborne,

who had the disadvantage of going to Saint Pauls has made it into that

inner circle. Here is the question, what is Michael Gove up to? If you

saw the response from George Osborne, there was no slap down,

saw the response from George Osborne, there was no slap down and

Osborne, there was no slap down, and they know this is an area they are

weak on an David Cameron will not comment on it. If this had been a

Labour shadow minister making a similarly disloyal statement, they

might have been shot at dawn. But there is a real tolerance from

Michael Gove to go freelance which comes from George Osborne. It's

about highlighting educational reforms that he wants to turn every

school in to eat and so it won't happen in the future. But it's also

pointing out who did not go to Eton school and who would be the best

candidate to replace David Cameron as leader, George Osborne, and who

did go to Eton school, Boris Johnson. Michael Gove is on

manoeuvres to destroy Boris Johnson's chances of being leader.

It's a good job they don't have an election to worry about. Hold on. I

think they are out of touch with businesses as well as working

people. You ask about who is talking about wage earners. Businesses are.

They are worried that unless living standards rise again there will be

nobody there to buy anything. We are running out of time, but the TUC,

are enthusiastic about HS2? We supported. We think it's the kind of

infrastructure project that we need to invest in long-term. He could, if

we get it right, rebalance north and south and create good jobs along the

way -- it could. Thank you very much tool. I have to say that every week

-- thank you very much to you all. That's all for today. I'll be back

next Sunday at 11am, and Jo Coburn will be on BBC Two tomorrow at

midday with the Daily Politics. Remember if it's Sunday, it's the

Sunday Politics.