16/03/2014 Sunday Politics South East


16/03/2014

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

:00:37.:00:44.

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

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

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top story. Ed Balls says millions of people

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

:00:55.:00:56.

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

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

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

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In the south`east, Labour h`s a means no chance

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In the south`east, Labour h`s a political mountain to climb with no

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MPs in the region. As the p`rty gathers in

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of cycling. The three areas of London getting a cash boost to try

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something different. And with me as always our top

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political panel - Nick Watt, Helen Lewis and Janan Ganesh. They'll be

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tweeting their thoughts using the hashtag #bbcsp throughout the

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programme. So, just three months after his last major financial

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statement, George Osborne will be at the despatch box again on Wednesday,

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delivering his 2014 Budget. The Chancellor has already previewed his

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own speech, pledging to build what he calls a "resilient economy". The

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message I will give in the Budget is the economic plan is working but the

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job is far from done. We need to build resilient economy which means

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addressing the long-term weaknesses in Britain that we don't export

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enough, invest enough, build enough, make enough. Those are the things I

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will address because we want Britain to earn its way in the world. George

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Osborne's opposite number, Ed Balls, has also been talking ahead of the

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Budget. He says not everyone is feeling the benefit of the economic

:02:28.:02:30.

recovery, and again attacked the Government's decision to reduce the

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top rate of tax from 50 to 45%. George Osborne is only ever tough

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when he's having a go at the week and the voiceless. Labour is willing

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to face up to people on the highest incomes and say, I'm sorry,

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justifying a big tax cut at this time is not fair. We will take away

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the winter allowance from the richer pensioners, and I think that's the

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right thing to do. George Osborne might agree, but he's not allowed to

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say so. That was the Chancellor and the shadow chancellor. Janan, it

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seems like we are in a race against time. No one argues that the

:03:07.:03:10.

recovery is not under way, in fact it looks quite strong after a long

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wait, but will it feed through to the living standards of ordinary

:03:15.:03:19.

people in time for the May election? They only have 14 months to do it.

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The big economic variable is business investment. Even during the

:03:25.:03:28.

downturn, businesses hoarded a lot of cash. The question is, are they

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confident enough to release that into investment and wages? Taking on

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new people, giving them higher pay settlements. That could make the

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difference and the country will feel more prosperous and this time next

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year. But come to think of it, it strikes me, that how anticipated it

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is, it's the least talked about Budget for many years. I think that

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is because the economy has settled down a bit, but also because people

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have got used to the idea that there is no such thing as a giveaway.

:03:59.:04:02.

Anything that is a tax cut will be taken away as a tax rise or spending

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cut. That's true during the good times but during fiscal

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

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

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

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

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

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

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

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

:04:46.:04:50.

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

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

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

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

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

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

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

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George Osborne announcing the rays in the personal allowance will go

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up, saying it might go up to 10 750 from next year, and Conservative MPs

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say that that's OK but we need to think about the middle voters.

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People are saying the economy is recovering but no one is feeling it

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in their pocket. These are people snagged in at a 40p tax rate. The

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Tories are saying these are our people and we have to get to them.

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He has given the Lib Dems more than they could have hoped for on raising

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the threshold. Why is he not saying we have done a bit for you, now we

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have to look after our people and get some of these people out of that

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40% bracket? Partly because the Lib Dems have asked for it so

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insistently behind-the-scenes. Somebody from the Treasury this week

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told me that these debates behind the scenes between the Lib Dems and

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Tories are incredibly tenacious and get more so every year. The Lib Dems

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have been insistent about going further on the threshold. The second

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reason is that the Tories think the issue can work for them in the next

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election. They can take the credit. If they enthusiastically going to

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?12,000 and make it a manifesto pledge, they can claim ownership of

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the policy. The Liberal Democrats want to take it to 12,500, which

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means you are getting into minimum wage territory. It's incredibly

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expensive and the Tories are saying that maybe you would be looking at

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the 40p rate. The Tories have played as well. There have been authorised

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briefings about the 40p rate, and Cameron and Osborne have said that

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their priority was helping the lowest paid which is a useful

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statement to make and it appeals to the UKIP voters who are the

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blue-collar workers. And we are right, the economy will determine

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the next election? You assume so. It was ever that is. It didn't in 992

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

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

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

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certainly clarified matters. UKIP say it just shows the mainstream

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

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

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securing a referendum. Giles Dilnot reports.

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

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

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

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

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

:08:10.:08:21.

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

:08:22.:08:24.

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

:08:25.:08:30.

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

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

:08:35.:08:37.

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

:08:38.:08:47.

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

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membership: the largest rebellion against a Tory prime minister over

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

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

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coalition Government including selfie-conciously-pro European Lib

:09:07.:09:08.

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

:09:09.:09:11.

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

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

:09:15.:09:17.

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

:09:18.:09:25.

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

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like UKIP, we want a referendum but only a Conservative government can

:09:32.:09:36.

deliver it because most suffer largest would say it is possible in

:09:37.:09:41.

the first past the post system to have a UKIP government --

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sophologists. And then it's easy for as to say that if a UKIP vote lets

:09:51.:09:58.

in a Conservative government, then they won't hold a referendum. UKIP

:09:59.:10:03.

seem undaunted by the clarifications of the other parties, campaigning

:10:04.:10:07.

like the rest but with a "tell it how it is, just saying what you re

:10:08.:10:10.

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

:10:11.:10:16.

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

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

:10:22.:10:27.

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

:10:28.:10:31.

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

:10:32.:10:38.

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

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were quick to capitalise on the announcements, saying only the

:10:44.:10:48.

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

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

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

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

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

:11:07.:11:09.

how they voted before is complicated, and what dent they

:11:10.:11:12.

might make on Conservative and Labour votes in 2015 is trickier

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

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

:11:24.:11:26.

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

:11:27.:11:30.

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

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

:11:36.:11:38.

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

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

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

:11:50.:11:52.

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

:11:53.:11:56.

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

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any support the other parties have previously enjoyed.

:12:00.:12:02.

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

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

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

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

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way between now and the next election, and Conservative party

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

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

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

:12:41.:12:44.

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

:12:45.:12:48.

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

:12:49.:12:51.

that Labour will match the Conservative pledge by the next

:12:52.:12:55.

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

:12:56.:13:00.

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

:13:01.:13:03.

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

:13:04.:13:10.

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

:13:11.:13:14.

Remember, two thirds of our voters would never vote Conservative

:13:15.:13:17.

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

:13:18.:13:22.

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

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

:13:26.:13:31.

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

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

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

:13:41.:13:44.

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

:13:45.:13:47.

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

:13:48.:13:52.

situation in key marginals, especially where all three parties

:13:53.:13:56.

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

:13:57.:14:00.

the local elections and the European elections, there are target

:14:01.:14:07.

constituencies where UKIP has a reasonably good chance of winning a

:14:08.:14:10.

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

:14:11.:14:17.

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

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

:14:21.:14:27.

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

:14:28.:14:31.

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

:14:32.:14:33.

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

:14:34.:14:37.

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

:14:38.:14:41.

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

:14:42.:14:46.

minority Ed Miliband government it means no referendum. Labour and the

:14:47.:14:49.

Liberal Democrats are now at one on the matter. The next election is in

:14:50.:14:54.

a few weeks time, the European elections. What happens in those

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elections will likely change the party stands and position on a

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referendum. The fact that Ed Miliband has said this means, for

:15:03.:15:06.

us, our big target on the 22nd of May will be the Labour voters in the

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Midlands and northern cities, and if we do hammer into that boat and we

:15:11.:15:14.

are able to beat Labour on the day, there's a good chance of their

:15:15.:15:23.

policy changing. One poll this morning suggests Labour is close to

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you at 28, the Conservatives down at 21, the Lib Dems down at eight. You

:15:32.:15:38.

are taking votes from the Conservatives and the Liberal

:15:39.:15:41.

Democrats. We are certainly taking votes from the Lib Dems but that is

:15:42.:15:49.

comparing the poll with one year ago when I don't think most people knew

:15:50.:15:54.

what the question really was. You seem to be in an impossible position

:15:55.:15:59.

because the better you do in a general election, the less chance

:16:00.:16:05.

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

:16:06.:16:10.

third of our voters are Conservatives. When we have polled

:16:11.:16:16.

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

:16:17.:16:20.

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

:16:21.:16:25.

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

:16:26.:16:30.

Conservative under any circumstances so the arithmetic does not suggest

:16:31.:16:36.

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

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

:16:40.:16:44.

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

:16:45.:16:51.

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

:16:52.:16:59.

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

:17:00.:17:04.

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

:17:05.:17:10.

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

:17:11.:17:15.

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

:17:16.:17:19.

national television on the alternatives of the European Union

:17:20.:17:24.

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

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

:17:39.:17:44.

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

:17:45.:17:48.

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

:17:49.:17:54.

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

:17:55.:17:58.

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

:17:59.:18:04.

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

:18:05.:18:10.

want to show why that is nonsense. Who do you think is playing you in

:18:11.:18:16.

their mock debates? They probably went to the pub and found someone!

:18:17.:18:23.

We will see. You have promised to do whatever it takes to fund your

:18:24.:18:27.

European election campaign, how much has been given so far? Just give it

:18:28.:18:34.

a few weeks and you will see what Paul is planning to do. He has made

:18:35.:18:40.

a substantial investment in the campaign already. How much? I'm not

:18:41.:18:49.

answering that for now. We are well on our way to a properly funded

:18:50.:18:53.

campaign and our big target will be the big cities and the working vote

:18:54.:19:00.

in those communities. Your deputy chairman Neil Hamilton is another

:19:01.:19:04.

former Tory, he says so far we haven't seen the colour of his

:19:05.:19:09.

money. Exactly two weeks ago, and things have changed since then. Mr

:19:10.:19:16.

Sykes has written a cheque since then? Yes. This morning's papers

:19:17.:19:25.

saying you will be asking MEPs to contribute ?50,000 each, is that

:19:26.:19:33.

true? Over the next five years, yes. Not for the European campaign. So

:19:34.:19:39.

lack of money will not be an excuse. We will have a properly funded

:19:40.:19:44.

campaign. How we raise the kind of money needed to fund the general

:19:45.:19:48.

election afterwards is another question. What is UKIP's policy on

:19:49.:19:59.

paying family members? We don't encourage it and I didn't employ any

:20:00.:20:04.

family member for years. My wife ended up doing the job and paid for

:20:05.:20:10.

the first seven years of my job She is paid now? Until May, then she

:20:11.:20:17.

comes off the payroll am which leaves me with a huge problem. In

:20:18.:20:25.

2004 you said, UKIP MEPs will not employ wives and there will be no

:20:26.:20:31.

exceptions. An exception was made because I became leader of the

:20:32.:20:35.

National party as well as a leader of the group in European

:20:36.:20:39.

Parliament. Things do change in life, and you can criticise me for

:20:40.:20:43.

whatever you like, but I cannot be criticised for not having a big

:20:44.:20:49.

enough workload. No, but you didn't employ your wife when you had told

:20:50.:20:58.

others not to do it your party. Nobody else in my party has a big

:20:59.:21:01.

job in Europe and the UK. We made the exception for this because of

:21:02.:21:06.

very unusual circumstances. It also looks like there was a monetary

:21:07.:21:11.

calculation. Listen to this clip from a BBC documentary in 2000. It

:21:12.:21:18.

is a good job. I worked it out because so much of what you get is

:21:19.:21:24.

after tax that if you used the secretarial allowances to pay your

:21:25.:21:27.

wife on top of the other games you can play, I reckon this job in

:21:28.:21:35.

Stirling term is over a quarter of ?1 million a year. That is what you

:21:36.:21:38.

would need to earn working for Goldman Sachs or someone like that.

:21:39.:21:45.

I agree with that. More importantly the way you really make money in the

:21:46.:21:48.

European Parliament is being their five days a week, because you sign

:21:49.:21:53.

in every day, you get 300 euros every day, and that is how people

:21:54.:21:59.

maxed out. The criticism of me is that I am not there enough so

:22:00.:22:04.

whatever good or bad I have done in the European Parliament, financial

:22:05.:22:08.

gain has not been one of the benefits. There have been

:22:09.:22:13.

allegations of you also employing a former mistress on the same European

:22:14.:22:18.

Parliamentary allowance, you deny that? I am very upset with the BBC

:22:19.:22:23.

coverage of this. The ten o'clock news run this as a story without

:22:24.:22:28.

explaining that that allegation was made using Parliamentary privilege

:22:29.:22:32.

by somebody on bail facing serious fraud charges. I thought that was

:22:33.:22:40.

pretty poor. You have a chance to do that and you deny you have employed

:22:41.:22:48.

a former mistress? Yes, but if you look at many of the things said over

:22:49.:22:52.

the last week, I think it is becoming pretty clear to voters that

:22:53.:22:56.

the establishment are becoming terrified of UKIP and they will use

:22:57.:23:03.

anything they can find to do us down in public. Is an MEP employs his

:23:04.:23:10.

wife and his former mistress, that would be resigning matter, wouldn't

:23:11.:23:16.

it? Yes, particularly if the assumption was that money was being

:23:17.:23:20.

taped for work but was not being done. Who do you think is behind

:23:21.:23:27.

these stories? It is all about negative, it is all about attacks,

:23:28.:23:34.

but I don't think it is actually going to work because so much of

:23:35.:23:37.

what has been said in the last week is nonsense. A reputable daily

:23:38.:23:42.

newspaper said I shouldn't be trusted because I had stored six

:23:43.:23:47.

times for the Conservative party, I have never even stored in a local

:23:48.:23:51.

council election. I think if you keep kicking an underdog, it will

:23:52.:23:56.

make the British people rally around us. Is it the Conservatives? Yes,

:23:57.:24:07.

and the idea that all of our voters are retired colonels is simply not

:24:08.:24:12.

true. We get some voters from the Labour side as well. Would you

:24:13.:24:22.

consider standing in a Labour seat if you are so sure you are getting

:24:23.:24:27.

Labour votes? Yes, but the key for UKIP is that it has to be marginal.

:24:28.:24:36.

Just for your own future, if you fail to win a single soul -- single

:24:37.:24:43.

seat in the general election, if Ed Miliband fails to win an outright

:24:44.:24:48.

majority, will you stand down as UKIP leader? I would think within

:24:49.:24:53.

about 12 hours, yes. I will have failed, I got into politics not

:24:54.:24:58.

because I wanted a career in politics, far from it. I did it

:24:59.:25:04.

because I don't think this European entanglement is right for our

:25:05.:25:07.

country. I think a lot of people have woken up to the idea we have

:25:08.:25:12.

lost control of our borders and now is the moment for UKIP to achieve

:25:13.:25:19.

what it set out to do. Will UKIP continue without you if you stand

:25:20.:25:24.

down? Of course it will. I know that everyone says it is a one-man band

:25:25.:25:34.

but it is far from that. We have had some painful moments, getting rid of

:25:35.:25:36.

old UKIP, new UKIP is more professional, less angry and it is

:25:37.:25:41.

going places. Nigel Farage, thank you for being with us.

:25:42.:25:46.

So, what else should we be looking out for in Wednesday's Budget

:25:47.:25:49.

statement? We've compiled a Sunday Politics guide to the Chancellor's

:25:50.:25:51.

likely announcements. Eyes down everyone, it's time for a

:25:52.:25:54.

bit of budget bingo. Let's see what we will get from the man who lives

:25:55.:25:58.

at legs 11. Despite some good news on the economy, George Osborne says

:25:59.:26:01.

that this will be a Budget of hard truths with more pain ahead in order

:26:02.:26:05.

to get the public finances back under control. But many in the

:26:06.:26:07.

Conservative party, including the former chancellor Norman Lamont

:26:08.:26:10.

want Mr Osborne to help the middle classes by doing something about the

:26:11.:26:13.

4.4 million people who fall into the 40% bracket. Around one million more

:26:14.:26:20.

people pay tax at that rate compared to 2010 because the higher tax

:26:21.:26:23.

threshold hasn't increased in line with inflation. Mr Osborne has

:26:24.:26:28.

indicated he might tackle the issue in the next Conservative manifesto,

:26:29.:26:32.

but for now he is focused on helping the low paid. It's likely we will

:26:33.:26:38.

see another increase in the amount you can earn before being taxed

:26:39.:26:43.

perhaps up another ?500 to ?10, 00. The Chancellor is going to flesh out

:26:44.:26:46.

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

:26:47.:26:49.

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

:26:50.:27:06.

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

:27:07.:27:10.

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

:27:11.:27:13.

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

:27:14.:27:15.

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

:27:16.:27:18.

by the former Conservative chancellor Norman Lamont, in Salford

:27:19.:27:20.

by the former Labour Cabinet minister Hazel Blears, and in

:27:21.:27:23.

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

:27:24.:27:26.

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

:27:27.:27:33.

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

:27:34.:27:43.

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

:27:44.:27:48.

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

:27:49.:27:53.

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

:27:54.:27:58.

forever and forever increasing the personal allowance and not

:27:59.:28:01.

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

:28:02.:28:07.

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

:28:08.:28:10.

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

:28:11.:28:16.

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

:28:17.:28:23.

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

:28:24.:28:30.

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

:28:31.:28:34.

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

:28:35.:28:40.

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

:28:41.:28:54.

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

:28:55.:29:00.

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

:29:01.:29:03.

raise the threshold for national insurance contributions, which is

:29:04.:29:10.

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

:29:11.:29:19.

threshold? We are concentrating on raising the lower threshold because

:29:20.:29:25.

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

:29:26.:29:31.

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

:29:32.:29:34.

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

:29:35.:29:39.

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

:29:40.:29:44.

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

:29:45.:29:48.

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

:29:49.:29:53.

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

:29:54.:30:00.

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

:30:01.:30:05.

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

:30:06.:30:14.

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

:30:15.:30:18.

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

:30:19.:30:23.

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

:30:24.:30:30.

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

:30:31.:30:36.

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

:30:37.:30:40.

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

:30:41.:30:45.

?10,000, we hope eventually 12, 00, and that means only people on very

:30:46.:30:50.

low wages. If you opt out of national insurance, you're saying to

:30:51.:30:53.

people that you make no contribution to the welfare system, so there is a

:30:54.:30:59.

general principle that people should participate and paying, and also

:31:00.:31:04.

claim when they need something out. We thought raising the threshold was

:31:05.:31:07.

simple and effective at a time of economic austerity and the right way

:31:08.:31:10.

to deliver a helpful support to welcoming people. -- working people.

:31:11.:31:17.

With the Labour Party continue to raise the threshold, or do they

:31:18.:31:21.

think there is a case that there are too many people being dragged into

:31:22.:31:27.

the 40p tax bracket? If Norman Lamont thinks this is the right time

:31:28.:31:30.

to benefit people who are reasonably well off rather than those who are

:31:31.:31:34.

struggling to make ends meet, then genuinely, I say it respectfully, I

:31:35.:31:38.

don't think he's living in the world the rest of us are. Most working

:31:39.:31:43.

people have seen their wages effectively reduced by about ?1 00

:31:44.:31:46.

because they have been frozen, so the right thing is to help people on

:31:47.:31:53.

modest incomes. I also understand that if the 40% threshold went up,

:31:54.:31:56.

the people who would benefit the most, as ever, are the people who

:31:57.:32:01.

are really well off, not the people in the middle. The Conservatives

:32:02.:32:05.

have already reduced the 50p tax on people over ?150,000 a year, and we

:32:06.:32:11.

have to concentrate on the people going out to work, doing their best

:32:12.:32:14.

to bring their children up and have a decent life and need a bit of

:32:15.:32:17.

help. I think raising the threshold is a good thing. We would bring back

:32:18.:32:21.

the 10p tax, which we should never have abolished, and do things with

:32:22.:32:28.

regard to childcare. At the moment, childcare costs the average family

:32:29.:32:31.

as much as their mortgage, for goodness sake. We would give 25

:32:32.:32:35.

hours free childcare for youngsters over three and four years old. That

:32:36.:32:38.

would be a massive boost the working families. We are talking about

:32:39.:32:46.

nurses, tube drivers, warrant officers in the army. There are many

:32:47.:32:50.

people who are not well off but have been squeezed in the way everybody

:32:51.:32:55.

has been squeezed and they are finding it continuing. I am stunned

:32:56.:32:59.

by Malcolm's argument where everybody should pay something so

:33:00.:33:02.

you should not take people out of national insurance, but the

:33:03.:33:05.

principle doesn't apply to income tax. You can stand that argument on

:33:06.:33:11.

its head and apply it to income tax. Most people don't see a difference

:33:12.:33:15.

between income tax and national insurance, it's the same thing to

:33:16.:33:20.

most people. It is true that it isn't really an insurance fund and

:33:21.:33:22.

there is an argument from merging both of them. But we have

:33:23.:33:28.

concentrated on a simple tax proposition. Norman is ignoring the

:33:29.:33:34.

fact the people on the 40% rate have benefited by the raising of the

:33:35.:33:38.

personal allowance. To say they have been squeezed is unfair. The

:33:39.:33:41.

calculation is that an ordinary taxpayer will be ?700 better off at

:33:42.:33:47.

the current threshold, and about ?500 better off at the higher rate.

:33:48.:33:51.

It is misleading to say the better off we'll be paying more. I agree

:33:52.:33:56.

with Hazel, if you go to the 40 rate, it's the higher earners who

:33:57.:34:00.

benefit the most, and we won't do that when the economy is not where

:34:01.:34:04.

it was before the crash. How much will the lower paid be better off if

:34:05.:34:11.

you reintroduce the 10p rate? Significantly better off. I don t

:34:12.:34:16.

have the figure myself, but they'd be significantly better off and the

:34:17.:34:22.

Budget should be a mixture of measures to help people who work

:34:23.:34:25.

hard. That is why I think the childcare issue has to be

:34:26.:34:29.

addressed. ?100 a week of the people with childcare payments. It is a

:34:30.:34:35.

massive issue. We want the job is guaranteed to get young people back

:34:36.:34:39.

into work. There's been hardly any discussion about that, and we have

:34:40.:34:42.

nearly 1 million people who have been out of work for six months or

:34:43.:34:45.

more, and as a country we need to do something to help that. 350,000

:34:46.:34:53.

full-time students, so it is a misleading figure. It is not a

:34:54.:34:55.

million including full-time students. All parties do this. It

:34:56.:35:02.

sounds to me, Malcolm Bruce, you have more in common with the Labour

:35:03.:35:05.

Party than you do with the Conservatives. You want an annual

:35:06.:35:09.

levy on houses over ?2 million, so does Labour. A lot of your members

:35:10.:35:13.

want to scrap the so-called bedroom tax and so does labour. You think

:35:14.:35:17.

every teacher should have a teaching qualification, and so does Labour.

:35:18.:35:21.

Your policy on the EU referendum is the same. Let me go on. And you want

:35:22.:35:26.

to scrap the winter fuel allowance for wealthy pensioners. We want to

:35:27.:35:32.

make sure we get the public finances in order and we have grave

:35:33.:35:34.

reservations about the Labour Party promises. But they followed your

:35:35.:35:44.

spending plans in the first year. The point we are making is we can

:35:45.:35:48.

make a fairer society and stronger economy if you keep the public

:35:49.:35:51.

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

:35:52.:35:55.

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

:35:56.:35:58.

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

:35:59.:36:04.

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

:36:05.:36:11.

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

:36:12.:36:16.

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

:36:17.:36:20.

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

:36:21.:36:23.

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

:36:24.:36:28.

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

:36:29.:36:33.

best thing would have no Budget The main thing is to get the deficit

:36:34.:36:37.

down. My argument is is that you have an adjustment in tax rates it

:36:38.:36:40.

should be shared between the allowances and the higher rate, but

:36:41.:36:45.

I don't think that the progress on the deficit is something we can give

:36:46.:36:51.

up on. This is still a very long way to go. We're only halfway through.

:36:52.:36:58.

Hazel, does it make sense to borrow for tax cuts? I am reluctant to do

:36:59.:37:01.

this, but I agree with both Norman and Malcolm. Malcolm Bruce wants to

:37:02.:37:08.

borrow for tax cuts. We absolutely need to get the deficit down and get

:37:09.:37:12.

finances on a strong footing. But we also have to think about having some

:37:13.:37:17.

spending in the system that in the longer run saves us money. We all

:37:18.:37:21.

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

:37:22.:37:25.

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

:37:26.:37:30.

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

:37:31.:37:34.

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

:37:35.:37:41.

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

:37:42.:37:43.

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

:37:44.:37:47.

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

:37:48.:37:51.

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

:37:52.:37:54.

And Mr Sunday Politics East the us discuss

:37:55.:38:10.

And Mr Sunday Politics East the south`east. Coming up, should

:38:11.:38:14.

everyone have the right to larch where they want to? We will be

:38:15.:38:21.

asking that as councillors say Brighton's March For England should

:38:22.:38:25.

be banned from the seafront. Joining me at the Conservative MP for

:38:26.:38:30.

Sevenoaks Michael Fallon, also a government minister for energy and

:38:31.:38:37.

business, and Lord Steve Bassam First to the debate on whether there

:38:38.:38:43.

should be an in`out referendum on the EU. We already knew that David

:38:44.:38:48.

Cameron wants one and Nick Clegg doesn't but we didn't know what Ed

:38:49.:38:52.

Miliband thought. He told us in his beach this week.

:38:53.:39:02.

If a voter asked you, will xou guarantee me a say on whethdr

:39:03.:39:06.

Britain stays and gets out of the EU, what is the answer in a

:39:07.:39:08.

sentence? If there is a transfer of powers

:39:09.:39:15.

from Britain to the European Union then there will be a referendum My

:39:16.:39:20.

priority is jobs for young people, protecting the NHS.

:39:21.:39:28.

So maybe or maybe not. I said very clearly that thd lock

:39:29.:39:31.

will be triggered in the next Parliament.

:39:32.:39:38.

Pin elections take place in just under two months' time. Our guest

:39:39.:39:48.

last week said in reaction to Ed Miliband's announcement, anx target

:39:49.:39:53.

seats Ed Miliband were hoping to take have been delivered to your

:39:54.:40:02.

cat. She is right as an she? `` delivered to you kept. `` UKIP.

:40:03.:40:13.

I think he has put the case very positively. If there is a proposal

:40:14.:40:19.

to transfer powers away frol the UK then Labour will trigger a

:40:20.:40:22.

referendum and I think that is right. I think that clarifids

:40:23.:40:27.

exactly where we are. Our Tory colleagues are in this curious

:40:28.:40:32.

position of saying they might have a referendum by the end of 2007 if

:40:33.:40:37.

they manage to renegotiate the deal or package with 27 other melbers of

:40:38.:40:45.

the EU. It very unlikely scdnario. To MPs last week on this programme

:40:46.:40:49.

said they want out of Europd, one of them known to be a loyalist in the

:40:50.:40:55.

party. Despite your leader's promise, this issue just get worse

:40:56.:41:00.

for you. We are saying there will be a

:41:01.:41:05.

referendum in 2017 on the rdform package we want for Europe. A much

:41:06.:41:15.

less bureaucratic Europe, there are four parties, two of them don't want

:41:16.:41:20.

any change at all, that is Labour and the Liberal Democrats. There are

:41:21.:41:23.

only two that want to changd and there is only one and that hs asked

:41:24.:41:26.

I to do anything about it. I dispute that.

:41:27.:41:31.

You said you didn't want to change Europe.

:41:32.:41:35.

We have said we want Europe to reform.

:41:36.:41:39.

So why is it unlikely there will be a referendum?

:41:40.:41:42.

He was talking about whether there was a transfer of hours proposed to

:41:43.:41:48.

be away from the UK to Europe. In those circumstances we are very

:41:49.:41:51.

clear. Have got to sell that to thd voters.

:41:52.:41:57.

It is quite a confused mess`ge. You have arguably helped Michael's

:41:58.:42:04.

party. I don't think there is uncertainty.

:42:05.:42:09.

I think it has been created by damaging business. We have got the

:42:10.:42:16.

right approach to the EU and the necessary reforms.

:42:17.:42:21.

We are going to leave it thdre but we are going to stay on the subject

:42:22.:42:25.

of Ed Miliband's strategy bdcause the party is wrote meeting hn

:42:26.:42:35.

Crawley `` meeting in Crawldy for the party conference. In thd last

:42:36.:42:42.

general election, the party was wiped off the political map you re

:42:43.:42:46.

so what are the prospects of a rock bible? I talked to their deputy

:42:47.:42:52.

leader Harriet Harman. `` prospects of a revival.

:42:53.:43:04.

Labour candidates must be w`ving goodbye to power, according to

:43:05.:43:12.

UKIP. I'm not concerned about what they

:43:13.:43:18.

say because that is not the point of what Ed Miliband said. It is not

:43:19.:43:25.

confused, what he said forw`rd, it is actually quite a complex issue

:43:26.:43:30.

but it is very clear what hd said. Overall, he thinks the question of

:43:31.:43:36.

all the jobs that depend on our trade with Europe, it is very

:43:37.:43:40.

important that we have that relationship with the Europdan Union

:43:41.:43:43.

and are part of the European Union so that we can sell our goods to

:43:44.:43:49.

them and attract investment into this country because we are part of

:43:50.:43:53.

the big trading bloc that is the European Union.

:43:54.:43:58.

They might not want to think about it but let's remind ourselvds that

:43:59.:44:06.

you have serious work to do here. UKIP is the party that is stealing

:44:07.:44:12.

seats from you in marginal seats. They proved to be a very serious

:44:13.:44:17.

threat to you here in the south`east.

:44:18.:44:18.

I think the most important thing is to show that we are on the doorstep

:44:19.:44:27.

and on people 's side. People say to us they will vote for UKIP because

:44:28.:44:34.

we are all the same and we don't go round there and aren't concdrned

:44:35.:44:40.

about them and use UKIP is ` kind of plague on all your houses khnd of

:44:41.:44:49.

boat. That challenges us to show that's we understand the problems

:44:50.:44:52.

people are having and we ard on the side. But looking over our shoulder

:44:53.:45:00.

to UKIP policies, because I don t think they offer a way forw`rd for

:45:01.:45:13.

growth or jobs or the NHS. It is one issue that is your parties

:45:14.:45:21.

`` party's Achilles' heel, immigration.

:45:22.:45:28.

People are worried about thd effects of migration and that is whx we have

:45:29.:45:36.

said we want to bring about changes in the European Union and Ed

:45:37.:45:41.

Miliband has identified a ntmber of ways of changing it. One of those is

:45:42.:45:47.

how long it takes a country to join the European Union.

:45:48.:45:51.

Let us get back to the general election. In your target se`ts, not

:45:52.:45:56.

many of them are in the south`east compared to the last general

:45:57.:45:59.

election. Is that an admisshon you are writing of this region?

:46:00.:46:06.

No, we are not writing of this region. There are council elections

:46:07.:46:13.

coming up and people need strong councillors on their side. There is

:46:14.:46:18.

no difference between the Tories and the Lib Dems right now. Thex are

:46:19.:46:25.

both responsible for the cost of living crisis and growing problems

:46:26.:46:29.

in the NHS. We look forward to seeing how he

:46:30.:46:34.

will do. She is not terribly bothered about

:46:35.:46:39.

what UKIP is saying. Does she realise the scale of the problem

:46:40.:46:44.

your party has in this region? Come general election day, there

:46:45.:46:49.

will be a broad and it will either be David Cameron or Ed Miliband She

:46:50.:46:54.

is absolutely right to focus on our message. Of course UKIP is ` threat

:46:55.:47:03.

but even in the regions she noted earlier, there is...

:47:04.:47:15.

Your party doesn't have any representation.

:47:16.:47:20.

We are campaigning hard in the south`east. We have got good

:47:21.:47:29.

prospects. We have got more councillors in the district

:47:30.:47:32.

authorities. Not enough considering it is four

:47:33.:47:38.

years since she had an MP. We made progress in the council

:47:39.:47:44.

elections as well. Our progress is good. We know we can win se`ts in

:47:45.:47:53.

the south`east. We at concentrating on jobs crisis for young people And

:47:54.:48:05.

the health sector. We know we have campaign issues that are effective

:48:06.:48:07.

and we think we have the right approach to Europe. We understand

:48:08.:48:20.

the concern about immigration. You are talking about hard pressed

:48:21.:48:27.

to voters, that is a diffictlt message for you to sell to people.

:48:28.:48:37.

I think we can point to the achievement of the coalition. We

:48:38.:48:40.

were left with this terribld economic legacy which left this

:48:41.:48:51.

region worse off than most. Of course, we didn't have an oral

:48:52.:48:59.

majority but we can work towards the next election and get some of our

:49:00.:49:07.

policies into action `` over role majority. Labour still wants to

:49:08.:49:17.

borrow. Ed Miliband says she still got it

:49:18.:49:24.

wrong. We had to save the banks in the

:49:25.:49:31.

crisis. Your party was at the wrong side of that argument at thd time.

:49:32.:49:36.

There was growth in the British economy for the first two qtarters

:49:37.:49:40.

of 2010 and that was part of Labour's success.

:49:41.:49:45.

You have made very modest g`ins You have only got the year to the next

:49:46.:49:50.

general election. How many seats do you think realistically why you will

:49:51.:49:56.

be able to win back here? I think the general election in 2015

:49:57.:50:01.

is there for us to win and the coalition is clearly falling apart

:50:02.:50:06.

and the Conservative Party hs divided amongst itself, as we have

:50:07.:50:09.

seen this week over Europe. We will have a strong case whether the

:50:10.:50:19.

British general electorate. You don't sound very optimistic

:50:20.:50:22.

about winning seats in the south`east. If you are going to be a

:50:23.:50:42.

national party... We have done huge progress in reducing the deficit.

:50:43.:50:45.

The last thing we want to do is go back.

:50:46.:50:48.

We could talk about that policy for hours but we will have to ldave it

:50:49.:50:51.

there. In six weeks time, the marchers

:50:52.:51:00.

planned across Brighton front. But few cars the contract of `` you

:51:01.:51:13.

marches cause the controversy of March For England.

:51:14.:51:17.

It has become a regular datd in the Brighton calendar when... The

:51:18.:51:31.

organisers say they wanted to be peaceful but others say it hs a

:51:32.:51:36.

front for far right groups. In recent years, the event has been

:51:37.:51:41.

marred by violence and conflict between the two groups. Last year,

:51:42.:51:48.

19 people were arrested as larches clashed with opposition protesters.

:51:49.:51:56.

Two police officers were injured. This man once banned.

:51:57.:52:12.

`` this man wants it banned. One trader told me it cost him

:52:13.:52:19.

?10,000. Others were fearful that they couldn't open their shops. I do

:52:20.:52:26.

not think that is fair. Brighton is widely known for

:52:27.:52:30.

tolerance and diversity and most locals fundamentally agree with the

:52:31.:52:36.

right to protest but most traders say it is the route they object to.

:52:37.:52:41.

If they want to express thehr preferences, they should, btt maybe

:52:42.:52:46.

not on the seafront. It was over the top last ye`r, it

:52:47.:52:51.

was like a war zone. It stops access for us traddrs and

:52:52.:52:56.

we lose a day's trade. What is the answer?

:52:57.:53:10.

Move the march, full stop. It costs nearly ?500,000 to police.

:53:11.:53:18.

Some say there is a wider cost to the city.

:53:19.:53:27.

The economic damage is one thing but the reputational damage is worse. It

:53:28.:53:38.

is entirely the opposite. Brighton is no stranger to protests.

:53:39.:53:44.

During the 1960s, there werd violent clashes between the mods and

:53:45.:53:49.

rockers. Today, the city is better known for colourful events like

:53:50.:53:53.

Brighton Pride. The March For England is more controversi`l. What

:53:54.:54:00.

can be done? It seems a council has limited powers to intervene. But

:54:01.:54:06.

there are discussions with Sussex Police over coordination of the

:54:07.:54:11.

march. The ban can only be ordered by the Home Secretary and only in

:54:12.:54:16.

extreme cases. The march wotld be that the call to stop but there is

:54:17.:54:21.

extreme pressure to relocatd it It is fair to say that the March For

:54:22.:54:26.

England is extremely unpopular but the plan is for the seafront to be

:54:27.:54:32.

cordoned off as the march m`kes its way along this road. That still

:54:33.:54:39.

leaves one question unanswered, happy but 's got the appropriate

:54:40.:54:43.

balance between the rights of demonstrators and the reput`tion of

:54:44.:54:47.

Brighton is one of Britain's's Premier tourist resorts.

:54:48.:54:54.

Superintendent Steve Whitton joins us now from Brighton. Are you

:54:55.:54:58.

expecting much trouble? It is fair to say that therd have

:54:59.:55:04.

been problems in the past and last year and previous years there has

:55:05.:55:08.

been some violence. I am determined to get the balance right between an

:55:09.:55:14.

individual's fundamental right to peacefully protest and our wider

:55:15.:55:20.

responsibilities around maintaining order.

:55:21.:55:24.

How do you do that? What ard your options?

:55:25.:55:30.

The legal powers which govern how we can pull is a situation that smack

:55:31.:55:35.

police `` Paul is a situation.. There are certain situations we can

:55:36.:55:55.

impose if we feel them necessary. We heard in the report that you have

:55:56.:56:01.

an option of going to the Home Secretary. When we consider that?

:56:02.:56:09.

It is one of those things wd struggle with every year in terms of

:56:10.:56:18.

understanding. It is fundamdntal that people are loads to pe`cefully

:56:19.:56:24.

protest. In terms of Hanning a march, that can only be considered

:56:25.:56:32.

if we feel there is likely to be serious disorder and the only way we

:56:33.:56:39.

can prevent that is to ban the march.

:56:40.:56:43.

While you anywhere near reaching that point?

:56:44.:56:50.

I will keep this under constant review but we are not anywhdre near

:56:51.:56:54.

that threshold and it is an exceptional power that has only been

:56:55.:56:59.

used a couple of times nationally. The other important point around

:57:00.:57:05.

powers to ban a march is th`t it only bands in March, there hs no

:57:06.:57:11.

power to ban an assembly whhch could cause more disruption if we can t

:57:12.:57:17.

manage it within a controlldd way. Thank you for explaining yotr

:57:18.:57:21.

situation. Lord Bassam of Brighton, you know the city well. What should

:57:22.:57:29.

be done? I am rather sympathetic to the call

:57:30.:57:32.

for banning it. These are b`sically nasty, racist thugs.

:57:33.:57:45.

Actually, the counter protesters are usually the ones that cause the

:57:46.:57:47.

trouble. I am not terribly sympathethc to

:57:48.:57:57.

this March and I think the police working with the local authority

:57:58.:58:03.

should try to ban this becatse it is bad for local business and not good

:58:04.:58:09.

for the reputation of the chty. I believe in protecting peopld 's

:58:10.:58:12.

rights to a voice that I don't think this is giving voice to much

:58:13.:58:14.

really. It is Lord Bassam's home turf so he

:58:15.:58:23.

knows it better than most pdople but I am wary about banning people s

:58:24.:58:30.

right to protest. Even Stop The March don't w`nt to

:58:31.:58:38.

stop the march. It is for the police to man`ge

:58:39.:58:44.

this. And to pay for it.

:58:45.:58:50.

I quite understand that dam`ged to trade and it is up to the ptlleys to

:58:51.:58:58.

manage this. I don't think that answers should always be just to ban

:58:59.:59:02.

it. It is time now for the other

:59:03.:59:11.

political stories of the wedk. No fracking in the National Parks

:59:12.:59:14.

says The National Trust and wildlife groups. The South Downs is one

:59:15.:59:17.

National Park meted for the controversial shale gas extraction

:59:18.:59:21.

method. 30 years after the start of the

:59:22.:59:24.

Miners' Strikes, Betteshangdr Colliery near Dover will get coastal

:59:25.:59:27.

communities funding, turning it into a sustainable energy centre.

:59:28.:59:32.

Mixed signals from Southeastern The rail operator hopes to extend its

:59:33.:59:35.

service in Kent but is at standstill in Sussex with much of the Hastings

:59:36.:59:41.

line now closed indefinitelx. After landslips three months ago. Hastings

:59:42.:59:46.

Council is worried about thd impact on tourism.

:59:47.:59:48.

It's a City Deal. Greater Brighton has signed up to government's City

:59:49.:59:52.

Deal scheme which aims to tdmpt tech industry investors down to Silicon

:59:53.:59:55.

Beach. It could be worth ?170 million.

:59:56.:59:59.

And Chartwell has a new reshdent. Jock is the sixth marmalade cat to

:00:00.:00:03.

move into Winston Churchill's home, as per his will.

:00:04.:00:08.

You get so many people coming in saying, "Where's the cat?"

:00:09.:00:18.

Michael Fallon, we know you are enthusiastic about fracking. Should

:00:19.:00:23.

it really happen in the South Downs to?

:00:24.:00:32.

They do have structural 's `` stricter rules but they shotld look

:00:33.:00:39.

at each application on its lerits. So yes in other words.

:00:40.:00:45.

Look at each application on its merits.

:00:46.:00:51.

Thank you to both my guests. That is it for this week.

:00:52.:00:55.

industrial action is a sign of failure marked success. -- not

:00:56.:01:00.

success. Andrew, back to you. Has George Osborne got a rabbit in

:01:01.:01:13.

his Budget hat? Will the Chancellor find a way to help the squeezed

:01:14.:01:16.

middle? And how do Labour respond? All questions for The Week Ahead.

:01:17.:01:24.

And joining Helen, Janan and Nick to discuss the budget is the general

:01:25.:01:29.

secretary of the Trades Union Congress Frances O'Grady. Welcome

:01:30.:01:34.

back to the programme. I know the TUC has a submission, but if you

:01:35.:01:37.

could pick one thing that you wanted the Chancellor to do above all, what

:01:38.:01:43.

would it be? We want a budget for working people, which means we have

:01:44.:01:47.

to crack the long-term problem of investment in the British economy.

:01:48.:01:52.

Certainly I would like the Chancellor to merit that title they

:01:53.:01:59.

want of the new workers party, and take action on living standards but

:02:00.:02:02.

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

:02:03.:02:12.

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

:02:13.:02:15.

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

:02:16.:02:19.

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

:02:20.:02:25.

problem is we have key industries like construction and manufacturing

:02:26.:02:27.

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

:02:28.:02:34.

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

:02:35.:02:39.

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

:02:40.:02:43.

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

:02:44.:02:48.

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

:02:49.:02:53.

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

:02:54.:02:57.

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

:02:58.:03:03.

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

:03:04.:03:09.

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

:03:10.:03:13.

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

:03:14.:03:17.

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

:03:18.:03:22.

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

:03:23.:03:25.

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

:03:26.:03:28.

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

:03:29.:03:31.

will be attacked by the Conservatives for being

:03:32.:03:35.

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

:03:36.:03:42.

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

:03:43.:03:47.

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

:03:48.:03:53.

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

:03:54.:03:57.

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

:03:58.:04:01.

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

:04:02.:04:05.

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

:04:06.:04:11.

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

:04:12.:04:14.

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

:04:15.:04:18.

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

:04:19.:04:24.

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

:04:25.:04:28.

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

:04:29.:04:34.

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

:04:35.:04:38.

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

:04:39.:04:44.

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

:04:45.:04:49.

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

:04:50.:04:52.

recovery for ordinary working people. Government ministers, as you

:04:53.:04:58.

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

:04:59.:05:01.

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

:05:02.:05:07.

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

:05:08.:05:12.

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

:05:13.:05:16.

sensible deals with employers to protect jobs through this period,

:05:17.:05:19.

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

:05:20.:05:24.

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

:05:25.:05:31.

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

:05:32.:05:39.

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

:05:40.:05:47.

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

:05:48.:05:50.

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

:05:51.:05:55.

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

:05:56.:06:00.

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

:06:01.:06:03.

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

:06:04.:06:09.

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

:06:10.:06:13.

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

:06:14.:06:16.

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

:06:17.:06:20.

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

:06:21.:06:24.

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

:06:25.:06:27.

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

:06:28.:06:32.

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

:06:33.:06:36.

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

:06:37.:06:43.

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

:06:44.:06:47.

should be looking at our business investment. And also the deficit.

:06:48.:06:55.

The deficit is 111 billion, and that is a problem, because we are not at

:06:56.:06:58.

the end of the cutting process, there are huge cuts to be made. I

:06:59.:07:03.

understand we are only a third of the way through. That will

:07:04.:07:06.

definitely affect business confidence. It is clear that the

:07:07.:07:10.

strategy has failed. Borrowing has gone up and it's not delivered

:07:11.:07:13.

improved living standards and better quality jobs, so cutting out of the

:07:14.:07:21.

recession is not going to work. The structural budget deficit was going

:07:22.:07:24.

to be eliminated three weeks today under the original plan. They missed

:07:25.:07:30.

target after target. Every economist has their own definition of that. I

:07:31.:07:36.

think Mark Carney is right when he says that fundamentally the economy

:07:37.:07:41.

is unbalanced and it is not sustainable, growth is not

:07:42.:07:45.

sustainable. But if it clicked on, it would be more balanced. It is not

:07:46.:07:51.

just north and south and manufacturing a way out with

:07:52.:07:54.

services, but it is also between the rich and everybody else. What do you

:07:55.:08:00.

make of the fact that there will effectively be another freezing

:08:01.:08:03.

public sector pay, or at least no more than 1%? Not even that for

:08:04.:08:11.

nurses and health workers. But they will get 3% progression pay. 70 of

:08:12.:08:16.

nurses will not get any pay rise at all. They get no progression pay at

:08:17.:08:20.

all. I think this is smack in the mouth. Smack in the mouth to

:08:21.:08:26.

dedicated health care workers who will feel very, very discontented

:08:27.:08:31.

about the decision. Danny Alexander, I saw him appealing to

:08:32.:08:36.

health workers do not move to strike ballots and said they should talk to

:08:37.:08:42.

their department. But about what? Is that real pay cut has been imposed,

:08:43.:08:48.

what are workers left with? So do you expect as a result of yet more

:08:49.:08:53.

tough controls on public sector pay that unrest is inevitable? I know

:08:54.:08:58.

some unions will be consulting with their members, but ultimately it's

:08:59.:09:03.

always members who decide what to do. It does seem to me insulting not

:09:04.:09:08.

to at least be honest and say that we are cutting real pay of nurses,

:09:09.:09:17.

health care workers, on the back of a ?3 billion reorganisation of the

:09:18.:09:20.

NHS that nobody wanted and nobody voted for. Their long-term changes

:09:21.:09:28.

taking place here that almost talks about -- there are long-term

:09:29.:09:32.

changes. It is how lower percentage wages have become of GDP on how big

:09:33.:09:39.

the percentage of profits is. It seems to me there is a strong case

:09:40.:09:44.

for some kind of realignment there. The biggest event of my life, in

:09:45.:09:48.

this world, is the entry of a couple of billion more people into the

:09:49.:09:51.

labour supply. At the end of the Cold War, India and China plugged

:09:52.:09:56.

into the global economy. If there is a greater supply of that factor of

:09:57.:10:00.

production, logically you conclude that wages will fall or stagnate and

:10:01.:10:05.

that has been the story in this country and America and large parts

:10:06.:10:07.

of Western Europe in the last generation. What is not possible is

:10:08.:10:11.

for governments to do much about it. They can ameliorate it at the

:10:12.:10:15.

margins, but the idea that the government controls living

:10:16.:10:19.

standards, which has become popular over the last six months, and the

:10:20.:10:22.

Labour Party have in establishing that, and I don't think it's true.

:10:23.:10:28.

George Osborne's options are astonishingly limited compared to

:10:29.:10:32.

public expectations. If wages have reached a modern record low as

:10:33.:10:36.

percentage of GDP, who is going to champion the wage earner? We have

:10:37.:10:43.

lost Bob Crow, Tony Benn passed away, so who is the champion? The

:10:44.:10:48.

trade union movement is the champion of ordinary workers. We need those

:10:49.:10:52.

larger-than-life figures that we will mess. Have you got them yet? We

:10:53.:11:00.

have a generation of workers coming through. One thing about the loss of

:11:01.:11:04.

Bob Crow is that the whole union movement has responded strongly to

:11:05.:11:08.

that, and we want to say that we are strong and united and here to stand

:11:09.:11:11.

up for working people and we will fight as hard as Bob Crow did.

:11:12.:11:16.

Whoever replaces Bob Crow or Tony Benn, we can be sure they will not

:11:17.:11:20.

come from Eton because they all have jobs in the government. I want to

:11:21.:11:24.

put up on the screen what even Michael Gove was saying about this

:11:25.:11:25.

coterie of Old Etonian 's. He's right, is he not? He's

:11:26.:11:40.

absolutely right. We have the idea of the manifesto being written by

:11:41.:11:46.

five people from Eton and one from Saint Pauls. A remarkable example of

:11:47.:11:52.

social mobility that George Osborne, who had the disadvantage of going to

:11:53.:11:55.

Saint Pauls has made it into that inner circle. Here is the question,

:11:56.:12:03.

what is Michael Gove up to? If you saw the response from George

:12:04.:12:06.

Osborne, there was no slap down and they know this is an area they are

:12:07.:12:09.

weak on an David Cameron will not comment on it. If this had been a

:12:10.:12:14.

Labour shadow minister making a similarly disloyal statement, they

:12:15.:12:19.

might have been shot at dawn. But there is a real tolerance from

:12:20.:12:22.

Michael Gove to go freelance which comes from George Osborne. It's

:12:23.:12:26.

about highlighting educational reforms that he wants to turn every

:12:27.:12:29.

school in to eat and so it won't happen in the future. But it's also

:12:30.:12:33.

pointing out who did not go to Eton school and who would be the best

:12:34.:12:37.

candidate to replace David Cameron as leader, George Osborne, and who

:12:38.:12:41.

did go to Eton school, Boris Johnson. Michael Gove is on

:12:42.:12:45.

manoeuvres to destroy Boris Johnson's chances of being leader.

:12:46.:12:52.

It's a good job they don't have an election to worry about. Hold on. I

:12:53.:12:58.

think they are out of touch with businesses as well as working

:12:59.:13:01.

people. You ask about who is talking about wage earners. Businesses are.

:13:02.:13:05.

They are worried that unless living standards rise again there will be

:13:06.:13:10.

nobody there to buy anything. We are running out of time, but the TUC,

:13:11.:13:16.

are enthusiastic about HS2? We supported. We think it's the kind of

:13:17.:13:21.

infrastructure project that we need to invest in long-term. He could, if

:13:22.:13:25.

we get it right, rebalance north and south and create good jobs along the

:13:26.:13:29.

way -- it could. Thank you very much tool. I have to say that every week

:13:30.:13:36.

-- thank you very much to you all. That's all for today. I'll be back

:13:37.:13:39.

next Sunday at 11am, and Jo Coburn will be on BBC Two tomorrow at

:13:40.:13:44.

midday with the Daily Politics. Remember if it's Sunday, it's the

:13:45.:13:46.

Sunday Politics.

:13:47.:13:49.

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