29/04/2012 Sunday Politics South


29/04/2012

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And in the South: The local government pension scheme

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was already a hot potato even before a pressure group claimed it

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Apology for the loss of subtitles for 1677 seconds

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Welcome to Sunday Politics South. On today's show: The local

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government pension scheme was already a hot potato even before a

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pressure group claimed it is facing a massive deficit. We will hear

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from the unlikely bedfellows of a union organiser and a Conservative

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council leader as to why they think that is wrong.

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More on that later. First, though, let's meet the two politicians who

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will be with me for the next 20 minutes. Lord Chidgey was the

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Liberal Democrat MP for Eastleigh for 11 years until the 2005

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election. And Tobias Ellwood is the Conservative MP for Bournemouth

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East. Will you work closely read Jeremy Hunt. I was the shadow

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tourism minister in that time. is in a difficult position. How

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well his character stand up to it? He is valued as a member of the

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Cabinet and gave a great performance in the Commons making a

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statement. He has provided more information today and has said that

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he will come forward to discuss this. This is something the media

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is focusing on just now. It is a lot of pressure on an individual.

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Yes, I think he can. I think it will be interesting to see what

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relationship the wars between the special adviser and Jeremy Hunt. We

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all want to have the facility of special advisers helping us, but

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what exactly is their role and how far can they go? A lot of Lib Dems

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are upset about this. As there is as semi-private world in government,

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if I may say now that I am experiencing it, were you have the

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money and resources to pay people to be a special advisers. I think

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this becomes a rather closed world. There is more transparency? With

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every single decision that had to be made by Jeremy Hunt, he took the

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advice of independent advisers. It is the Cabinet member who makes the

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decisions. He has been very clear about that.

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It is the local elections on Thursday. If you were watching the

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programme last week, we were talking to the UK Independence

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Party about their electoral chances. This week we are talking to the

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Greens. Caroline Lucas, the party leader and MP for Brighton Pavilion,

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joins us now from our Brighton studio. No election in Brighton

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this year, but you're putting candidates up in other places in

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the South? We are. A quarter of seats nationwide have candidates

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from the Green Party. We're looking at Reading where we have two Green

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members. Also other places per we want a stronger foothold across the

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South East. So much of the debate is about the economy. Green

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candidates will be talking about spending more taxpayers' money.

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They will say that bike investing in the Green economy, you can

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create jobs. Want to promote insulation and people's homes. End

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in Kirklees, we had a scheme where insulation was rolled out across

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60,000 homes. That created jobs and helped people. It is all about

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subsidy and public spending. The public is not in a mood to hear

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that. I think the public does want to you about how they can save

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money in their bills. As people have an interest in Green issues

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and we can create jobs. There was a survey this week saying that people

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are less interested in politics than in the last 10 years. Can you

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capitalise on that disenchantment? There is a huge potential. There is

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a disillusionment with the three main parties. They are increasingly

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indistinguishable. That is worse with a coalition government. People

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are looking for a stronger alternative, so when you have a

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party that is nationally in tune with public opinion when it comes

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to challenging the privatisation of public services and renewing

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nuclear weapons, the Greens are more in tune with public opinion,

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and what we are finding is that once they get at first Green

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councillor on the council, the light get and they want more of

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some. -- more of them. You are indistinguishable in government and

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it is turning people off. To hear this accusation is very interesting.

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There are huge differences in where become from from a party

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perspective. We have had to come together because of the mess the

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last Labour government left us in. That is why we have been called

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upon to sort out the deficit. Clearly there will -- there will be

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some overlap between the three parties. We are succeeding in

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getting the country back on that its feet. As you know, I am a

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Shadow Minister for International Development end their Foreign

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Office in Africa and I meet their ministers every week. It is no easy

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ride in Cabinet. When there is disagreement, it is rough. It is

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not a nice cosy tea party, it is a very robust and often volatile

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political discussion of argument. You are for getting the result of

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the last general election. There was not a clear winner so there is

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not a mandate for any single party to do any single thing. Therefore

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there is a requirement for two parties to morph together for a

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period to meet the challenges of the day. Was that a mid-term

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protest? I think people who voted Liberal Democrat are very upset.

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When you see at Lib Dems especially -- essentially selling out over

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tuition fees and the NHS, they thought they were getting a radical

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alternative. Can I say something about the economy? But if you vote

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for the Greens, you might take away some of the votes for one of the

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bigger parties. Labour first introduced tuition fees. You are

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exactly demonstrating the critiques that so many people have of this

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tea-parties from outside of Westminster. Can I say something

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about the cuts? I wanted to say that there is an absolute consensus

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with the three main parties at the best way of tackling the deficit is

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to cut more and more. If Government starts to stop spending, that gets

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us into a worse recession, as we can see with this at double-dip

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recession. We need to spend money and grow. If we use the money of

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quantitative easing to invest in jobs, that is how you get out of

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recession. One of the biggest points of

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friction between the Government and public sector workers is over their

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pensions. The Government reckons there need to be changes to cut

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costs, the unions, not surprisingly, are resisting that vigorously. But

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now a pressure group has waded into the row to claim that councils

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across the country are facing deficits of millions of pounds each

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on the local government pension scheme.

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With just over 5 million members, the local government pension scheme

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is one of the largest of its kind in the country. It is made up of

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100 funds independently managed by its representatives from that

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theory are. Sounds as safe as houses, but not according to the

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TaxPayers' Alliance. Pension reform has been a political hot potato for

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some time. With talk of gold-plated retirement for public sector

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workers while an increasing number of private sector companies close

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their final salary pension schemes. Now a black hole of �54 billion has

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been found by the TaxPayers' Alliance. While the assets they are

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holding might rise, it looks as though there is a genuine gap which

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cannot be filled by yet more burdens on taxpayers as council tax

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payers are already paying more than enough for. In the South, report

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claims that the pension scheme for Dorset County Council has a deficit

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of just over �300 million. Hampshire County Council has the

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third highest deficit all local authorities. �700 million. Just how

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worried should we really be about this warning from the TaxPayers'

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Alliance? It is rather like saying to someone with a mortgage that you

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have a black hole in your bank account of �100,000. In fact, he or

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she has 25 years in which to pay off that �100,000 mortgage. So it

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is an unfair snapshot and I do wish the TaxPayers' Alliance would stop

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being so sensational about this. Local government pension schemes

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are very important to very many people, including the council tax

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payer. Hampshire County Council says it is just a calculation made

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on paper by accountants. Unions are equally frustrated. They say the

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TaxPayers' Alliance need to get its facts straight. If you look at the

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Hampshire pension scheme, it is �16 million in profit and has �4

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million in assets. This is not a pension scheme in problem. But they

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ignore these facts and start to make up their own. No one -- not

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everyone will retire on the same day. We saw some financial advice.

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I don't think anybody should be scared. This is of concern. If it

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was just one county council that had a deficit, you should be

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worried. The simple fact is most pension schemes are in deficit at

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the present time and that the stock market moves out of recession or

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the diptych is in, the deficits will start to be reduced. I don't

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think there is anything particularly to worry about -- the

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debt it is in. We are all living longer and pensions must reflect

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this. If we want to maintain its generous public sector pensions,

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for more generous than most people in the private-sector, then we're

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going to have to see those workers paying more for them. We will put a

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proposal to Our members later in the year. It might include people

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working longer and paying more money into pensions. We don't need

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the TaxPayers' Alliance putting out bogus report and sticking their

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nose in just because they don't want the scheme to exist at all.

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toxic issue which has already led to industrial action. Where do you

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stand? I spoke to the Local Government Association before the

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programme because this is complicated. There are 100

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government pension schemes across the country. On balance, schemes

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are in profit. Is this like having a mortgage? It is. The whole point

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is that over the last 12 months, 54 billion was the total claimed the

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scheme was a in deficit, but 37 billion has been accrued through it

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rises in the stock market. In one year, 37 billion has been paid in.

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They are saying there is a 54 billion deficit over all. It won't

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take long to get back in balance. We must protect the pensions of the

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lower paid. They are vulnerable and we have to be fair and make choices

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to have some flexibility on how we deal with them. Those are the real

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issues. I find myself in agreement with the trade union on that point.

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This is a snapshot of the financial affairs right now. Those pension

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schemes have not matured and so you cannot take the sums as they are.

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Had the TaxPayers' Alliance spoken to Bournemouth Borough Council,

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they would have got a more complete picture of the state of affairs

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rather than this snapshot. George Osborne and this Government is

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taking robust action because it was John Prescott who avoided this

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issue because he is so close to the unions. In 1997, the cost to the

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taxpayer of all these council pensions was �2 billion. That has

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now raised to 6 billion. We cannot go on like this. People are living

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10 years longer than they were a few decades ago. This will hurt the

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low paid. We will not. The new system that comes and will not

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affect people earning less than 21,000. It is rated so that people

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on large salaries, such as those who lead unions, will take a big

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hit. We have introduced these tough decisions, as well as increasing

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the age of retirement. Now our regular round-up of the

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political week in the South in 60 seconds.

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The Labour leader Ed Miliband kicked off the week with a visit to

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Reading ahead of the local elections. At Leek Town College,

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students turned out to hear him declare yet unemployment a massive

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emergency. British Gas cut 550 jobs at a Southampton call centre.

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Everyone was crying. I might never work again. At the with HSBC,

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Zurich Insurance and other companies, total job losses in the

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South came to 1,500. He Employment Minister tried to offer some

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reassurance. There are opportunities for people who need

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to get back into work. It has been a gloomy week. To cheer us up, the

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children of the school had a positive attitude to their new ball

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at -- solar panels. It might not be sunny, but we will still get energy.

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Everyone in the collision -- the coalition must be concerned.

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have just had a drop in unemployment. There is an increase

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in the number of people in the private sector which is

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compensating for the loss of jobs in the public sector. More people

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have come into the private sector than those who have lost their jobs

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in the public sector. Will people be feeling good about what

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Conservatives and Liberal Democrats have done with that economy? There

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is a long haul here and we have more to do to move the economy

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forward. We should be careful about opinion polls now. I remember the

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1980s and 1990s when Neil Kinnock got 50% poll ratings from --

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ratings. Yet he did not win. remember the St p b n on 45%. But

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then we had a war in the Falkland Isles. -- the SDP. There was also

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Margaret Thatcher. I have been through several recessions and it

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is not easy. I have seen one million people long-term unemployed

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over one year. 25% unemployment in Spain just now. We must not make

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the mistakes of the past. We have to invest in training and skills.

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Our present workforce is a badly under skilled. It is all very well

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having apprenticeship schemes, but they have to be properly designed

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so that people can compete worldwide. Financial services are

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no answer. You are always optimistic. We have a worse deficit

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than Spain and look at their unemployment rate. Our unemployment

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levels are dropping. Their situation -- our situation was

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worse than their us in 2008. their's.

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That is the Sunday Politics in the South. Thanks to my guests, Lord

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Chidgey and Tobias Ellwood. There will be coverage of the local

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