29/09/2013 Sunday Politics Wales

do with the lack of talent, it is Sunday Politics. David Cameron

rushes out a scheme to help house-buyers with deposits. Is he

merely stoking a new house price bubble? As Tory activist 's gather

merely stoking a new house price in Manchester, we will have the

results of our exclusive survey of Conservative councillors. I will be

speaking to Foreign Secretary William Hague. And Ed Miliband made

headlines with his pledge to freeze energy prices for 20 months after

headlines with his pledge to freeze the next election. But does the new

Later in the programme: As the policy really stack up?

Later in the programme: As the Conservatives gather in Manchester,

we'll hear from their Assembly leader Andrew RT Davies on taxation,

devolution and the Welsh budget. Conservative London politicians

believe that strikes on the Underground should be made illegal,

something the Prime Minister doesn't rule out.

With me are a trio of top political commentators. All three will be

tweeting their thoughts, or in some cases just their thought through the

show, using the hashtag #bbcsp. The Conservative Party conference gets

under way in Manchester this afternoon. We have already been

bombarded with a series of policy announcements, a tax break for

married couples of up to £200 per year, more money on life extending

cancer treatments and, last night, the news that the second stage of

the Chancellor's Help To Buy scheme will start next week. That is

brought forward from the start of next year. David Cameron says it is

all about helping hard-working people. Right now, you can't get,

it's very difficult to get, a 90% or 95% mortgage. That means a typical

family with two people earning 20,000, 25,000, they are being

asked, to buy an average house, they 20,000, 25,000, they are being

are being asked to find a £40,000 deposit. They can afford the

are being asked to find a £40,000 mortgage payment, but they can't get

the mortgage. They can't buy their flat or house. As Prime Minister,

I'm not going to stand back while people's aspirations to get on the

I'm not going to stand back while housing ladder, to own their own

flat or home, is being trashed. That is why we need to act. A predictable

attempt by party leadership to kick-start the conference with

eye-catching policies. The polls show a big bounce for Ed Miliband

and the Labour Party, with decent numbers for UKIP. What do party

activists think about David Cameron's leadership and the

challenge posed by UKIP? Adam Fleming has been meeting Tory

councillors as they travel to their party conference.

For the Conservatives this weekend, all roads and trams lead to

Manchester for their party conference, and as a scene setter we

asked ComRes to survey councillors are Finland and Wales. Councillors

asked ComRes to survey councillors like Tom, packing for conference at

home in Wellingborough. Immigration is an issue for him. He thinks there

are pros and cons. But we found that 54% of his colleagues feel

immigration has had a negative impact on the UK. I think it

reflects into this wider issue of our relationship with Europe. People

are very concerned about the possible influx of ovarian and

Romania emigrants. Obviously the issue of Europe is very big. --

Ukrainian. His colleagues in Corby are worried about the rise of the UK

Independence Party. In our survey, nearly a quarter of Conservative

councillors thought that their party should make a pact with UKIP. The

concern is, yes, will they take votes away from ourselves in 2015?

If that happens, maybe we don't get back in. Maybe a partnership is the

way to go. It depends what they want and we want. But we should be

talking about them. A pact? Depends what they say, anything is possible.

What would you like to see? Ideally, from my point of view, a national

pact. David Cameron arrived in Manchester last night. Around the

same time as these activists from London. I broke the news to them

that in our survey just 26% of Tory councillors think that the prime

ministers in touch with the lives of ordinary people. The same at all

Conservatives, you don't judge people by their background. It's not

where they come from, it is where they are going to. It is not a

where they come from, it is where problem that he is a bit on the posh

side? Cull you might describe him like that, I would not use those

words. Explain your T-shirt, it is a phrase that a senior Cameron person

is alleged to have used about you? It is a humorous way of letting the

is alleged to have used about you? party now that we are here to say

what we think. Members are important. We are not going away any

time soon. A sentiment you will hear a lot at this conference, because

just 22% of councillors in our survey said that David Cameron was

any good at listening to the people that work hard for his party. That

was Adam. Joining me now from the Conservative Party conference in

Manchester, Foreign Secretary William Hague. Welcome to the Sunday

Politics. Good morning. Over one in five Tory councillors in our survey

support a pact with UKIP at the next election. Why do you think that is?

If it is one in five, it means a large majority did not want a pact

with UKIP at the next election. They have noticed that UKIP, in local

elections, has been receiving votes, some of which would otherwise have

been for the Conservatives. I think we have to make sure that people

understand that at a general election they are choosing between a

Conservative and Labour Government, as David Cameron as Prime Minister

or Ed Miliband. If people want to get a referendum on Europe, the only

way to do that is to have David Cameron as Prime Minister. I think a

general election is different from the local government perspective. It

is pretty unusual, some might say unprecedented, for a large chunk of

one of the big parties in this country to want to go into coalition

one of the big parties in this with a smaller party before an

election. When has that ever happened? Looking at your survey,

three times as many didn't want to do that. As ever, with a survey,

with statistics, you can highlight it whichever way around you want to.

The point is, we are not having pacts with other parties, electoral

pacts with other parties. You rule it out? That is not going to happen.

What we do want is to have a pact it out? That is not going to happen.

with the voters, if you like, as we have often done in the Conservative

Party. We have won over the voters of other parties to support our

policies and Prime Minister. That is important with those people that say

they want to vote for UKIP. By default, they would produce a Labour

government in the exact opposite of many of the things they intend, if

they would otherwise vote Conservative and decide to vote for

UKIP instead in a general election. That could help to produce a Labour

government. The chairman of the 1922 committee, the elected voice of

Conservative backbenchers, he says your party should spell out what had

once back from the European Union before next year's European actions.

Do you agree? We will be spelling out some things in the European

elections. I will be talking about this later on today. For instance,

about the need the UK and the European treaties the concept of

ever closer union, a concept that in Britain we have never really

believed in. We would like that to be changed, with all of the

consequences that would flow from that. We will be setting out the

examples and principles of the changes we want to say. Certainly

over the next year, not only before the European actions but the general

election, if you are saying, let have the exact list of anything that

we are going to be able to negotiate, that is difficult because

there will be a negotiation of a new deal in Europe if David Cameron as

there will be a negotiation of a new Prime Minister after the next

election. To some extent, that has to be negotiated. Only 11% of your

own councillors feel that people in their area think that George Osborne

is in touch with ordinary people. Why is he seemed to be so aloof? It

is not for me to explain why people say what they say in surveys. The

important thing is what we are delivering for the country. What

George Osborne is delivering his renewed economic growth. 1.4 million

new jobs in the private sector, help for hard-working people, by reducing

the tax for 25 million of them. The Help To Buy scheme that we are

highlighting today. That is what really matters to people, actually,

I think you will find. Let's talk about helping ordinary people. Ed

Miliband is guilty freeze energy prices. What are you going to do

about energy prices, we already asked energy companies to put people

on their lowest tariffs. This has not been amended. -- implemented.

Why not? This is going to happen within this government. It is going

to happen within this government when the... Why hasn't it happened

now? People are suffering now from rising energy prices. It has not

happened because my colleagues have been implimenting it. In the case of

Ed Miliband's policy, if you are asking why it has not yet happened

under this Government, it didn't even survive a few our's scrutiny in

opposition. In a few hours he had to concede that if there was a big

change in oil prices then the policy would not work. The trouble is, it

would dry up some of the investment in the energy industry. I don't

think it is a credible promise. For a party that presided over council

tax bills doubling in the next government, -- last government, it's

not very credible. Why is George Osborne going against the European

Union to protect banker bonuses? Well, we don't want to see the

European treaties used in a way that they should not be used. It's not

necessarily over this particular issue. It is over the power that the

European Union has over our lives and over this country. Can the

bankers look after themselves? We should be able to decide those

things in our own country. We have never signed up to such matters in

European institutions. If you allow one thing that wasn't meant to be

decided to be decided, you find one thing that wasn't meant to be

there are another ten or 20 things that affect many other people. We

are very vigilant about what we call competence creep, with the European

Union taking more powers than it was meant to have. That is one of the

reasons why people do want a referendum, do want a new deal in

reasons why people do want a Europe. That is what we intend to

give them. Let's look at in competence creep. A big city

institution, ICAP, fined for fixing the LIBOR rates. The founder of that

company has donated £5 million to your party. Shouldn't you give it

back? Aren't you ashamed to accept that money? He has donated his own

money to the Conservative Party. Which he made out of ICAP. As people

have to other parties, people are free to do that and they should be

free to do that. I am not aware of any plan for that to be repaid.

Because you can't afford to. Let's recap this. We have seen Tory MPs

parrot propaganda lines from the energy companies this week. We have

the Chancellor going to court to fight for unlimited banker bonuses.

We have a top Tory donor the centre fight for unlimited banker bonuses.

of yet another city scandal. Ed Miliband is right when he says you

lot are on the side of the vested interests so the rich and powerful,

isn't he? Well, again, look at the record. I just did! 1.4 million

extra jobs in the private sector, 25 million people with a tax cut, a

Help To Buy scheme which is going to help so many people, particularly

young people have the house that they need and deserve for the

future. Council tax bills held down, welfare reform so that it pays to

work. Actually, this is a government achieving things for hard-working

people and that will be highlighted to this conference.

While President Laugharne he's talking about peace, the Iranians

are speeding up their nuclear weapons programme. -- is talking.

It would be hard to say from week to week whether it is speeding up

or slowing down but they are continuing with it. That is why we

say the new message - the new words - from Iranian leadership are very

welcome. I said that to the Foreign Minister in New York over the last

few days but it is the actions that will count. At the moment, the

nuclear programme continues. We have agreed to commence

negotiations on that and that will be a very important test as to

whether actions will match the words. When will we know it if we

are being strung along? He has strung as a long in the past as a

nuclear weapons negotiator. When will we know if he is not just

doing that again? Over the next few weeks, it will be a very important

time. He has said there should be more transparency over the Iranian

nuclear programme. It is not transparent in many regards at the

moment. The atomic agency is asking for information that is not being

given. One test is, in the coming weeks, will they give more

information? The information that the international of authority is

asking for about their nuclear programme. We will be able to form

a view of this in the coming weeks or months. It is important we test

their new willingness to talk to us and negotiate with us. It is

important to find out whether they are serious about it. You are

asking, is the nuclear programme are serious about it. You are

really continuing? Are they really going to be realistic about

negotiations and offer something they have not offer before?

Speaking of being strung along, what sanctions would President

Assad face if, in six months - the Year, Syria still has a chemical

weapons arsenal. In the resolution we voted through the UN Security

Council on Friday night, is the commitment that the Security

Council will take measures under Chapter seven of the UN Charter in

the event of non-compliance. Does that allow full force? I did not

catch that. Does that allow for force? It is similar to the

Security Council resolution about Iraq, which most people concluded

in not allow full force. It does not specify that. It talks about

terms seven of the charter. That is a message of the whole UN Security

Council that there will be measures - there will be consequences - if

the Assad regime does not comply. Russia has a lot riding on this. It

has a big commitment. I have spent a lot of time at my Russian

counterpart over the last week. Russia has said, this is something

you will have to do. We will work with Russia and others very closely

to check there is compliance will this resolution. Given the progress

that has been made, you must be very glad that the British House of

Commons stopped your rash to force against Syria. -- rush. The reason

Commons stopped your rash to force has happened is because there was a

credible threat of military action. President Obama did not get it

through Congress. They have not had the vote in Congress. There is no

other explanation as to why the policy changed. It was because

there was a debate about military action in the West that the policy

changed on theirs. That is why it changed. We were not in a rush for

military action. The boat put to the House of Commons was to have

another Aotearoa after the inspectors reported. It was before

we got to that point that the Russian and Syrian policy changed.

We need to make sure that works in practice. Thank you. What do you

make about this rushing forward with the help to buy scheme which

was meant to start next year - coming forward mad to the next

couple of weeks? I think it is a terrible policy. The Treasury

Select Committee, Perez a fundamental problem with the

Government having an interest in mortgage lending. -- there is a

fundamental problem. It should have been set much lower to exclude

London and the South East where houses are dramatically overvalued.

Many economists think freezing energy prices is a terrible policy.

These policies can be popular. If you have no chance of getting a

deposit, the Government will make that possible because it will

guarantee a big chunk of the deposit. Do not forget George

Osborne tried every single lever. It looked like he could not do

anything to get the economy moving. It is moving. They have pulled it

forward and there are signs it is recovering. The reason why they are

doing this is they want to show this week at the conference there

are real sort of understandable issues you can explain very simply

are real sort of understandable that really up going to improve

people's lives. The Conservatives were slightly spooked by Ed

Miliband's speech last week. The language used by David Cameron this

morning was that the tax policy was nuts. Much more cautious and --

language about the energy price freeze. They are nervous that Ed

Miliband may be touching a nerve on that one. What we will get this

week, I suggest, his Tory populism to counter Miliband populism. I

week, I suggest, his Tory populism think we will see that and it will

be a mistake. As long as it is think we will see that and it will

about The Picture, they are on relatively strong ground. When the

political conversation changes to more fiddly things, particularities

of energy prices or living standards, things that are some way

below that picture, I do not think they can win a bidding war with the

below that picture, I do not think Labour Party. It is about borrowing

against a party that stands for the rectitude at a macro economic

against a party that stands for the It is about getting the

conversation back to where it It is about getting the

before the Labour conference, which is unemployment, GDP growth and the

warming economic picture. That does not pay energy bills. Does not

sound that the Tories have anything not pay energy bills. Does not

to counter the price freeze. -- it does not sound. They have had a

week to think about a great attack line and they do not add anything.

They have just said, the lights will go out. Now they're saying, it

will not the credibility test. Ed Miliband

said, if there were a big spike in energy prices, he would not be able

to keep his freeze in those circumstances.

to keep his freeze in those credibility test. It was

to keep his freeze in those politically acute announcement but

it is about credibility. Being seen as serious and grown-up is worth

it is about credibility. Being seen more than any burst of popularity.

My worry about the announcement is more than any burst of popularity.

with the election campaign, it begins to lose credibility, begins

to seem a banana republic. It looks a lot less wise than it did last

week. I disagree. Every time energy bills go up and they will continue

to go up, it will be a reminder of how much people are being hit in

the pockets. People know by energy prices are going up. There is a

structural change in the world that was not there before - China and

India. These energy companies may be making huge profit but, at the

end of the day, what is driving up the cost of fuel is China and India.

Ed Miliband, great man that he is, I am not sure he can take on the

people Sammir on that one. How dare you! -- the People's Army. Ed

Miliband came out fighting at Labour's Conference in Brighton

last week. Dogged by criticism over the summer of his leadership style

and lack of policies, Mr Miliband tried to demonstrate his strength

of character with a series of bold announcements, and attempted to

position himself on the side of ordinary Brits. The Labour leader

told party members he would stand up to the strong and take on the

vested interests that hold back our up to the strong and take on the

economy. In a speech in which he jokingly referred to himself as an

action hero, Mr Miliband promised to switch the forthcoming business

action hero, Mr Miliband promised tax cut from large firms to smaller

businesses. He said he would force big firms to train at an apprentice

every time they bring in a worker from outside the EU. He hinted that

increasing the minimum wage would be increased. He bowed to take on

developers with a use it or lose it threat to landowners and pledged to

build 200,000 homes each year by 2020. He promised to freeze energy

prices and reset the energy market. The next Labour government will

freeze gas and electricity prices until the start of 2017. That

provoked a rash of headlines - hailing the return of red Ed macro.

It has also given him a spike in the polls. And Labour's Shadow

Energy Secretary Caroline Flint joins me now for the Sunday

Interview. Ed Miliband says, our energy market

is broken and does not work. In what way is that market to date

different from the one Labour left behind in 2010? We have six

companies that dominate the energy sector. It is the same. They

generate energy, and sell it on to us. What we recognise and Ed

Miliband recognised when he was Secretary of State and asked for

more information from the company Secretary of State and asked for

is on hold serve costs and profits, all the things we have done to

mitigate against that in terms of a warm front programme and everything

else has not dealt with the fundamental problem that the

Horsell market is too secretive and it is too much about such supply. -

- the wholesale market. We have been raising with the Government in

- the wholesale market. We have a co-operative way the argument for

resetting the market. It has got worse in terms of speed at which

prices have gone up. Labour put wholesale and retail together. It

was the start this dates back to Margaret Thatcher and the

privatisation. We took some reforms to reset the market. We have

realised it was not working and it was broken and we need to reset it.

Ed Miliband will be the first to say we did not do enough from 2005

onwards. Let's have a look at what happened to energy prices under the

Labour government. Electricity up 67%, gas up 139%. Overall prices up

by 48%. The market was broken and the Government as well. From 2005,

we saw prices biking as wholesale prices went up. The tick action on

the one Front programme, decent homes for social housing. -- we

took action on per warm front programme. Trying to do things

around social obligations needs to be looked at. Gas and electricity

bills are high partially as a consequence of the market you

presided over but as a consequence of Labour policy. Beds have a look

at the breakdown of dual fuel - gas and electricity bill. -- let's have

a look. The supply costs of getting it to us and so on. The policies

a look. The supply costs of getting that were introduced by your

government - Green levies - are adding almost 10% to has told

energy bills. £112 on average bill of 1188. You have put the bill up.

Eight -- social and green obligations amount to £112. That

helps the poorest insulate homes. Overwhelmingly, looking at your

helps the poorest insulate homes. graph and the figures I have,

wholesale costs are worth more than half. What we have seen, based on

figures we now have, in Eni macro, a wholesale costs fell by 39% and

that was not reflected in our bills. Do you have plans to do anything

about the £112? If you took that off, you could cut bills by 10%

tomorrow. Or if you were in power. It is important that restimulate

the opportunity to grow clean energy. It -- we stimulate. If we

do not have clean energy, we will be beholden for ever-more to fossil

do not have clean energy, we will fuels that are depleting. It will

create jobs and bring in investment will start in the last few years,

we have seen investment in renewable energy half. -- in

investment. If I could go back to competition in the markets,

whatever advance there are, looking at whether the money raised through

energy companies to deliver energy efficiency, is that doing as well

as it might? Could it be better delivered by another agency? They

are fair questions. We need to get ahead of that and look at the

market. Can we make the market will competitive make sure when there is

downward pressure on wholesale prices, that is reflected on our

bills? That is the bigger picture argument. Also the freeze to help

people during that period. As you complain about the energy

prices, it was as a result of your actions. Ed Miliband introduced the

climate change act. He admitted prices would have to rise to pay for

decarbonisation. He said, we are going to minimise the costs as much

decarbonisation. He said, we are as possible, but it is true there is

not a low-cost energy future out there. It is important that we

address the pressures on bills, but also recognise that if we are going

to build a better future where we can have more home-grown British

energy and, in the long-term, cheaper, we need to invest in

renewables. Truth is it is about the market. I acknowledge I acknowledge

eyes what you say about the 112. I am not going to disagree. But

wholesale prices have fallen. They fell in 2009, we got a reduction in

bills of 5%. Which are saying that the big companies are overcharging

customers. We are seeing profits going up, but we haven't seen the

amount of investment suggested by those profits coming through. But

that £125 is going to get worse, because your leader said in his

speech in Brighton that Labour will have a world leading commitment in

Government to take out all carbon from energy generation by 2030. That

is not that far away. By 2030, no more coal generation, no more gas

generation, only much more expensive nuclear and much more expensive

generation, only much more expensive renewables. It cannot be done

without bills going up even further? Hang on a second. The 2030 target to

remove carbon from the electricity supply, we have said we should set a

target now because, actually, it gives us more time to plan ahead and

also allows investment to come in. There is plenty of people with cash

in their pockets not want to invest what they are stalling because of

the Government's hesitancy over this. I just want a clarification

here. My understanding is that your commitment is to get rid of all

carbon from power generation by 2030? From the letters city supply.

Only electricity. We will still have gas? We have always said we will

need gas for decades to come. So we are clear for that. But you will be

increasingly dependent on expensive nuclear. EDF are currently demanding

twice the market price to build plans in this country. Renewables

are two or three times the market price. Bills are going up under your

policies, and the coalition policies? On nuclear, we took a

decision under the Labour Government that we needed to revitalise the

sector, to hit targets on clean that we needed to revitalise the

energy and make sure it can do the heavy lifting. The Government at the

present time are engaged in heavy lifting. The Government at the

discussions with EDF about what the strike price should be. It's

important, because I don't know what it's going to be, it is important

that stands up to scrutiny in terms of value for money. At the same

that stands up to scrutiny in terms time, I go back to market reforms.

We will not just have a target for difference, the jargon for nuclear,

we will have it for renewables as well. That is even more important,

that we have a transparent market so that we can have a robust target

price to be judged against. Michael Gove recognised in question time

that the market was not working. The Telegraph said in its editorial,

they used the term cosy cartel. We have former advisers to David

Cameron saying something needs to be done. I'm surprised David Cameron

doesn't acknowledge that. You are going to freeze prices for 20 months

and will come up with a new regulator to replace Ofgem. Will

that regulator have the power to regulator to replace Ofgem. Will

control prices? The new energy watchdog will have a strategy

responsibility to monitor the wholesale costs and prices, which it

currently doesn't have at the moment. As a result of that it will

currently doesn't have at the have the power that, if the

wholesale prices fall, it can force the energy companies, if they don't,

to pass on reductions in bills to consumers. It will not have what we

to pass on reductions in bills to see in some parts of the European

Union, 15 of them, that have a variety of price controls that set

things at below inflation and what have you. France, Spain, Italy. It

will not do that. Why? Because we are looking at a temporary price

freeze to reflect a reduction in are looking at a temporary price

wholesale prices, to give the British public respite from ever

climbing bills while they get reforms into the market. At the end

of this, what we want is a more competitive market that can be

trusted, that is more transparent. competitive market that can be

We do believe it is right that, actually, we need a regulator that

has much more of a role in making sure the market is managed

effectively. Are you accusing energy companies of profiteering? EU I am

accusing them of overcharging and not passing on wholesale reduction

costs to the customer in a fair way. Of making Carter -- cartel profits?

I do believe that the level of profits they have passed on to their

shareholders is high, compared to the reductions they could have

provided to consumers. Let's look at the evidence for that. Here are the

British owned companies, SSE and Centrica. In the last fiscal year

they made combined earnings of £4 billion. But they invested £3

billion. The remaining money went to debt servicing and paying dividends,

which go into pension funds. Where in these figures is the

profiteering? My figures that I got through their reporting to Ofgem and

work done by other organisations, Witch and others, it shows that in

Centrica's case they have something like 8% return in profit margins on

the retail side. That goes up to 24% on the generation side. They have

passed on, in terms of profits, something I70 4% through evidence to

shareholders. But these figures don't show that. They have invested

£3 billion. I am reporting what has been reported by Ofgem. Ofgem has

not accused them of property in. They may well be, but we don't have

the evidence. I would accuse Ofgem of not doing the job they should be

doing, and they have held back from tackling the issue. It is

acknowledged, across the sector, across the big six, something like

50% of profits has gone over to dividends to shareholders. In

Centrica's case it is 74%. On the Centrica example, even though they

have had the highest profit margins, they have invested the least. It is

have had the highest profit margins, fair to question. We are running out

of time. None of us really know what the true price of energy is that is

Labour's policy to reform his crucial. That is because he merged

the market and we can't tell the difference. If they continue putting

prices up, even after your price freeze, if they don't invest in a

way that they do, do you rule out wholesale nationalisation?

Absolutely. I want a more competitive market and that is why

we are resetting it. You are watching Sunday Politics. Coming up

in just over 20 minutes I will be looking at the week ahead with our

political panel Hello, and on Sunday Politics Wales:

As the Conservatives gather in Manchester, we'll hear from their

Assembly leader, Andrew RT Davies. And a warning that jobs could go and

stores close if the Welsh Government decides to cut business rate relief

for charity shops. Joining me throughout today's

programme are two Assembly members - Plaid Cymru's Jocelyn Davies and the

Conservative, William Graham. Good morning to you both. Let's talk

about an article in one of the newspapers this morning from the

Chief Constable of Cumbria police who says that all class a drugs

should be decriminalised. I remember a few years ago you had

Lemmy talking about the dangers of drugs. Drugs cause untold misery and

death. You must examine it in a very objective way. It has to be examined

once again but in a very detailed form, perhaps with the odd pilots to

see if it works. It isn't the first time we have heard this. I think

there were similar calls. Yes, he wet even further and called for

heroin to be provided on the NHS. I agree with William. This is

something I wouldn't dismiss but we need to look very carefully at what

the impacts would be and I think pilots would be a good idea. We will

leave it there for now. As we have heard already, the

Conservatives are holding their annual conference in Manchester. And

as we continue our conference coverage, their Assembly leader,

Andrew RT Davies, has been talking to our correspondent, David Cornock.

Hello from Manchester and a very important conference, this, for the

Conservatives. It is 20 months before the general election in 2015.

What impact will it have in Wales? Let's talk to Andrew RT Davies will

stop -- Andrew RT Davies. There was a report a year ago that Wales

should have tax evading powers. We're waiting for response. What

does that say about the conservative attitudes to devolution? Your Mac

automatically, the Conservatives in London delivered legislative powers

to the Assembly. We have full executive responsibility and can

make primary legislation. I believe a couple of weeks waiting for silk

will not make a difference. The couple of weeks? It is often now. --

autumn now. I can fully appreciate those implications. We're very close

by population along the land border with England and we have to look at

those things across the whole of the United Kingdom. We have all signed

up to making sure there is accountability and responsibility to

the amount spent in Wales. This is taxpayers money. What we have is a

Government in Cardiff Bay that fritters valuable tax payers money

away, and has no accountability for the way it is raised. We will get

there, but it's important that when the packages delivered it is

complete and delivers the responsibility we all want to see.

Nick Clegg says the conservative half of the Coalition is blocking

for the devolution on principle. Do you believe everything the Deputy

Prime Minister says? He is in Coalition with your party. What I am

talking about is the Welsh agenda, and that is putting real change to

Wales and making sure that people know there is an alternative. We put

various policies forward in the last 12 months to invest in Wales, get

finance for business, we generate high streets, talk about taxation to

stimulate the Welsh economy, bringing back grammar schools. There

is an appetite for solutions to the problems people in Wales face. I

grammar schools the solution? When an idea was put forward in

Westminster, the minister involved was sacked. That is Westminster, not

Cardiff. That is what evolution is about. I could go on, but your

listeners would forcefully. -- your viewers would fall asleep. These are

the issues that we can bring forward to the public to for change after 13

years of stagnation. We had the dead hand of labour around the throat of

the Welsh economy. We need a change in Wales and Conservatives are not

for the fight. -- out from a fight. Any discussions about getting the

budget through? Any discussions with other parties about forming an

alliance to get what you want? We have outlined our priorities, which

is making sure the Welsh NHS has the resources it needs to make sure the

people get back on the road of recovery when they are struck with

illness so they can get back to employment and being in avoidable

and the earning money for the economy and themselves. It is

disappointing on the eve of the conference that I can see an

extension to the drugs fund that will be an official to people in

England to have a diagnosis, and yet in Wales, we have a failure to

support this policy. Many people are suffering as a result, and I hope

the political parties will rally around because of the NHS. You

haven't had a discussion with other parties got you might -- with other

parties quicken my there are always discussions going on. We have mapped

out a position. The First Minister has the responsibility to map out

his territory. It is interesting, the future of the Welsh

Conservatives, or cause you have carved out a distinctive position.

But that position is so distinctive it is hard to see you as a potential

party of Government given you are unlikely to win a majority. I

disagree. We need to put forward a progressive agenda in 2016. We have

started doing that as the position of the largest opposition. I hope

other parties want to see a prosperous economy, better education

standards, and a bust NHS delivering for the people of Wales. People will

be all to sign up for that. We are a centre-right party proud of our

roots and traditions and proud to be Welsh Conservatives.

Jocelyn Davies, let's touch on budget and alterations -- budget

negotiations. You have been involved in that. Are you aware of

discussions ongoing with the Conservatives? I am not. I do not

think we learned much in that interview about whether he had

anything to give away or not. I don't think the Tories are middle

shooting with Labour. It will be interesting to see if they do. We

decided to join in an alliance with the Liberal Democrats to get a

better deal out of the negotiations because in the past Labour has been

able to play one of us off against the other. The cant do that this

year. -- they cannot do that. You don't think they will have to settle

for chicken, as Andrew Davies said? I don't think so. You wouldn't look

at it in that light. We decided we would join forces with the Liberal

Democrats to get a better deal all round. It will prevent labour from

playing one of against the other. The other alternative is Andrew RT

Davies and I don't think they will do that. That is not a possibility,

is it? Your party will be outside these negotiations and unable to

influence the budget. It doesn't work like that. They may well have

talked to us and we have talked to them in the past. We had a

negotiation previously that fell down in the end. What is good is

that opposition parties are going to get a decent amount out of the

Labour Government when it was previously very small. Jocelyn

alluded to an alliance with the Lib Dems. You will know all about that

as a conservative. David Carter not asked Andrew RT Davies -- our

correspondent was bidding to Andrew RT Davies. You think it is important

that we see the Government response to Silks and other later? There has

to be proper consultations on tax-raising powers and even if

granted there must be a referendum. What about the delay? I am

disappointed. Should any of these measures -- measures require

legislation before the election, we're running out of time. Other

Conservatives at Westminster holding that back? They have not denied it.

I am assuming that probably is correct. That makes it difficult for

due in Wales because you support these recommendations, don't you?

This is what happens in a devolved settlement. We don't completely

follow the Westminster line, we have our own policies. This is one of

them. We would press for the right solution and not rush into it. The

key message from this conference, we understand, 18 months before the

election, what you want to see from David Cameron? The housing proposals

are worthwhile looking at again. There are lots of people desperate

to own a house and this will enable that to occur. That is good. We

won't have it in Wales, that is bad. What you make of David Cameron's

announcement on the help to buy? Saving the deposit when house pros

at -- house prices are so high detail is a lot of people. If you

need 20,000 £30,000 to get down, even though you can afford a

mortgage, we need something helps first-time buyers. We need to be

careful not to drive up prices by providing it to easily. There is a

fine balance to be struck. I would be cautious about it.

We will leave it there for now. The biggest charity retailer in

Wales, Tenovus, has abandoned plans to open 14 new shops over the next

two years as the Welsh Government considers cutting business rate

relief for charities. It's warning that jobs and stores could close has

been echoed by the British Heart Foundation Cymru which says almost a

third of its shops are under threat if ministers go ahead with the

proposals next week. Here's our business correspondent, Brian

Meechan. From fighting cancer at home to

fighting poverty across the globe and much else in between. Shops have

been a useful tool for many charities, selling on donations to

raise monitor for the wider objectives. They are a familiar

sight across high streets in Wales, even more so in these troubled

economic times. But our charity shops a vital part of local

communities or have too many of them opened up, stifling business for

commercial stores? Charity shops which pay reduced business rates

have been said to drive up business rates and that commercial shops out

of business. Not so, say campaigners. There is no evidence to

show that charity shops are one of the causes of decline on the high

street. The Government has been looking at cutting the relief on

rates from 80 to 50% unwashed shops. Abolishing relief completely for the

guest shops to pay full rates. And limiting the amount of charity shops

in an area. This charity store in Newport is one of the 34 in Wales.

As a large furniture store, it would lose rates relief and would have to

pay the full amount. This would threaten the viability of our shops

in Wales. We calculated a possible closure of around ten shops. That

means a loss of jobs. Over 30 jobs of managerial staff. Proposals have

already had an impact according to the Chief Executive of the cancer

charity, Tenovus. It has abandoned plans to open 14 shops in the next

two years. I am completely baffled by the proposals. It makes me

incredibly sad. What we have got to remember here that Tenovus is that

our Shield holders are cancer piece in which -- our shareholders are

cancer patients and families. The money we would lose if we stood

still now would pay for two cancer support advisers. They see patients

day in and day out in outreach centres and communities so the

impact is large for us. Many small retailers want a level playing field

with charities. The Federation of Small Businesses it says it has to

be kept in context. It is an important subject that has an impact

on our members. I don't think you can blame charity shops for every

walk that the high street is having. It is clearly about out-of-town

shopping and that more of us want to shop online. The Welsh Government

will outline plans next week. Liberal Democrats and some Welsh

charities have told us that they have legal advice that say ministers

don't have those powers unless they change the law fast. Many charities

argue that there driven -- if they are driven off the high streets,

they wouldn't be replaced by small retailers but rather by payday loan

companies, pawnbrokers and empty shops.

Both of your parties have policies alluding to business rate relief

scrapping business rates up to a certain level. What do you expect

from the Minister this week? If she acts on the recommendations, she

will register relief available charity shops. I visited that shop

in Newport in the summer, and I think in terms of other traders, so

long as they are not selling new goods, that is a major issue. When

you are selling new goods, you have the benefit of rate relief and the

majority of shop workers are volunteers. They do occupy large

stores. The rates on that are hundreds of thousands idea in

Newport alone. No-one is trying to drive charity shops from the high

street. They are very necessary part of that in many towns. Retailing is

changing and we have to take account of that. We must make our policies

in June to make sure there are more longer these huge numbers of shops,

that are open, sorry, and are not just left vacant. There is an issue

that if the rate relief was changed and charity shops didn't open in

towns or closed down, they wouldn't necessarily be filled by businesses

anyway. I would fear that those businesses would then be empty. Even

though other traders might think they are in competition, more and

more empty premises mean less and less fruitful. It would mean and

detrimental effect on other shopkeepers because if no-one wants

to go -- no-one wants to go to a town when half the shops and empty.

We all like charity shops. The other side of the coin is that those

charities do very good work. If they don't have the prophets, who will

fund the bill for those good works? I don't think the Government will.

It is a fine balance. Maybe there will be a compromise of some sort.

Perhaps if they are selling brand-new goods rather than

second-hand goods where there is definite competition. You have been

lobbied quite strongly on this. From who? From the charities directly and

small businesses. I have been lobbied by members of the public

supporting the charitable works that charities do. I think they put a

very good adamant forward. Who will carry out his good works grit --

good works but you might we have from charities who said he might not

open new shops summer might close. That will have an impact on the high

streets. There is no doubt about it. There is no clear solution. We have

to take action, and I suspect we will see some reduction in rates

relief will stop -- Rachel relief. In times of recession and if you

look at Newport, it is a town in decline. It is a simple solution but

a complex situation which I don't think is the answer. Your party

released a document about your vision for the high street,

introducing free parking. Our high streets under threat because of

out-of-town shopping and those kinds of things? They are under threat

because the way in which people shop is different. If you do not have

good parking or free parking, a cross-section of traders, including

independence, we have an over abundance of retail. There are huge

numbers of small shops and that has got to change the way we look at

more residential redevelopment of that kind. If there are too many

shops, leave it to the market, let them close down? That does happen.

There might be the generation. We need to decide what town centres are

for. When it's look at our behaviour, all of us, and not go

into the town we are not going to the town centres. We cannot get what

we want when they go there. That is why shoppers often bareback on the

high street. We will be back with you shortly.

Time now for a quick look back at some of the political stories of the

week in 60 seconds. Conservative MP called for Gordon

Brown's former press officer Damien McBride to be investigated by the

police and Civil Service ready later. The MP said Mister McBride

admitted in his book that he accessed the former Prime

Minister's e-mail account without authorisation. He said this was an

abuse of the computer misuse act. Assembly members passed a new law

aimed at protecting the rights of mobile home residents. The Liberal

Democrat MP said his Private member 's Bill would help residents who

have suffered intimidating behaviour.

Paul Murphy opposed the plan to introduce a Welsh name to the

village of Varteg. Locals said a new name would mock the village. The MP

said moves like this would fuel resentment.

Jocelyn Davies, we have about Peter Black's Lord Mayor on mobile homes.

An observation by you on that? There was something in the bill which I

think is very interesting. And the definition of family. We have

spouses and civil partnerships and injuring family relationships in the

same category. No discrimination, none superior to the other. I am

proud of the other. I am proud Welsh Government supported that and that

every Assembly member was keen to do that so we have a new definition.

First in the British Isles in this legislation. That links into your

party's announcement only married persons tax allowance. Perhaps they

could have looked at this legislation. It is a very good

definition. I trust Westminster will look more closely and interviews

more legislation on that basis. Both of you represent Southeast Wales. We

have been mention of Varteg there. You think this is a nonsense, do

you? If local people don't want it, why impose it? Everyone knows it as

Varteg. Why embarrass the people was a stupid name? The villagers of

course wouldn't mind a Welsh place name, they just don't want that one.

I wonder if we could have got with something else and given it another

name in Welsh they would have been more comfortable with. They not

objecting to the Welsh language, they just want -- they just do not

want that what. Paul Murphy said it is embarrassing to local people.

Have you spoken to people there? People have been in touch. They

thought they would get adverse political -- publicity, and is only

have. How does this move forward? With difficulty, I suspect. It has

been Varteg for germination is I do not see a need for real change. --

it has been Varteg for generations. Lovely to see you. That is all we

have time for this week. and Emily Thornberry. Back to you,

Andrew. So, we'll David Cameron's marriage

tax break win over voters? How will So, we'll David Cameron's marriage

the Tories react to Ed Miliband's conference initiatives? And what is

UKIP leader Nigel FarageFarage up to conference initiatives? And what is

with the Tories in Manchester? Joining us now is UKIP's Diane

James. She came second in the easterly by-election.

On this business of a possible Tory- UKIP pact, in a general election,

let's see what David Cameron had to say about that earlier. I am not

looking for a packed. I think we need to give people a clear choice

at the general election. The British economy has turned a corner. We are

on the right track, we are seeing more jobs, new businesses, we are

beginning to get things moving again. Do you want to stick with us,

delivering an economy for hard-working people, or do you want

to put it at risk with Ed Miliband hard-working people, or do you want

and his crazy plans to tax business out of existence? That was the Prime

Minister on the Sunday Politics. Is there any appetite on the UKIP side

for a pact? In my experience, discussions around the country, I

would say no. It's being discussed, then? EU no. It has not come up. It

is the media that is pushing this. It has reflected what has happened

with the parties since the conference season began. Labour are

trying to reclaim what I would call the traditionalist socialist

position. I'm not sure what the Liberal Democrats or two, but the

Conservatives are trying to react to the threat that UKIP represents.

There is this element, the accusation they are lurching more to

the right, which the media wants to interpret as them possibly being

able to do some sort of pact with UKIP. Have you given any thought to

what shape it would take? Not whatsoever. It is not on the radar.

I have read comments, including individual such as Douglas

Carswell, the Eurosceptics, that they might form a potential, let's

call it, you know, cabinet. If there were UKIP members, I don't doubt

that Nigel Farage would be one of them. But I would reiterate it is

not discussions that are taking place. I am thinking more of an

electoral pact, not a coalition. I have responded to that by saying,

the moment, there are no ongoing discussions. There is certainly

nothing that has been discussed at a constituency level or coming out of

the national executive. You don't believe any constituencies are

discussing this with Tory Eurosceptics? I am not privy to what

all 360 constituencies might be discussing. All I can do is give you

the example of the few I have seen and know it is not on the agenda.

Without a pact, it is perfectly possible that you could fail to win

a single seat at the next election, but put Ed Miliband into Downing

Street? Categorically not. There are a number of seats out there that are

very clear marginals, just like Eddy Izzard was. I believe there could be

an MP -- just like Eastleigh was. If you take enough votes away from the

Tories, if you make sure that Labour wins? I will go back to the comment

I made. If you take Eastleigh as an example, a Liberal Democrat held

seat, even after that result, does not mean that UKIP is suddenly going

to be focusing on Tory seats. We are out there because people resonate

with our message. For the Liberal Democrats to make it abundantly

clear that they will not support a referendum, that they will not

support any discussion on leaving the queue, that could be a big

turn-off for voters. David Cameron says there is not going to be a

pact, Diane James says there is not going to be one. There might be one

or at a constituency level. But it seems clear to me that there will

not be a national one. So, does David Cameron have a UKIP strategy?

The only encouraging thing for UKIP's successful David Cameron is

that their support is so enormous UKIP's successful David Cameron is

that the moment that he would only UKIP's successful David Cameron is

really need to win back maybe a third or a quarter of its to make a

decisive difference to the Tory share of the vote in 2015. The

question becomes, how much of that UKIP support is up for grabs? A poll

last week suggested that 47% of current UKIP voters would consider

voting Tory if it meant preventing Ed Miliband becoming Prime Minister.

That number goes up to 57% against the backdrop of an economic

recovery. So, plausibly, there is quite a lot to play with. The

secondary question is, what does David Cameron do to win over those

people? He has tried a Europe will referendum and it didn't work. He

tried travelling up his immigration policy and that didn't work. I

wonder if it is time. You wait until the run-up to 2015, when they start

to focus on the explicit choice between Ed Miliband and David

Cameron, and that is what shifts a lot of UKIP support to David

Cameron. We heard from William Hague earlier in the programme, the Tory

line is that if you vote UKIP you could end up with Ed Miliband in

Downing Street. That is the simple appeal, isn't it? Yes, and I think

Downing Street. That is the simple Diane is right, I think the European

elections will show a good showing for UKIP. It is deemed the one where

you can play away. I think it will be hard for people to get excited

about that, I think that bounce will fade away. In Eastleigh, they had a

good ground game, that is difficult for UKIP, that don't have that

machinery sorted. How are they going to fund that operation? But the UKIP

bounce could fade away after the European elections. Even if they go

down to 6% or 8% in a general election, they are still immensely

dangerous to the Conservative Party. But there is really only two things

David Cameron can do. One is to be boring and talk about helping people

with their mortgage, helping with bread and butter issues. The second

thing is, those European actions, he tends to the natural Conservative

voters and says, you have had your fun, next year do you want me or Ed

Miliband us your prime and? The real danger with David Cameron is saying,

of course, there is not going to be a pact, the danger is you will get a

of course, there is not going to be repeat of the 1977 election. John

Major said, famously, do not bind my hands. A series of Conservative

candidates said they would personally rule out membership of

the euro, when the Conservative membership was wait and see. That

looked like a Prime Minister not in charge of his party. The danger is

you will get a repeat of that amongst Conservative candidates.

Let's assume you do really well in the European actions and there is a

widespread expectation that you will, even in Downing Street. They

might be managing expectations. What stops you fading away as the general

might be managing expectations. What election approaches? A number of

reasons. As has been mentioned, the whole issue of the referendum pledge

has been proved to be an absolute nonsense. It is so contingent on if

I am re-elected, if it's not a coalition government, is, if, if.

That was fooled nobody. The issue of where voters are coming from, it is

That was fooled nobody. The issue of because they have lost faith in what

David Cameron says. There is nothing he is going to say that is convince

them to give him another chance. I think that is my view and the view

of a lot of UKIP. I am told that they have expunged Nigel Farage from

the fringes? It is a great scoop, on the front page. They are outside the

ring of steel. Even so, they won't include him in the conference

programme, so they must be worried about something. His people have

paid money for adverts in the Tory brochure and his name has been taken

out. Speaking of people the Tory brochure and his name has been taken

leadership is worried about, Boris Johnson, are we in any doubt as a

result of his Financial Times interview that he is now beginning

his long march back to Parliament? He does express feeling slightly sad

during the Syria debate that he was He does express feeling slightly sad

not there, on the political front line to participate. I still do not

see why it is in his interest is to move before 2015. No, I don't think

he will move before, I think he is sending a signal to the existing

Tories in the Commons that when Call Me Dave goes, I will be back? He has

the Vince Cable problem, if you say the same thing too many times,

people get bored and factor it in. The interesting thing is him saying

that people have seven years before the electorate get bored of them. He

might be cresting that. He doesn't want to be Prime Minister, he is

much more ambitious than that. He wants to be an emperor. He was

asked, which Roman emperor would you like to be compared to? You said,

Augustus, the first and most important. I don't think you are

thinking big enough. See what I have to put up with, every Sunday? By

virtue of being born in the US, he could be president. Unlike Arnold

Schwarzenegger. How about a deal with Boris? He has made no secret,

after Eastleigh, that he would be open to a discussion. Let's call it

no more than a discussion. He has been adamant, however, he does not

see any reason, any justification or any opportunity where he would be

able to have that discourse with any opportunity where he would be

David Cameron. Maybe it comes down to that on both sides. I've no idea.

We know that the Tories will be even more Eurosceptic after the next

election? I can't imagine David Cameron's successor will be somebody

that supports EU membership in principle. If you look at the

ideological direction of the party. The leadership contest will be about

2018. If you are standing, when David Cameron renegotiate our

membership, are you going to say David Cameron renegotiate our

this is a great deal for Britain David Cameron renegotiate our

because the Prime Minister has turned to leave rapid change two

words in the working Time directive, turned to leave rapid change two

or are you going to become a leader by saying, I want out? What would be

a good conference for David Cameron this week? A decent poll bounce. Ed

Miliband have a good one. An eye-catching announcement related to

living standards. May be a clearer line on energy prices? That would

certainly help, that fightback has been rubbish so far. The thing we

should be looking out for are not the polls immediately after, but the

ones about the end of October, when everything gets to settle down and

then we will see what happens. In a word, what is Nigel Farage out to

get at the Tory conference? What is he doing, other than mischief? I

could almost say revenge. Revenge on Mr Cameron? Yes. You know? Lord

Ashcroft was there at the Labour conference, let's put it into

conference. You call it mischief, but there is every reason why he

should be there. We all call it mischief. Thanks for being with us.

Join me on Daily Politics for live coverage of the Conservative Party

conference tomorrow morning from 11:30 on BBC Two. We will bring you

George Osborne's speech live and uninterrupted. I'll be back next

weekend when guests will include former Conservative Chancellor

Kenneth Clarke. Remember, if it is Sunday, it's the Sunday Politics.