27/10/2013 Sunday Politics Wales


27/10/2013

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Morning, folks. Welcome to the Sunday Politics. Hope you enjoyed

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the extra hour in bed, and that you've realised it's not 12:45. It's

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11:45! It's getting stormy outside. But they're already battening down

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the hatches at Number Ten because coalition splits are back, with

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bust-ups over free schools and power bills. We'll speak to the Lib Dems,

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and ask Labour who's conning whom over energy.

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EU leaders have been meeting in Brussels. But how's David Cameron

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getting on with that plan to change our relationship with Europe? We

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were there to ask him. Have we got any powers back yet? DS!

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Foreign companies own everything from our energy companies to our

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railways. Does it from our energy companies to our

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as many daily journeys made by bus than by tube, so why is the planned

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investment in buses not keeping pace?

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And with me, three journalists who've bravely agreed to hunker down

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in the studio while Britain braces itself for massive storm winds,

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tweeting their political forecasts with all the accuracy of Michael

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Fish on hurricane watch. Helen Lewis, Janan Ganesh and Nick Watt.

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Now, sometimes coalition splits are over-egged, or dare we say even

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occasionally stage-managed. But this week, we've seen what looks like the

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genuine article. It turns out Nick Clegg has his doubts about the

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coalition's flagship free schools policy. David Cameron doesn't much

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like the green levies on our energy bills championed by the Lib Dems.

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Neither of them seems to have bothered to tell the other that they

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had their doubts. Who better to discuss these flare-ups than Lib Dem

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Deputy Leader Simon Hughes? He joins me now. Welcome. Good morning. The

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Lib Dems spent three years of sticking up for the coalition when

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times were grim. Explain to me the logic of splitting from them when

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times look better. We will stick with it for five years. It is

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working arrangement, but not surprisingly, where there right

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areas on which we disagree over where to go next, we will stand up.

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It is going to be hard enough for the Lib Dems to get any credit for

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the recovery, what ever it is. It will be even harder if you seem to

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be semidetached and picky. The coalition has led on economic

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policy, some of which were entirely from our stable. The one you have

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heard about most often, a Lib Dem initiative, was to take people on

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blowing comes out of tax. The recovery would not have happened,

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there would not have been confidence in Britain, had there not been a

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coalition government with us in it, making sure the same policies

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produced fair outcomes. We are not going to leave the credit for any

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growth - and there has been very good news this week. We have played

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a part in that, and without us, it would not have happened. Does it not

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underline the trust problem you have? You promised to abolish

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tuition fees. You oppose nuclear power, now you are cheerleading the

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first multi-billion pounds investment in nuclear generation.

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You are dying out on your enthusiasm on green levies, and now they are up

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for renegotiation. Why should we trust a word you say? In relation to

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green levies, as you well know, just under 10% is to do with helping

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energy and helping people. Unless there is continuing investment in

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renewables, we will not have the British produced energy at cheaper

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cost to keep those bills down in the future. At cheaper cost? Explain

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that to me. Off-shore energy is twice the market rate. The costs of

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renewables will increasingly come down. We have fantastic capacity to

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produce the energy and deliver lots of jobs in the process. The parts of

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the energy bill that may be up for renegotiation seems to be the part

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where we subsidise to help either poor people pay less, or where we do

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other things. Too insulated the homes? Are you up to putting that to

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general taxation? Wouldn't that be progressive? I would. It would be

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progressive. I would like to do for energy bills what the Chancellor has

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done for road traffic users, drivers, which is too fuelled motor

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fuel -- to freeze new to fall. That would mean there would be an

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immediate relief this year, not waiting for the election. So there

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is a deal to be done there? Yes. We understand we have to take the

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burden off the consumer, and also deal with the energy companies, who

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look as if they are not paying all the tax they should be, and the

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regulator, which doesn't regulate quickly enough to deal with the

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issues coming down the track. We can toughen the regulator, and I hope

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that the Chancellor, in the Autumn statement, was signalled that energy

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companies will not be allowed to get away with not paying the taxes they

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should. And this deal will allow energy prices to come down? Yes. How

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could David Laws, one of your ministers, proudly defend the record

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of unqualified teachers working in free schools, and then stand

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side-by-side with Mr Clegg, as he says he is against them? David Laws

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was not proudly defending the fact that it is unqualified teachers. He

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said that some of the new, unqualified teachers in free schools

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are doing a superb job. But you want to get rid of them? We want to make

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sure that everybody coming into a free school ends up being qualified.

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Ends up? Goes through a process that means they have qualifications. Just

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as we said very clearly at the last election that the manifesto

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curriculum in free schools should be the same as other schools. It looks

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like Mr Clegg is picking a fight just for the sake of it. Mr Clegg

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was taught by people who didn't have teaching qualifications in one of

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the greatest schools in the land, if not the world. It didn't seem to do

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him any harm. What is the problem? If you pay to go to a school, you

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know what you're getting. But that is what a free school is. No, you

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don't pay fees. A free school is parents taking the decisions, not

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you, the politicians. We believe they would expect to guarantee is,

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firstly that the minimum curriculum taught across the country is taught

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in the free schools, and secondly, that the teachers there are

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qualified. Someone who send their kids to private schools took a

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decision to take -- to send their children there, even if the teachers

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were unqualified, because they are experts in their field. Someone who

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send their kids to free schools is because -- is their decision, not

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yours. Because some of the free schools are new, and have never been

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there before, parents need a guarantee that there are some basics

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in place, whatever sort of school. So they need you to hold their hand?

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It is not about holding hands, it is about having a minimum guarantee.

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Our party made clear at our conference that this is a priority

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for us. Nick Clegg reflects the view of the party, and I believe it is an

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entirely rational thing to do. Nick Clegg complained that the Prime

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Minister gave him only 30 minutes notice on the Prime Minister Buzz 's

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U-turn on green levies. That is almost as little time as Nick Clegg

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gave the Prime Minister on his U-turn on free schools. Aren't you

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supposed to be partners? Green levies were under discussion in the

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ministerial group before Wednesday, because we identified this as an

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issue. We do that in a practical way. Sometimes there is only half an

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hour's notice. We had even less than half an hour this morning! Simon

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Hughes, thank you. So the price of energy is the big

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battle ground in politics at the moment. 72% of people say that high

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bills will influence the way they vote at the next election. Ed

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Miliband has promised a price freeze after the next election, but will

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the coalition turned the tables on Labour, with its proposal to roll

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back green levies. Caroline Flint joins us from Sheffield. It looks

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like the coalition will be able to take ?50 of energy bills, by

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removing green levies. It is quite clear that different parts of the

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government are running round waking up to the fact that the public feel

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that this government has not done enough to listen to their concerns.

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Last week, there was a classic case of the Prime Minister making up

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policy literally at the dispatch box. Let's see what they say in the

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autumn statement. The truth is, whatever the debate around green

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levies, and I have always said we should look at value for money at

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those green levies. Our argument is about acknowledging there is

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something wrong with the way the market works, and the way those

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companies are regulated. Behind our freeze for 20 months is a package of

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proposals to reform this market. I understand that, but you cannot tell

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as the details about that. I can. You cannot give us the details about

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reforming the market. We are going to do three things, and I think I

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said this last time I was on the programme. First, we are going to

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separate out the generation side from the supply side within the big

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six. Secondly, we will have a energy pool, or power exchange, where all

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energy will have to be traded in that pool. Thirdly, we will

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establish a tougher regulator, because Ofgem is increasingly being

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seen as not doing the job right. I notice that you didn't mention any

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reform of the current green and social taxes on the energy bill. Is

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it Labour's policy to maintain the existing green levies? In 2011, the

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government chose to get rid of warm front, which was the publicly funded

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through tracks a scheme to support new installation. When they got rid

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of that, it was the first time we had a government since the 70s that

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didn't have such a policy. What is your policy? We voted against that

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because we believe it is wrong. We believe that the eco-scheme, a

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government intervention which is ?47 of the ?112 on our bills each year,

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is expensive, bureaucratic and isn't going to the fuel poor. I am up for

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a debate on these issues. I am up for a discussion on what the

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government should do and what these energy companies should do. We

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cannot let Cameron all the energy companies off the hook from the way

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in which they organise their businesses, and expect us to pay

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ever increasing rises in our bills. There is ?112 of green levies on our

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bills at the moment. Did you vote against any of them? We didn't, but

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what I would say ease these were government imposed levies. When they

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got rid of the government funded programme, Warm Front, they

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introduced the eco-scheme. The eco-project is one of the ones where

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the energy companies are saying, it's too bureaucratic, and it is

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proving more expensive than government estimates, apparently

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doubled the amount the government thought. These things are all worth

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looking at, but don't go to the heart of the issue. According to

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official figures, on current plans, which you support, which you voted

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for, households will be paying 41% more per unit of electricity by

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2030. It puts your temporary freeze as just a blip. You support a 41%

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rise in our bills. I support making sure we secure for the future access

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to energy that we can grow here in the UK, whether it is through

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nuclear, wind or solar, or other technologies yet to be developed. We

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should protect ourselves against energy costs we cannot control. The

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truth is, it is every fair for you to put that point across, and I

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accept that, but we need to hear the other side about the cost for bill

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payers if we didn't invest in new, indigenous sources of energy supply

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for the future, which, in the long run, will be cheaper and more

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secure, and create the jobs we need. I think it is important to

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have a debate about these issues, but they have to be seen in the

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right context. If we stay stuck in the past, we will pay more and we

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will not create jobs. How can you criticise the coalition's plans for

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a new nuclear station, when jeering 13 years of a Labour government, you

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did not invest in a single nuclear plant? You sold off all our nuclear

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technology to foreign companies. Energy provision was put out to

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private hands and there has been no obstacle in British law against

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ownership outside the UK. Part of this is looking ahead. Because your

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previous track record is so bad? What we did decide under the

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previous government, we came to the view, and there were discussions in

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our party about this, that we did need to support a nuclear future.

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At the time of that, David Cameron was one of those saying that

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nuclear power should be a last resort. And as you said, the

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Liberals did not support it. We stood up for that. We set in train

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the green light of 10 sites, including Hinkley Point, for

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nuclear development. I am glad to see that is making progress and we

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should make more progress over the years ahead. We took a tough

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decision when other governments had not done. You did not build a new

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nuclear station. When you get back into power, will you build HS2?

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That has not had a blank cheque from the Labour Party. I am in

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favour of good infrastructure. Are you in favour of?, answer the

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question? I have answered the question. It does not have a blank

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cheque. If the prices are too high, we will review the decision when we

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come back to vote on it. We will be looking at it closely. We have to

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look for value for money and how it benefits the country. Have you

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stocked up on jumpers this winter? I am perfectly all right with my

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clothing. What is important, it is ridiculous for the Government to

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suggest that the answer to the loss of trust in the energy companies is

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to put on another jumper. The coalition has taken a long time

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to come up with anything that can trump Ed Miliband's simple freezing

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energy prices, vote for us. Are they on the brink of doing so? I do

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not think so. They have had a problem that has dominated the

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debate, talking about GDP, the figures came out on Friday and said,

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well, and went back to talking about energy. My problem with what

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David Cameron proposes is he agrees with the analysis that the Big Six

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make too many profits. He wants to move the green levies into general

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taxation, so that he looks like he is protecting the profits of the

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energy companies. If the coalition can say they will take money off

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the bills, does that change the game? I do not think the Liberal

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Democrats are an obstacle to unwinding the green levies. I think

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Nick Clegg is open to doing a deal, but the real obstacle is the carbon

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reduction targets that we signed up to during the boom years. They were

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ambitious I thought at the time. From that we have the taxes and

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clocking up of the supply-side of the economy. Unless he will revise

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that, and build from first principles a new strategy, he

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cannot do more than put a dent into green levies. He might say as I

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have got to ?50 now and if you voters in in an overall majority, I

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will look up what we have done in the better times and give you more.

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I am sure he will do that. It might be ?50 of the Bill, but it will be

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?50 on your general taxation bill, which would be more progressive.

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They will find it. We will never see it in general taxation. The

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problem for the Coalition on what Ed Miliband has done is that it is

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five weeks since he made that speech and it is all we are talking

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about. David Cameron spent those five weeks trying to work out

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whether Ed Miliband is a Marxist or whether he is connected to Middle

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Britain. That is why Ed Miliband set the agenda. The coalition are

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squabbling among themselves, looking petulant, on energy, and on

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schools. Nobody is taking notice of the fact the economy is under way,

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the recovery is under way. Ed Miliband has made the weather on

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this. It UK has a relaxed attitude about

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selling off assets based -- to companies based abroad. But this

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week we have seen the Swiss owner of one of Scotland's largest

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industrial sites, Grangemouth, come within a whisker of closing part of

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it down. So should we care whether British assets have foreign owners?

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Britain might be a nation of homeowners, but we appear to have

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lost our taste for owning some of our biggest businesses. These are

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among the crown jewels sold off in the past three decades to companies

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based abroad. Roughly half of Britain's essential services have

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overseas owners. The airport owner, British Airports Authority, is

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owned by a Spanish company. Britain's largest water company,

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Thames, is owned by a consortium led by an Australian bank. Four out

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of six of Britain's biggest energy companies are owned by overseas

:20:50.:20:52.

giants, and one of these, EDF Energy, which is owned by the

:20:53.:20:55.

French state, is building Britain's first nuclear power plant in a

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generation, backed by Chinese investors. It's a similar story for

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train operator Arriva, bought by a company owned by the German state.

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So part of the railways privatised by the British government was

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effectively re-nationalised by the German government. But does it

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matter who owns these companies, as long as the lights stay on, the

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trains run on time, and we can still eat Cadbury's Dairy Milk?

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We are joined by the general secretary of the RMT, Bob Crow, and

:21:32.:21:36.

by venture capitalist Julie Meyer. They go head to head.

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Have we seen the consequences of relying for essential services to

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be foreign-owned? Four of the Big Six energy companies, Grangemouth,

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owned by a tax exile in Switzerland. It is not good. I do not think

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there is a cause and effect relationship between foreign

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ownership and consumer prices. That is not the right comparison. We

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need to be concerned about businesses represented the future,

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businesses we are good at innovating for example in financial

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services and the UK has a history of building businesses, such as

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Monotypes. If we were not creating businesses here -- Monotise. Like

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so many businesses creating products and services and creating

:22:38.:22:47.

the shareholders. Should we allow hour essential services to be in

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foreign ownership? It was demonstrated this week at

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Grangemouth. If you do not own the industry, you do not own it. The

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MPs of this country and the politicians in Scotland have no say,

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they were consultants. Multinationals decide whether to

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shut a company down. If that had been Unite union, they are the ones

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who saved the jobs. They capitulated. They will come back,

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like they have for the past 150 years, and capture again what they

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lost. If it had closed, they would have lost their jobs for ever. If

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the union had called the members up without a ballot for strike action,

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there would have been uproar. This person in Switzerland can decide to

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shut the entire industry down. The coalition, the Labour Party, as

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well, when Labour was in government, they played a role of allowing

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industries to go abroad, and it should be returned to public

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ownership. Nestor. It has demonstrated that the Net comes

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from new businesses. We must not be... When Daly motion was stopped

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by the French government to be sold, it was an arrow to the heart of

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French entrepreneurs. We must not create that culture in the UK.

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Every train running in France is built in France. 90% of the trains

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running in Germany are built in Germany. In Japan, it has to be

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built in that country, and now an energy company in France is

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reducing its nuclear capability in its own country and wants to make

:24:48.:24:50.

profits out of the British industry to put back into it state industry.

:24:51.:24:55.

That happened with the railway industry. They want to make money

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at the expense of their own state companies. We sold off energy

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production. How did we end up in a position where our nuclear capacity

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will be built by a company owned by a socialist date, France, and

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funded by a communist one, China, for vital infrastructure? I am not

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suggesting that is in the national interest. I am saying we can pick

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any one example and say it is a shame. The simple matter of the

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fact is the owners are having to make decisions. Not just

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Grangemouth, businesses are making decisions about what is the common

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good. Not just in the shareholders' interest. For employees, customers.

:25:45.:25:50.

What is in the common good when prices go up by 10% and the reason

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is that 20 years ago they shut every coal pit down in this country,

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the Germans kept theirs open and subsidised it and now we have the

:26:01.:26:03.

Germans doing away with nuclear power and they have coal. Under the

:26:04.:26:12.

Labour government, in 2008, the climate change Act was passed. Well

:26:13.:26:18.

before that, and you know yourself, they shut down the coal mines to

:26:19.:26:22.

smash the National Union of Mineworkers because they dared to

:26:23.:26:26.

stand up for people in their community. Even if we wanted to

:26:27.:26:31.

reopen the coalmines, it would be pointless. Under the 2008 Act, we

:26:32.:26:36.

are not meant to burn more coal. The can, as if you spent some of

:26:37.:26:42.

the profits, you could have carbon catch up. That does not exist on a

:26:43.:26:51.

massive scale. You are arguing the case, Julie Meyer, for

:26:52.:26:54.

entrepreneurs to come to this country. Even Bob Crow is not

:26:55.:27:00.

against that. We are trying to argue, should essential services be

:27:01.:27:07.

in foreign hands? Not those in Silicon round about doing start-ups.

:27:08.:27:14.

I am trying to draw a broader principle than just energy.

:27:15.:27:18.

Something like broadband services, also important to the functioning

:27:19.:27:25.

of the economy. I believe in the UK's ability to innovate. When we

:27:26.:27:30.

have businesses that play off broadband companies to get the best

:27:31.:27:35.

prices for consumers. These new businesses and business models are

:27:36.:27:41.

the best way. Not to control, but to influence. It will be a disaster.

:27:42.:27:47.

Prices will go up and up as a result. Nissan in Sunderland, a

:27:48.:27:53.

Japanese factory, some of the best cars and productivity. You want

:27:54.:27:57.

that to be nationalised and bring it down to the standard of British

:27:58.:28:02.

Leyland? It is not bring it down to the standard. The car manufacturing

:28:03.:28:05.

base in this country has been wrecked. We make more cars now for

:28:06.:28:12.

20 years -- than in 20 years. Ford's Dagenham produced some of

:28:13.:28:17.

the best cars in the world. Did you buy one? I cannot drive. They moved

:28:18.:28:24.

their plants to other countries, where it was cheaper labour. Would

:28:25.:28:31.

you nationalise Nissan? There should be one car industry that

:28:32.:28:36.

produces cars for people. This week the EU summit was about Angela

:28:37.:28:41.

Merkel's mobile phone being tapped, they call it a handy. We sent Adam

:28:42.:28:49.

to Brussels and told him to ignore the business about phone-tapping

:28:50.:28:53.

and investigate the Prime Minister's policy on Europe instead.

:28:54.:29:03.

I have come to my first EU summit to see how David Cameron is getting on

:29:04.:29:12.

with his strategy to claim power was back from Brussels. Got any powers

:29:13.:29:21.

back yet? Yes! Which ones? Sadly, his fellow leaders were not as

:29:22.:29:25.

forthcoming. Chancellor, are you going to give any powers back to

:29:26.:29:32.

Britain? Has David Cameron asked you for any powers back? The president

:29:33.:29:36.

of the commission just laughed, and listen to the Lithuanian President.

:29:37.:29:45.

How is David Cameron's renegotiation strategy going? What's that? He

:29:46.:29:54.

wants powers back for Britain. No one knows what powers David Cameron

:29:55.:29:59.

actually wants. Even our usual allies, like Sweden, are bit

:30:00.:30:07.

baffled. We actually don't know yet what is going through the UK

:30:08.:30:13.

membership. We will await the finalisation of that first. You

:30:14.:30:19.

should ask him, and then tell us! Here is someone who must know, the

:30:20.:30:24.

Dutch Prime Minister, he is doing what we are doing, carrying out a

:30:25.:30:30.

review of the EU powers, known as competencies in the jargon, before

:30:31.:30:35.

negotiating to get some back. Have you had any negotiations with David

:30:36.:30:38.

Cameron over what powers you can bring back from Brussels? That is

:30:39.:30:45.

not on the agenda of this summit. Have you talked to him about it?

:30:46.:30:49.

This is not on the schedule for this summit.

:30:50.:30:55.

David Cameron's advises tummy it is because he is playing the long game.

:30:56.:31:06.

-- David Cameron's advisers tell me. At this summit, there was a task

:31:07.:31:12.

force discussing how to cut EU red tape. Just how long this game is was

:31:13.:31:18.

explained to me outside the summit, by the leader of the Conservatives

:31:19.:31:25.

in the European Parliament. I think the behind-the-scenes negotiations

:31:26.:31:28.

will start happening when the new commissioner is appointed later next

:31:29.:31:32.

year. I think the detailed negotiations will start to happen

:31:33.:31:37.

bubbly after the UK general election. That is when we will start

:31:38.:31:41.

getting all of the detail of the horse trading, and real, Lake night

:31:42.:31:49.

negotiations. Angela Merkel seems keen to rewrite the EU's main

:31:50.:31:54.

treaties to deal with changes in the Eurozone, and that is the mechanism

:31:55.:31:58.

David Cameron would use to renegotiate our membership. Everyone

:31:59.:32:03.

here says his relationship with the German Chancellor is strong. So

:32:04.:32:07.

after days in this building, here is how it looks. David Cameron has a

:32:08.:32:13.

mountain to climb. It is climbable, but he isn't even in the foothills

:32:14.:32:17.

yet. Has he even started packing his bags for the trip?

:32:18.:32:22.

Joining us now, a man who knows a thing or two about the difficulties

:32:23.:32:30.

Prime Minister 's face in Europe. Former Deputy Prime Minister,

:32:31.:32:33.

Michael Heseltine. We are nine months from David Cameron's defining

:32:34.:32:37.

speech on EU renegotiation. Can you think of one area of progress? I

:32:38.:32:44.

don't know. And you don't know. And that's a good thing. Why is it a

:32:45.:32:52.

good thing? Because the real progress goes on behind closed

:32:53.:33:03.

doors. And only the most naive, because the real progress goes on

:33:04.:33:09.

behind closed doors. Because, in this weary world, you and I, Andrew,

:33:10.:33:15.

know full well that the moment you say, I making progress, people say,

:33:16.:33:21.

where? And the machine goes to work to show that the progress isn't

:33:22.:33:27.

enough. So you are much better off making progress as best you can in

:33:28.:33:35.

the privacy of private diplomacy. It is a long journey ahead. In this

:33:36.:33:41.

long journey, do you have a clear sense of the destination? Do you

:33:42.:33:46.

have a clear sense of what powers Mr Cameron wants to negotiate? I have a

:33:47.:33:51.

clear sense of the destination, which is a victory for the campaign

:33:52.:33:57.

that he will win to stay inside the European community. That is the

:33:58.:34:03.

agenda, and I have total support for that. I understand that, but if he

:34:04.:34:11.

is incapable of getting any tangible sign of renegotiation, if he is able

:34:12.:34:17.

only to do what Wilson did in 1975, which was to get a couple of token

:34:18.:34:23.

changes to our membership status, he goes into that referendum without

:34:24.:34:28.

much to argue for. He has everything to argue for. He's got Britain's

:34:29.:34:36.

vital role as a major contributor to the community. He's got Britain's

:34:37.:34:39.

self interest as a major beneficiary, and Britain's vital

:34:40.:34:48.

role in the City of London. He's got everything to argue for. He could

:34:49.:34:52.

argue for that now. He could have a referendum now. He doesn't want one

:34:53.:34:59.

now. I haven't any doubt that he will come back with something to

:35:00.:35:07.

talk about. But it may be slightly different to what his critics, the

:35:08.:35:15.

UK isolationist party people, want. He may, for example, have found that

:35:16.:35:19.

allies within the community want change as well, and he may secure

:35:20.:35:25.

changes in the way the community works, which would be a significant

:35:26.:35:31.

argument within the referendum campaign. Let me give you an

:35:32.:35:37.

example. I think it is a scandal that the European Commission don't

:35:38.:35:43.

secure the auditing of some of the accounts. Perhaps that could be on

:35:44.:35:49.

the agenda. He might find a lot of contributing countries, like

:35:50.:35:52.

Germany, like Colin and, would be very keen. -- like Holland. David

:35:53.:36:01.

vetoed the increase in the European budgets the other day, and he had a

:36:02.:36:08.

lot of allies. So working within Europe on the things that people

:36:09.:36:13.

paying the European bills want is fertile ground. Is John Major right

:36:14.:36:17.

to call for a windfall tax on the energy companies? John is a very

:36:18.:36:23.

cautious fellow. He doesn't say things without thinking them out. So

:36:24.:36:30.

I was surprised that he went for a windfall tax. First of all, it is

:36:31.:36:35.

retrospective, and secondly, it is difficult to predict what the

:36:36.:36:40.

consequences will be. I am, myself, more interested in the other part of

:36:41.:36:44.

his speech, which was talking about the need for the Conservative Party

:36:45.:36:50.

to seek a wider horizon, to recognise what is happening to the

:36:51.:36:54.

Conservative Party in the way in which its membership is shrinking

:36:55.:37:02.

into a southeastern enclave. Are you in favour of a windfall tax? I am

:37:03.:37:07.

not in favour of increasing any taxes. Do you share Iain Duncan

:37:08.:37:18.

Smith's point of view on welfare reform? I think Iain Duncan Smith is

:37:19.:37:28.

right. It is extremely difficult to do, but he is right to try. I think

:37:29.:37:34.

public opinion is behind him, but it isn't easy, because on the fringe of

:37:35.:37:44.

these issues there are genuine hard luck stories, and they are the ones

:37:45.:37:49.

that become the focus of attention the moment you introduce change. It

:37:50.:37:54.

requires a lot of political skill to negotiate your way through that. But

:37:55.:38:00.

isn't Iain Duncan Smith right to invoke the beverage principle, that

:38:01.:38:05.

you should be expected to make a contribution for the welfare you

:38:06.:38:11.

depend on? Yes, he is. I will let you get your Sunday lunch. Thanks

:38:12.:38:15.

for joining us. Coming up in just over 20 minutes, I

:38:16.:38:17.

will be looking Hello. What can be done to cut

:38:18.:38:35.

household energy prices? Christopher Salmon, the Police Commissioner of

:38:36.:38:40.

Dyfed-Powys, the most rural force in England and Wales, gives us his view

:38:41.:38:46.

on Plebgate. Joining me is the liberal Democrat MP and Albert Owen.

:38:47.:38:55.

Thank you for coming in. Let's begin briefly with some problems, I guess

:38:56.:39:01.

is the best way of describing it. Your government's reforms of

:39:02.:39:06.

disability living allowance. People who receive it will know that it is

:39:07.:39:13.

being changed. There are problems in rolling that out across the whole of

:39:14.:39:17.

the UK, it does not reflect well on this major policy of York

:39:18.:39:24.

government's. You run a pilot operation and you see what the

:39:25.:39:28.

problems are and you try and resolve those before rolling it out widely.

:39:29.:39:33.

There are lots of problems, are there not? The whole process is

:39:34.:39:38.

taking longer than they want. They want to make it shorter so when it

:39:39.:39:43.

is rolled out then the process is not as drawn out. For those people

:39:44.:39:47.

in the pilot areas, it can be tricky if there are issues with it. It is

:39:48.:39:54.

right to get it sorted before you roll it out nationally. Albert, this

:39:55.:40:00.

is responsible government? No, it is a flawed system and that is why we

:40:01.:40:04.

are having problems in rolling it out, and people in Wales are

:40:05.:40:12.

suffering. I know when Jenny was in opposition she was critical of the

:40:13.:40:16.

Labour government for its reforms. This government has shown that it

:40:17.:40:19.

cannot work and that is why there are delays. The government are

:40:20.:40:26.

examining problems and it will be rolled out, will it not? What

:40:27.:40:34.

conversations have you had with your constituents? There is a big issue

:40:35.:40:38.

here because we are talking about the honourable people in our

:40:39.:40:42.

society, some are disabled. There have been big problems with this. It

:40:43.:40:46.

is simple in theory to say we are going to be the same across the

:40:47.:40:55.

country but disability is different and people are worried about the

:40:56.:40:58.

Bedroom Tax. There is a lot of pressure on these people, and I

:40:59.:41:03.

think this has been rushed through and they have used the deficit

:41:04.:41:07.

reduction as a cover for this. Yes, we need to reform but we need to get

:41:08.:41:12.

people back to work in droves, and making work pay. This is a crude

:41:13.:41:17.

method to do it and that is why it has gone badly wrong. The budget for

:41:18.:41:25.

support for disabled people has not been cut at all. We are not talking

:41:26.:41:30.

about a massive deficit reduction programme. We are trying to make it

:41:31.:41:35.

fairer and reflect the difficulties just mentioned. Repercussions of the

:41:36.:41:41.

Plebgate affair have been felt across 43 police forces in England

:41:42.:41:45.

and Wales. It has dented public confidence in place. Christopher

:41:46.:41:54.

Salmon is going to open up to the public the way the force deals with

:41:55.:42:01.

complaints, to restore trust. The suggestion that police officers lied

:42:02.:42:05.

to relieve Chief Whip Andrew Mitchell of his job was probed last

:42:06.:42:10.

week. It was denied by the officers involved. The saga began more than a

:42:11.:42:13.

year ago with allegations that Andrew Mitchell calls police

:42:14.:42:19.

officers plebs after an altercation in Downing Street. The indications

:42:20.:42:26.

are being felt 200 miles away at the most rural police force in England

:42:27.:42:33.

and Wales. The whole Plebgate rout --, compensated as it seems, has

:42:34.:42:38.

asked whether the public trust the police. Dyfed-Powys Commissioner

:42:39.:42:46.

Christopher Salmon is ending his first year in the job. It is a very

:42:47.:42:54.

small number of people we're talking about here, but this is the thing

:42:55.:42:58.

about trust - when you lose it it's very corrosive, which is why I think

:42:59.:43:02.

it's so important that those of us involved in the leadership of

:43:03.:43:05.

policing to, if you like, face up to the elephant in the room and to

:43:06.:43:09.

address the problem where we see it. It's the easiest thing in the world

:43:10.:43:13.

to say, it's all fine in my patch, it's OK, and I think in 99.9% of the

:43:14.:43:18.

time that is true, but where there is a problem we have a duty to stand

:43:19.:43:22.

up and say we're going to deal with this. The handling of phone hacking

:43:23.:43:24.

and the Hillsborough disaster have raised concerns about police

:43:25.:43:28.

integrity. Home Secretary Theresa May is introducing a new code for

:43:29.:43:31.

officers and increasing the Independent Police Complaints

:43:32.:43:38.

Commission's powers to investigate the most serious complaints.

:43:39.:43:41.

Christopher Salmon wants to open up to the public so people can see they

:43:42.:43:47.

are dealt with fairly. We want to stop cases becoming serious and nip

:43:48.:43:52.

them in the bud. That is, I think we can do. We can introduce greater

:43:53.:43:56.

independence at the local level and there are models around the country

:43:57.:44:01.

where they are trying different ways of doing this. In haven and some are

:44:02.:44:08.

set there is a residence panel. There is a different model in

:44:09.:44:11.

Wiltshire and one in greater Manchester, and I am going to be the

:44:12.:44:15.

best magpie I can and steal the ideas, where I can, for Dyfed-Powys.

:44:16.:44:23.

In California, police routinely on video cameras to record dealings

:44:24.:44:27.

with the public. This is giving me the view of everything I see. It has

:44:28.:44:35.

cut complaints by 90%, and in incidents where officers used force,

:44:36.:44:40.

by 60%. Hampshire police have introduced cameras to 450 offices.

:44:41.:44:45.

Widespread trials across England and Wales are planned. They are backed

:44:46.:44:51.

by Conservative MP and special constable David Davis who is keen to

:44:52.:44:55.

emphasise the strengths of British policing. It is incumbent for all

:44:56.:45:03.

police officers to behave. I know what a great job they do, generally,

:45:04.:45:09.

and on this occasion, a small number have let down the grid image that

:45:10.:45:12.

the police have. Across the rest of the world, which is policing has a

:45:13.:45:18.

good reputation, and I think we are the best police force in the world.

:45:19.:45:23.

I am proud that we do not carry firearms. This view is endorsed by

:45:24.:45:31.

this MP who is taking evidence on the Plebgate affair. There have been

:45:32.:45:40.

excellent results in Wales. Crime has gone down by 25% in some areas

:45:41.:45:45.

and we have done an excellent job. Incidents like this distract from

:45:46.:45:48.

the good work that the police are doing. In difficult times, the

:45:49.:45:53.

police are doing an excellent job with limited funds. I trust them.

:45:54.:45:59.

The crime figure is the lowest recorded figure since surveys began

:46:00.:46:07.

in 1981. Following Plebgate, one in four people told a survey that they

:46:08.:46:11.

were less likely to trust the police. It is an irony that doubts

:46:12.:46:16.

about the integrity of officers are there when according to the

:46:17.:46:19.

statistics they are having their best results in fighting crime for a

:46:20.:46:25.

generation. The point made by Adrian is that crime levels seem to be low

:46:26.:46:30.

but faith or trust in the police is not what it was. How do you match up

:46:31.:46:39.

the two? These issues with Hillsborough are just now coming to

:46:40.:46:47.

light, and Plebgate has damaged that reputation. Community policing is

:46:48.:46:55.

very good but these incidents reflect very badly. I think it is a

:46:56.:47:00.

good idea to have more independence at an early stage because many

:47:01.:47:04.

complaints that I have handled on behalf of constituents have been

:47:05.:47:07.

internal, and the police have investigated them themselves, and

:47:08.:47:11.

people are not satisfied with the conclusions. One good thing I think

:47:12.:47:18.

they can do is enable that to happen. Jenny, there has been much

:47:19.:47:23.

debate with the future of the PCC, where do they stand with this?

:47:24.:47:30.

Should they remain? I do not know they should carry on how they are.

:47:31.:47:33.

The current situation is not working, and the IPCC needs more

:47:34.:47:44.

resources and more people. Christopher Salmon said more public

:47:45.:47:49.

should be involved with greater transparency, and at the moment is

:47:50.:47:53.

the police investigate themselves in bigger cases. I think we need a

:47:54.:48:01.

really good independent investigation so people can have

:48:02.:48:05.

faith in Nat. Having trust in the police is absolutely crucial, and it

:48:06.:48:09.

is only a small number of people who are tarnishing the reputation of the

:48:10.:48:14.

overwhelming majority of the police who are completely honest. We need

:48:15.:48:18.

to make sure that that trust carries on and we need to make sure there is

:48:19.:48:22.

an independent body to make sure people believe what they are seeing.

:48:23.:48:27.

There were a few ideas in Haven's package there. One way to protect

:48:28.:48:35.

the police might be a camera being worn by the police. What you make of

:48:36.:48:42.

that? I think they are doing that in big demonstrations and marches in

:48:43.:48:45.

our large towns and cities. Yes, let's be more open. We should not

:48:46.:48:51.

have cover ups because that is what damages the reputation of the

:48:52.:48:56.

police. It is the cover up afterwards. I do agree with what the

:48:57.:48:59.

Police Commissioner said. The more involvement from the public, the

:49:00.:49:03.

better. The more we see what is happening, the better. There is more

:49:04.:49:09.

surveillance, and people were wary of that but I think it has proved to

:49:10.:49:14.

be a good thing. It protects the police as well, not just the public.

:49:15.:49:21.

In terms of the politics of this, Andrew Mitchell was painted as the

:49:22.:49:26.

baddie at the beginning of this. Not so much now, there seems to be

:49:27.:49:30.

support from all four corners of the House. What he did was wrong, he

:49:31.:49:36.

admitted he lost his temper with the police. He has admitted that and

:49:37.:49:40.

said sorry. It looks as though the police have tried to construe a

:49:41.:49:47.

story, and they should apologise. This senior officers have apologised

:49:48.:49:50.

and so should the individual members of the police. Wipe the slate clean

:49:51.:49:54.

and move forward. This is a good idea either Police Commissioner to

:49:55.:49:58.

get more people involved. The IPCC should be left to deal with the most

:49:59.:50:07.

serious crimes. The ones at the lower levels should be dealt with by

:50:08.:50:12.

the police. Domestic energy prices are dominating the political agenda

:50:13.:50:15.

at the moment with politicians having their say. This week we will

:50:16.:50:19.

get the chance to hear from energy providers when representatives from

:50:20.:50:23.

the big energy companies appear before the energy select committee.

:50:24.:50:31.

The intervention of John Major sent tempers rising at Prime Minister 's

:50:32.:50:38.

questions. There is a crisis in energy and many people are worried.

:50:39.:50:43.

It is way beyond anything I think is acceptable. There were a number of

:50:44.:50:49.

ideas that show Ed Miliband is in the right place, but I do not think

:50:50.:50:53.

it is a workable opposition. Without some action, if we have a hard

:50:54.:50:57.

winter, there will be many people who will have to choose between

:50:58.:51:01.

keeping warm and eating. I do not think that is acceptable so I think

:51:02.:51:05.

there is a real chance this winter that the government will be forced

:51:06.:51:09.

to provide more assistance to people who are facing real difficulties. If

:51:10.:51:13.

that proves to be the case then I think it will be entirely reasonable

:51:14.:51:17.

for the Chancellor to recoup that money back from the energy companies

:51:18.:51:22.

in a one off fee, given the scale of their fees and the unjustified

:51:23.:51:27.

nature of the increases they have proposed. A windfall tax? Yes. It

:51:28.:51:40.

will be imposed retrospectively. The Prime Minister said that anyone who

:51:41.:51:43.

wants to intervene directly in energy markets was living in a

:51:44.:51:48.

Marxist universe. Can he tell the house how he feels now that the red

:51:49.:51:55.

peril has claimed for John Major? We are intervening! I am not surprised

:51:56.:52:05.

that he wants to quote the last Conservative Prime Minister and also

:52:06.:52:08.

forget the mess that the people in between made of art country. The

:52:09.:52:13.

former Prime Minister says that given the scale of profits, we

:52:14.:52:17.

should recoup that money. He wants to do it through a windfall tax. I

:52:18.:52:23.

say we need a price freeze. What does the Prime Minister wants to do

:52:24.:52:26.

to recoup that money for the consumer? Let me answer the

:52:27.:52:32.

question. We need to roll back some of the green regulations and

:52:33.:52:39.

charges! Yes, yes! We all know who put them in place. Jenny, that was

:52:40.:52:50.

David Cameron telling Ed Miliband about green levies. He wants to roll

:52:51.:52:53.

them back much to the consternation of your Liberal Democrat colleagues

:52:54.:52:59.

and the Deputy Prime Minister. What is your take? I think it is

:53:00.:53:08.

short-sighted. I do not know where the money should come from. We have

:53:09.:53:12.

to invest in low carbon technologies or we will end up with increasing

:53:13.:53:16.

dependence on fossil fuels, and they are running out. We need to take the

:53:17.:53:23.

long view and these things take a long time to set up. We need is to

:53:24.:53:28.

reduce the amount of carbon we are producing. Whether that is view

:53:29.:53:32.

levies on bills or other ways using taxation, I do not have a clear

:53:33.:53:37.

view, but I do think we need to make sure we are investing in that for

:53:38.:53:41.

the future. I assume you were in the Commons on Wednesday. What did you

:53:42.:53:46.

think about the Prime Minister? I was surprised. We can look at these

:53:47.:53:52.

things but I do not think we should roll back levies and I think it will

:53:53.:53:56.

be short-sighted for the future. Albert, you will be on the select

:53:57.:54:00.

committee and will have the opportunity to put the questions to

:54:01.:54:05.

the top six this week. What is the first question you want to ask? Why

:54:06.:54:10.

this is becoming a trend. The price of gas has spiked in the past and we

:54:11.:54:16.

have accepted that is the case. But not year-on-year. Going back to what

:54:17.:54:21.

John Major has said, David Cameron is behind this. 18 months ago he had

:54:22.:54:28.

a summit in Downing Street, he was only there for a few minutes, and he

:54:29.:54:38.

said he had sorted it out. They are going to put up a medium tariff and

:54:39.:54:43.

everybody will get that. We need to ask why year-on-year there will be a

:54:44.:54:50.

rise. If you put it into context, the green levies we pay our 9% of

:54:51.:54:56.

the total bill. Only 2% are green levies of that 9%. The rest are

:54:57.:55:00.

social levies which I think people will agree we need to help the most

:55:01.:55:03.

honourable heat their homes in winter. This year on year rise is

:55:04.:55:08.

hurting people in Wales and across the country. We pay more for

:55:09.:55:13.

electricity in Wales and many other regions in the UK. We produce an

:55:14.:55:20.

awful lot of it. It is an unfair system. That is why Ed Miliband has

:55:21.:55:24.

called for a reform of the market, a market which is not working. There

:55:25.:55:30.

is a suggestion, is there not, from the Conservatives and possibly from

:55:31.:55:35.

the Liberal Democrats, that this idea of freezing prices will lead to

:55:36.:55:41.

prices going up before the next general election? Do you want to ask

:55:42.:55:46.

the energy companies about this? We will ask them. They have put it up

:55:47.:56:00.

in the last years. What is important... Ed Miliband introduced

:56:01.:56:07.

a lot of the levies, didn't he? He is making things up on the hoof, but

:56:08.:56:11.

to answer your question, we will be asking that, what Ed Miliband did

:56:12.:56:18.

say is that reforming the markets, which governments can do, and then

:56:19.:56:24.

freeze for small businesses and domestic users, that way businesses

:56:25.:56:32.

will not be hammered by the rise in petrol costs. It is nonsense to say

:56:33.:56:35.

that the government is not reforming the energy markets. The biggest

:56:36.:56:41.

reform that has happened in decades is going through at the moment. The

:56:42.:56:46.

idea that you can freeze energy bills and that will solve it is a

:56:47.:56:51.

total con. Parliamentary language for you there! I am not in

:56:52.:56:59.

Parliament! If they think Labour is going to come in and hike prices

:57:00.:57:07.

up... They are doing it now! What do people think is going to happen to

:57:08.:57:11.

bills once the 20 month period is over? We need to tackle this in an

:57:12.:57:20.

holistic way. The government has invested in the Green Deal, and that

:57:21.:57:26.

will make a big difference in small-scale renewables so people are

:57:27.:57:30.

investing in their own energy. We need to overhaul the old boilers we

:57:31.:57:43.

have and so people will use less. What is the one message you want

:57:44.:57:48.

from the big six this week? We need to make sure they are not ripping

:57:49.:57:52.

off consumers, and a lot of that is around the competitive is of the

:57:53.:57:58.

market. -- competitiveness. They have minute related the money we

:57:59.:58:02.

have and we need to make sure people get a fair deal. Just saying we are

:58:03.:58:05.

going to freeze it is not the way forward. Time for a quick look back

:58:06.:58:10.

at some of the political stories in the week. Some businesses that were

:58:11.:58:24.

mis-sold financial products were going bust while they waited for

:58:25.:58:29.

compensation. It was said that only 32 of the 40,000 businesses affected

:58:30.:58:32.

had been compensated so far. First Minister backed plans to limit

:58:33.:58:38.

nonurgent operations at four hospitals in mid Wales this winter.

:58:39.:58:45.

One MP said that between April and November it would not conduct

:58:46.:58:52.

surgery is. Alan Davies was criticised for giving evasive

:58:53.:58:54.

answers to the environment committee. They said he gave

:58:55.:58:59.

contradictory information and criticised his department for

:59:00.:59:02.

financial mismanagement. The Welsh government said the issues were

:59:03.:59:08.

flawed and inaccurate. The Conservative leader said there

:59:09.:59:11.

should be shorter holidays and hold an extra meeting each week to make

:59:12.:59:15.

proceedings more relevant to the public. Jenny, what is your view? I

:59:16.:59:34.

have had a number of constituents affected by the mis-selling, it is a

:59:35.:59:39.

total scandal. It was a good debate on Thursday, and I hope it is on the

:59:40.:59:44.

government's agenda. MPs in the House on Thursday. They were

:59:45.:59:49.

suggesting that assembly members should squeeze in another session on

:59:50.:59:53.

Thursday and have fewer holidays. What do you think about this idea? I

:59:54.:59:59.

think there might be a case for sitting on Thursday. The reality is

:00:00.:00:05.

that most elected members work outside of what they do in the

:00:06.:00:10.

Chamber as well, and I think that needs recognising. It is a matter

:00:11.:00:15.

for them but, yes, I think they need to extend the working week, and as

:00:16.:00:19.

for holidays, that is a matter for them. I'd take the same holidays as

:00:20.:00:26.

my staff do. I do not have many Sundays. What do you think, Jenny? I

:00:27.:00:33.

think it is fair. I think people need to believe that their

:00:34.:00:35.

politicians are working hard for them. There is an awful lot going on

:00:36.:00:41.

in the Assembly and Parliament that is not what you see on TV. There is

:00:42.:00:51.

a long summer recess, that is the perception. Absolutely! In terms of

:00:52.:00:59.

the kind of work you are doing when you are not in Parliament?

:01:00.:01:05.

Casework. You are happy to defend your record? Absolutely, absolutely.

:01:06.:01:11.

It is important that elected politicians have enough time to talk

:01:12.:01:17.

to their constituents and talk to businesses within their local area

:01:18.:01:18.

so they are well informed businesses within their local area

:01:19.:01:19.

so they are well informed businesses within their local area

:01:20.:01:21.

free school area for into that category. Thank you.

:01:22.:01:32.

Is Labour about to drop its support category. Thank you.

:01:33.:01:33.

Is Labour about to drop its support for High Speed 2, a rail line the

:01:34.:01:37.

party approved while in government? for High Speed 2, a rail line the

:01:38.:01:48.

these green shoots? These are all questions for The Week Ahead.

:01:49.:02:01.

So, HS2. Miss Flint wouldn't answer the question. She's in northern MP

:02:02.:02:05.

too. Ed Balls is comparing it to the Millennium Dome.

:02:06.:02:10.

too. Ed Balls is comparing it to the minute's silence for HS2? It will

:02:11.:02:15.

not be quite as crude as that. They will not stand up and say, we

:02:16.:02:20.

not be quite as crude as that. They senior Labour person said to me it

:02:21.:02:20.

would be a bit senior Labour person said to me it

:02:21.:02:23.

that Gordon Brown and Ed Balls set for the euro back in 97. They will

:02:24.:02:29.

be chucking lots of questions into the air, and the questions will

:02:30.:02:33.

create doubt, and will create the grounds for Labour to say, at some

:02:34.:02:40.

point, we think there is a much much better way of spending the money. It

:02:41.:02:44.

isn't ?42 billion, because that includes a contingency. Let's see

:02:45.:02:51.

what Peter Mandelson had to say about HS2. He was in the government

:02:52.:02:58.

when Labour supported it. Frankly, there was too much of the argument

:02:59.:03:03.

that if everyone else has got a high-speed train, we should have won

:03:04.:03:09.

too. Regardless of need, regardless of cost, and regardless of

:03:10.:03:15.

alternatives. As a party, to be frank, we didn't feel like being

:03:16.:03:20.

trumped by the zeal of the then opposition's support for the

:03:21.:03:27.

high-speed train. We wanted, if anything, to upstage them. So they

:03:28.:03:32.

didn't really need it, and we're only talking about ?50 billion. Why

:03:33.:03:39.

would you take a decision involving ?50 billion in a serious way? For

:03:40.:03:43.

David Cameron, if it becomes clear Labour is against it, he cannot

:03:44.:03:49.

proceed. He indicated last week that he wouldn't proceed if the certainty

:03:50.:03:53.

wasn't there. For Labour, HS2 is really a debate about the deficit by

:03:54.:03:58.

proxy. They think that if you don't go ahead with HS2, that releases

:03:59.:04:02.

tens of billions of pounds to spend on other things, such as public

:04:03.:04:07.

services, without going into boring. I don't think that works because

:04:08.:04:29.

there was a difference between cancelling something that already

:04:30.:04:31.

exists to pay for something else, and cancelling something that does

:04:32.:04:34.

not yet exist and will be paid for over decades to pay for something

:04:35.:04:36.

here and now. Can Labour do this? I know that the line will be, we are

:04:37.:04:40.

not going to build this railway because we are going to build

:04:41.:04:42.

200,000 houses a year. Can they do this without political cost? I think

:04:43.:04:44.

there will be political costs, but they will play this card of we have

:04:45.:04:49.

changed our mind. I think Cameron's line has been very clever, saying we

:04:50.:04:54.

cannot do it without labour. You can put it in two ways. Sorry, we cannot

:04:55.:04:59.

go ahead with it, but Labour has ruined your chance of prosperity, or

:05:00.:05:04.

they can tie themselves to it, and then Labour cannot attack it on

:05:05.:05:10.

great grounds when costs do spire. You can write Labour's script right

:05:11.:05:16.

now. They can say, if we were in charge, the financial management

:05:17.:05:23.

would be much better. This raises some really important questions for

:05:24.:05:28.

the government. They have utterly failed to make the case for HS2.

:05:29.:05:34.

There is a real case to make. Between London and Birmingham it is

:05:35.:05:38.

about capacity not speed. North of Birmingham, it is about

:05:39.:05:43.

connectivity. It is a simple case to make, but it is only in the last

:05:44.:05:47.

month that they have been making that case. It shows really terrible

:05:48.:05:51.

complacency in the coalition that they haven't done that. We'll HS2

:05:52.:05:59.

happen or not? I think it will. For the reasons that Nick outlined,

:06:00.:06:03.

there is not of a constituency for it amongst Northern areas. -- there

:06:04.:06:12.

is enough of a constituency for it. There is private investment as well.

:06:13.:06:18.

It isn't like Heathrow. I say no, because I think Labour will drop

:06:19.:06:25.

their support for it. Caroline Flint said she was in favour of the

:06:26.:06:28.

concept of trains generally, but will it go further than that? It is

:06:29.:06:34.

difficult to see how it will go ahead if Labour will not support it

:06:35.:06:39.

after setting five tests that it clearly will not meet. Some will

:06:40.:06:47.

breathe a sigh of relief. Some will say, even in the 20th century, we

:06:48.:06:52.

cannot build a proper rail network. The economy was another big story of

:06:53.:06:58.

the week. We had those GDP figures. There is a video the Tories are

:06:59.:07:02.

releasing. The world premiere is going to be here. Where's the red

:07:03.:07:07.

carpet? It gives an indication of how the Tories will hand Mr Miliband

:07:08.:07:11.

and labour in the run-up to the election. Let's have a look at it.

:07:12.:07:45.

These graphics are even worse than the ones we use on our show! How on

:07:46.:07:50.

earth would you expect that to go viral? It did have a strange feel

:07:51.:08:00.

about it. It doesn't understand the Internet at all. Who is going to

:08:01.:08:04.

read those little screens between it? Put a dog in it! However,

:08:05.:08:16.

putting that aside, I have no idea that that is going to go viral. The

:08:17.:08:21.

Tories are now operating - and I say Tories rather than the coalition -

:08:22.:08:27.

on the assumption that the economy is improving and will continue to

:08:28.:08:32.

improve, and that that will become more obvious as 2014 goes on. We

:08:33.:08:37.

just saw their how they will fight the campaign. Yes, and at the

:08:38.:08:44.

crucial moment, you will reach the point where wages. To rise at a

:08:45.:08:48.

faster pace than inflation, and then people will start to, in the words

:08:49.:08:53.

of Harold Macmillan, feel that they have never had it so good. That is

:08:54.:08:58.

the key moment. If the economy is growing, there is a rule of thumb

:08:59.:09:06.

that the government should get a benefit. But it doesn't always work

:09:07.:09:09.

like that. The fundamental point here is that Ed Miliband has had a

:09:10.:09:13.

great month. He has totally set the agenda. He has set the agenda with

:09:14.:09:18.

something - freezing energy prices - that may not work. That video shows

:09:19.:09:23.

that the Conservatives want to get the debate back to the

:09:24.:09:26.

fundamentals. That this is a party that told us for three years that

:09:27.:09:34.

this coalition was telling us to -- was taking us to hell on a handcart.

:09:35.:09:39.

That doesn't seem to have happened. The energy price was a very clever

:09:40.:09:46.

thing, at the party conference season, which now seems years ago.

:09:47.:09:50.

They saw that the recovery was going to happen, so they changed the

:09:51.:09:57.

debate to living standards. Some economists are now privately

:09:58.:10:01.

expecting growth to be 3% next year, which was inconceivable for five

:10:02.:10:06.

months ago. If growth is 3% next year, living standards will start to

:10:07.:10:08.

rise again. Where does Labour go then? I would go further, and say

:10:09.:10:15.

that even though Ed Miliband has made a small political victory on

:10:16.:10:20.

living standards, it hasn't registered in the polls. Those polls

:10:21.:10:26.

have been contracted since April -- have been contracting since April.

:10:27.:10:30.

That macro economic story matters more than the issue of living

:10:31.:10:35.

standards. The interesting thing about the recovery is it confounds

:10:36.:10:39.

everybody. No one was predicting, not the Treasury, not the media, not

:10:40.:10:45.

the IMF, not the academics, and the only people I can think of... I fit

:10:46.:10:52.

-- I thought they knew everything! The only people I know who did are

:10:53.:10:58.

one adviser who is very close to George Osborne, and the clever hedge

:10:59.:11:01.

fund is who were buying British equities back in January. Because

:11:02.:11:06.

the Treasury's record is so appalling, no one believe them, but

:11:07.:11:10.

they were saying around February, March this year, that by the end of

:11:11.:11:16.

the summer, the recovery would be gathering momentum. For once, they

:11:17.:11:24.

turned out to be right! They said that the economy would be going gang

:11:25.:11:28.

bust is! Where did the new Tory voters come from? I agree, if the

:11:29.:11:35.

economic recovery continues, the coalition will be stronger. But

:11:36.:11:44.

where will they get new voters from? For people who sign up to help to

:11:45.:11:48.

buy, they will be locked into nice mortgages at a low interest rate,

:11:49.:11:52.

and just as you go into a general election, if you are getting 3%

:11:53.:11:58.

growth and unemployment is down, the Bank of England will have to review

:11:59.:12:01.

their interest rates. People who are getting nice interest rates now may

:12:02.:12:06.

find that it is not like that in a few months time. The point John

:12:07.:12:13.

Major was making implicitly was that Mrs Thatcher could speak to people

:12:14.:12:17.

on low incomes. John Major could not speak to them -- John Major could

:12:18.:12:22.

speak to them. But this coalition cannot speak to them. This idea

:12:23.:12:26.

about the reshuffle was that David Cameron wanted more Northern voices,

:12:27.:12:34.

more women, to make it look like it was not a party of seven men. When

:12:35.:12:39.

David Cameron became leader, John Major said, I do not speak very

:12:40.:12:44.

often, but when I do, I will help you, because I think you are good

:12:45.:12:48.

thing and I do not want to be like Margaret Thatcher. But that speech

:12:49.:12:53.

was clearly a lament for the party he believed that David Cameron was

:12:54.:12:57.

going to lead and create, but that isn't happening. And energy prices

:12:58.:13:03.

continue into this coming week. We have the companies going before a

:13:04.:13:08.

select committee. My information is they are sending along the secondary

:13:09.:13:12.

division, not the boss. How can they get along -- get away with that? I

:13:13.:13:17.

got the letter through from British Gas this week explaining why my

:13:18.:13:22.

bills are going up, and at no point since this became a story have any

:13:23.:13:26.

of the big companies handled it well. I will have to leave it there.

:13:27.:13:31.

Make sure you pay your bill! That's it for today. The Daily Politics is

:13:32.:13:38.

back on BBC Two tomorrow. I will be back here on BBC One next Sunday.

:13:39.:13:45.

Remember, if it's Sunday, it is The Sunday Politics.

:13:46.:13:52.

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