12/01/2014 Sunday Politics Wales

Good morning, welcome. 2014 is barely under way, and the

coalition is fighting over cuts. Nick Legg says Tory plans to balance

the books would hit the poorest hardest. He will not say what he

will cut. That is the top story. Chris Grayling called for a

completely new deal with Europe as he battles will rings from the

European Court of Human Rights. He joins me.

Labour promises to shift house-building up a gear, but how

Later in the programme: Secretary of will they

Later in the programme: Secretary of State David Jones tells us that

Wales is unlikely to get any extra funding to repair the damage caused

by the recent bad funding to repair the damage caused

be serious. Have cuts left to the service being overstretched?

With me for the duration, a top trio of political pundits, Helen Lewis,

Jan and Ganesh and Nick Watt. They will be tweeting faster than France

or long scoots through Paris. Nick Clegg sticks to his New Year

resolution to sock it to the Tories, the is how he described Tory plans

for another 12 billion of cuts on welfare after the next election.

You cannot say, as the Conservatives are, that we are all in it together

and then say that the welfare will not make any additional

contributions from their taxes if there is a Conservative government

after 2015 in the ongoing effort to balance the books. We are not even

going to ask that very wealthy people who have retired who have

benefits, paid for by the hard-pressed taxpayers, will make a

sacrifice. The Conservatives appear to be saying only the working age

pork will be asked to make additional sacrifices to fill the

remaining buckle in the public finances.

Nick Legg eating up on the Tories a, happens almost every day. I

understand it is called aggressive differentiation. Will it work for

them? It has not for the past two years. This began around the time of

the AV referendum campaign, that is what poisoned the relations between

the parties. They have been trying to differentiation since then, they

are still at barely 10% in the polls, Nick Clegg's personal ratings

are horrendous, so I doubt they will do much before the next election. It

is interesting it has been combined with aggressive flirtation with Ed

Balls and the Labour Party. There was always going to be some sort of

rapprochement between them and the Labour Party, it is in the Labour

Party's interests, and it is intent macro's interests, not to be defined

as somebody who can only do deals with the centre-right. A colleague

of yours, Helen, told me there was more talk behind closed doors in the

Labour Party high command, they have to think about winning the election

in terms of being the largest party, but not necessarily an overall

majority. There is a feeling it was foolish before the last election not

to have any thought about what a coalition might be, but the language

has changed. Ed Miliband had said, I cannot deal with this man, but now,

I have to be prismatic, it is about principles. Even Ed Balls. Nick

Clegg had specifically said that Ed Balls was the man in politics that

he hated. He said that was just a joke. Of course, it is about

principles, not people! When Ed Balls said those nice things about

Nick Clegg, he said, I understood the need to get a credible deficit

reduction programme, although he said Nick Clegg went too far. The

thing about Nick Clegg, he feels liberated, he bears the wounds from

the early days of the coalition, and maybe those winds will haunt him all

the way to the general election. But he feels liberated, he says, we will

be the restraining influence on both the Conservatives, who cannot insure

that the recovery is fair, and the Labour Party, that do not have

economic red ability. He feels relaxed, and that is why he is

attacking the Tories and appearing pretty relaxed. He could also be

falling into a trap. The Tories think what they suggesting on

welfare cuts is possible. The more he attacks it, the more Tories will

say, if you gave us an overall majority, he is the one it. He keeps

taking these ostensibly on popular positions and it only makes sense

when you talk to them behind the scenes, they are going after a tiny

slice of the electorate, 20%, who are open to the idea of voting Lib

Dem, and their views are a bit more left liberal than the bulk of the

public. There is a perverse logic in them aggressively targeting that

section of voters. In the end, ten macro's problem, if you do not like

what this coalition has been doing, you will not vote for somebody who

was part of it, you will vote for the Labour Party. The Tories are too

nasty, Labour are to spendthrift, Lib Dem, a quarter of their vote has

gone to Labour, and that is what could hand the largest party to

Labour. That small number of voters, soft Tory voters, the problem for

the Liberal Democrats is, if you fight, as they did, three general

elections to the left of the Labour Party, and at the end of the third,

you find yourself in Colour Vision with the Conservatives, you have a

problem. Chris Grayling is a busy man, he has

had to deal with aid riot at HM Prison Oakwood, barristers on strike

and unhappy probation officers taking industrial action.

Prison works. It ensures that we are protected from murderers, muggers

and rapists. It makes many who are tempted to commit crime think twice.

Traditional Tory policy on criminal justice and prisons has been tough

talking and tough dealing. Not only have they tended to think what they

are offering is right, but have had the feeling, you thinking what they

thinking. But nearly two decades after Michael Howard's message, his

party, in Colour Vision government, is finding prison has to work like

everything else within today's financial realities. The Justice

Secretary for two years after the election had previous in this field.

Ken Clarke. Early on, he signalled a change of direction. Just binding up

more and more people for longer without actively seeking to change

them is, in my opinion, what you would expect of Victorian England.

The key to keeping people out of prison now, it seems, is giving them

in a job, on release. Ironically, Ken Clarke was released from his job

15 months ago and replaced by Chris Grayling. But here, within HM Prison

Liverpool, Timpson has been working since 2009 with chosen offenders to

offer training and the chance of a job. Before you ask, they do not

teach them keep cutting in a category B prison. The Academy is

deliberately meant to look like a company store, not a prison. It

helps. You forget where you are at times, it feels weird, going back to

a wing at the end of the day. It is different. A different atmosphere.

That is why people like it. Timpson have six academies in prisons,

training prisoners inside, and outside they offer jobs to

ex-offenders, who make up 8% of their staff. It has been hard work

persuading some governors that such cooperation can work. I have seen a

dramatic change positively, working with prisoners, particularly in the

last five years. They understand now what business's expectation is.

Timpson do not just employ offenders, but as one ex-prisoner

released in February and now managing his own store says, the

point is many others will not employ offenders at all. From what I have

experienced, on one hand, you have somebody with a criminal conviction,

on the other, somebody who does not have one, so it is a case of

favouring those who have a clean record. Anybody with a criminal

conviction is passed to one side and overlooked. That, amongst myriad

other changes to prison and how we deal with prisoners, is on the desk

of the man at the top. Ever since Chris Grayling became Secretary of

State for Justice, he has wanted to signal a change of direction of

policy, and he is in a hurry to make radical reforms across the board,

from size and types of prisons to probation services, reoffending

rates, legal aid services, and there has been opposition to that from

groups who do not agree with him. But what might actually shackle him

is none of that. It is the fact that he is in government with a party

that does not always agree with him, he has to abide by the rulings of

the European Court of Human Rights, and in those famous words, there is

no money left. We would like to go further and faster. I would like him

too, but we are where we are. If the Liberal Democrats want to be wiped

out at the next election based on what they believe, that is fair

enough. We accept there has to be savings, but there are areas where

we feel that there is ideological driven policy-making going on, and

privatising may not save any money at all, and so does not make any

sense. The question is, we'll all of that means some of Chris Grayling's

reforms need closer inspection? Chris Grayling joins me now.

Welcome. We have a lot to cover. If you get your way, your own personal

way, will be next Tory manifesto promise to withdraw from the

European Convention of human rights? It will contain a promise

for radical changes. We have to curtail the role of the European

court here, replace our human rights act from the late 1990s, make our

Supreme Court our Supreme Court, they can be no question of decisions

over riding it elsewhere, and we have to have a situation where our

laws contain a balance of rights and responsibilities. People talk about

knowing their rights, but they do not accept they have responsible it

is. This is what you said last September, I want to see our Supreme

Court being supreme again... That is clear, but let's be honest, the

Supreme Court cannot be supreme as long as its decisions can be

referred to the European Court in Strasbourg. There is clearly an

issue, that was raised recency -- recently. We have been working on a

detailed reform plan, we will publish that in the not too distant

future. What we will set out is a direction of travel for a new

Conservative government that will mean wholesale change in this area.

You already tried to reform the European Court, who had this

declaration in 2012, do you accept that the reform is off the table?

There is still a process of reform, but it is not going fast enough and

not delivering the kind of change we need. That is why we will bring

forward a package that for the different from that and will set a

different direction of travel. We are clear across the coalition, we

have a different view from our colleagues. You cannot be half

pregnant on this, either our decisions from our Supreme Court are

subject to the European Cup or not, in which case, we are not part of

the European court. I hope you will see from our proposals we have come

up with a sensible strategy that deals with this issue once and for

all. Can we be part of the Strasbourg court and yet our Supreme

Court be supreme? That is by point, we have to curtail the role of the

court in the UK. I am clear that is what we will seek to do. It is what

we will do for this country. But how? I am not going to announce the

package of policies today, but we will go into the next election with

a clear strategy that will curtail the role of the European Court of

Human Rights in the UK. The decisions have to be taken in

Parliament in this country. Are you sure that you have got your own side

on this? Look at what the Attorney General says.

I would be asking Strasberg a different question to that. If the

best in class, he is saying is enough is enough, actually somebody

in Strasberg should be asking if this has gone the way it should have

done. I would love to see wholesale reform in the court tomorrow, I'm

not sure it is going to happen which is why we are going to the election

with a clear plan for this country. Would you want that to be a red line

in any coalition agreement? My mission is to win the next election

with a majority. But you have to say where your red lines would be. We

have been very clear it is an area where we don't agree as parties, but

in my view the public in this country are overwhelmingly behind

the Conservative party. 95 Conservative MPs have written to the

Prime Minister, demanding he gives the House of Commons the authority

to veto any aspect of European Union law. Are you one of the people who

wanted to sign that letter but you couldn't because you are minister? I

haven't been asked to sign the letter. We need a red card system

for European law. I'm not convinced my colleagues... I don't think it is

realistic to have a situation where one parliament can veto laws across

the European Union. I understand the concerns of my colleagues, but when

we set out to renegotiate our membership, we have got to deliver

renegotiation and deliver a system which is viable, and I'm not

convinced we can have a situation where one Parliament can prevent

laws across the whole European Union. So you wouldn't have signed

this letter? I'm not sure it is the right approach. I support the system

I just talked about. Iain Duncan Smith has suggested EU migrants

coming to work in this country should have to wait for two years

before they qualify for welfare benefits, do you agree? Yes, I think

there should be an assumption that before you can move from one country

to another, before you can start to take back from that country's social

welfare system, you should have made a contribution to it. I spent two

and a half years working in Brussels trying to get the European

Commission to accept the need for change. There is a groundswell of

opinion out there which is behind Iain Duncan Smith in what he is

saying. I think we should push for a clear system that says people should

be able to move from one country to get a job, but to move to another

country to live off the state is not acceptable. You are planning a new

2000 capacity mega prison and other smaller presence which will be run

by private firms. After what has happened with G4S, why would you do

that? No decision has been made about whether it will be public or

private. What do you think it will be? I'm not sure yet. There is no

clear correlation over public and private prisons and whether there

are problems or otherwise. Oakwood is in its early stages, it has had

teething problems at the start, but the rate of disturbance there is

only typical for an average prison of its category. If you take an

example of Parc prison in Wales, a big private run prison, run by G4S,

when it was first launched under the last government it had teething

problems of the same kind as Oakwood and is now regarded as one of the

best performing prisons. Why would you give it to a private company

then? We have only just got planning permission for the so we will not be

thinking about this for another few years. Some of the companies who run

prisons are under investigation with dreadful track records. In the case

of G4S, what we have experienced is acceptable and they have not been

able to go ahead with a number of contracts they might have otherwise

got. They are having to prove to the Government they are fit to win

contracts from the Government again. They are having to pay compensation

to the Government and the taxpayer. What has happened is unacceptable.

So why would you give them a 2000 capacity mega prison? Or anyone like

them? It cannot be said that every private company is bad. In addition

to problems at Oakwood, you are quite unique now in your position

that you have managed to get the barristers out on strike the first

time since history began. What happens if the bar refuses to do

work at your new rates of legal aid and the courts grind to a halt? I

don't believe that will happen. When the barristers came out on strike,

three quarters of Crown Courts were operating normally, 95% of

magistrates courts were operating normally. We are having to take

difficult decisions across government, I have no desire to cut

back lately but we are spending over ?2 billion on legal aid at the

moment at a time when budgets are becoming tougher. You issued

misleading figures about criminal barristers, you said that 25% of

them earn over ?100,000 per year but that is their turnover, including

VAT. 33% of that money goes on their expenses, they have to pay for their

own pensions and insurance. People are not getting wealthy out of doing

this work. I don't publish figures, our statisticians do, with caveats

in place explaining the situation. Where you have high-cost cases,

where we have taken the most difficult decisions, we have tried

hard in taking difficult decisions to focus the impact higher up the

income scale. But do you accept their take-home pay is not 100,000?

I accept they have to take out other costs, although some things like

travelling to the court, you and I and everyone else has to pay for

travelling to work. That is net of VAT. We have had a variety of

figures published, some are and some are not. Let's be clear, the gross

figures for fees from legal payments include 20% VAT. On a week when even

a cabinet minister can be fitted up by the police, don't we all need

well-financed legal aid? There is no chance that as a result

well-financed legal aid? There is no changes people will end up in court

unable to defend themselves. We have said in exceptional circumstances,

if you haven't got any money to pay, we will support you, but there is no

question of anyone ended up in court, facing a criminal charge,

where they haven't got a lawyer to defend them. Let's look at how so

many dangerous criminals have managed to avoid jail. Here are the

figures for 2012. Half the people for sexual assault found guilty, not

jailed. I thought you were meant to be tough on crime? Those figures

predate my time, but since 2010 the number of those people going to jail

has been increasing steadily. If you put the figures for 2010 on there,

you would see a significant change. We will never be in a position where

everybody who commits violence will end up in jail. The courts will

often decided to his more appropriate to give a community

sentence, but the trend is towards longer sentences and more people

going to jail. That maybe but it is even quite hard to get sent to jail

if you do these things a lot, again and again. In 2012 one criminal

avoided being sent to jail despite having more than 300 offences to his

name. 36,000 avoided going to jail despite 15 previous offences. That

is why we are taking steps to toughen up the system. Last autumn

we scrapped repeat cautions. You could find people getting dozens. As

of last autumn, we have scrapped repeat cautions. If you commit the

same offence twice within a two-year period you will go to court. You

still might end up not going to jail. More and more people are going

to jail. I cannot just magic another 34,000 prison places. You haven't

got room to put bad people in jail? The courts will take the decisions,

and it is for them to take the decisions and not me, that two men

in a bar fight do not merit a jail sentence. These figures contain a

huge amount of offences from the most minor of offences to the most

despicable. Something is wrong if you can commit 300 offences and

still not end up in jail. That's right, and we are taking steps so

this cannot happen any more. Nick Clegg said this morning you are

going to make 12 billion of welfare cuts on the back of this, he is

right, isn't he? People on the lowest incomes are often not paying

tax at all, the rich... But these cuts will fall disproportionately on

average earners, correct? Let's look at the proposal to limit housing

benefit for under 25s. Until today, after people have left school or

college, the live for a time with their parents. For some, that is not

possible and we will have to take that into account, but we have said

there is a strong case for saying you will not get housing benefit

until you are some years down the road and have properly established

yourselves in work. And by definition these people are on lower

than average salaries. Give me a case in which those on the higher

tax band will contribute to the cuts. We have already put in place

tax changes so that the highest tax rate is already higher than it was

in every year of the last government. The amount of tax...

There is no more expected of the rich. We will clearly look at future

policy and work out how best to distribute the tax burden in this

country and it is not for me to second-guess George Osborne's future

plans, but we need to look at for example housing benefit for the

under 25s. Is it right for those who are not working for the state to

provide accommodation for them? Thank you for being with us.

All three major parties at Westminster agree there's an urgent

need to build more homes for Britain's growing population. But

how they get built, and where, looks set to become a major battle ground

in the run-up to the next general election.

Although 16% more house-builds were started in 2012/13 than the previous

year, the number actually completed fell by 8% - the lowest level in

peacetime since 1920. The Office for National Statistics estimates that

between now and 2021 we should expect 220,000 new households to be

created every year. At his party's conference last autumn, Ed Miliband

promised a Labour government would massively increase house-building. I

will have a clear aim but by the end of the parliament, Britain will be

building 200,000 homes per year, more than at any time for a

generation. That is how we make Britain better than this. The Labour

leader also says he'd give urban councils a "right to grow" so rural

neighbours can't block expansion and force developers with unused land to

use it or lose it. The Government has been pursuing its own ideas,

including loan guarantees for developers and a new homes bonus to

boost new house-building. But David Cameron could have trouble keeping

his supporters on side - this week the senior backbencher Nadhim Zahawi

criticised planning reforms for causing "physical harm" to the

countryside. Nick Clegg meanwhile prefers a radical solution - brand

new garden cities in the south east of England. In a speech tomorrow,

Labour's shadow housing minister Emma Reynolds will give more details

of how Labour would boost house-building, and she joins me

now. It is not the politicians to blame, it is the lack of

house-builders? We want a vibrant building industry, and at the moment

that industry is dominated by big house-builders. I want to see a more

diverse and competitive industry, where self build plays a greater

role. In France over 60% of new homes are built by self builders,

but small builders build more homes as well. 25 years ago they were

building two thirds of new homes, now they are not building even a

third of new homes. That's because land policies have been so

restrictive that it is only the big companies who can afford to buy the

land, so little land is being released for house building. I

agree, there are some fundamental structural problems with the land

market and that is why we have said there doesn't just need to be

tinkering around the edges, there needs to be real reforms to make

sure that small builders and self build and custom-built have access

to land. They are saying they have problems with access to land and

finance. At the end of the day it will not be self, small builders who

reach your target, it will be big builders. I think it is pretty

shameful that in Western Europe the new houses built in the UK are

smaller than our neighbours. But isn't not the land problem? France

is 2.8 times bigger in land mass and we are and that is not a problem for

them. There is a perception we are going to build on the countryside,

but not even 10% is on the countryside. There is enough for us

to have our golf courses. There is enough other land for us to build on

that is not golf courses. The planning minister has said he wants

to build our National Parks, I am not suggesting that. The single

biggest land border is the public sector. It is not. There are great

opportunities for releasing public land, that is why I have been asking

the government, they say they are going to release and of public land

for tens of thousands of new homes to be built, but they say they are

not monitoring how many houses are being built on the site. When your

leader says to landowners, housing development owners, either use the

land or lose it, in what way will they lose it? Will you confiscated?

This is about strengthening the hand of local authorities, and they say

to us that in some cases, house-builders are sitting on land.

In those cases, we would give the power to local authorities to

escalate fees. This would be the compulsory purchase orders, a matter

of last resort, and you would hope that by strengthening the hand of

local authorities, you could get the house-builders to start building the

homes that people want. Would you compulsory purchase it? We would

give the local authority as a last resort, after escalating the fees,

the possibility and flexible it is to use the compulsory purchase

orders to sell the land on to a house builder who wants to build

houses that we need. Can you name one report that has come back in

recent years that shows that hoarding of land by house-builders

is a major problem? The IMF, the Conservative mayor of London and the

Local Government Association are telling us that there is a problem

with land hoarding. Therefore, we have said, where there is land with

planning permission, and if plots are being sat on... Boris Johnson

says there are 180,000 plots in London being sat on. We need to make

sure the house-builders are building the homes that young families need.

They get planning permission and sell it on to the developer. There

is a whole degree of complicity, but there is another problem before

that. That is around transparency about land options. There is

agricultural land that house-builders have land options on,

and we do not know where that is. Where there is a need for housing,

and the biggest demand is in the south-east of England, that is where

many local authorities are most reluctant to do it, will you in

central government take powers to force these authorities to give it?

We have talked about the right to grow, we were in Stevenage

recently. What we have said is we want to strengthen the hand of local

authorities like Stevenage so they are not blocked every step of the

way. They need 16,000 new homes, but they do not have the land supply.

What about the authorities that do not want to do it? They should be

forced to sit down and agree with the neighbouring authority. In

Stevenage, it is estimated at ?500,000 has been spent on legal

fees because North Hertfordshire is blocking Stevenage every step of the

way. Michael Lyons says the national interest will have to take President

over local interest. Voice cannot mean a veto. The local community in

Stevenage is crying out for new homes. Do you agree? There has to be

land available for new homes to be built, and in areas like Oxford,

Luton and Stevenage... Do you agree with Michael Lyons? The national

interest does have to be served, with Michael Lyons? The national

will put the five new towns? We have asked him to look at how we can

incentivise local authorities to come forward with sites for new

towns. You cannot tell us where they are going to be? I cannot. We will

have to wait for him. When you look at the historic figures overall, not

at the moment, Private Housing building is only just beginning to

recover, but it has been pretty steady for a while. The big

difference between house-building now and in the past, since Mrs

Thatcher came to power a and including the Tony Blair government,

we did not build council houses. Almost none. Will the next Labour

government embark on a major council has programme? We inherited housing

stock back in 1997... This is important. Will the next Labour

government embark on a major council has programme? We have called on

this government to bring forward investment in social housing. We

want to see an investment programme in social housing, I cannot give you

the figures now. We are 18 months away from the election. Will the

next Labour government embark on a major council house Northern

programme? I want to see a council house building programme, because

there is a big shortage of council homes. That is a guess? Yes. We got

there in the end. -- that is a yes? We will be talking to Patrick homes

in the West Midlands in a moment. You are watching the Sunday

Politics. Coming up in just over 20 minutes, I will look at the week

ahead with our political Hello and on the Sunday Politics

Wales, is the Welsh Government making the most of the powers it

already has? And could Pembrokeshire markets get

cut as the local council tries to make savings?

But first, the Chancellor George Osborne says 2014 will be a year of

hard truths. Some say his warning last week about more spending cuts

put Conservatives on an election footing. I asked Mr Osborne's

Cabinet colleague David Jones, the Welsh Secretary, what are the

choices facing the UK Government as the coalition begins its final full

year before the general election? I think there is no doubt we do have

to make hard choices. We came to power at a time when the economy was

probably at its weakest position for over 70 years. Clearly, it was a

major effort to get us to the position we are in now, to the

position where the economy is turning the corner. Having said

that, the deficit is still too high and we do now need to take further

steps to reduce that deficit. What the Chancellor was talking about was

be hard choices that are going to have to be made to reduce the

deficit further in the years 2016 and 2017. The reason you need to

keep cutting is because you have failed to make the economy grow at

the rate that you envisaged? I do not think that is right at all.

Quite the contrary. If you see what has happened over the last three and

a half years, the economy is moving from rescue to recovery. The figures

we are seeing in terms of job numbers are particularly good. We

are seeing growth which is outstripping the OBR's predictions.

In the three and a half years since we took power, we have made

remarkable strides. But the fact is the deficit is still Burma. The

choices we are going to have to make are going to be choices that will

reduce that deficit -- the choices are still there. People will have to

decide whether they will want to elect a prudent Conservative

administration or a Labour Party administration which is moving back

from stringency to a position where they are saying, we cannot move

ahead so quickly with the necessary spending reductions. The Chancellor

talks about ?25 billion worth of cuts in the first two years after an

election. ?12 billion of cuts from welfare. When will people hear from

you where exactly you will make those cuts? Those are cuts that we

are preannouncing before the general election. We are making a strong

signal that as we move closer to the general election, those

announcements will be made. We will have to see legislation in the

course of this Parliament to effect both spending reductions. Over the

next 12 months, we will be seeing a lot more flesh on the bone. Do you

agree with the Prime Minister that pensions and pension benefits should

be protected? If you do, the consequences are that you are

hitting some of the most vulnerable people and taking cash out of the

economy, effectively. We are not taking cash out of the economy. What

we intend to do is protect pensioners who are among the most

vulnerable parts of our society. They are people who spent their

working lives saving for their retirement and we have to make sure

they have a retirement in which they can be comfortable. It means more

and more of the burden falls on the working age population, on younger

people. Is that fair? I would not say that. What I would point out is

that more and more people are now in work as a result of, for example,

increasing the tax threshold from 2015. People will on average be ?700

better off than they would have been otherwise. We have taken steps to

freeze fuel duty so that people are paying about 20% less per litre than

they would have done if the Labour Party had still been in power. I do

not think it is fair to say that all of the benefit is going to

pensioners. There are plenty of people now who are significantly

better off as a result of the decisions that we have made than

they would have been if the Labour Party had still been in power. But

there are people watching who would be worse still if you on cutting

benefits. These are the tough decisions that the Chancellor is

talking about. Frankly, they are decisions that are going to have to

be made. The hard fact is that in 13 years, the Labour Party reduced the

economy of this country to frankly the most worrying state since the

1930s. We were elected to power in 2010 by the straightforward consent

of the British people to restore prudence to the economy. This is

what we have done. We have taken decisions that the Labour Party

would not have had the courage to do and it would appear that now despite

all of their talk they still like the courage to take those difficult

decisions in the years ahead. Is the government united on this? We hear

reports on rifts in the cabinet. The Work and Pensions Secretary for

example does not agree with the Chancellor. Is that right? That is

not right. The Cabinet is united in agreeing that we have to make the

necessary tough decisions. In terms of the ?25 billion figure, yes, that

is agreed across the Cabinet. The economy in Wales, your party would

like to see income tax cut. Are you in favour of devolving income tax

powers to the Welsh public? Would you like to see tax cut by the Welsh

public? We have already made an announcement that we are prepared to

devolve competence for income tax to the Welsh Government. You want to

see that happen yourself? I have been very bullish and vociferous

about this. I believe the Welsh governance should have an early

referendum after the competence has been devolved to them on the issue

of whether or not they should have tax varying powers. I will be

campaigning strongly for a yes vote. The hard fact is that Wales is

the poorest part of the UK. Therefore, Wales needs a competitive

advantage. One of the ways that we can give a competitive advantage to

Wales is to have a more favourable rate of income tax and that is why I

will urge the Welsh Government to have an early referendum and go for

a yes vote. The flooding that has hit many communities here, it has

been a grim start to the New Year. Who should pay for the clean-up

costs? Of course, it is a question of first of all assessing the level

of damage. We have seen terrible scenes from example, Aberystwyth,

but the Welsh governorate has the power in certain cases to give

assistance to local authorities in the clean-up costs. It is a scheme

called the Bell win scheme in England. It will be a matter for the

Welsh Government to make an assessment which I hope they will do

as soon as possible. I believe they are doing it. They will have to

decide whether or not they will give the assistance to the Welsh local

authorities. If there is extra spending in England by the UK

Government to deal with the consequences of flooding there, will

Wales get extra funding as a consequence? When will we find out

how much? First of all, there has to be a decision made whether or not

the damage sustained over the past few weeks is sufficient for any

further expenditure to be made. What I would say is that if the Treasury

gives extra money to the Department for Communities and Local Government

in England, then there would be right consequence extra money for

Wales. Just to reiterate, I do not believe there is probably going to

be extra money coming to England or to Wales because both England and

Wales already have the necessary reserves to make payments. Their

cause by members of the European Parliament for the European

government to apply to the EU for extra funds -- there are calls. The

EU Solidarity fund is something triggered in exceptional cases and I

believe I am right in saying that the damage we are talking about is 3

billion euros worth of damage. In previous years, I think an

application was made in 2007, and there was worse flooding then than

recently. I doubt whether the European Solidarity fund would be

resorted to on this occasion. But of course, if it were necessary, of

course it would be possible for the Welsh Government to make its own

representations. Thank you very much. We are going to have to leave

it there. Now, it's a political fact of life

that local councils are having to cut back on how much money they

spend. But the financial climate means some are having to look at

more radical ways of saving money, including selling off or shutting

some historic town centre markets. Tomos Livingstone has been to

Pemborkeshire to find out more. It is market day in Fishguard, the

chance to stop up on groceries, have a cup of tea and catch up on the

latest news. Today it is the future of the market itself which is under

the spotlight. Like many others, it is run by the local council and in

the current climate it is looking to cut back wherever it can. It is more

about other things than finance, as far as I'm concerned. It is a busy

market, people like to come and meet and have a cup of coffee. The people

of Fishguard spend money of -- on all sorts of goods at the market. It

is not all about money all of the time. That is the way I see it.

Campaigners say the weekly market is a vital part of Fishguard's social

fabric and it brings in much-needed cash to the local economy. But

premature council like every authority in Wales is under severe

pressure to save money -- Pembrokeshire council. They say it

makes sense to look at every option for the future. Those options

include passing control of the markets to a private operator or

even shutting down altogether. The council told us he future of four

markets was under review and the Cabinet will discuss what to do at a

meeting next month. Traders say a closure would be a huge blow to the

community. There are a lot of people like the butchers and fishmongers

who have been here well over 20 years and have grown to know

everyone that comes week in week out. Personally, it would be a

travesty for myself and for the town in general. Every customer that

comes to us at the moment is saying how quiet the town is and the

busiest day of the week is the Thursday when the market is open. If

the market was not here, they might not come into town at all. For a lot

of people, they would not get out otherwise. You do not get to see

people and talk to people a lot of the time. Having somewhere where you

can have a cup of coffee, have a chat, talk to the traders, it does

not matter whether you buy or not, although we appreciate it. It gives

a lot of older people, as well as youngsters, a chance to come out and

see other people, have a different life to what they normally do. The

body representing traders say that markets are a vital lifeline for

towns across the country. It is very important. Town centres in general

are struggling to keep going, to attract footfall. The market is a

footfall generator. You go to most towns with a market and they will

say to you that the biggest day of the week is market day. Some

politicians agree that traditional town centre markets are one way to

revive the high street. Out and about in Swansea market over the

festive period, the leader of the Welsh Conservatives said Welsh

councils had 22 learn about encouraging people to buy locally.

There is an initiative in Northern Ireland where there will be free car

parking across the whole of the province. That is one of the issues

highlighted in the regeneration strategy. There needs to be greater

access to free car parking. There needs to be a town centre manager.

There needs to be a focus on business rates to help small

businesses so that money is not being taken out of the businesses.

We need a 24-hour culture on the high street. Pembrokeshire is not

the only Welsh council adapting to the political climate, one where

cash is scarce and not everyone will get a slice of the cake. Another

council that at cuts to everything from paddling pools to street

lighting this week. Cardiff is looking at closing recycling

centres. The fear in Fishguard is that without its market it could

become a ghost town. It is one example of the way that tough

political decisions are having a real impact on communities up and

down Wales. Tomos Livingstone reporting there.

Later this week, MPs start scrutinising the Wales Bill which,

among other things, sets out those new tax and borrowing powers for the

Assembly. But is the Welsh Government making the most of the

powers it already has? Some disappointing results in health,

education and the economy have led to serious criticism of the Welsh

Government's record and of the labour Party's record in power since

the start of devolution. Our political editor Nick Servini has

been taking a closer look. In recent weeks, the role of the

Welsh Government in health, education and the economy, the

pillars of our everyday lives, has come under question. These are

challenges that have been with us for many years. The role of

successive labour led Welsh governments since the start of

devolution has also come under scrutiny. What can the past tell us

about the present? We have been talking to some of the big beasts of

the early years of devolution when the political landscape was very

different. And when a big priority was shoring up the institution. When

I think back on those first years, it was literally from my point of

view as a minister, it was desperately trying to keep the

institution afloat. We had a minority administration. That is why

when I was a minister my priority was clearly to establish stability.

That is why we realised the only way we would do that was by going into

coalition with the Liberal Democrats. I think the assembly

itself was born of great uncertainty, hostility amongst the

electorate. That for me was a big problem. A difficult birth but the

question is whether the policies that have been developed over the

past 14 years have led to better public services. For many years

after the beginning of devolution, we tended to get obsessed about

doing things differently from England where we should have been

focusing on doing things better. We should have been more focused on the

outcomes of our policies than on the processes, more focused on the ends

if you like, than the means. The second problem, for many years in

Wales, we have not been very good at accepting what I would call

constructive challenge or constructive criticism. Labour has

got into bed with different parties over the years. There was a

coalition with Plaid Cymru and in the beginning with the Liberal

Democrats. One former partner gave his verdict. With one party in

charge, clearly their domination of political thinking and philosophy is

what has driven it. It is different from what happens in England. It is

more centralised and controlled from the centre and deriving decisions

which are perhaps old-fashioned. Those are the things I think may

have held Wales back and I think we now need to be moving forward with

getting some fresh ideas, fresh thinking into what we do in Wales.

The Welsh Government has come out fighting. On education, it insists

the system is not in crisis. On health, it claims improvement is

taking place. On the economy, it points to the recent unemployment

figures which put Wales's rate as the same as the UK average. All of

these things have come under intense scrutiny in the past. Expect no let

up as the assembly goes for even more powers in the future.

And Nick Servini joins me in the studio. The last political year

finished with some figures that do not reflect brilliantly on the Welsh

Government's record. Does that set the tone for this year? I think it

does, particularly around the education figures at the end of the

last year. We had a clutch of indicators and as a result there was

a lot of debate about this. Inevitably, it will dominate things

this year. As much as anything, one of the features last year was the

extent to which David Cameron used the performance of the Welsh NHS as

a kind of political football at Westminster. What I am talking about

there, criticising it at Prime Minister's Questions on a regular

basis. One of the questions is whether that will broaden out into

some of the other areas. In the autumn I spoke to an insider in the

Conservative Party who told me David Cameron was reluctant to criticise

the education system in Wales too much because he did not want to be

seen to be too negative about the life chances of young people in

Wales. I suspect and common sense would tell us as we march towards a

very tight general election, it could get fairly brutal and the

performance of the Welsh Government is likely to come under scrutiny. It

will be talked about at a wider level across the UK as a result. It

has a ready started. We had waiting times figures this week. Yes. These

are the referral to treatment after people have seen a GP. It is more

than 13,000 people, the highest it has been for a number of years.

People waiting more than nine months as a result of that. It has started

already and I think one of the big tests for the Welsh, will be whether

it can communicate its message -- tests for the Welsh Government will

be whether it can communicate its message about reforms in the NHS and

whether it can impact on some of the performance indicators. An early

indication of this is when the results of the big reconfiguration

of services for casualty departments in hospitals in South Wales will be

announced. Thank you. Time now for a quick look back at

some of the political stories of the week in 60 Seconds.

An MP called for tougher sentences for motorists convicted of driving a

sentences -- driving offences which caused death or serious injury. At

Welsh questions, the Secretary of State David Jones paid tribute to

the Conservative peer who died before Christmas. He said the former

Welsh office minister had served with distinction for many years and

was a champion for Wales and the Welsh language. The chief executive

of the NHS and Wales announced he would be standing down at the end of

March. He said he had mixed feelings about the decision to move to a new

role with the health service in the East Midlands.

And as this man the first political casualty of the year? David Jones

was ousted as the leader of Powys county council when he lost a

no-confidence vote. The former council chairman was chosen as his

successor. Nick is still with me. The assembly

is backing this coming week. Very soon local councils will be on the

agenda. You have touched on it already. The week after next, we are

expecting the results of the Williams commission which is looking

at public service delivery across the board. The real expectation is

that it will fire the starting gun on local government reorganisation.

Last time it happened was nearly 20 years ago. I think we will have a

big debate about old-fashioned lines in the map and what we will end up

with is a big big change to the 22 unitary authorities currently under

way. Big debates about how much it will cost. What does it mean for the

150,000 people who work for local government in Wales? What does it

mean for council taxpayers? What does it mean for the services local

authorities deliver? Some of the talk is whether it could be quite a

radical change, down to a fairly small number of local authorities to

mirror the health boards in Wales. Particularly in the realms of social

care, some people say if you can connect them up with the health

boards, there is the potential for huge savings will stop generally, if

you can cut back on the overheads. -- potential for huge savings.

Generally, if you can cut back on the overheads, people say that the

local authorities are too small and you do not get the economies of

scale. Thank you very much. I hope you can

scale. Thank you very much. I hope you can

scale. Thank you very much. I hope will not be revoked. And I wouldn't

want it to go. Thank you, back to Andrew.

Can David Cameron get his way on EU migration? Will he ever be able to

satisfy his backbenchers on Europe? Is Ed Miliband trying to change the

tone of PMQ 's? More questions for the week ahead.

We are joined by Jacob Rees Mogg from his constituency in Somerset.

Welcome to the programme. You one of the 95 Tory backbenchers who signed

this letter? Suddenly. Laws should be made by our democratically

elected representatives, not from Brussels. How could Europe work with

a pick and mix in which each national parliament can decide what

Brussels can be in charge of? The European Union is a supernatural

body that is there for the cooperation amongst member states to

do things that they jointly want to do. It ought not be there to force

-- to enforce uniform rules on countries that do not want to

participate. It is the vision of Europe that people joined when we

signed up to it and came in in 1973. It has accreted powers to itself

without having the support of the public of the member states. This is

just a way of preparing the ground for you to get out of Europe

altogether, isn't it? I do not big so. There is a role for an

organisation that does some coordination and that has trade

agreements within it, I do not think there is a role for a federal state.

Europe seems to be dominating the. I remember your leader telling you not

to bang on about Europe, your backbench colleagues seem to have

ignored that. Would you like to restrict the flow of EU migrants to

come to work in this country? Yes. I think we should have control of our

own borders, so we can decide who we want to admit for the whole world.

What we have at the moment is a restrictive control of people coming

from anywhere other than the EU. There is a big decrease in the

number of New Zealanders who came in the last quarter for which figures

are available, but a huge increase in people coming from the continent.

Does it really make sense to stop our second cousins coming so that we

can allow people freely to come from the continent? I do not think so, we

need to have domestic control of our borders in the interests of the

United Kingdom. There are still lots more people coming from the rest of

the world than from the European Union. That has been changing. But

there are still more. A lot more. The permanent residence coming from

the European Union are extremely high. In the period when the Labour

Party was in charge, we had to put 5 million people coming here, of whom

about 1 billion were from Poland. -- we had 2.5 million people coming

here. We have no control over them. Like the clock behind you, you are

behind the times on these figures. I have stopped the clock for your

benefit, because it was going to chime otherwise! I thought that

might be distracting! Only a Tory backbencher could stop a clock!

Helen, when you at this up, it is preparing to get out, is it not? We

have had this one bill about a referendum that seems to have tied

us up in knots for months on end. If Parliament could scrutinise every

piece of EU legislation, we would never get anything else done. It

would be incredible. Even Chris Grayling said earlier that you can

not have a national veto on anything that the EU proposes. I am surprised

that Jacob Rees Mogg is talking about dismantling one of Margaret

Thatcher's most important legacies, the creation of the single market,

and the person sent there to dream it up under Margaret Thatcher said

the only way you can run this sensibly is by not having national

vetoes, because if you have that, guess what will happen? The French

will impose lots of protectionist measures. It was Margaret

Thatcher's idea that national parliaments should never veto. How

could you fly in the face of the lady? Even the great lady makes

mistakes. Excuse me, Jacob Rees Mogg says even Margaret Thatcher makes

mistakes! No wonder the clock has stopped! Even be near divine

Margaret made a mistake! But on the single market, it has been used as

an excuse for massive origination of domestic affairs. We should be

interested in free trade in Europe and allowing people to export and

import freely, not to have uniform regulations, as per the single

market, because what that allows is thought unelected bureaucrats to

determine the regular vision. We want the British people to decide

the rules for themselves. If this makes the single market not work,

that is not the problem, because we can still have free trade, which is

more important. If David Cameron is watching this, I am sure he is, it

will be nice for you to come on and give us an interview, he must be

worried. He is beginning to think, I am losing control. It is a clever

letter, the tone is ingratiating and pleasant, every time, you have stood

up to Brussels, you have achieved something, but the content is

dramatic. If you want Parliament to have a veto, you want to leave the

EU, because the definition is accepting the primacy of European

law. The MPs should be clear about that. It is almost a year since the

Europe speech in which David Cameron committed to the referendum. The

political objective was to put that issue to bed until the next

election. It has failed. David Cameron is going to have to pull off

a major miracle in any renegotiations to satisfy all of

this. Yes, it makes me think how much luckier he has been in

coalition with the Liberal Democrats, because there is a bit of

the Tory party that is irreconcilable to what he wants to

do. The Conservative MPs are making these demands just as David Cameron

is seeing the debate goes his way in Europe. Angela Merkel has looked

over the cliff and said, do I want the UK out? No, they are a

counterbalance to France. France one the UK to leave, but they do not,

because they do not want to lose the only realistic military power Tom

other than themselves. Just when the debate is going David Cameron's way,

Jacob Rees Mogg would take us out. Let me move on to another subject.

That is nonsense. The debate is not beginning to go David Cameron's way.

We are having before us on Monday a bill about European citizenship and

spending British taxpayers money so that Europe can go and say we are

all EU citizens, but we signed up to being a part of a multinational

organisation. The spin that it is going the way of the leader of a

political party is one that has been used before, it was said of John

Major, it was untrue then and it is now. It is, for the continuing

deeper integration of the European Union. I want to ask a quick

question. Chris Grayling said to us that the Tories would devise a way

in which the British Supreme Court would be supreme in the proper

meaning of that, but we could still be within the European Court of

Human Rights. Can that circle be squared? I have no idea, the Lord

Chancellor is an able man, and I am sure he is good at squaring circles.

I am not worried about whether we remain in the convention or not. PMQ

's, we saw a bit about this week, Paul Gorgons had died, so the house

was more subdued, but he wants a more subdued and serious prime

ministers questions. Let's remind ourselves what it was like until

now. What is clear is that he is

floundering around and he has no answer to the Labour Party's energy

price freeze. The difference is, John Major is a good man, the Right

Honourable gentleman is acting like a conman. Across the medical

profession, they say there is a crisis in accident and emergency,

and we have a Prime Minister saying, crisis, what crisis? How out of

touch can hate the? You do not need it to be Christmas to know when you

are sitting next to a turkey. It is not a bad line. Is Ed Miliband

trying to change the tone of prime ministers questions? Is he right to

do so? The important point is this was a special prime ministers

questions, because everybody was really sad and by the death of Paul

Goggins and in the country, the legacy of the floods. That was the

first question that Ed Miliband asked about, so that cast a pall

over proceedings. When it suits him, Ed Miliband would like to take a

more statesman-like stance, but will it last? That is how David Cameron

started. His first prime ministers questions, he said to Tony Blair, I

would like to support you on education, and he did in a vote

which meant Tony Blair could see off a naughty operation from Gordon

Brown. But it did not last, they are parties with different visions.

Jacob Rees Mogg, would you like to see it more subdued? I like a bit of

Punch and Judy. You need to have fierce debate and people putting

their views passionately, it is excellent. I am not good at it, I

sit there quite quietly, but it is great fun, very exciting, and it is

the most watched bit of the House of Commons each week. If it got as dull

as ditchwater, nobody would pay attention. Three cheers for Punch

and Judy. Ed Miliband is going to make a major speech on the economy

this week. You can now define the general approach. We had it from

Emma Reynolds, we have seen it over energy prices, this market is bust,

the market is not working properly, and that will therefore justify

substantial government intervention. Intervention which does not

necessarily cost money. It is the deletion and reorganising

industries. It constitutes an answer to the question which has been

hounding him, what is the point of the Labour Party when there is no

money left? He says, you do not spend a huge amount fiscally, but

you arrange markets to achieve socially just outcomes without

expenditure. It is quite serious stance. I am not sure it will

survive the rigours of an election campaign, but it is an answer. Is

that an approach, to use broken markets, to justify substantial

state intervention? Yes, and the other big plank is infrastructure

spending. The Lib Dems would not be against capital investment for info

structure will stop Emma Reynolds talking about house-building, the

idea of pumping money into the economy through infrastructure is

something that the Labour Party will look at. Jacob Rees Mogg, you once

thought Somerset should have its own time zone, and today, you have

delivered on that promise! Live on the Sunday Politics! I try to

deliver on my promises! That is all for today, the Daily

Politics is on BBC Two every day this week, just before lunch. I

aren't back next Sunday here on BBC One at 11am. -- I am back. If it is

Sunday, it is the Sunday Politics.