08/09/2011 Daily Politics


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Good afternoon and welcome to The Daily Politics. More gloomy news on


the UK economy as it is revealed one in seven shops have been empty


for a year. How can Greg be promoted? Lord Heseltine joins us.


Is it time to change our relationship with Europe? Many on


the Conservative backbenches thinks so, but will this coalition


Government clawback powers from Brussels?


They lost out in the recent Welsh Assembly elections, but we are not


ignoring them. Plaid Cymru has set out their stall as their party


conference begins. All that in the next half hour and


with us for the programme today is businesswoman, entrepreneur and


star of Dragons Den, Deborah Meaden. Welcome. Thank you.


Government's Banking Commission, headed by Sir John Vickers, will


call for the swift introduction of legislation to enact its


recommendations, followed by a phasing in of the reforms. It will


propose firewalls be erected between the High Street and


investment arms of the big banks, protecting taxpayers from their


riskier operations. The banks and some business groups had been


lobbying for a protracted delay to these changes. Politically, voters


will say a system that is set up to avoid a repeat of the banking


crisis, having this firewall, is desirable. What about from a


business point of view? completely get the emotion of it.


It's sounds like it makes perfect sense. I issue is that businesses


need to banks to lend and we do not need to introduce change that will


inhibit back in any way. You think it well. I worry it well. It could


make the retail banks more cautious. Also we go back to the root of it.


Lehmann Brothers was an investment bank and that got into trouble and


Northern Rock was a retail bank and that got into trouble. I think it


is about the way it is regulated as opposed to changing the structure.


If you do not support the idea, and it is a radical change, how worried


are you that the banks, even if they do not enact these


recommendations, how worried are you that they will start to


transfers increase costs on to business and people like you and me.


I am worried. I think the reform if it is too big a change, change


means costs and that will definitely be passed on to me, the


businesses. The simplest way of doing it is going to mean that the


lowest cost to me as a business. The key is to find a mechanism to


get the bank's lending again. are still not lending. Worse than


that, good businesses that are doing very well, and they should


not lend to businesses that are not good, but businesses doing very


well are finding their covenants are being changed and if they


dispose of assets, that money is being sucked into the bank and the


bank is not releasing it again. should the banks be protected, why


should they be bailed out by the taxpayer? Businesses like yours are


not. It is not the banks that are being protected. It is ultimately


the businesses that are being protected. They are the mechanism


by which we get our cash. If the banks are allowed to fail, I fail


as well. I think that protection is through the banks, but it is about


protecting the individual and those businesses. That is the only reason


those banks will sell. More gloomy economic news this morning as a


survey reveals one in seven shops in the UK have been empty for a


year. In some parts of the country as many as a third of retail units


are empty. On Tuesday the Chancellor admitted growth would be


sluggish for this foreseeable future, while some warn of a


double-dip recession. How can we left ourselves out of the worst


economic slowdown in living memory? First, here is Giles Dilnot.


It is what a fired-up economy does, it is the process by which recovery


comes, it is growth, the expansion of businesses and services that


make money. Ever since it came to power, the coalition Government has


peddled the idea that if you concentrated on fiscal repair,


deficit-reduction and monetary stability, then growth happened as


a result. But increasingly businesses and economists are


suggesting that is different from having the measures to promote


growth. This perceived lack of a growth strategy is starting to


cause a bit of frustration. Intense frustration at what is going on. I


see a lot of people wanting reforms and a lot of disappointment. Growth


has slowed quite substantially. There has been a change of mood.


What is needed according to the City and business is a more


strategic growth plan. Government can do that, since many businesses,


especially small ones, are necessarily to focus on getting


through the next month than looking at how it grows in uncertain times.


We have had atrocious recession. Anyone still alive now has done


well to fair the storm. But my belief is there are loads of


businesses out there that have far more potential than they are


fulfilling. I wonder whether there is an opportunity for us or the


Government as a whole to try and a support them and bring them forward


and say, we will give you some guidance. Not necessarily cash, but


good advice. Does that mean the Government being more directly


involved, intervening, in helping companies to grow? Does that mean


more use of the regional growth fund? I am sceptical about the


Government tried to Micra manage or determine the shape of the recovery.


This does not work. You cannot do that. You need a cultural


revolution, a different attitude in embracing growth. The Government


has to say we want businesses to grow and they have to do something


about it. That means a rowing back of employment regulations and tax


breaks, thing as the Chancellor could do. Where confidence is


turned upside down, like euro debt, he has less control of it. But in


the end is building breath about changing mood? What we have seen is


unpredictable. Tackling uncertainty is a far less exact science. I am


joined by Lord Heseltine, an adviser to the Government's


regional growth fund. Deborah Meaden is still with me. The Bank


of England has kept interest rates at a record historic low. It is the


32nd month. No real surprise. Since September 2010, the economy has


only grown by 0.2%. How worried I knew about growth? Well, we are all


worried, but that does not mean to say there are simple solutions. If


I was the Chancellor today, I would realise that I am living in an


extremely uncertain world where there are very serious downside


risks. The thing people want most from the Chancellor is he keeps his


nerve, pursues policies that keep us out of the crisis world of


southern Europe, and recognises there is relatively little that a


Government can do. That is the key. The Government has no real money to


spend. Interest rates are at an historic low, so you cannot go much


further down. The Government is leading the 50 pence top rate of


tax for the moment. What levers are there at George Osborne's disposal


to kick-start the economy? regional fund I have is an example


of what you can do and it has some effect. We have a �1.4 billion to


spend. Less than the regional development agencies. It is not


comparable because ours is a challenge fund. If we have �1.4


billion of taxpayers' money, we are probably getting six times as much


private money on top of that. You will find yourself it is �8 million


over three years. Particularly in the more regional outlying areas


which we are targeting. What are you doing with it? We heard from


the businesses that the biggest problem is uncertainty. Does they


need to be more targeting by the Government and by the fund you are


advising on? Our fund is already effectively closed because we have


had so many bits and we are oversubscribed and we are now


allocating the cash. That is a piece of done business, but the


money will flow. There are very limited things Government can do,


but I will suggest two. First is to look through the filing cabinets of


Whitehall for all the decisions that are sitting in ministers'


offices that have not been taken and a wartime attitude that says we


have got to get every decision taken, either to end uncertainty,


or to let something go ahead. If the planning authorities did the


same thing, that would release a certain amount of opportunity. The


second thing is they can look at all the capital programmes they


have got and use them for a challenge purposes, competitive


purposes. Instead of saying, we will use a �1 building a public


sector has come at they would say, we have got one pound of public


money, what are we offered if we put it up for competition in terms


of additional Gearing? Does then need to be more pushing growth in


terms of the Government tried to spend more money, so it is not


focusing so much on posterity? It is trying to booze consumer demand.


That is using the existing levels of public expenditure to create


bigger demand and to loosen up money that the private sector is


prepared to add to what the Government has got. Do you agree


with his perceived lack of a growth strategy? No, I think there are all


sorts of politicians and commentators who have said we need


growth. Of course we would like to have growth. But if you are sitting


in a business, you know there is a massive uncertainty out there. When


someone says, would you like to spend money on this or that? There


is not the confidence to take that decision. If you are a banker, you


are worried about the next banking crisis. You are trying to get your


debts under control. All of us are holding back and until the mood


changes, you will not see expansion. That to me is the issue. It is


about perception. I have talked to a lot of small businesses and I


have got a nice basket of people to talk to. There was this big mood


when the Government first came in and we had an emergency budget and


it was galvanising, we have got to take some medicine. I think there


is a gap because now when I talk to people they feel, what now? They


feel like they are not being spoken to and they are not being brought


along. We are going to have tough times, but there is not a


communications. Do you think the Government's plan A is wrong? The


idea it is all about austerity and cuts and wage freezes, the public


sector losing jobs, pensions losing money. Has that got to slow down?


certainly do not think it was wrong when it was brought in. We had a


job to do and we had to do it quickly and I felt like, let's get


on with it. I think we have to review it, as if the country was a


big business. In any business you have to review what is happening.


Do you agree with that? Do you think George Osborne needs to look


at slowing down the pace of that austerity? No, what I think is what


I have said. They could use elements of the existing plan to


get bigger expenditure consequences. However, I think there is a


political problem. George Osborne knows that he is on the most


fragile of economic territory. He has to be highly irresponsible in


handling that. What he cannot do is give an impression that it is all


going to be wonderful tomorrow, because it is not going to be


wonderful, and he would get found out. On the other hand, if he goes


around saying, it is going to be rough, he would be accused of


undermining what little confidence there is. I agree, but when you set


out a business plan and things do not go according to that plan, I


believe you have to address that. You have to communicate that. The


truth is it has not gone according to plan. I am now left feeling, now


what? You cannot shoot off in this direction or at that direction, but


it is that type of communication. Most of it was right, but these are


the bits we need to change. A group of economists have claimed the 50


pence top rate of tax makes Britain a less attractive place to invest


in. Do you agree with that? Yes, but I do not think it is a


determining factor in how the economy would respond in the next


six months. It was a political trap by the Labour Party to try to get


the Tories to fight on the electoral ground. Is he right to


retain it? Politically at the moment, but it has got to go as


soon as possible. Is it making Britain less attractive? I think


the facts need to ascertain whether or not it is right. We can sit here


and guess. If we make a decision now, it is a political decision,


It looks like Europe is going to become a hot issue in government


again. David Cameron and Nick Clegg have so far managed to keep a lid


on the simmering tensions in the coalition. That could be about to


change. Next week, up to 80 Euro- sceptic MPs are planning to meet to


press the Government used the crisis in the eurozone to change


Britain's relationship with Europe. Many want to seek a referendum.


There's pressure from outside with independent MEP Nikki Sinclair due


to hand in a 100,000 name petition to Downing Street, calling for a


straight in or out of vote. Lord Lawson has called for David Cameron


to use the current crisis as an opportunity to terror at the Lisbon


Treaty. He argues, enough is enough. This is worrying the Liberal


Democrat side of the coalition. Speaking to the New Statesman,


Danny Alexander called for further involvement in Europe, saying we


should be redoubling our effort, not looking at this as an excuse to


further run agenda of weakening our times. David Cameron has repeatedly


said this is not the time for renegotiation and stated that we


must have a eurozone that works. That's not exactly music to


Conservative backbench ears. Conservative MP Mark Reckless had


this to put the Prime Minister. Prime Minister has listened to


Liberal Democrat colleagues by delaying the police elections until


November next year. Will he now listen to Conservative colleagues


and take that opportunity to hold a referendum on Europe? A genius way


of putting the question. As I explained yesterday, I want us to


be influential in Europe about the things that matter to our national


interests. David Cameron. With us now is Conservative MP and Co


author of the book Masters of Nothing, Masters of Nothing. And


the chairman of the Liberal Democrat parliamentary committee on


parliamentary affairs, Martin Hall. Can I start with you? There is


clearly an happiness on the Tory backbenchers that more is not being


done to crawl back powers from Brussels. It's something that was


certainly suggested by the Government at the beginning. There


is growing demand for them to use the eurozone crisis to renegotiate


their position. Which powers do you want clawed back? Well, you know


that a number of a has signed a letter to the Financial Times. What


we are calling for is essentially to use the opportunity of the


current integration that Europe may have to go through, to claw back


the powers around employment and social legislation. It is the


social chapter? David Cameron has made clear there is not going to be


any in or out referendum. He didn't seem to answer questions yesterday.


What pressure can you bring to bear on him? I think the idea of the


referendum is a distraction. We would agree that the meeting that


is going to take place on Monday is not about if we are to have a


referendum now. I think that would be wrong and divisive. What we are


talking about his 80 or so Conservative Members of Parliament


coming-together to begin to think through what are the things that,


when the time is right, in six months, a year, two years time,


when Europe does physically consolidate, which it looks like


they will have to, the Chancellor has said they will probably have to,


and we want to be supportive, but, due to use that opportunity to


actually bring back powers? Alan Lib Dem coalition partners are


passionate about the localism agenda. The more power that we can


bring back locally, the better we are going forward as part of Europe,


supporting the European project in a healthy way. But there is no


signal from David Cameron that you are going to get your way or this


or that they will go down that path? That's not true, David


Cameron is on record as saying that when the opportunity arises...


he hasn't given a time, nothing on record to say when it will be. He's


effectively kicked it into the long grass? Our duty as backbenchers is


to do the thinking ahead of that. We don't want to be negotiating...


That's very good of you! Provide Liberal Democrat perspective, we


heard Nick Clegg giving a speech saying it's the wrong time to start


renegotiating, we have to support Europe. How big an issue is it


going to be in terms of dividing with your Tory colleagues? I don't


think it's a dividing line, we agree with Conservative ministers.


To try and inject an argument about British status within the European


Union, at a time when European governments are trying to


delicately renegotiate their way and find a path way through the


crisis, it's the governmental equivalent of antisocial behaviour.


But that is what they want to do, look at that position fairly soon?


Yes, backbenchers. It's not the view of Conservative ministers or


Liberal Democrat in the house. We've always been in favour of an


in or out referendum at a time of fundamental shift. We spent an


inordinate amount of parliamentary time creating the EU Act, which


creates a tough regime saying that anything changing beat relationship


will be subject to parliamentary scrutiny and possibly a referendum


in many circumstances. That should be good enough for Conservative


colleagues. Good enough? I would say we are in violent agreement. We


are just saying that we are doing a bit of thinking. If you are going


to negotiate with someone, there's no point back to doing it on the


spur of the moment. The duty of backbenchers is to do a bit of


brainstorming, coming up with ideas that we can present to government


to say they are some of the ideas for a healthy relationship and


settlement with Europe. Lord Heseltine, do you welcome the


Liberal Democrat input on this issue in the coalition? I strongly


support the Prime Minister's position. His position is that of


every Prime Minister I'd worked for, from Harold Macmillan to Lord Hulme,


Ted Heath, Margaret Thatcher, John Major. They have all presided over


a close relationship with Britain and Europe. That's for one reason,


it is in British interests. There has always been a group of people


in the Labour Party, and they were against the European Common Market,


in the Conservative Party, there has always been a group trying to


frustrate the European concept. It is still there. Very well known to


you, obviously, because of the times during the 80s and 90s. Is it


different now cost and Mark --? The group of MPs that of boys and is


content and new MPs. They put David Cameron there. We are not talking


about some veteran MPs. Does that change the game and put more


pressure on him? It depends on how many there are and what the


circumstances are. Certainly when Lady Thatcher ran the Conservative


Party and John Major, they had a very substantial group of Euro-


sceptics on their backbenchers. I would say one thing, in what is an


extremely fragile world situation, if you want to life the tinderbox,


just start saying that Britain is going to start to try and


renegotiate their position in Europe. It's about the last thing


anyone wants. Day you go? I think this whole argument of Barbara you


Nobody is saying that we want to pull out of Europe. Even by going


at this issue, are you threatening the coalition's and the


Government's position? To be quite honest, you are saying that nobody


wants to pull out. All of the people that want a referendum want


to pull out. They think with the help of Euro-sceptic press they


could win a referendum. That is what it's about. They never wanted


a referendum when they could not win it. It's pure opportunism.


can't deny that, can you? I don't believe, if you take top of the


head reaction, some of the polling day have been bandied about, that


is the true picture. But that is the aim. George Eustace, one of


your Tory backbench colleagues, said today that David Cameron is


the more -- most Euro-sceptic Prime Minister they have had in a long


time. They think they have a way in. He also said the referendum is a


distraction. We're talking about using an opportunity to think


through what sort of relationship we want with in a healthy European


Union that delivers for the UK. I was a businessman before I became a


politician. 40% of our exports are to this market, we wanted to


succeed. He does have a point, people are looking at the eurozone


and saying it's a basket case. Isn't this the ideal opportunity?


Why shouldn't we look at the British position, because we are


being destabilised by it? If we loosened some of the ties,


especially as you would see it, harmful labour laws, it's the time


to loosen our ties with the EU? It's the worst possible time to


throw spanners in the works and complicate the already complicated


situation. The best time is when we have fundamental changes, like the


Lisbon Treaty or the Maastricht treaty. That is when we might have


missed the opportunity to have the referendum. If we want one, maybe


we should have one in the future at a similar time? Are you glad we


didn't join the euro? It's difficult in hindsight. But yes, I


think so. But I agree with the Prime Minister's position on the EU.


I'm very supportive of that. still think we should join? Given


the lack of fiscal discipline in the eurozone, which we can now see


causing enormous problems, with hindsight, I'm glad we are not in


there at the moment. You would like to join in the future? It if the


euros and sorts out its problems and applies the fiscal discipline


we are replying in this country now, quite rightly, which they said they


would apply in the eurozone, I think the debate is open-ended


future. Thank you very much. A poor showing for The Party for Wales and


the Welsh Assembly elections in May. Plaid Cymru lost four seats, coming


third place after the Conservatives. Ben Needham is standing down. This


weekend they have decamped to Llandudno to lick their wounds at


the party conference. I am joined by the party president. You came


third behind the Tories in the Welsh Assembly elections. Isn't it


obvious now that the Welsh have no interest at all in independence?


Well, we've had a very interesting year. In March, we had a tremendous


success in the referendum for law- making powers. In effect, that


makes our assembly into a parliament. That was on the


condition of... Up sorry, that is not about your party. The party


hasn't done well? A well, the party achieved that. If it wasn't for


Plaid Cymru, that wouldn't have happened. The results in May were


disappointing. We are carrying out a review and we are looking at the


situation. We are also entering a totally new, exciting period for


the party. We will be electing a new leader, as you said.


Politically, the situation in the UK is changing. Independence is now


firmly on the agenda with the SNP government in Scotland moving


towards a referendum. Our priority will be to ensure that Wales is not


left behind. That it is part of the debate and part of the process.


isn't it actually the difference between the SNP in Scotland and


Plaid Cymru in Wales, the fact that the SNP have been very successful


recently and Plaid Cymru had, there is no appetite for it in Wales? Are


you saying you are going to create an appetite for independence now?


Well, we are starting the debate on independence in terms of our party.


We want independence rather than dependence. That is the situation


we are in now. Particularly in a time of economic crisis, we have to


look at how best to build up Wales's economy, create more jobs,


create a sustainable economy. In the European context, this debate


is taking place in several countries across Europe. There are


other nations moving towards independence. We have to have this


debate with the people of Wales, the people of Wales will decide


which direction we take in future. But this is what we believe is best,


in the best interests of Wales and all of the people that live there.


In terms of the economy, difficult times, what distinguishes you and


Plaid Cymru to Labour in terms of the views towards the economy?


what we want to do is to look at, for example, our natural assets,


all of the ways in which we can develop industries based on


alternative energy sources and so on. We have just commissioned a


report which shows that, actually, in this worldwide economic crisis,


the small countries, small, independent countries, are working


together and can actually fare better than larger countries. We


are looking seriously at the ways in which we can develop within the


European Union context, if we were a member state and our own right in


Europe. Then we would be able to get a lot more benefits within that


context because the UK government is not fighting for what is in


Wales's interests. Gil Evans, thank you very much. Enjoy the party


conference. That is all for today, thanks to all of our guests,


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