08/09/2011 Daily Politics


08/09/2011

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

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

:00:31.:00:37.

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

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

:00:42.:00:45.

the Conservative backbenches thinks so, but will this coalition

:00:45.:00:48.

Government clawback powers from Brussels?

:00:48.:00:52.

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

:00:52.:00:57.

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

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conference begins. All that in the next half hour and

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with us for the programme today is businesswoman, entrepreneur and

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

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

:01:17.:01:21.

call for the swift introduction of legislation to enact its

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

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propose firewalls be erected between the High Street and

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investment arms of the big banks, protecting taxpayers from their

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riskier operations. The banks and some business groups had been

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

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

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

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

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

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

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

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

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

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

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

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

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

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recommendations, how worried are you that they will start to

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

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

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

:02:55.:03:00.

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

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

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

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

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

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well are finding their covenants are being changed and if they

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

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

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

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

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the businesses that are being protected. They are the mechanism

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

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

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

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

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

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

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are empty. On Tuesday the Chancellor admitted growth would be

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sluggish for this foreseeable future, while some warn of a

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

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

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

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

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

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peddled the idea that if you concentrated on fiscal repair,

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deficit-reduction and monetary stability, then growth happened as

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a result. But increasingly businesses and economists are

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suggesting that is different from having the measures to promote

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

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

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

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

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

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

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especially small ones, are necessarily to focus on getting

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

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

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

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businesses out there that have far more potential than they are

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

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

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

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good advice. Does that mean the Government being more directly

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

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

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

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

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revolution, a different attitude in embracing growth. The Government

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

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

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

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

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

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

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

:07:20.:07:24.

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

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

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

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

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

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

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extremely uncertain world where there are very serious downside

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

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

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southern Europe, and recognises there is relatively little that a

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

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

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

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

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

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

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

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

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

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

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over three years. Particularly in the more regional outlying areas

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

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the businesses that the biggest problem is uncertainty. Does they

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

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

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

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

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

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

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Whitehall for all the decisions that are sitting in ministers'

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

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

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

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

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

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have got and use them for a challenge purposes, competitive

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

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

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

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

:10:41.:10:46.

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

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

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That is using the existing levels of public expenditure to create

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

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

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

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sorts of politicians and commentators who have said we need

:11:15.:11:20.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

:13:05.:13:10.

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

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

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

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

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

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

:13:35.:13:40.

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

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

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

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

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

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

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

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

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

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

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

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

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

:14:40.:14:43.

determining factor in how the economy would respond in the next

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

:14:48.:14:52.

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

:14:52.:14:56.

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

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

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

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

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

:15:19.:15:24.

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

:15:24.:15:27.

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

:15:27.:15:32.

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

:15:32.:15:36.

press the Government used the crisis in the eurozone to change

:15:36.:15:40.

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

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

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

:15:50.:15:54.

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

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

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

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

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Danny Alexander called for further involvement in Europe, saying we

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

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

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

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

:16:25.:16:29.

Conservative backbench ears. Conservative MP Mark Reckless had

:16:29.:16:35.

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

:16:35.:16:38.

Liberal Democrat colleagues by delaying the police elections until

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November next year. Will he now listen to Conservative colleagues

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

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

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

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

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

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the chairman of the Liberal Democrat parliamentary committee on

:17:12.:17:16.

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

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

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

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certainly suggested by the Government at the beginning. There

:17:25.:17:28.

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

:17:29.:17:34.

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

:17:34.:17:37.

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

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

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

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the powers around employment and social legislation. It is the

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

:17:56.:17:59.

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

:17:59.:18:04.

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

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

:18:08.:18:11.

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

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

:18:15.:18:19.

talking about his 80 or so Conservative Members of Parliament

:18:19.:18:22.

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

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

:18:26.:18:29.

when Europe does physically consolidate, which it looks like

:18:29.:18:33.

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

:18:33.:18:37.

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

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actually bring back powers? Alan Lib Dem coalition partners are

:18:43.:18:46.

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

:18:47.:18:51.

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

:18:51.:18:54.

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

:18:54.:18:57.

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

:18:57.:19:01.

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

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

:19:05.:19:10.

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

:19:10.:19:14.

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

:19:14.:19:18.

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

:19:18.:19:23.

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

:19:23.:19:28.

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

:19:28.:19:31.

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

:19:32.:19:35.

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

:19:35.:19:39.

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

:19:39.:19:43.

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

:19:43.:19:46.

Union, at a time when European governments are trying to

:19:46.:19:49.

delicately renegotiate their way and find a path way through the

:19:49.:19:52.

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

:19:52.:19:56.

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

:19:56.:20:01.

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

:20:01.:20:04.

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

:20:04.:20:08.

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

:20:08.:20:12.

inordinate amount of parliamentary time creating the EU Act, which

:20:12.:20:18.

creates a tough regime saying that anything changing beat relationship

:20:18.:20:22.

will be subject to parliamentary scrutiny and possibly a referendum

:20:22.:20:25.

in many circumstances. That should be good enough for Conservative

:20:25.:20:30.

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

:20:30.:20:33.

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

:20:33.:20:37.

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

:20:37.:20:40.

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

:20:40.:20:47.

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

:20:47.:20:49.

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

:20:49.:20:53.

settlement with Europe. Lord Heseltine, do you welcome the

:20:53.:20:57.

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

:20:57.:21:01.

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

:21:01.:21:05.

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

:21:05.:21:11.

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

:21:11.:21:15.

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

:21:15.:21:19.

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

:21:20.:21:24.

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

:21:24.:21:28.

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

:21:28.:21:34.

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

:21:34.:21:39.

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

:21:39.:21:46.

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

:21:46.:21:49.

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

:21:49.:21:52.

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

:21:52.:21:56.

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

:21:56.:22:00.

circumstances are. Certainly when Lady Thatcher ran the Conservative

:22:01.:22:05.

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

:22:05.:22:12.

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

:22:12.:22:16.

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

:22:16.:22:20.

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

:22:20.:22:23.

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

:22:23.:22:29.

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

:22:29.:22:37.

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

:22:38.:22:42.

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

:22:42.:22:47.

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

:22:47.:22:50.

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

:22:50.:22:53.

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

:22:53.:22:57.

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

:22:57.:23:01.

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

:23:01.:23:07.

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

:23:07.:23:11.

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

:23:11.:23:15.

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

:23:15.:23:20.

your Tory backbench colleagues, said today that David Cameron is

:23:20.:23:22.

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

:23:23.:23:27.

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

:23:27.:23:31.

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

:23:31.:23:37.

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

:23:37.:23:40.

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

:23:40.:23:44.

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

:23:44.:23:49.

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

:23:49.:23:52.

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

:23:52.:23:57.

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

:23:57.:24:02.

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

:24:02.:24:07.

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

:24:07.:24:11.

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

:24:11.:24:15.

throw spanners in the works and complicate the already complicated

:24:15.:24:19.

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

:24:19.:24:22.

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

:24:22.:24:26.

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

:24:26.:24:31.

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

:24:31.:24:35.

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

:24:35.:24:39.

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

:24:39.:24:44.

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

:24:44.:24:48.

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

:24:48.:24:52.

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

:24:52.:24:56.

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

:24:56.:24:58.

euros and sorts out its problems and applies the fiscal discipline

:24:58.:25:02.

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

:25:02.:25:06.

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

:25:06.:25:11.

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

:25:11.:25:16.

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

:25:16.:25:20.

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

:25:20.:25:25.

weekend they have decamped to Llandudno to lick their wounds at

:25:25.:25:31.

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

:25:31.:25:34.

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

:25:35.:25:38.

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

:25:38.:25:45.

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

:25:45.:25:48.

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

:25:48.:25:51.

makes our assembly into a parliament. That was on the

:25:51.:25:56.

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

:25:56.:26:02.

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

:26:02.:26:06.

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

:26:07.:26:10.

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

:26:10.:26:14.

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

:26:14.:26:18.

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

:26:18.:26:24.

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

:26:24.:26:29.

firmly on the agenda with the SNP government in Scotland moving

:26:29.:26:32.

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

:26:32.:26:36.

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

:26:36.:26:40.

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

:26:40.:26:45.

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

:26:45.:26:49.

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

:26:49.:26:52.

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

:26:52.:26:57.

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

:26:57.:27:01.

We want independence rather than dependence. That is the situation

:27:01.:27:06.

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

:27:06.:27:10.

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

:27:10.:27:15.

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

:27:15.:27:18.

is taking place in several countries across Europe. There are

:27:19.:27:23.

other nations moving towards independence. We have to have this

:27:23.:27:27.

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

:27:27.:27:32.

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

:27:32.:27:35.

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

:27:36.:27:40.

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

:27:40.:27:46.

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

:27:46.:27:52.

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

:27:52.:27:57.

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

:27:57.:28:01.

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

:28:01.:28:07.

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

:28:07.:28:11.

the small countries, small, independent countries, are working

:28:11.:28:15.

together and can actually fare better than larger countries. We

:28:15.:28:19.

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

:28:19.:28:25.

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

:28:25.:28:28.

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

:28:28.:28:33.

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

:28:33.:28:38.

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

:28:38.:28:42.

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

:28:42.:28:45.

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