With predictions for the global economy going from gloomy to gloomier, the chancellor sends a defiant message to those urging him to change course. Jo Coburn presents.
Browse content similar to 09/09/2011. Check below for episodes and series from the same categories and more!
Hello and welcome to The Daily Politics. As predictions by the
global economy go from a punitive being near, the Chancellor's sense
a defiant message on his plans to reduce the deficit. We will stick
to the death as the plan we have set out. It is the rock of
stability upon which our recovery is built. As UKIP's leader Nigel
Farage prepares to address his party conference, we will ask him
if he will make common cause with Tory Euro-sceptic backbenchers.
As the Greens gather for their own conference, how are their polities
going down in Brighton and Hove? Banning bacon sandwiches was not
universally popular. It is a traditional, manual work for us and
they like their eggs and bacon and all the trimmings that go with that.
Hopefully after a full breakfast are Mehdi Hasan from the New
Statesman, and Sarah Sands from the Evening Standard.
Later today finance ministers will meet in my say to discuss how to
deal with an economic crisis that seems to be deepening by the date.
They have got their work cut out. Yesterday, the OECD released
figures predicting the group of the seven largest economies will grow
by just 0.2%, with Britain growing by 0.3% over the same time. The
Shadow Chancellor Ed Balls used the figures to criticise the
Government's approach to fixing the economy and said it had a reckless
policy that is hurting, but clearly not working. However, this morning,
George Osborne insisted his deficit reduction plans were right. We will
stick to the plan we have set out. It is the rock of stability on
which our recovery is built and it has delivered record low interest
rates. Abandoning that it would put those interest rates at risk.
Nothing would be more damaging for Britain at this fragile moment for
the world's economy that an increase in mortgage rates for
families and an increase in the cost of borrowing for businesses.
On the other side of the Atlantic, President Obama has announced a
$450 billion package which he hopes will create jobs and boost the
economy. It includes tax cuts to help small businesses, funding for
infrastructure businesses, and cash worth emergency services workers.
Last night, he claimed the plans would give a much needed boost to
the American economy. The purpose of the American jobs act is simple,
to put more people back to work, and more money in the pockets of
those who are working. It will create more jobs for construction
workers, teachers, veterans, and the long-term unemployed. It will
provide a jolt to the economy that has dolls and give people
confidence if they invest and higher, there will be customers for
their products and services. From the most powerful man in the world
to one of the biggest brains in the BBC, let's get some analysis from
the BBC's economics editor, Stephanie Flanders. President
Obama's approach is totally different to George Osborne's. He
says he is sticking to his austerity plan. Are there any signs
that other countries and the IMF are beginning to turn away from the
Chancellor's approach? Certainly Christine Lagarde in the last few
weeks has had a much more nervous tone about the global economy and
she said explicitly that policy makers everywhere have to worry
about letting their long-term need to cut the budget get in the way of
short-term growth. She made a big point at the meeting this morning
and she said, if you do not get Rose, nothing else will get fixed.
A lot of people have wondered if this applies to the UK. She was
pretty clear this morning and she said she thought there was room in
the Chancellor's plan to respond to what is going on without needing to
do anything different. There is one big difference with the US.
Basically, George Osborne is going to borrow a lot more if we have
slow-growth, whether he likes it or not. That is not the case in the US.
A lot of states are having to balance their budgets and may end
up cutting spending when the economy goes down. The President
has had to offset that with all these stimulus packages. There is a
difference between Britain and America. In terms of the language
being used, Ed Balls has already picked up and interpreted Christine
Lagarde's comments as saying George Osborne has to change direction.
You are right, she said the policy is currently appropriate, but what
you think she is really thinking? There is an interesting dynamic. A
year ago, there was quite a debate when the new Government announced
its austerity programme. There were a few people inside the IMF has
said it was a little too tight and they were overruled and the IMF has
consistently had the position that it was right, but you had to be
aware and ready to respond to risks. That rhetoric has ratcheted up.
Today she talked about having heightened readiness and an ability
to be super ajar if things started to go wrong. Still she is speaking
to the script, but the tone is changing will stop some people
would say it is a bit strange to be constantly talking about being
ready for the risks to materialise, when she is also saying they have
already happened. If George Osborne and decides to do things
differently, what leaders are at his disposal in terms of kick-
starting the economy? Part of the problem and part of the gloom is
that there are not a lot of leaders that any of these governments can
pall. I think what he would emphasise, and the IMF, is that
there is some flexibility inside his scheme. The borrowing will go
up naturally. There is also the fact they are meeting their budget
target earlier on the current plans. There is room for quite a lot of
borrowing to happen without him being able to officially say he is
going for a plan B. What is odd about the Chancellor is he is now
public about the flexibility of his plan. He could have talked about
that all along and he chose to give the impression it is more rigid
than it is. My ad Hassan, nobody is really advocating that George
Osborne abandons his policy of fiscal austerity, in broad terms.
There are a lot of top economists who are saying that. Bring in a
short term, fiscal stimulus. One of the economists who predicted the
crash, said he has switched his position. In the F T, the bond
market message is clear, borrow and spend. We have also heard that the
markets are still very real Sjoerd by sticking to an austerity package.
It is not true although parties want them to abandon it. The
austerity plan is right. I think Stephanie is right to say we have
to look at Christine Lagarde's remarks and the new ones in her
comments. She does not denounce a Government's central policy, but
she does a nimble, super a jar, height and readiness. She said,
there are countries in the world under pressure from the bond
markets and they have to consolidate now and fast. There are
others who have got more scope for growth. President Obama has
recognised that belatedly. But it did not work for him either? That
is not true. Some people say the stimulus was not big enough. Should
George Osborne changed direction? am tentative about saying we need
one or the other. I think to abandon it at this stage would be
not only politically unwise, but everyone would panic. To say, we
will carry on, but we have a bit of flexibility. Since he raised
interest rates, that is the branch we are hanging on to. There are
some things that can be quite calming. But economists are divided.
I agree economists are divided. What is interesting in recent weeks
it is George Osborne's own supporters who are having their
doubts. A couple of years ago they were attacking George Brown and
Alistair Darling. But perhaps he can change things without
announcing he is changing things. They have committed so hard and so
firmly to this, they are saying it is the glue that keeps the
coalition together. Why didn't Ed Miliband talk about the economy in
Prime Minister's Questions? I don't know. Someone like me would say
that Alistair Darling's position is not credible. I think trying to ape
the Tories on cuts did not help Labour at all. Raising VAT, but VAT
is one of the tax cuts they should make as Ed Balls is asking for now.
Let's see if Ed Miliband chooses to go on it next week. Delegates to
their UKIP's conference might be experiencing a sense of deja vu as
they gather in is born today. Nigel Farage has called on Tory voters to
abandon the Conservatives for his true party of Euro-scepticism and
it has a familiar ring to it. It was UKIP that made the argument
we should no longer be part of the European Union and we desperately
need a referendum. We made it respectable and made it easier for
people in the Tory party and the Labour Party to say the same thing.
Presumably in the interests of Euro-sceptics, you would not run a
UKIP candidate against any Conservative MP who holes those
opinions. Let's wait and see how genuine those people are. Whilst
there are good people standing up in the Conservative Party, the
leadership of the Conservative Party are more committed to
membership of the European Union and more committed to deny it as a
referendum that ever before. That is the leadership. We are talking
about 80 newly elected Conservative MP is forming a blog, music to your
ears. You are not gonna stand UKIP candidates against them, are you?
My job as leader of this party is for us to fight as many elections
as we can at local, regional, national and international level.
We are going in, getting ready for those elections with the intention
of winning them and we will have up by that time 600 candidates
selected to fight the next general election. The important thing is
not what happens in individual constituencies, the important thing
is we get this country a referendum. If Mr Cameron wants to damage the
party Matt Burke, he can give us a referendum. But you are open to
assessing how a serious these Conservative candidates are. We'd
talked to some of them? Look, my commitment is to make UKIP a bigger
political party than it is today given that everything we stand for
it is in the mainstream. You are not answering the question. I think,
one or two of these people in the Conservative Party ought to
consider whether they are in the right party or not. They are doing
their best to put pressure on their leader to change their policy. The
best thing they can do is to come and join us. Have you talked to any
of them? I am happy to meet people from the Conservative Party or the
Labour Party who want the same things we want. You would not
really, if you are thinking about the Botha, and the voters who wants
to see Britain's relationship with Europe changed, they are hardly
going to change UKIP the struggle to win elections, instead of a
Euro-sceptic Conservatives. there is a sitting member of
parliament for the Tory or Labour Party that openly says they want
Britain to lead the European Union and renegotiate a genuine free
trade agreement, of course I am open to talking to them. But when
it comes to it, that 80 or so Euro- sceptics, I suspect the number that
are committed to as leading is rather small. Let's look at UKIP.
We have talked before about the party and its performance at local
level. It does not have a great standing at local level and perhaps
that is why it does not do so well nationally. It is interesting to
look at the local elections that took place earlier this year. We
stood in an 8th of the seats and got about a third of a million
votes, the same pro-rata as we got in the European elections in 2009.
More people who vote for us in Euro elections under PR are going out
and voted for us under first past the post. It does not get us over
the hurdle of first-past-the-post. In Cambridgeshire we have taken
control of the council. There are one or two areas where we have put
down good roots and we have built on it. We have yet under first past
the post to make a breakthrough. When I first became leader in 2006,
when people were asked how would they vote in a general election, it
was below 1%. A poll two days ago put us at 7%. We are making good,
Your message is that the party has disappeared. Are you trying to
bring it back by its seeming the political career of Neil Hamilton?
For most of the history of UK up we had the Conservative Party in
opposition. Just wait until David gets in. He will be a patriotic,
Euro-sceptic Prime Minister. He is in. He has proved to be the most
pro EU Prime Minister since Edward Heath. People who have put their
faith in the Conservative Party and believe the promises of David
Cameron, they are now feeling they have been let down like a cheap
pair of braces. My argument is, if they believe those things we are a
credible alternative for their vote. Bringing Neil Hamilton into the
hierarchy of the party, will that really attract more members? Neil
Hamilton joined the party in 2004 and has been a supporter ever since.
He has decided to throw his hat into the ring and be a candidate
for our national executive. If the membership of the party wanted to
be part of the management team, he will be, if they do not, he will
not. Let's go to the beginning of that interview in terms of
relationship with Euro-sceptic Tory MPs. Is there a danger of them
standing against Euro-sceptic MPs or not? UKIP is a nutty Party. Way
used to talk about little England in a derogatory term, now that
feels as if we are away from the contagion of Europe. Europe is not
a great place to be at the moment. Most Tories like power - all people
like power. They are in government. They are not going to be suicidal
about it. There is a taming effect of being in government. Does the
party faced a big improvement in political fortunes? Bearing in mind
that the issues of Europe are being raised now much more regularly by
Tory MPs. The British public have never bought the idea of single
issue parties. They might be singing with the tide of Euro-
scepticism. It does not always benefit them. It helps them at
European elections. Local and national are not the same break
through. I think the person now lack credibility. David Cameron
said they were a bunch of balloons and fruitcakes. They have a real
issue with that. Nigel Farage has been a more successful leader. Now,
UKIP are not the only political party, whose faithful are gathering.
The Greens assemble in Sheffield this weekend as a party of power
after their victory in last May's council elections in Brighton and
Hove. Adam Fleming has been back to the south coast to see how the
Green Revolution is progressing. Join me on a pedal-powered tour of
the first British city that is run by the Green Party. It does not
feel very different but the Greens They have saved this stretch of
cycle path from being axed. They have plans to put solar panels on
to the roots of schools and council houses. They have set up a
commission to give low-paid council workers a living wage of at least
�7.20 an hour. One policy has been dumped. Meat-free Mondays were
piloted in a canteen and they decided it was a load of rubbish.
Workers turned up first thing in the morning and found it was a meat
free mandate in the canteen. Management gave no indication that
was going to happen. There was no notice it was going to happen. It
did not go down too well. There could be more back-pedalling. The
party does not have a majority. It will have to compromise with Labour
and the Tories. As I discovered, the opposition leaders do not find
their Greens very appetising. Greens have said they want or
developers of new buildings to incorporate rooftop allotments.
There are very many people in Brighton and Hove that would like
to own at a rave, never mind an allotment. You are going to be a
crime that type of thing, wouldn't to be better to squeeze a couple
more units of housing out of a developer instead of asking them to
provide this type of gimmick? we saw quite early on was one
Cabinet member welcoming demonstrations and welcoming a camp
right on the main central gardens and saying this was the sort of
protest that they welcomed. This protest was about unemployment in
Spain. Brighton's business people are much more supportive of the new
administration. Some warned may have got their work cut out.
big challenges for them are to provide 6000 jobs just to stand
still. Our population is growing. It is a young population. I think
they will have to provide more affordable homes. They have their
own priorities which are really bold. Making this the greenest city
in the UK. The a six in the rankings so far. To go to the top
will be a challenge. This comes with a price tag. Next it council
tax is being put up by 3.5%. Joining us now is Green councillor
Jason Kit Kat. On the front of the website it says there is a new
party in town. You could end finishing that phrase by saying,
they're going to put up taxes up by 3.5% as they are doing in Brighton.
We are getting very harsh government imposed cuts. The
feedback we got was they understood that choice and they wanted to
protect frontline services. We can do our best to meet the challenge
and we will do that in an open and inclusive way. When people are
struggling in terms of meeting bills and spending, it will not
help them, or will it? It is a difficult choice. It is a below
inflation rate increase. We are a minority administration. We will
need to discuss this with all parties. The advice is do not put
up council taxes. The other a green agenda has been resisting all the
cuts going. How is that going? wanted to resist cuts in a legally
acceptable way. I have been to see local government ministers. I have
a meeting Scheduled with Eric Pickles later. We are saying that
Brighton and Hove is worse than the national average. We do not think
that is fair. Is it fair to have that slogan? I think it is. The
other parties do not seem willing to challenge the mainstream
perspective that where these cuts are necessary, we do not think they
are. One thing that was picked up, and there was little joke about it,
meat-free Mondays, was that the really good use of your time?
Exploring alternative opportunities in the canteens was part of our
manifesto but it is not something we seek to impose. It was done in a
small part of the council and it was not successful and we will
focus on other policies like introducing a living wage for
lower-paid council staff. We have positive things to spend our time
on. To go back to your original plea, trying to attract Liberal
Democrats. However sac going? The proof is in the pudding. It does
not seem to have happened. We have had a surge in membership. As you
know, our support is geographically not very smooth. We have hot spots
in certain areas was dog and London we have had a high profile. We are
getting defections. It will be a slow process in a first-past-the-
post world. Are you expecting had to be improved numbers? We hope so.
We believe that Brighton and Hove is the first green run council and
it is a sign of greater things to come. Time now to see what else has
been going on in our round-up of the political week. After a sum up
where nothing very much happened at all, MPs returned to Westminster
this week to see a man in a bow-tie saying that plan A is not going
entirely to plan. The leader of the opposition did not want to ask the
Prime Minister about it. If isn't it interesting that he does not
dare mention the economy? Did have something to do the memoirs of a
former Chancellor? Former News International employees were doing
their best to dish the dirt on James Murdoch. Conservative
backbenchers have returned with a backbone, giving David Cameron a
kicking over Europe. Will he listen to Conservative colleagues and take
that opportunity to hold a referendum on Europe? Tory MPs
wanted to know that he was showing Nick Clegg who was boss.
honourable lady is frustrated about... Maybe I should start all
over again. Sarah Sands, was that sensible question but did it sound
patronising? A little bit and chivalrous. Both he and George
Osborne have to watch that a bit. They can be smirking schoolboys.
She can be a difficult woman. It was a serious point she was making.
I would have thought better not. It was a mistake of tone. It got him
out of quite an awkward corner at the time. It was quite funny.
has been coming after him. She had a go at him for bottling it and
switching his position. She claimed that Evan Harris was holding the
Prime Minister and Deputy Prime Minister hostage. No longer the
Liberal Democrat MP he seems to have more power and influence as a
back bench Liberal Democrat. They are not quite as powerful, or are
they? They do seem to be bringing out, particularly some Conservative
backbenchers, using this, as they see it, they are not sticking to
the Government line, is it an opportunity to put pressure on?
see this in offices as well. The troublemakers are ones that get
more attention and more concessions. It is quite tempting. You used to
be beaten up metaphorically by the whips. Let's not forget, the start
of this parliament, has been a backbencher. That is Tom Watson. He
will get a hero's welcome in Liverpool later this month. It is
interesting to see, if we are seeing a revival of awkward
backbenchers and awkward Select committees, that can only be a good
thing. Has David Cameron got something to fear? If he handles it
well, you never know how much he is giving people rope. He has a good
sort of balance. He is very riskless. I would always back him
on that. He does not seem to be frightening off the backbenchers.
There are 80 in the Euro-sceptic group. Are we really going to go
full circle and find ourselves again the Tory Party torn over
Europe? Let see what happens at the party conferences. All that
excitement to look forward to. That is all for this week. Andrew will
Jo Coburn has the top political stories of the day. With predictions for the global economy going from gloomy to gloomier, the chancellor sends a defiant message to those urging him to change course.
As the party conferences get under way, the programme talks to UKIP leader Nigel Farage and visits Brighton to find out how the Greens are coping with the realities of power.
Jo also has the weekly round-up in 60 seconds, and she is joined in the studio by Mehdi Hassan from the New Statesman and Sarah Sands from the London Evening Standard.