:00:25. > :00:30.Afternoon, folks, welcome to this Daily Politics conference special
:00:30. > :00:34.live from Birmingham. They are working up a head of steam
:00:34. > :00:38.against the rich, the Tories, their partners.
:00:38. > :00:43.Later this morning, the Business Secretary, Vince Cable is to unveil
:00:43. > :00:48.his plans for curving ective pay. We bring that live. The party is in
:00:48. > :00:54.Tory bashing mode, in the hope it restores the identity and repair
:00:54. > :01:01.its ratings in the polls. They are dire. That is for the
:01:01. > :01:04.party and its leader, Clegg. The party are at 11% and 60% of the
:01:04. > :01:10.people have no idea when the Lib Dem leader stands for.
:01:10. > :01:14.Vince Cable is to vent his annual splurge of populism before the
:01:14. > :01:20.party faithful. Last year he called the bankers, perspectives and
:01:20. > :01:24.conmen. This year, he is targeting highly paid executives. He is
:01:24. > :01:31.talking to the Energy Secretary, Chris Huhne, about all of that and
:01:31. > :01:34.more. We go existential and ask, why are we here? Why oh, why? Does
:01:34. > :01:44.a Lib Dem conference matter were you are in coalition with the
:01:44. > :01:45.
:01:45. > :01:49.So, all of that and more is coming up in the next hour.
:01:49. > :01:54.It is TV conference gold. Public service broadcasting at its finest.
:01:54. > :01:58.With us to kick it off we have Sam Coates from the Times and Nick Watt
:01:58. > :02:02.from the Guardian, despite that, they are both friends, both of them.
:02:02. > :02:06.What is the mood of the conference? This is cheery. This is the first
:02:06. > :02:11.time in three or four years where there has not been a great fight at
:02:11. > :02:17.conference. What a lot are hoping is that broadly speaking the polls
:02:17. > :02:22.have bottomed up. There is an ever so slightly uptick in many of the
:02:22. > :02:26.opinion polls, they are hoping it will not get worse and they can
:02:26. > :02:31.start rebuilding the reputation ahead of a next election. Yes it is
:02:31. > :02:34.bad, but I was speaking to a senior Lib Dem official, who said if you
:02:34. > :02:38.remember how unpopular Tony Blair was after the Iraq war, he still
:02:38. > :02:41.managed to win in 2005. We have to remind people that things are not
:02:41. > :02:46.as black as they are sometimes painted.
:02:46. > :02:51.What do we make of the status of Nick Clegg? Back in May you may
:02:51. > :02:56.have thought this would be a lynch mob it is not that, but what...? I
:02:56. > :03:01.was at a fringe event, he spoke, half of the people in the audience
:03:01. > :03:06.were speaking amongst themselves? We all like to talk about economics.
:03:06. > :03:10.We have to take the economics analogy. That the Liberal Democrats
:03:10. > :03:14.have experienced sick kl growth, but the underlying structural
:03:14. > :03:17.position is dire. The growth is that at the time of the alternative
:03:17. > :03:22.vote when they lost they were on the floor. Nick Clegg looking like
:03:22. > :03:27.he was bleeding. They have managed to differ enSecretary of State
:03:27. > :03:30.themselves on the NHS, the tails are up, but the underlying
:03:30. > :03:36.structural position, facing the electorate in 2015, that is not
:03:36. > :03:45.looking good, they are still at the 11, 12% in the opinion polls.
:03:45. > :03:49.That is your views, but I have made a wee extra in Glasgow.
:03:49. > :03:53.Here in Birmingham, there is more security than ever it must mean
:03:53. > :03:57.that the Lib Dems matter at least. The theme of the conference is in
:03:57. > :04:01.Government on your side, but not if you are a Tory. They may be in
:04:02. > :04:05.coalition with the Tories, but the Lib Dems favourite sport at this
:04:05. > :04:08.conference is whack a Tory. Like the Tories, the Lib Dems are
:04:08. > :04:13.worried that the economy is grinding to a halt, but unlike the
:04:13. > :04:18.Tories, there are many Lib Dems who would like to see more fiscal
:04:18. > :04:22.stimulus and more printing of the money. I asked Danny Alexander if
:04:22. > :04:26.his plan A was still working or if there was a need for a plan A plus
:04:26. > :04:32.or even a plan B? The credibility that we establish, the commitments
:04:32. > :04:36.that we have made on the deficit reduction mean we are not facing
:04:36. > :04:39.the problems that many countries are facing. Looking around the
:04:40. > :04:44.eurozone there are doubts about the capacity of leaders to make the
:04:44. > :04:49.right decisions. Looking to the United States, their
:04:49. > :04:52.downgrade came from the rows going on in their political system.
:04:52. > :04:55.Having political leaders who take difficult decisions and sticking to
:04:55. > :05:00.them is important at a time like this. That is the view from the
:05:00. > :05:04.bridge, but what is the view from the deck along -- among the Lib Dem
:05:04. > :05:09.rank and file? Have you reservations about being in bed
:05:09. > :05:12.with the Tories? Of course! But is there no alternative? In this case,
:05:12. > :05:17.that was the, it was the least worst decision that could have been
:05:17. > :05:22.made at the time of the election. think that the two coalition
:05:22. > :05:25.partners have worked together rather more co-operatively than
:05:25. > :05:28.imagine that they may have at one point.
:05:28. > :05:32.That they could have been scratching their eyes out? That
:05:33. > :05:36.could have been a possibility. Would you like a badge? It does not
:05:36. > :05:44.express what I feel. I like the coalition... So you may wear that?
:05:44. > :05:48.Would you like to hold on to it? will keep it
:05:48. > :05:52.Four months away in a terrible local election results in the
:05:52. > :05:56.defeat of the alternative vote referendum, Nick Clegg must have
:05:56. > :06:01.felt that Birmingham would turn in a lynch mob, but it has not. The
:06:01. > :06:06.position is secure, but the average Lib Dem activist is still uneasy,
:06:06. > :06:13.even angry about being in bed with the Tories.
:06:13. > :06:17.Gems of wisdom, I think. Would you not agree? What would we do without
:06:17. > :06:21.you. I know. 50P tax rate? Am I right in
:06:21. > :06:26.thinking that they are going along in getting rid of it as George
:06:26. > :06:29.Osborne wants to do it, provided that they get something in return?
:06:29. > :06:35.And don't forget that George Osborne has done this study, he has
:06:35. > :06:39.said that he cannot get rid of the 50p tax rate until 2013 as it has
:06:39. > :06:44.to be in line with the pay freeze for the public sector workers, but
:06:44. > :06:49.there must be two things, one, getting the money you would have
:06:49. > :06:55.raised from the richer people through the mansion tax and the
:06:55. > :07:01.focus on tax cuts has to be on the lower earners and raising the
:07:01. > :07:07.coalition allowance, it talks about raising that lower income earn up
:07:07. > :07:11.to �12,000 so nobody on minimum wage has to be on that rate of tax.
:07:11. > :07:15.All of this Tory bashing, do the Tories care? There will be lots of
:07:15. > :07:20.Lib Dem bashing by the time we get to a Tory conference in a couple of
:07:20. > :07:24.weeks' time. So this is grown up? Yes. This is
:07:24. > :07:28.about reminding the party that they can have freedom inside of the
:07:28. > :07:32.coalition. Take the 50p tax rate, it is not live, it does not feel to
:07:32. > :07:36.me inside government. It is an artificial construct.
:07:36. > :07:40.To differ enSecretary of State? between the two parties and to
:07:40. > :07:46.cheer the troops along it is depressing that the coalition
:07:46. > :07:49.policy work like that, but that is what it takes. They have a licence
:07:49. > :07:53.to disagree, they will get to the same position. What is interesting
:07:53. > :07:57.is what Vince Cable will be saying when he is talking about cracking
:07:57. > :08:01.down on boardroom pay. His people are saying that this is going to
:08:01. > :08:05.happen over David Cameron's dead body, so that they know it is
:08:05. > :08:09.unlikely to happen. They know it will not happen. David Cameron is a
:08:09. > :08:14.young, fit chap, he will be fine. They know it will not happen. You
:08:14. > :08:18.have to say why are you doing it? It is one thing to differ
:08:18. > :08:23.enSecretary of State yourselves from the Conservatives, but they
:08:23. > :08:26.must not be a mini opposition. If you are putting up these ideas,
:08:26. > :08:30.that Vince Cable knows is not going to happen, you have to be careful
:08:30. > :08:35.not to cross the line. But there is a bigger problem for
:08:35. > :08:42.Vince Cable. It is this: Most of the business world would like a
:08:42. > :08:46.Business Secretary that champions business. He seems to needle at one
:08:46. > :08:50.end and what the objection for many Tories is that he does not to
:08:50. > :08:55.anything for the growth and the expansion of the private sector
:08:56. > :08:57.that is critical. Somebody prepared to put the rocket boosters behind
:08:57. > :09:07.British business, rather than making it difficult.
:09:07. > :09:08.
:09:08. > :09:15.We will put that to the director of -- to Miles Templeman.
:09:15. > :09:18.In a moment we are talking to Chris Huhne, first, a couple of emergency
:09:19. > :09:22.debates this morning. Let's hear what was said from the conference
:09:22. > :09:30.floor. The fundamental liberal principles
:09:30. > :09:36.of a free independent, and unfetered estate, holding power are
:09:36. > :09:41.sacrosanct for Liberal Democrats, but so, also, are the democratic
:09:41. > :09:44.principles of accountability and transparency. We do not tolerate
:09:44. > :09:47.unethical behaviour from other professional groups that hold great
:09:47. > :09:52.responsibility, we must not tolerate it from our journalists.
:09:52. > :09:58.Freedom and accountability are not incompatible. So this motion
:09:58. > :10:01.insists on a pulsory code of conduct to be the part of every
:10:01. > :10:07.journalist's contract. We have sufficient officers who are trained
:10:07. > :10:12.who have the sufficient equipment, but need the leadership to be
:10:12. > :10:19.effective. We need policies like restore tiv justice that prevent
:10:19. > :10:23.reoffending rather than draconian sentences being passed because
:10:23. > :10:27.magistrates and judges come under political pressure.
:10:27. > :10:35.With me now, via popular acclaim, the energy and Climate Change
:10:35. > :10:39.Secretary, Chris Huhne. A big title? Not as big as your 's,
:10:39. > :10:46.Andrew! That is true. Tim Farron, I believe he is the President of Your
:10:46. > :10:51.party? He is. He -- He says that the Government would be, "A
:10:51. > :10:55.nightmare without the Lib Dem ministers" Is he right? It would be
:10:55. > :10:57.more interesting. Is nightmare? To be clear, I do
:10:58. > :11:00.think that the political balance of the government is a coalition,
:11:00. > :11:04.between the Liberal Democrats who have a clear, independent stand on
:11:04. > :11:09.a number of issues and the Conservatives also who come from a
:11:09. > :11:15.different political tradition. We have to come promisise. There is
:11:15. > :11:21.nothing to be ashamed of in come promisising. If we had not to get
:11:21. > :11:27.us out of the economic problems that time that we had, it would
:11:27. > :11:34.have been difficult in failing to compromise in the budget over
:11:34. > :11:38.losing the triple A status. Now, Europe. Should Greece be given the
:11:38. > :11:42.next trench of emergency aid? is to be entirely up to the
:11:42. > :11:46.eurozone and entirely up to the conditions... When I have not been
:11:46. > :11:51.involved in the negotiations, I think it is key that the Greeks
:11:51. > :11:55.stick to their commitments. Not to cut? Part of the problems
:11:55. > :11:58.began when the Greek Government did not present accounts which were
:11:58. > :12:02.correct about the size of their budget deficit and the size of the
:12:02. > :12:10.debt. They got into the Euro area under false pretences.
:12:10. > :12:15.But we knew that? No we did not. France did it, so did Italy? No. No.
:12:15. > :12:23.No other country has actually falsified its national accounts in
:12:24. > :12:32.the same way that Greece did. But Italy did not meet the criteria
:12:32. > :12:37.it got in with 112 % of GDP? If you are so far away from the criteria
:12:37. > :12:43.that there is no room for interpretation, there is the other
:12:43. > :12:47.room, Italy, was the debt falling, it was, that was allowed, there was
:12:47. > :12:51.wriggle room, but the Greek Government presented figures that
:12:51. > :12:56.the current Government found out about at the election that were
:12:56. > :13:00.completely false. It was like Enron falsifying their accounts, that is
:13:00. > :13:08.really outrageous. OK. You follow these things closely.
:13:08. > :13:13.In your view, is it inevitable that Greece will default? No. Nothing is
:13:13. > :13:17.ever inevitable. Is it likely? In the current
:13:17. > :13:21.circumstances, the real issue for Greece and the eurozone is to put
:13:21. > :13:24.together a package that allows it to be a sustainable solution going
:13:24. > :13:29.forward. One of the difficulties if Greece were to default is that
:13:29. > :13:32.there are a number of banks within and outside of the Euro area that
:13:32. > :13:39.could be negatively affected. I remember back in the crisis that we
:13:39. > :13:44.had here in the UK in the 1980s, when we had Lloyds and the Middles
:13:44. > :13:49.who had more than their entire capital reserves outstanding, even
:13:49. > :13:53.to American companies, all in default. If we crystallise the
:13:54. > :14:00.default then and there, we would have had two big High Street banks
:14:00. > :14:03.going bust. We did not do that. We waited, they built up reserves, in
:14:03. > :14:13.the threatened is the Brady restructuring to ensure a long-term
:14:13. > :14:30.
:14:30. > :14:35.My hunch would be that we have underestimated the political will
:14:35. > :14:39.of people on the Continent to keep the show on the road. I believe, in
:14:39. > :14:44.general, it is rash to assume that things are going to fall apart in
:14:44. > :14:48.the European Union. Actually, our experience is that Europeans use a
:14:48. > :14:51.good crisis to build up, solve the problem and get back on the road.
:14:51. > :14:55.The Financial Times this morning has done calculations, using the
:14:55. > :15:00.same methodology as the Government, and has discovered that the
:15:00. > :15:02.structural deficit, the bit which does not disappear when growth, is
:15:02. > :15:07.actually �12 billion higher than the government calculated. Does
:15:07. > :15:13.that mean there will have to be more austerity measures?
:15:13. > :15:16.Financial Times, bless them, is a journalistic organisation, not a
:15:16. > :15:23.well-established and reputable authoritative international
:15:23. > :15:28.economic organisation. Take the IMF, the OECD, both of them for the
:15:28. > :15:31.serious calculations of the structural balance. They know that
:15:31. > :15:35.different methodologies to the Treasury. I think that is more
:15:35. > :15:39.likely. So the Financial Times is wrong? I have no idea whether it is
:15:39. > :15:42.wrong or right, but the government should not, given that we have put
:15:42. > :15:46.in place a framework with the Office for Budget Responsibility,
:15:46. > :15:51.an independent body with a lot of resources designed to come up
:15:51. > :15:57.with... But they have used the OBR's mechanism to calculate this.
:15:57. > :16:01.Are you saying the FT is not authoritative on these matters?
:16:01. > :16:06.does that have the final word. One of the things that we are clearly
:16:06. > :16:08.going to see is that the director of the Budget -- the Office for
:16:08. > :16:13.Budget Responsibility will hold forth on these matters. That is the
:16:13. > :16:17.appropriate body for putting forward, if there is a problem of
:16:17. > :16:20.this sort, to the government, and the OBR is the independent body
:16:20. > :16:25.under started that is charged with coming up with this analysis, that
:16:26. > :16:29.they find a problem, we will respond to it. -- and a statute.
:16:29. > :16:34.those calculations are right, and we will find out from the OBR, if
:16:34. > :16:39.there is a �12 billion structural deficit, bigger than you have been
:16:39. > :16:42.proceeding along, will we have to cut more? It is absolutely clear
:16:42. > :16:47.that the Government is committed to ensuring that we have a sustainable
:16:47. > :16:50.structural balance, that is an absolutely key commitment. It has
:16:50. > :16:57.what has got us out of the dangers on that we were in immediately
:16:57. > :17:01.after the election. -- the danger zone. A number of countries have
:17:02. > :17:05.fallen into economic crisis since then, even though they have smaller
:17:06. > :17:10.budget deficits than we do. We have been able to get out of that danger
:17:10. > :17:14.zone because our commitment to incredible physical programme.
:17:15. > :17:18.still not clear if you're going to have to cut more. 9 am I, because
:17:19. > :17:22.it will depend on the recommendations of the OBR. --
:17:22. > :17:26.neither am I. That is the appropriate way of doing it, not
:17:26. > :17:30.reacting to something that appears in newspapers, no matter how
:17:30. > :17:35.reputable they are. I used to work for the Economist, not the
:17:35. > :17:39.Financial Times. We were colleagues for a brief period. It is 50% and
:17:39. > :17:42.by the Financial Times. And a very good investment it has proved for
:17:42. > :17:47.them! We are going to hear from Vince Cable in a minute. What has
:17:47. > :17:53.he done for business? I think the key thing he has done is to make
:17:53. > :17:58.sure that with the deregulation that is going on, where we can get
:17:58. > :18:03.rid of excessive red tape, that is being done... What is the big
:18:03. > :18:11.thing? It is a whole raft of rules. What is the biggest the regulatory
:18:11. > :18:14.change? The obviously follows his department, and I follow mine. I am
:18:14. > :18:17.the Secretary for Energy and climate change. The singers beggars
:18:17. > :18:22.proposers what we are trying to do on the planning rules, which is
:18:22. > :18:27.very controversial. That the single biggest proposal. Is that his
:18:27. > :18:32.department? It is part of the deregulation, part of the growth
:18:32. > :18:36.review... Of so what has he done for business? That is a key thing.
:18:36. > :18:41.It is not his department. He has been involved in the road review
:18:41. > :18:46.from the beginning, coming up with the ideas that we have been putting
:18:46. > :18:54.in government. -- the growth review. He will continue that work as he
:18:54. > :18:57.has done since the election. Miles Templeman is the head of the
:18:57. > :19:01.Institute of Directors. What are you looking for from Vince Cable
:19:01. > :19:05.this morning? We are certainly not looking for what we think we can to
:19:05. > :19:08.get about executive pay, quite the wrong issue to be talking about
:19:08. > :19:13.when we are really trying to encourage growth, stimulating
:19:13. > :19:19.investment, get overseas people to come here. It is that to be talking
:19:19. > :19:25.about that topic at this stage. -- daft. War would be wrong with Kevin
:19:25. > :19:29.executive pay? The ratio to normal pay is far higher than it has ever
:19:29. > :19:33.been. For a start, you are only talking about the very top
:19:33. > :19:39.executives. Most executives get nothing like that, as he would
:19:39. > :19:45.appreciate. The average director earns about 75,000, a good salary.
:19:45. > :19:50.That is a non-executive. No, no, that is an executive director.
:19:50. > :19:56.in the FTSE 100 for 250, they earn a lot more than that. Not most
:19:56. > :20:02.directors. In the 1950s, they earned about 40 times average
:20:02. > :20:07.earnings. Today they earn 400 times average earnings. Why? It varies
:20:07. > :20:10.dramatically between companies, as you know. Basically, you are in a
:20:11. > :20:14.marketplace of directors. You have got to pay them what they can get
:20:14. > :20:18.internationally, and that is the price. It is the same in any sport
:20:18. > :20:21.or music or anything. The top people are earning a lot more. What
:20:21. > :20:25.I would like to see is more emphasis on how we get the lower
:20:25. > :20:29.paid people to earn more, rather than trying to hold back those were
:20:29. > :20:33.creating wealth and stimulating business. A wee are about to hear
:20:33. > :20:39.from Mr Cable. I just hope we will be an odyssey in going up in a
:20:39. > :20:42.second. Can I just ask you this, do you take what he is saying
:20:42. > :20:45.seriously, or is it just conference rhetoric? I hope it is just
:20:46. > :20:50.conference rhetoric, because it is not something that would help
:20:50. > :20:54.business and the economy. All right. We are going to have delivered
:20:54. > :21:00.there, he is on his feet. Straight into the conference hall to hear
:21:00. > :21:08.When I joined up, I had very mixed feelings about the coalition. Like
:21:08. > :21:11.many of you, I looked for good precedents. I thought of Clement
:21:11. > :21:18.Attlee and Aaron Bevan, working with their Tory opponents,
:21:18. > :21:22.Churchill and Beaverbrook, setting aside their political differences
:21:22. > :21:29.in a common cause. Of course, that coalition unleashed the great
:21:29. > :21:35.liberal reforms. You could say, well, that was war, that was
:21:35. > :21:41.different, and it is different. But we now face a crisis that is the
:21:41. > :21:48.economic equivalent of war, and this is not a time for business as
:21:48. > :21:53.usual for politics as usual. The financial crisis is still with us.
:21:53. > :22:00.It never went away. And we can now say that recovery has stalled in
:22:00. > :22:06.the United States and the position in the eurozone is, well, Dyer. But
:22:06. > :22:10.it is wishful thinking to imagine that we have a healthy economy
:22:10. > :22:18.which has somehow been infected by a dangerous foreign virus, because
:22:18. > :22:23.many of our problems are home-grown. Gordon Brown regularly advised the
:22:23. > :22:27.rest of the world to follow his British model of rock, but the
:22:27. > :22:33.model was flawed. -- growth. It led to the highest level of household
:22:33. > :22:40.debt in relation to income in the world. It produced a dangerously
:22:40. > :22:45.inflated property bubble. It encouraged bloated banking, while
:22:45. > :22:48.manufacturing declined at an unprecedented right. And then they
:22:48. > :22:55.socialised the cost of the crash through a massive budget deficit,
:22:56. > :23:00.the biggest of any major economy. And his disciple, Ed Balls, highers,
:23:00. > :23:05.well, sort of apologised, but now advocates policies that would
:23:05. > :23:12.repeat that disaster. -- has. What this period of crisis should have
:23:12. > :23:17.taught us, above all, his humility. And humility in politics means
:23:17. > :23:27.accepting that one party does not have all the answers. Recognising
:23:27. > :23:37.
:23:37. > :23:44.that working in partnership is And it has been hard, and it has
:23:44. > :23:47.required courage from our party to withstand the tribalism which is
:23:47. > :23:51.British politics at its worst. And it has not been possible for the
:23:51. > :23:55.party to get its own way on everything. I mean, I regret this
:23:55. > :24:01.year that we did not secure a tighter control on bank pay and
:24:01. > :24:06.bonuses, for example. A bad message was sent that unrestrained greed is
:24:06. > :24:11.acceptable, and we now know where that leads. What we do have are
:24:11. > :24:18.very real achievements. My team in the business department, and I want
:24:18. > :24:26.to acknowledge David Willetts and our own outstanding minister Ed
:24:26. > :24:30.We have not only made a major contribution to deficit-reduction,
:24:31. > :24:34.but we are now helping recovery. We are greatly expanded
:24:34. > :24:39.apprenticeships, giving respect and recognition to the 60% of young
:24:39. > :24:44.people who do not pursue academic study at universities. We have
:24:44. > :24:47.protected our science budget, and we have launched a chain of
:24:47. > :24:51.Technology Innovation centres promoting the technologies of the
:24:51. > :24:57.future. We have established a green investment bank to promote major
:24:57. > :25:02.green projects, and Nick Clegg has driven the regional growth fund,
:25:02. > :25:06.investing in businesses up and down the country, not just in the south-
:25:06. > :25:10.east. And we, and Ed Davey in particular, have done what
:25:10. > :25:15.Conservative and Labour governments failed to do, legislate for the
:25:15. > :25:21.necessary reform of the Royal Mail, with worker shares, providing a
:25:21. > :25:27.stable future for the post office network. And then, after a
:25:27. > :25:32.generation of manufacturing decline, we brought jobs back to Britain in
:25:32. > :25:36.stealer at Red Care, a motor vehicle supply chains, electric
:25:36. > :25:40.vehicles, and in aerospace through Rolls-Royce, Airbus and Augusta
:25:40. > :25:46.Westland. And this morning, Jaguar and Land Rover announced that they
:25:46. > :25:56.are to build a new engine plant in the West Midlands, a massive boost
:25:56. > :26:02.
:26:02. > :26:12.for British manufacturing and for And that is what I mean by a
:26:12. > :26:15.
:26:16. > :26:21.business recovery, cars, not But this work is just beginning.
:26:21. > :26:28.Because to turn Britain around, we need much more. And I have three
:26:28. > :26:33.priorities, stability, stimulus, solidarity. Stability in the
:26:33. > :26:37.government's finances, the deficit problem, and in our banks. Stimulus
:26:37. > :26:43.to support growth, and that sustainable growth based on
:26:44. > :26:50.business investment, exports, green technology and manufacturing. And
:26:50. > :26:55.solidarity to give people a sense of a shared society, reducing our
:26:55. > :27:00.appalling inequalities of income and wealth, and creating a
:27:00. > :27:05.responsible capitalism. Let me start with stability. The last
:27:05. > :27:11.government promised an end to boom and bust, but it gave us both. And
:27:11. > :27:17.it left us a dangerous, unsustainable budget deficit. And
:27:18. > :27:24.cutting that deficit is a thankless and unpopular task, but it is
:27:24. > :27:28.unavoidable if our country and party are to be taken seriously.
:27:28. > :27:35.And the government's tough approach to deficit reduction is often
:27:35. > :27:39.attacked as ideological, as right- wing. The truth is that financial
:27:39. > :27:46.discipline is not ideological, it is a necessary condition for
:27:46. > :27:52.effective government, and I see us following in the footsteps of
:27:52. > :27:57.Stafford Cripps and Roy Jenkins in post-war Britain, and it brought
:27:57. > :28:02.the Canadian Liberals, Scandinavian Social Democrats, the Clinton
:28:02. > :28:07.Democrats in United States, because they understood, unlike today's
:28:07. > :28:17.Labour Party, that the progressive agenda of centre-left parties
:28:17. > :28:23.
:28:23. > :28:27.cannot be delivered by bankrupt I think most of the British public
:28:27. > :28:32.to get it, but there are politicians on both Left and Right
:28:32. > :28:37.who do not, and some of them believe that governments, like
:28:37. > :28:41.Father Christmas, they draw up lists of tax cuts and giveaways,
:28:41. > :28:47.and they assume that Santa Claus will pop down the chimney and leave
:28:47. > :28:50.presents under the tree. This is childish fantasy. Some of them, for
:28:51. > :28:55.example, believe that if taxes on the wealthy are cut, new revenue
:28:55. > :29:00.will miraculously appear. And I think the reasoning is something
:29:00. > :29:05.like this, all those British billionaires who demonstrate their
:29:05. > :29:10.patriotism by hiding from the taxman in Monaco for some Caribbean
:29:10. > :29:20.bolt hole will come rushing back to pay more tax at a lower rate. Well,
:29:20. > :29:23.
:29:23. > :29:29.I'm afraid that my view of this is Financial stability is not just
:29:29. > :29:35.about the Government's deficit. Massive potential instability is
:29:35. > :29:41.caused by British-based global banks whose combined assets are
:29:41. > :29:47.over 400% of the size of our economy. The largest of any major
:29:47. > :29:53.country. And that the present, banks offered a one-way bet. If
:29:53. > :29:58.they gambled and win, they fill up the bonus pool, and when he loses,
:29:58. > :30:03.the taxpayer pays. And the Independent Banking Commission, the
:30:03. > :30:09.Vickers commission, provides a means to stop this dangerous
:30:09. > :30:12.nonsense. The commission's key findings, which are two separate
:30:12. > :30:22.retail and casino banking, must be put in place. Legislation will
:30:22. > :30:28.
:30:28. > :30:34.start soon, and it will be APPLAUSE.
:30:34. > :30:41.And if there are any doubts about the need for radical reform, the
:30:41. > :30:45.UBS rogue trader is to dispel them. We simply cannot have rogue
:30:45. > :30:52.institutions, exposing taxpayers to the risk of exploding financial
:30:52. > :30:57.weapons of mass destruction. APPLAUSE.
:30:57. > :31:03.But the banks must also perform their basic economic function.
:31:03. > :31:07.Which is channeling our savings, into productive investment.
:31:07. > :31:13.They are doing so. Productive British business and banking are
:31:13. > :31:16.currently at odds. Banks operate a bit like a man who
:31:16. > :31:23.either wears his trousers around his chest stifling breathing, which
:31:23. > :31:30.is what they do at the moment or around their ankles, exposing their
:31:30. > :31:38.assets. APPLAUSE
:31:39. > :31:44.That's if they have any! We want the trousers around the middle!
:31:44. > :31:49.Steady lending growth, especially to protective British businesses,
:31:49. > :31:55.small-scale enter prices, that is what they have to do. No more feast
:31:55. > :32:00.and famine in bank lending. APPLAUSE
:32:00. > :32:04.Now the big economic policy question now is how-do we pro gres
:32:05. > :32:08.from financial stability to growth? -- progress from financial
:32:08. > :32:13.stability to growth? With business and consumer confidence so low,
:32:13. > :32:16.there is a responsibility on Government. My job is to support
:32:16. > :32:19.businesses. That means promoting British
:32:19. > :32:23.commerce in the big emerging markets that have been neglected in
:32:23. > :32:27.the past. It means keeping Britain open to
:32:27. > :32:33.inward investment, to trade, to students and skilled workers.
:32:33. > :32:39.It means cutting red tape which is suffocating growing companies which
:32:39. > :32:46.create jobs. Well, I I will not provide cover
:32:46. > :32:50.for the ideological deendents of those who once sent children up
:32:50. > :32:57.chimneys. Panic in financial markets will not be stopped by
:32:57. > :33:03.scrapping maternity rights. APPLAUSE
:33:03. > :33:09.But the immediate threat is lack of demand.
:33:09. > :33:15.With consumers, companies and governments cutting spending, there
:33:16. > :33:23.was once a talk of a paradox of thrift where everyone in every
:33:23. > :33:27.country is individually wise, but collectively foolish, leading to a
:33:27. > :33:32.downward spiral. A lot of the responsibility for countering this
:33:32. > :33:39.rests on the bank of England, to relax monetary policy, but
:33:39. > :33:44.government can also act. We can use Chris Huhne's Green Deal to
:33:44. > :33:49.generate 100,000 jobs, we can leverage private investment through
:33:49. > :33:54.the growth fund and the Greenpeace Investment bank. We can allow
:33:54. > :33:58.councils to use planning permission, using the permissions for social
:33:58. > :34:02.housing.. We can step up investment in our clapped out infrastructure.
:34:02. > :34:05.There are tens of billions of pounds of British savings in
:34:05. > :34:11.pension funds and insurance companies ready to invest in
:34:11. > :34:15.transport, energy, broadband and housing if the regulators can
:34:15. > :34:20.ensure a reasonable, mot raid return. As Danny announced
:34:20. > :34:24.yesterday, the the Government is putting serious money behind local
:34:24. > :34:28.infrastructure, but even with a stimulus to support the recovery,
:34:28. > :34:34.the next few years will be difficult.
:34:34. > :34:38.Living standards are being squeezed by continued high imported
:34:38. > :34:43.inflation. The painful truth is that Britain is now a poorer
:34:43. > :34:48.country as a result of the financial crash.
:34:48. > :34:54.The public will only accept continuing us stairity if it is
:34:54. > :34:58.seen to be fair. Yet there is currently a great sense of
:34:58. > :35:02.grievance that the workers and the pensioners are paying the penalty
:35:02. > :35:12.for a crisis that they did not create.
:35:12. > :35:13.
:35:13. > :35:23.APPLAUSE And I want a real sense of
:35:23. > :35:30.
:35:30. > :35:35.solidarity. That does not mean that we go around in green bowler hats
:35:35. > :35:40.carrying suitcases, but we have as a party made clear our priorities
:35:40. > :35:43.for continuing to lift lower than average earners out of tax and the
:35:43. > :35:49.wealthy must pay their share. What the Liberal Democrats should focus
:35:49. > :35:52.on are the vast disparrities of wealth. Much of it in inflated
:35:52. > :35:59.property and land price, artificially generated by the boom
:35:59. > :36:04.of the last decade. A few weeks ago a house changed hands for �140
:36:04. > :36:14.million. One newspaper headline said without
:36:14. > :36:15.
:36:15. > :36:22.a sense of irony, "Oligarchs are being priced out of Central London"
:36:22. > :36:28.Yet the owners pay no more tax than men of -- many of the occupants of
:36:28. > :36:34.a family semi-. When some critics attack our party policy on a tax on
:36:34. > :36:39.properties over �million, you have to wonder what part much the solar
:36:39. > :36:44.system they live in, but let me be clear, there is absolutely nothing
:36:44. > :36:47.wrong with generous rewards for those who build up successful
:36:47. > :36:57.businesses. For those who create wealth and
:36:57. > :37:06.
:37:06. > :37:12.People accept capitalism, but what they want is responsible capitalism.
:37:12. > :37:17.As for irspibl capitalism, some of you may have noticed that one of
:37:17. > :37:21.the big media companies has recently had a spot of bother! I
:37:21. > :37:27.think that you know who I'm referring to. All I would say about
:37:27. > :37:32.it is this: The Labour Party, the Conservatives, even the Scottish
:37:32. > :37:38.nationalists spent years queuing up to pay them homage. What makes me
:37:38. > :37:42.proud of our party is that we never compromised oifs in that way.
:37:42. > :37:52.APPLAUSE -- come promisised ourselves in
:37:52. > :37:58.that way. APPLAUSE
:37:58. > :38:03.What I want to do is to strengthen the best of British business.
:38:03. > :38:11.I have taken two initiatives in particular. I have asked Professor
:38:11. > :38:15.John Kay, together with Sir John Rose, the former boss of Rolls-
:38:15. > :38:22.Royce. They have commitment to long-term investment, training, R
:38:22. > :38:27.and D. I have asked them to look at how we make our stock markets and
:38:27. > :38:32.institutional investors get out of this short-term speculative mind
:38:32. > :38:36.frame. I am separately consulting on how best to tackle the
:38:36. > :38:41.escalation of executive pay. Which in many cases have lost connection
:38:41. > :38:49.with the value of shares, let alone average employee pay.
:38:49. > :38:55.APPLAUSE It is very hard to explain why
:38:55. > :39:00.share holders can vote to cut top pay, that the managers then ignore
:39:00. > :39:06.the vote. Surely pay should be transparent and not hidden from
:39:06. > :39:11.share holders and the public? So, I want to call time on payouts for
:39:11. > :39:17.failure. APPLAUSE
:39:17. > :39:24.Let me... Let me just say in conclusion, that when my staff saw
:39:24. > :39:29.my draft of this speech, they said that they could see the grey sky,
:39:29. > :39:34.but where are the sunny uplands? I have to say that I'm sorry, but I
:39:34. > :39:37.can only tell it as asee it. I think that people are not
:39:37. > :39:42.projecting ten years ahead when they are worrying about how to
:39:42. > :39:47.survive the next ten days to their pay day, but I do sense a deeper
:39:47. > :39:57.truth, that the public is tired of being lied to by politicians and
:39:57. > :39:58.promised what cannot be delivered. The truth is that there are
:39:58. > :40:04.difficult times ahead. Britain's post-war pattern of ever rising
:40:05. > :40:09.living standards has been broken by the financial collapse. But I
:40:09. > :40:13.believe that we can turn the economy around and we will.
:40:13. > :40:19.In the coalition agreement we promised to put fairness at the
:40:19. > :40:24.heart of all that we do. As we rebuild our broken economy
:40:24. > :40:31.from the rubble, the Liberal Democrats know that you can't do
:40:31. > :40:41.one without the other. So we must now do both, fairness and recovery.
:40:41. > :40:42.
:40:42. > :40:47.Thank you. APPLAUSE
:40:47. > :40:53.Nick Clegg getting on to his feet there to give Vince Cable a
:40:53. > :40:59.standing ovation. A rather more low-key Vince Cable than some
:40:59. > :41:04.expected. He attacked the Tory supplysiders with the low rate of
:41:04. > :41:09.tax. Attacking yet again the banks, calling for a stimulus, although
:41:09. > :41:12.not clear if this was to be a new stimulus. He went through a range
:41:12. > :41:17.of existing policies. He is slightly constrained as it is the
:41:17. > :41:23.policy of the coalition not to have further stimulus in the sense of
:41:23. > :41:28.new money. He attacked the ideological descendents of those
:41:28. > :41:31.who sent children up chimneys, though he did not say who they were.
:41:31. > :41:36.He also called as had been trailed in the papers and the broadcasts
:41:36. > :41:41.this morning for greater controls on executive pay, but all that he
:41:41. > :41:44.announced was an investigation to be led by the former chief
:41:44. > :41:49.executive of Rolls-Royce into how stock markets and institutional
:41:49. > :41:53.investors can get away from the speculation, so that it highly
:41:53. > :41:57.likely to be that radical and he is consultanting about what to do on
:41:57. > :42:00.executive pay. So I suspect in the boardrooms of the City of London up
:42:00. > :42:04.and down the country, they are breathing a little sigh of relief.
:42:04. > :42:08.Let's find out from the head of the Institute of Directors, Templeton,
:42:08. > :42:13.he has been listening to the speech in London. What did you make of it
:42:13. > :42:19.Miles Templeman? It was like you, it was much milder than we were
:42:20. > :42:24.expecting. Much we agreed with. The emphasis on growth, on planning
:42:24. > :42:29.liberalisation, and infrastructure. So those things are key to growth.
:42:29. > :42:32.I was glad, apart from the bashing of the banks again that he kept off,
:42:32. > :42:36.largely, the whole issue of executive pay.
:42:37. > :42:42.So, you are not frightened? He has not frightened the horses by what
:42:42. > :42:46.he said on executive pay? It was strongly billed but in your view
:42:46. > :42:51.turned out to be pretty much milk and water? I think that is as it
:42:51. > :42:54.should be. It is not the issue that we should be talking about now. We
:42:55. > :42:59.know that the share hold verse a responsibility. That is in place.
:42:59. > :43:03.It is increasingly transparent what is happening. I think that is
:43:03. > :43:06.improving. We are on that track. What we don't need is anything
:43:06. > :43:09.further. Could you answer the question that
:43:09. > :43:14.Chris Huhne seemed to have difficulty in answering to me a few
:43:14. > :43:21.minutes ago, what in your view has Vince Cable done for business?
:43:21. > :43:26.thought it was a good question. I think he said one or two things, on
:43:26. > :43:29.a presentships they have been goofpltd we support that. The
:43:29. > :43:34.planning on regulation -- the planning on infrastructure. The
:43:34. > :43:38.regulation, we have not had progress, but a lot of fine words.
:43:38. > :43:43.I think that the enterprise zone is a good one, but will it be
:43:43. > :43:47.effective? We will wait and see. There are some areas, but not a lot
:43:47. > :43:52.of progress yet,ual it is a difficult environment. Do you think
:43:52. > :43:57.he was re fefring to you or the Institute of Directors as the
:43:57. > :44:00.ideological descendents of those who want to send children up
:44:01. > :44:06.chimneys? I don't know who. He did not follow through on it at all any
:44:06. > :44:10.way. No. I think what we need from him is a much stronger voice
:44:10. > :44:13.supporting business. We don't need the problems in business, but the
:44:13. > :44:17.support. We need that internationally as well as at home.
:44:17. > :44:23.He is doing that. Do you think that Vince Cable is
:44:23. > :44:28.that strong voice? He's got to be, otherwise we never get the inward
:44:28. > :44:31.investment. Is he? Well, the less he talks about bashing banks and
:44:31. > :44:35.executive pay, the better. Miles Templeman, thank you very
:44:35. > :44:39.much. Now, it is a hard life here at
:44:39. > :44:43.party conferences, I'm sure you realise that. Not only do we wade
:44:43. > :44:48.through countless fringe events, endless drinks receptions it is our
:44:48. > :44:53.duty to go and to get our heads around the impenetrable language
:44:53. > :44:59.that the political parties like to use on these occasions, but never
:44:59. > :45:06.fear, in the first of our series of conference jargon busters, who are
:45:06. > :45:10.you going to call? The Daily Politics and Andrew Dilnot, our own
:45:10. > :45:17.dictionary, he's been out and about in Birmingham, looking at the
:45:17. > :45:24.powers of the Lib Dem conference. Of all of the party conferences,
:45:24. > :45:28.the Lib Dem seas arguably the most powerful. The conference is the
:45:28. > :45:33.sovereign body of the party. It is responsible for making policy and
:45:33. > :45:37.all policy flows from it. Not always a source of comfort to
:45:37. > :45:47.the leadership, however, not everything voted on in conference
:45:47. > :45:49.
:45:49. > :45:53.actually make it is into an There is part of the party will
:45:53. > :45:56.have suggested things they want to discuss, and they pass that on to
:45:56. > :45:59.the federal committee, who choose which ones will be debated at
:45:59. > :46:04.conference, and then members will get to vote on them and turn them
:46:04. > :46:07.into policy. Oh, yeah, how do they vote? Each member is issued with a
:46:07. > :46:13.voting card that comes with their conference pass. That allows them
:46:13. > :46:17.to take part in the full debates, which I chaired by the President of
:46:17. > :46:23.the party or his representatives. He or she have the final say in any
:46:23. > :46:29.decision. That was Giles Dilnot. With me now
:46:29. > :46:34.part two MPs July overtaking notes, Duncan Hames and Tessa Munt. What
:46:34. > :46:41.is the point of a Liberal Democrat conference that might it is a good
:46:41. > :46:44.time to get together, to recharge our batteries. You are in a
:46:44. > :46:48.coalition with no power to implement what to discuss. Are you
:46:48. > :46:54.sure? To anyone policy that you have passed this week that will be
:46:54. > :47:00.adopted by the coalition. -- Tell Me one policy. In March, as a
:47:00. > :47:03.result of the demands we wanted to the health reforms, conference
:47:03. > :47:07.flexed its muscles, and we have seen the impact of that in
:47:07. > :47:12.legislation. What have you done this week? We have had the
:47:12. > :47:15.discussion about having a response to looking at drugs and the problem
:47:15. > :47:21.of drugs that inflicts massive damage on all of our communities. I
:47:21. > :47:25.know it is a very unpopular topic, but it is what we have called for,
:47:25. > :47:28.a structured and proper look at the impact. I listened to parts of the
:47:28. > :47:32.debate. Do think the government will adopt it? We have to ask, and
:47:32. > :47:36.we will see. We will have a go, won't we? Would you hold your
:47:36. > :47:40.breath for it? We have got to do something, we cannot ignore the
:47:40. > :47:44.problem any longer. Isn't there a danger that your conference is
:47:44. > :47:49.becoming more like the Labour and Conservative conferences, which
:47:49. > :47:53.over the years have a bath into rallies? Well, I guess your viewers
:47:53. > :47:55.can judge that over the next couple of weeks. I think they will say
:47:55. > :47:58.that Liberal Democrat conference has been different to the
:47:58. > :48:02.conferences they will see in the next couple of weeks, which are
:48:02. > :48:06.dominated by the platform. What is the mood of this conference?
:48:06. > :48:09.think it is a slightly different one from normal, been at perhaps
:48:10. > :48:13.when we met back in March, people were still slightly shell-shocked
:48:13. > :48:16.about the fact that we were in power. What has happened in his
:48:16. > :48:21.last little while is that, having recovered from the damage that we
:48:21. > :48:25.were inflicted in May, what has happened now... In what way have
:48:25. > :48:32.you recovered? Q and n% in the polls. I do not mean in polling
:48:32. > :48:36.terms. What we have got is an opportunity to actually rebuild our
:48:36. > :48:41.thoughts, think about the impact policies. What has changed is that
:48:41. > :48:47.we have grown up a little bit, I think. That is what power has done.
:48:47. > :48:51.I think it probably has. Are you growing up? We certainly have to
:48:51. > :48:55.leave quite a lot of old habits behind. We need to roll our sleeves
:48:55. > :49:00.and concentrate on making a difference, rather than talking
:49:00. > :49:04.about a vision for what might be, instead making sure that it happens.
:49:04. > :49:09.Do you want to change the rules of conference? Does it need to be
:49:09. > :49:13.modernised? Does it needs to be more dynamic, interesting? No.
:49:13. > :49:17.think it was pretty interesting when the issue that was of great
:49:17. > :49:22.concern to the whole country was being discussed at our last Lib Dem
:49:22. > :49:26.Conference... You are back in March again! This is now set them up.
:49:26. > :49:30.This was an experience we never had in opposition, and I'm sure we'll
:49:30. > :49:33.have other debates like that again. I think that has reinvigorated Lib
:49:33. > :49:36.Dem Conference, to know that the debates here can make a difference
:49:36. > :49:43.in government Airway that they never could before. Is it true that
:49:43. > :49:50.he will miss the speech are your great leader? I am all start house
:49:50. > :49:55.that you do such a thing? It is just a one-off. Is it true that you
:49:55. > :49:59.are going on your honeymoon? That is right, yes. Isn't Birmingham
:49:59. > :50:03.enough of a honeymoon for any Lib Dem? An old liberal city, a fine
:50:03. > :50:07.tradition. Where could you go that could better Birmingham? It is
:50:07. > :50:12.certainly a great prelude to my honeymoon to have spent his time at
:50:12. > :50:15.conference. Where are you going? That's is a state secret, Andrew.
:50:15. > :50:22.thought you believed in transparency! A bit of privacy as
:50:22. > :50:32.well. You're also marrying a Theroux -- fellow anti-. I have
:50:32. > :50:33.
:50:33. > :50:38.already married there. I did not get an invite! So you donate the
:50:38. > :50:41.honeymoon did go on to Birmingham, is that what happened? -- delayed.
:50:41. > :50:44.We manage to come to conference, but I figured that while the other
:50:44. > :50:50.parties are having their conferences, that is when we will
:50:50. > :51:00.be leased list. We be taking the lead Dem manifesto or the Orange
:51:00. > :51:00.
:51:00. > :51:03.Book on honeymoon? I think we might Stop you might think the Liberal
:51:03. > :51:07.Democrats are a soft and cuddly party, but we know differently.
:51:07. > :51:11.They are turning nasty. The knives are out, and not just towards
:51:11. > :51:21.Labour, they barely mention in these days. They are having a go at
:51:21. > :51:24.The our coalition partners are sometimes helpful. I thought of
:51:24. > :51:33.asking George Osborne for some jokes for his speech, as he knows a
:51:33. > :51:39.lot about gags. They get worse! But I did not want to get up his nose
:51:39. > :51:44.about it. I thought I went to queue for too long tonight, because I
:51:44. > :51:48.want to get back to my hotel room to watch Strictly. Do you watch it?
:51:48. > :51:55.Coming back to George Osborne, I heard that he is keen to get on a
:51:55. > :51:58.show as well. He wants to do a line dance. It probably damages my
:51:58. > :52:05.efforts as getting anything through the court ever again. But never
:52:05. > :52:09.mind. I'm afraid divorce is inevitable, so has your President I
:52:09. > :52:12.took the liberty of seeking legal advice about how we stand any event
:52:12. > :52:17.of a World Cup, and there is good news and bad news. Good news, we
:52:17. > :52:25.might get half of Ashcroft's money. Bad news, we have to have Eric
:52:25. > :52:29.Pickles at the weekends. With me now, the Foreign Office
:52:29. > :52:34.minister Jeremy Browne. Welcome to the Daily Politics. That afternoon.
:52:34. > :52:39.Does all this Tory bashing get your pulse racing? I think he expected
:52:39. > :52:43.at the party conference, no doubt there will be some Lib Dem bashing
:52:43. > :52:48.at the Labour and Conservative conferences as of. I let it wash
:52:48. > :52:54.over me. You are not going to be embarrassed when you next bargain
:52:54. > :52:58.to thought Tory boss at the Foreign Office. No, I don't think I will. I
:52:58. > :53:03.have missed what you call Tory machine. Really? It has been hard
:53:04. > :53:08.to avoid. I think all party conferences, as long as I have been
:53:08. > :53:13.going to them, have had people taking a knock at the other two
:53:13. > :53:16.parties, and all three parties did, and probably the public do not
:53:16. > :53:20.respond well, but sometimes the party faithful quite enjoy it and
:53:20. > :53:25.it raises their spirits. But why are you bashing the Tories more
:53:25. > :53:28.than Labour? I do not know if we are. Oh, yes, you are! I suppose
:53:28. > :53:32.there might be concern in some quarters that we do not appear to
:53:32. > :53:35.have lost our distinctiveness, and maybe people feel there is an
:53:35. > :53:38.audience for showing that we are different in spirit from the
:53:38. > :53:43.Conservatives, but I think is pretty peripheral to what is
:53:43. > :53:48.happening at a conference as a whole. The Secretary of the 1922
:53:48. > :53:53.Committee of backbenchers, Mark Pritchard, once a vote on Britain's
:53:53. > :53:56.membership of the European Union. - - once. That was in your Lib Dem
:53:56. > :54:02.manifesto last year, so presumably you are in favour of that. I do not
:54:02. > :54:05.think it end -- it is anything that is likely to happen soon, and the
:54:05. > :54:09.Prime Minister has said that, at Mark Pritchard, a perfectly
:54:09. > :54:13.reasonable MP, the needs to raise that with the leader of his own
:54:13. > :54:16.party, I think. But it was in your manifesto, I will read out the
:54:16. > :54:22.words. The European Union has evolved significantly since the
:54:22. > :54:26.last public vote on membership over 30 years ago, 1975, when we voted
:54:26. > :54:31.to stay in. The Liberal Democrats remain committed therefore to a
:54:31. > :54:34.referendum. We had the coalition agreement that was forged in the
:54:34. > :54:38.days after the general election, and there was no commitment to a
:54:38. > :54:42.referendum on Britain's membership of the European Union. So it is not
:54:42. > :54:46.party policy any more. When the Prime Minister and the Deputy Prime
:54:46. > :54:49.Minister feel that is a necessary measure to take, then no doubt it
:54:49. > :54:53.will be taken, but it isn't anything that is being contemplated
:54:53. > :54:55.at this stage. To be honest, if you look at what is happening in Greece
:54:55. > :54:59.and other countries in the eurozone, a referendum on Britain's
:54:59. > :55:02.membership is not the number one issue with regard to Europe at the
:55:02. > :55:06.moment. What actually matters most in Europe is whether the currency
:55:06. > :55:11.which many countries in the European Union belong to is going
:55:12. > :55:17.to go even further into crisis, and that is what is preoccupying people.
:55:17. > :55:21.So should we filed his promise in your manifesto alongside tuition
:55:21. > :55:28.fees as not worth the paper it was written on? -- should we file this
:55:28. > :55:35.promise. Let me put it this way. I was born in May 1970, and we abide
:55:35. > :55:41.many general elections since then. -- we have had. No Lib Dem
:55:41. > :55:43.manifesto commitments implemented that any of those general elections.
:55:43. > :55:48.2010, three quarters of our manifesto commitments implemented
:55:48. > :55:52.in government. It is an amazing achievement for a party that only
:55:52. > :55:55.as 8% of the seats in the House of Commons, we are in coalition with
:55:55. > :55:59.the Conservatives in the national interest because no party won the
:55:59. > :56:03.general election. No party has a mandate to implement this party
:56:03. > :56:06.manifesto in full, but for the first time in my grandparents
:56:06. > :56:10.lifetime we are implementing large parts of our manifesto. People who
:56:10. > :56:17.have voted Lib Dem for decades in the Wilders years have reasons to
:56:17. > :56:21.be ecstatic that their vote now cancels and they -- that their vote
:56:21. > :56:25.now counts for something. Would it make sense that Britain would
:56:25. > :56:29.prosper if it loosened its ties with the EU? Our relationship with
:56:29. > :56:32.the EU is in the agreement that the parties arrived at after the last
:56:32. > :56:36.general election, and we are working very constructively, the
:56:36. > :56:39.government as a whole, within the European Union, and I can give you
:56:39. > :56:43.a couple of examples. We have just signed a free-trade agreement with
:56:43. > :56:46.South Korea, a country I have responsibility for within the
:56:46. > :56:51.Foreign Office. That is a great success. We are co-ordinating
:56:51. > :56:57.policy across the European Union with regards to Syria. I think that
:56:57. > :57:02.is an important shed bit of policy. Two good examples, but what is the
:57:02. > :57:05.answer to my question? Would we prosper if we loosened our ties
:57:06. > :57:10.with the EU, as William Hague has claimed? The point and making is
:57:10. > :57:13.that the government has a settled position on the EU, and in practice
:57:13. > :57:16.on a day-to-day basis we are working very constructively with
:57:16. > :57:20.the other members of the European Union to deliver British objectives.
:57:20. > :57:24.Tim Farron, the President of your party, says that the government,
:57:24. > :57:29.this current government, would be an absolute nightmare without Lib
:57:29. > :57:33.Dem ministers. Is he right? It is a hypothetical question, because no
:57:33. > :57:36.party won the last general election, so we have a coalition as a result
:57:36. > :57:39.of the British people deciding that no party decided to govern alone.
:57:39. > :57:43.The British people came to the conclusion that they did not want
:57:43. > :57:47.any party to be in government implementing its manifesto in its
:57:47. > :57:51.entirety on their own. So it does not sound like you agree with the
:57:51. > :57:54.phrase absolute nightmare. They, as a result, have given as a situation
:57:54. > :57:59.where we needed to forge a coalition, and that is what we have
:57:59. > :58:02.done. If I wanted to join the Conservative Party, if I wanted to
:58:02. > :58:06.implement Conservative Party policies, I could have done that. I
:58:06. > :58:09.did not do that, I joined the Liberal Democrats, and I'm proud of
:58:09. > :58:12.the contribution they are making to government, but we finished third
:58:13. > :58:16.in the general election. We do not deserve to govern outright or on
:58:17. > :58:19.our own, we did not win a mandate. We are in collision with the
:58:19. > :58:23.Conservatives, and lover of making every effort to put the country
:58:23. > :58:30.back on a street. Would you like a badger that says don't panic Quetta
:58:30. > :58:35.mark what are the other options? I love tax cuts, I love the euro.
:58:35. > :58:42.Would you like that? No. I love nuclear power. Love is a bit strong.
:58:42. > :58:46.How about I love the coalition? think that reflects the mood are
:58:46. > :58:49.all hard-headed people. That is it for today. We are back tomorrow at