02/12/2011 Daily Politics


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Afternoon folks, welcome to the Daily Politics on Friday. Stop me


if you've heard this one before, but there's talk of a grand plan


emerging from Europe finally, really, honestly to solve the euro


crisis. Sceptical? You old cynic. Well, David Cameron's up for it and


he's meeting the French President this afternoon, promising to lend


his support to plans for deeper fiscal union. But what would that


really mean and would it be good for Britain? We'll get the view


from Brussels. And what will this week's grim Autumn Statement mean


for politics in the UK in general and the Liberal Democrats in


particular? After Danny Alexander pledged that his party will go into


the next election promising to deliver George Osborne's austerity


measures, we ask one senior MP where that leaves the Lib Dems as


an independent political party. And as the depth of the crisis sinks in,


could voters reject the established parties and turn to UKIP? With a


by-election in Feltham and Heston less than two weeks away, this


candidate thinks their moment has come. Many people like me will join


because we are fed up of the broken promises. And who better to guide


us through these stormy times than two of the finest Political Editors


on the Sunday beat, Isabel Oakeshott of the Sunday Times and


Vincent Moss of the Sunday Mirror? Welcome back. Yet another summit


next week. We are told we have 10 days to save the Europe, now we are


down to eight, do we really take this seriously? -- the euro.


think people are baffled, not a week goes by where we are not told


we are staring into the abyss, yet the world never does quite seem to


end. But Mervyn King is obviously taking it very seriously. He was


very gloomy yesterday. I gather he is even more gloomy in private. I


am not sure whether the Treasury is best pleased to hear Mervyn King


being quite so negative about it so I guess we must take it seriously.


The difficulty is things are getting worse behind the scenes,


the Italians are paying an arm and a leg for their debt, the US


Federal Reserve had to step in and provide liquidity in the shape of


dollars into the European banking system, it may not be getting more


difficult in ways people immediately feel but there was a


gathering storm but is really brewing. Very much so and there is


a gathering sense politicians feel they should shrug and say they have


no idea how to save this. They clearly have not. We'll just bit


players in this, like the unpopular guest at a wedding, nobody wants to


hear our stories, we are not part of the club. He is convincing his


backbenchers we are not about to give more powers to Europe, perhaps


give up our veto, which we might end up doing. So let's take a look


at the latest, and who knows maybe greatest, plan to save the euro.


I'm sure you're all already keenly opening your Advent calendars


leading up to the big day. Well for the EU, that day is just around the


corner. Yes, it's another make or break summit and this time it's the


European Council meeting a week today. Speaking yesterday,


President Sarkozy warned that the euro could not survive without more


convergence and argued Europe had to be "refounded" with a new treaty.


Mr Sarkozy also indicated a two- speed Europe was inevitable,


something David Cameron will want assurances about in today's talks


with the French President. The Prime Minister backs further


integration but wants to ensure that Britain won't lose out. The


ECB President, Mario Draghi, has said the bank is ready to act more


aggressively. But he urged leaders to agree stronger deficit and debt


rules leading to a new "fiscal compact". Next Monday the German


Chancellor Angela Merkel and President Sarkozy will meet to try


to thrash out a plan. This morning Mrs Merkel spoke to the German


Parliament and promised concrete steps towards a "fiscal union" and


declared the start of a new phase of European integration. Well,


Richard Corbett is the spokesman of the President of the European


Council and he's in Brussels. When the French President talks about a


new treaty, is it a new treaty for the European Union, or eurozone?


depends on what the content of the treaty is. Their ideas that would


require all 27 countries to agree because it would require changing


the European Union treaties. There are some ideas that could be done


among the 17 eurozone countries because they would not concern the


non- members. What is Mr Sarkosi talking about? We will see. He has


not yet tabled proposals. There are many ideas coming in and the


challenge next week will be to get agreement among the different


member states of the European Union presented by the heads of state and


The markets move at the click of a mouse but political processes take


longer. Are you saying Nicolas Sarkozy, in this keynote speech


last night, which we were all briefed about, he has called for a


resounding of Europe and a new treaty for this resounding, but we


do not know if he is talking about the eurozone, or the whole of the


European Union. -- re-founding. Every country has the right to come


up with ideas but you have to have a solution acceptable to all member


states, which is what the meeting will be about. With respect, you're


not telling us anything we do not know. That is the point of a summit,


for everybody to get together and agree. Calling for a new treaty and


a re founding of the eurozone, isn't that like saying let's build


a new house while your own house is still on fire? No, it is saying we


have gone a long way in addressing these problems but what has been


done so far is insufficient, let's look at what else we need to do. We


know some decisions need to be taken next week that affect the


short run, they are crucial for now, but you also need a longer term


perspective. You need to address both the legacy of past mistakes


and the procedures to make sure you do not repeat those mistakes again


in the future. They are two sides of the same coin. So what is the


minimum this summit has to achieve next week? On the one hand it has


to deal with the immediate crisis, the legacy of accumulated debts,


and set down procedures to avoid -- which might involve changes to the


treaty and to make sure we do not end up in this situation again.


What I am asking is in the short run, you said there were certain


things this summit must do, I understand that, so I am asking you


what are these things the summit must do to deal with the here and


now, rather than the tomorrow? biggest problem in the here and now


is those countries whose debt levels are so high that we are


having difficulty going to the markets, what has happened within


the eurozone is we at least have in place mechanisms to make loans to


those countries to give them time to turn a corner. But the funds we


have available to that have reached their limits, so in the short run


we need to find ways to increase the firepower so that extra loans,


if needed, can be given to those countries that need time to turn


the corner. You were supposed to do that on 27th October when you


announced the supposed... That has not happened, they have announced


they are now unlikely to get that money. So where will this firepower


come from? The package agreed in October was sufficient to deal


would be immediate problem which concerned Greece. Things have now


moved on. Markets move faster than political processes. You promised


to get a fund of a trillion Euros, and you did not, so where do you go


now? We have approached a trillion, we are not there yet but there are


other ways in which we need to approach that and to say we are


moving more slowly, democracy has moved more slowly, it is not a


reason to abandon democracy, you still have to go through democratic


procedures involving 27 different countries. So it takes time.


should tell that to the Greeks and the Italians, they are unsure about


the democracy at the moment. Having... There a change their


governments through their own democratic procedures. I am sure,


with a gun at their head. The new head of BCB, did you read into what


he was saying yesterday which was if the French and Germans commit


the eurozone to Rooney convincing fiscal Union integration, that he


would be prepared for the ECB to act as lender of last resort, to


buy the Italian government bonds or even think of issuing eurozone


bombs, is that what he was telling us? -- bonds. The ECB acts as a


last-resort lender to banks, the question is whether it should to


the government. I think there is a widespread expectation that the


bank is willing to do that, providing it has guarantees that


this will not be an open-ended process going on forever. It wants


to see reforms on the political side as well. Has he convinced Mrs


Muggle of that? -- Merkel. It is an independent Bank and takes its own


decisions by majority and will continue to do so. -- majority vote.


The bad give you confidence? To me it sounds like more meetings about


meetings about meetings, and in a month or so we will see more about


staring into the abyss. From David Cameron's point of view, his blood


must be running cold at all this talk of a treaty change. What he


has to avoid at all cost us anything that could give rise to a


case for a referendum. Now, the Coalition Government was supposed


to be a project for just this parliament. The plan was to tackle


the deficit by 2015 before the partners went their separate ways


at the next General Election. Well, like so much else, it hasn't worked


This week the Chancellor admitted that cuts would continue all the


way to 2017 and the Chief Secretary Danny Alexander agreed. But what


would that mean for the Liberal Democrats in 2015? Here's Mr


Alexander on Tuesday's Newsnight where he was asked where the extra


cuts required after 2015 would be found. In good time, before the


next election, we will set out what the measures are to deliver the


initial -- the additional savings. But you do not know where you will


find more than 28 billion? conducted a spending review


detailing the cuts for this Parliament, we have just decided


what the path of spending is in the next three years and in due course


will set that out in detail. A so you are going into the next


election promising further billions of pounds in cuts in public


spending? That is what you're saying your manifesto? I am afraid


so. And Tom Brake, Liberal Democrat Home Affairs spokesman joins me.


Welcome back. Are we clear, the Liberal Democrats are signed up to


the longer term austerity measures, taking us now through to 2017?


Clearly we are signed up to the Autumn Statement and because of the


state of the economy it requires addressing the structural deficit


to go beyond 2015, but at the same time we will stand in the elections


in 2015 as an independent party without any pacts, we will draw up


a man of destiny. -- our manifesto. It would be strange if we


maintained the strain - Mike same approach as was -- same approach as


was agreed. By at implicit in that manifesto will be two for the years


of cuts take nasty 2017 which will be the same as the two years of


cuts that will be in the Tory manifesto? I think what will be


implicit in that is that there will be both cuts in the manifesto, but


also in areas where we might want to increase spending. As we devise


our manifesto I imagine we will have different priorities to the


Conservatives, different areas where we want to invest and


potentially different areas where Danny Alexander said that the cuts


imprisoned in the Autumn Statement for two years beyond would be


unveiled before the next election, in good time, he said. So, surely


you can't govern together saying these are the cuts we're going to


make after the election, and in your manifesto put in something


different. It is perfectly possible for the Liberal Democrats in


coalition to devise a programme which will run until 2015, set out


beyond then what our intentions are, and at the same time, as an


independent party, to devise a manifesto which sets out our


priorities, identified areas where they need to be reductions in


spending and areas where there can be increases. But overall you need


to have cuts. If you're going to increase spending, you will need


even more cuts in other areas, otherwise Danny Alexander has said


something which is not true. If you're going to increase spending,


in this climate, you will have to cut even more elsewhere, otherwise


the envelope does not stick. A at the moment we are doing the right


thing in terms of the economy. We will see what impact that has by


2015. It is difficult to predict now what will be required in 2015.


But it is perfectly achievable in government, when the government is


spending �600 billion a year, four are still have different priorities


where we can increase in some areas. My point is, there is an overall


fiscal framework which the Chief Secretary to the Treasury has laid


down. We used it to that overall framework of public spending?


principle of reducing spending, and the broad brush of how much will be


required to address the structural deficit by 2017 is something I will


be very surprised if we do not incorporate in our manifesto. We


want to demonstrate we have been credible in terms of our policies


towards the economy, and that will need to continue in our manifesto.


The fine detail can be different. If you want to increase spending in


other areas, that follows you have to cut more elsewhere to stay


within the Danny Alexander framework. That is the sort of


discussion going on within the coalition where we have argued for


instance for a reduction in tax for people on low and middle incomes,


which we have achieved. That has meant achieving savings elsewhere.


What was his authority for committing you to two years of tax


cuts? We have, as a party, when we went into coalition, the Liberal


Democrats set out the fact we would address the structural deficit, the


economy, as our priority. Because of the economic circumstances,


particularly in Europe, it is more difficult to achieve that. He had


authority to commit the party to that because the number one


priority for the party is to sort out the economic mess we were left,


and make sure we deliver. When you hear politicians talking about


increasing spending in 2017, do you wonder if they have read the Autumn


Statement? Many of them cannot have done, there is no authority from


Liberal Democrats I have spoken to commit the party to be ONS the


general election. The Lib Dems can define themselves as different in


their manifesto, some things will go by the board because you are in


coalition. You can map out your own agenda. If you are in coalition


again, conveniently dump them. I certainly do not think many of the


Liberal Democrats I have spoken to think Danny Alexander has authority.


He may be Chief Secretary to the Treasury but he does not have


authority to dictate the Liberal Democrat manifesto. Those comments


caused a hell of a row behind the scenes. You have spoken to them?


They are not happy at all, he is in no position to set out their


manifesto at this stage. I get the impression you are less happy in


private and public. I am very open about this. As a party, the


credibility rests on the fact we deliver it in relation to the


economy. Something we have pinned our flag to the mast, if we do not


deliver, our credibility is damaged. The first test of the political


impact of the Chancellor's sobering statement this week comes in


Feltham and Heston, where a by- election caused by the death of


Labour MP Alan Keen is less than two weeks away. It's a safe Labour


seat but, in an environment where faith in the traditional parties


has taken a pretty big hit, UKIP have high hopes. Here's Adam


Fleming. With the country's busiest airport


on its doorstep, some have called this a Heathrow a by-election.


Labour touch down in this seat in 1992, and the late Alan Keen held


on to it at the last general election or the with a reduced


majority which some put down to the scandal of MPs expenses. Labour


campaigning lasted for just 15 days, the bare minimum allowed in law.


The airport is nearby, it is important to make sure there isn't


a gap in representation with all these issues. Hello, I M Roger


Crouch. The two coalition partners are campaigning in the wake of the


Autumn Statement, which promised an extended period of spending cuts.


It is bad, the economic picture is very tough for ordinary families


here but when I talk to them, they very much understand why the


difficult decisions are taken. Lib Dems are acting in the national


interest and we are put in that before party interest. Hopefully


local residents will see we are taking difficult decisions but


looking after the vulnerable. Hoping to capitalise on the


vulnerability of the main party, UKIP, who came second in another


by-election this year. A recent poll put them one point behind the


Liberal Democrats nationally. Hang on, their candidate looks familiar.


Didn't used to be a Tory? A Tory candidate? I was and many others


were as well. The pattern of the previous months and years to come


will be that many like me will join UKIP. Because we are fed up with


the broken promises. Fed up of a party which tells us they will take


a tough line on immigration and yet we find it back at record levels.


Their battle plan is complicated by the BNP had actually beat them in


the last election and a standing again. All this feels a tiny bit


pointless, because this seed is heading for the departure lounge in


2015, it will be carved up in the review of constituency boundaries.


Here is a full list of candidates standing in Feltham and Heston,


which you can also see on the BBC politics website.


To discuss how the week's economic gloom might affect the parties'


fortunes, we're joined by Tomas Mludzinski from Ipsos Mori.


It is a new politics in a way. In theory, the government should now


do badly because the economy is miserable, but it may not work out


that bad? We have definitely seen record numbers of people saying the


economy is the most important issue, 62% trapped month from month, the


number one issue by far since 2000 and it. Unemployment is now rising


as an important issue after relatively low levels of concern.


It is now about 32%, much higher than we have seen since 1998.


is Labour not much further ahead than you would think at this stage?


There is clearly a problem for Labour in terms that they still


have some of the blame for the economic mess. The banks, the


eurozone crisis, the current government are also getting some of


that plane. We see quite recently in our poll's in September the


Conservatives opened up a ten-point lead as being seen as the best


party to manage the economy. Only one in five people now think,


despite the government, most people think the government is doing a bad


job managing the economy, keeping unemployment down, just one in five


thinks it could be better under Labour. The economic backdrop is


unprecedented, living standards will be squeezed more than ever.


Per capita income has are likely to be 5% down compared with 2008. I am


not sure the political discourse has yet risen to confront all of


that. I do not think it has really. Speaking to Labour people this


morning, they are confident about this by-election, they think they


will hold their position. But, really, they should be doing an


awful lot better and privately many acknowledge that. There are ongoing


issues with Ed Miliband and his popularity. That will be a


continuing theme for the next few years. The question is, is it a


Gordon Brown situation where they all say privately we know we can't


win with the sky, and don't do anything. Or would it come to a


head? If this is politics now, with no money. One of the reasons the


by-election is such a short campaign, Labour doesn't have


enough money. It expects to win it. The real story will be an implosion


in the Liberal Democrat vote, they came third last time, we will see


UKIP beat them. Nigel Farage saying they are too minus one for the Lib


Dems. Bad news for the Lib Dems. UKIP result would be to beat the


Liberal Democrats, not to win it. suspect they can certainly beat the


Liberal Democrats. Polling at a time of austerity is


always interesting. It's been quite a week, and the news has been so


bad you might not want to relive it. Well, bad luck. Here's Giles with


the week in 60 seconds. A packed week in politics kicked


off with the Chancellor's Autumn Statement. It turned out to be more


like a full blown Budget from George Osborne, as he predicted


much slower growth, and announced a range of new infrastructure


projects. Protesters stormed the British


Embassy in Tehran, leading to the Foreign Secretary expelling Iranian


diplomats from the UK, and more sanctions from EU countries


concerned with their nuclear programme.


Complete appalling and disgraceful behaviour by the Iranians.


Over one million public sector workers took part in nationwide


strikes on Wednesday, angry at proposals to change their pension


packages. Solidarity forever.


On the subject of strikes: Jeremy Clarkson got himself in trouble,


again, by saying on The One Show that he thought strikers should be


shot. Both Clarkson and the BBC later apologised for what was


described as a joke that went too far and was taken out of context.


The unions were less amused. That's all for this week. The end


to our guests. -- Thanks. Jo will be back on Monday. Don't forget The


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