02/12/2011 Daily Politics


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02/12/2011

Andrew Neil has the top political stories of the day.


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

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

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

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

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

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

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

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

:00:54.:00:57.

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

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

:01:07.:01:09.

the next election promising to deliver George Osborne's austerity

:01:09.:01:12.

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

:01:12.:01:16.

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

:01:16.:01:26.
:01:26.:01:27.

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

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

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

:01:35.:01:45.
:01:45.:01:47.

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

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

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

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

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

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

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

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

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

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

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

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

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The difficulty is things are getting worse behind the scenes,

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

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

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

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difficult in ways people immediately feel but there was a

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

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

:03:13.:03:19.

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

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

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

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

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

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

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

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

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

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European Council meeting a week today. Speaking yesterday,

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President Sarkozy warned that the euro could not survive without more

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

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

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

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with the French President. The Prime Minister backs further

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

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

:04:28.:04:38.
:04:38.:04:38.

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

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

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Chancellor Angela Merkel and President Sarkozy will meet to try

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

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

:04:55.:05:05.
:05:05.:05:07.

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

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Richard Corbett is the spokesman of the President of the European

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

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

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

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require all 27 countries to agree because it would require changing

:05:35.:05:40.

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

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among the 17 eurozone countries because they would not concern the

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

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

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challenge next week will be to get agreement among the different

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

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:06:12.:06:15.

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

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

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

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

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

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:06:46.:06:48.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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having difficulty going to the markets, what has happened within

:08:47.:08:57.
:08:57.:08:58.

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

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

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

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

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

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

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

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

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

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would be immediate problem which concerned Greece. Things have now

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

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

:09:54.:10:00.

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

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

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

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

:10:14.:10:20.

procedures involving 27 different countries. So it takes time.

:10:21.:10:24.

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

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

:10:31.:10:35.

governments through their own democratic procedures. I am sure,

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

:10:41.:10:47.

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

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the eurozone to Rooney convincing fiscal Union integration, that he

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

:10:58.:11:03.

buy the Italian government bonds or even think of issuing eurozone

:11:03.:11:13.
:11:13.:11:18.

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

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

:11:22.:11:26.

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

:11:26.:11:29.

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

:11:29.:11:35.

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

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

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:11:49.:11:53.

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

:11:53.:12:03.
:12:03.:12:03.

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

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

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

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

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

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

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

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

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the deficit by 2015 before the partners went their separate ways

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

:12:42.:12:52.
:12:52.:12:55.

This week the Chancellor admitted that cuts would continue all the

:12:55.:12:58.

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

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

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

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

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

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

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find more than 28 billion? conducted a spending review

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detailing the cuts for this Parliament, we have just decided

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

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

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election promising further billions of pounds in cuts in public

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

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

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

:13:56.:14:06.

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

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

:14:09.:14:13.

state of the economy it requires addressing the structural deficit

:14:13.:14:20.

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

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

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

:14:34.:14:40.

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

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

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

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

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

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

:15:08.:15:12.

our manifesto I imagine we will have different priorities to the

:15:12.:15:15.

Conservatives, different areas where we want to invest and

:15:15.:15:25.
:15:25.:15:27.

potentially different areas where Danny Alexander said that the cuts

:15:27.:15:32.

imprisoned in the Autumn Statement for two years beyond would be

:15:33.:15:39.

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

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

:15:43.:15:46.

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

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different. It is perfectly possible for the Liberal Democrats in

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

:15:57.:16:03.

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

:16:03.:16:07.

independent party, to devise a manifesto which sets out our

:16:07.:16:12.

priorities, identified areas where they need to be reductions in

:16:12.:16:16.

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

:16:16.:16:21.

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

:16:21.:16:26.

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

:16:26.:16:36.

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

:16:36.:16:40.

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

:16:40.:16:46.

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

:16:46.:16:50.

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

:16:50.:16:56.

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

:16:56.:17:02.

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

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

:17:06.:17:13.

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

:17:13.:17:17.

fiscal framework which the Chief Secretary to the Treasury has laid

:17:17.:17:24.

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

:17:24.:17:30.

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

:17:30.:17:34.

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

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

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

:17:43.:17:49.

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

:17:49.:17:54.

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

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

:18:00.:18:04.

within the Danny Alexander framework. That is the sort of

:18:04.:18:08.

discussion going on within the coalition where we have argued for

:18:08.:18:13.

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

:18:13.:18:20.

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

:18:20.:18:30.
:18:30.:18:34.

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

:18:34.:18:41.

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

:18:41.:18:45.

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

:18:45.:18:50.

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

:18:50.:18:58.

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

:18:58.:19:02.

authority to commit the party to that because the number one

:19:02.:19:06.

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

:19:06.:19:11.

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

:19:11.:19:17.

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

:19:17.:19:25.

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

:19:25.:19:30.

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

:19:30.:19:34.

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

:19:34.:19:42.

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

:19:42.:19:48.

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

:19:48.:19:54.

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

:19:54.:19:59.

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

:19:59.:20:03.

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

:20:03.:20:08.

authority to dictate the Liberal Democrat manifesto. Those comments

:20:08.:20:12.

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

:20:12.:20:17.

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

:20:17.:20:21.

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

:20:21.:20:27.

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

:20:27.:20:31.

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

:20:31.:20:36.

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

:20:36.:20:44.

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

:20:44.:20:46.

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

:20:47.:20:50.

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

:20:50.:20:54.

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

:20:54.:20:57.

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

:20:57.:21:00.

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

:21:00.:21:07.

Fleming. With the country's busiest airport

:21:07.:21:16.

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

:21:16.:21:20.

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

:21:20.:21:24.

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

:21:24.:21:34.
:21:34.:21:34.

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

:21:34.:21:42.

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

:21:42.:21:46.

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

:21:46.:21:53.

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

:21:53.:21:59.

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

:21:59.:22:04.

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

:22:04.:22:09.

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

:22:09.:22:14.

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

:22:14.:22:20.

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

:22:20.:22:24.

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

:22:24.:22:28.

local residents will see we are taking difficult decisions but

:22:28.:22:32.

looking after the vulnerable. Hoping to capitalise on the

:22:32.:22:37.

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

:22:37.:22:42.

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

:22:42.:22:47.

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

:22:47.:22:52.

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

:22:53.:22:57.

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

:22:57.:23:04.

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

:23:04.:23:07.

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

:23:07.:23:13.

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

:23:13.:23:17.

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

:23:17.:23:23.

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

:23:23.:23:27.

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

:23:27.:23:34.

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

:23:34.:23:37.

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

:23:37.:23:41.

which you can also see on the BBC politics website.

:23:41.:23:44.

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

:23:44.:23:50.

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

:23:50.:23:56.

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

:23:56.:24:00.

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

:24:00.:24:06.

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

:24:06.:24:11.

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

:24:11.:24:17.

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

:24:17.:24:23.

as an important issue after relatively low levels of concern.

:24:23.:24:30.

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

:24:30.:24:35.

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

:24:35.:24:39.

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

:24:39.:24:44.

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

:24:44.:24:48.

eurozone crisis, the current government are also getting some of

:24:48.:24:54.

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

:24:54.:24:58.

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

:24:58.:25:02.

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

:25:02.:25:07.

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

:25:07.:25:14.

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

:25:14.:25:18.

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

:25:18.:25:28.
:25:28.:25:32.

unprecedented, living standards will be squeezed more than ever.

:25:32.:25:38.

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

:25:38.:25:42.

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

:25:42.:25:46.

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

:25:46.:25:50.

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

:25:50.:25:54.

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

:25:54.:26:01.

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

:26:01.:26:04.

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

:26:04.:26:09.

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

:26:09.:26:12.

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

:26:12.:26:17.

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

:26:17.:26:22.

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

:26:22.:26:25.

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

:26:25.:26:31.

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

:26:31.:26:35.

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

:26:35.:26:41.

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

:26:41.:26:51.

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

:26:51.:26:56.

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

:26:56.:27:01.

Liberal Democrats. Polling at a time of austerity is

:27:01.:27:07.

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

:27:07.:27:11.

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

:27:11.:27:17.

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

:27:17.:27:20.

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

:27:21.:27:24.

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

:27:24.:27:26.

much slower growth, and announced a range of new infrastructure

:27:26.:27:29.

projects. Protesters stormed the British

:27:29.:27:32.

Embassy in Tehran, leading to the Foreign Secretary expelling Iranian

:27:32.:27:35.

diplomats from the UK, and more sanctions from EU countries

:27:35.:27:40.

concerned with their nuclear programme.

:27:40.:27:44.

Complete appalling and disgraceful behaviour by the Iranians.

:27:45.:27:47.

Over one million public sector workers took part in nationwide

:27:47.:27:50.

strikes on Wednesday, angry at proposals to change their pension

:27:50.:27:55.

packages. Solidarity forever.

:27:55.:27:59.

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

:27:59.:28:03.

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

:28:03.:28:07.

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

:28:07.:28:11.

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

:28:11.:28:21.
:28:21.:28:24.

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

:28:24.:28:32.

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

:28:32.:28:35.