:00:40. > :00:48.Afternoon folks, and welcome to the Daily Politics. There's more
:00:48. > :00:51.fevered speculation over the contents of George Osborne's budget.
:00:51. > :00:54.The Daily Politics understands we can expect a change in the 50p rate
:00:54. > :01:01.of tax and plans to raise the tax free allowance to �10,000 earlier
:01:01. > :01:04.than first promised. We'll bring you all the details.
:01:04. > :01:07.The top team in both the Liberal Democrats and the Conservatives all
:01:07. > :01:15.seem happy with the Budget, but what do their MPs think? We'll get
:01:15. > :01:18.the thoughts of two backbenchers. Both the Chancellor and Shadow
:01:18. > :01:20.Chancellor had lots to talk about this morning as they waited for the
:01:20. > :01:23.Queen's Address to Parliament. We'll bring you highlights of the
:01:23. > :01:25.speech. And the NHS bill could finally clear all it's
:01:25. > :01:34.parliamentary stages this evening, but what actual difference will the
:01:34. > :01:38.bill make to patients? We'll speak to a health minister. All that in
:01:38. > :01:41.the next hour, and joining us for the first part of the programme, we
:01:41. > :01:46.have two wise men. I'm afraid BBC cutbacks meant we couldn't afford
:01:46. > :01:48.three. The former Scottish Secretary Michel Forsyth and former
:01:48. > :01:51.employment minister Jim Knight, welcome to the show. Earlier today,
:01:51. > :01:58.as part of her Diamond Jubilee celebrations, the Queen addressed
:01:58. > :02:00.both Houses of Parliament. To mark the occasion, the Queen was
:02:00. > :02:03.presented with a specially- commissioned stained glass window,
:02:03. > :02:13.donated by members of both Houses. Here are some highlights of the
:02:13. > :02:13.
:02:13. > :02:57.Apology for the loss of subtitles for 44 seconds
:02:57. > :03:07.You have become too many of us a kaleidoscope Queen of a
:03:07. > :03:08.
:03:08. > :03:12.kaleidoscope country in a Since my accession I have been a
:03:13. > :03:22.regular visitor to the Palace of Westminster, and that the last
:03:22. > :03:28.count have had the pleasurable duty of treating with 12 prime ministers.
:03:28. > :03:34.During these years as your Queen, the support of my family has,
:03:34. > :03:41.across the generations, been at beyond measure. Prince Philip is, I
:03:41. > :03:51.believe, well known for declining Compliments of any kind. But
:03:51. > :03:57.
:03:57. > :04:01.throughout he has been a constant And the highlights from this
:04:01. > :04:06.morning, a very grand occasion. Michael Forsyth, they understand
:04:06. > :04:09.you were there. Describe the atmosphere. We have seen the
:04:09. > :04:14.pictures of Westminster Hall, the oldest part of the Palace of
:04:14. > :04:22.Westminster and it did look amazing. I sat there thinking this is the
:04:22. > :04:25.same place that Queens were tried, and you have a sense of history,
:04:25. > :04:29.and then the Queen arrives and addresses were given by the Lords
:04:29. > :04:33.and Commons, but in her address she made some very pertinent points in
:04:33. > :04:37.a subtle way about the importance of continuity. It was the best
:04:37. > :04:41.argument I could think of for not having the presidency. It brought
:04:41. > :04:43.everyone together. No one was sure when to end the applause. We wanted
:04:43. > :04:48.to keep applauding but we were interrupted by the Speaker
:04:48. > :04:54.presenting a petition. It was interesting to see all former prime
:04:54. > :05:00.ministers, she mentioned that she has presided over 12, familiar old
:05:00. > :05:04.faces there as well. Nice to see some of the old faces. These are
:05:04. > :05:10.occasions that we do well in this country. The Queen is certainly a
:05:10. > :05:14.class act and has it really well. That sits well with how well we do
:05:14. > :05:19.big state occasions, and the jamboree and pomp and ceremony.
:05:19. > :05:22.sign of her retiring any time soon. She said she would read dedicate
:05:22. > :05:27.herself to the service of the great country and its people and in the
:05:27. > :05:31.years to come, she is 86. That was the best bit of the speech. An
:05:31. > :05:35.affirmation of the importance of monarchy as an institution which
:05:35. > :05:40.continues. There is no question of her abdicating at any stage. I
:05:40. > :05:45.think that is essential to the whole nature of the office. There
:05:45. > :05:49.is a lot to be said for having an apolitical head of state. She does
:05:49. > :05:53.that really well. I think the nation is very happy if she wants
:05:53. > :05:56.to carry on and will be delighted with the message she gave today.
:05:56. > :05:59.And a special tribute to Prince Philip who has not been well over
:05:59. > :06:06.the last few months, but interesting to hear her make
:06:06. > :06:10.special reference to him at a personal level. In some ways we
:06:10. > :06:14.have an affection for Prince Philip, for all of his gaffes for as much
:06:14. > :06:17.as his good behaviour, but she values him as a lifelong partner
:06:17. > :06:23.and pays tribute to the support he gives her, and quite right she
:06:24. > :06:26.should do so. What was he on about, the kaleidoscope Queen and the
:06:26. > :06:32.kaleidoscope country, a kaleidoscope Commonwealth? What was
:06:32. > :06:37.that about? I have no idea. But when the Queen said we have had
:06:37. > :06:42.many changes over the is the one thing has remained the same, the a
:06:42. > :06:48.foul of the arms services, she was underlining the importance of
:06:48. > :06:55.continuity as well as change -- the about service of the armed forces.
:06:55. > :07:05.So what did it actually mean? The Lords and the Commons have no idea
:07:05. > :07:07.
:07:07. > :07:11.Well, in just over 24 hours' time, George Osborne will emerge from
:07:11. > :07:14.Number 11 Downing Street with his red box to deliver his third Budget,
:07:14. > :07:17.although you have to wonder whether he needs to as most of what's going
:07:17. > :07:19.to be in it has already been leaked. One journalist asked the Prime
:07:20. > :07:23.Minister if there was anything but hadn't been leaked in the Budget,
:07:23. > :07:26.and he just smiled. There will be new measures on tax and spending on
:07:26. > :07:30.the margins, but there budget will be fiscally neutral, in other words
:07:30. > :07:39.they will be no overall boost to the economy. But then maybe things
:07:39. > :07:42.are looking up a little bit anyway? Behind the door at Number 11 there
:07:42. > :07:45.have probably been a couple of late nights as the Chancellor and his
:07:45. > :07:48.aides put the final touches to the Budget. But what is the broader
:07:48. > :07:51.economic picture? This morning we've had some good news on
:07:51. > :07:54.inflation, which fell from 3.6% in January to 3.4% in February. There
:07:54. > :07:57.might also be some good news on growth tomorrow. In the autumn
:07:57. > :08:02.statement last November, the OBR forecast that growth this year
:08:02. > :08:06.would be 0.7%. According to the Financial Times that figure will be
:08:06. > :08:09.revised slightly upwards to 0.8%. The slight upturn in growth means
:08:09. > :08:12.there could also be some better news on borrowing. In November,
:08:12. > :08:19.borrowing was expected to be around �127 billion for this financial
:08:19. > :08:21.year. But some reports suggest it could be more like �120 billion.
:08:21. > :08:24.The slight improvement in the economic landscape gives the
:08:24. > :08:26.Chancellor a bit more wriggle room. With that in mind, the Daily
:08:26. > :08:30.Politics understands tomorrow's Budget will be dominated by two
:08:30. > :08:32.major announcements. Firstly, the tax-free allowance before income
:08:32. > :08:35.tax kicks in will be increased more quickly than the Coalition
:08:35. > :08:45.agreement currently envisages, reaching �10,000 in April 2014, a
:08:45. > :08:46.
:08:46. > :08:51.Secondly, the top rate of income tax will be cut from 50p to 45p,
:08:51. > :08:57.but not until April 2013. Joining me now is Simon Hayes, chief UK
:08:58. > :09:03.economist at Barclays Capital. Give us your reaction to the inflation
:09:03. > :09:08.figures first of all. The inflation figures were mildly encouraging but
:09:08. > :09:12.the fact is the fall in inflation was less than we expected to say,
:09:12. > :09:16.and this is a concern that we have for the rest of the year. It is
:09:16. > :09:20.important inflation falls as households were squeezed last year
:09:20. > :09:24.and there was a week pay growth which accounts for the weakness in
:09:24. > :09:27.the economy we saw last year but there are things like higher oil
:09:27. > :09:32.prices and higher commodity prices meaning inflation might not fall as
:09:32. > :09:35.fast and as much as we hoped this year. So you do not think it will
:09:35. > :09:40.reach the target being put forward for the end of the year to, much
:09:40. > :09:44.further down? If the Bank of England expects it to fall below
:09:44. > :09:48.the 2% target by the end of the year and we expect it will fall
:09:48. > :09:52.closer to the target but remain above that level of 2%. That should
:09:52. > :09:57.provide some support for households as there is less of a squeeze but
:09:57. > :10:00.the boost will not be as strong as some forecasters expected. What
:10:00. > :10:04.about borrowing? The indication is that the Chancellor's figures might
:10:04. > :10:08.be slightly better and the mind after borrow quite as much. No one
:10:08. > :10:12.wants to talk about green shoots, but does it indicate a slight
:10:12. > :10:18.upturn? Fighting the way to characterise it is that the
:10:18. > :10:21.situation doesn't look as bad -- I think the way to characterise it.
:10:21. > :10:24.Last November in the last three months of last year the economy
:10:24. > :10:28.actually contracted. The early indications are in the first
:10:28. > :10:34.quarter of the year we will see some return to growth although the
:10:34. > :10:37.euro area is in recession, so there are difficulties ahead. The bad
:10:37. > :10:45.news we were factoring into forecasts at the end of last year
:10:45. > :10:49.maybe isn't quite so bad, as it stands now. Simon Hayes, thank you.
:10:49. > :10:54.Let's see what our guests make of the current economic situation.
:10:54. > :10:59.Whether the OBR thinks growth will be 0.7 or 0.8% is neither here nor
:10:59. > :11:05.there. The Financial Times's splash on that I thought was April Fool's
:11:05. > :11:09.Day. The idea that anybody knows by one percentage point, a 10th of a
:11:09. > :11:15.percentage point is irrelevant. Growth will be in Munich and
:11:15. > :11:20.inflation is still high at 3.5% and unemployment is forecast to stay at
:11:20. > :11:25.2.7 million. It is still grim. agree. The fundamental problem is
:11:25. > :11:28.that the government is spending too much, about half of what the entire
:11:28. > :11:32.Earl of -- country produces. While it continues at that level it is
:11:32. > :11:36.hard to see how good levels of growth can be obtained, because
:11:36. > :11:40.growth is created by small and medium-sized businesses selling
:11:40. > :11:44.goods and services competitively. If there is a huge tax burden upon
:11:44. > :11:50.them and regulation it is hard for them to do so. That there is no
:11:50. > :11:55.great change in the Government's strategy, as it won't cut tax.
:11:55. > :11:59.Every cut will be balanced by a tax increase or a spending cut, so it
:11:59. > :12:02.is fiscally neutral. Even in the tax changes it makes it is not
:12:02. > :12:07.planning any transformational tax changes that would give a new lease
:12:07. > :12:13.of life to the businesses you speak of. I agree with you. When we were
:12:13. > :12:18.in opposition and I did the tax commission for George, his manager
:12:18. > :12:23.was a lower, fairer, flatter taxes and stability. -- is mantra. I do
:12:23. > :12:27.not know if they're going to do anything about pension relief.
:12:27. > :12:30.understanding is not. Well, that is a big step forward, because it is
:12:30. > :12:36.important to have stability in an area like long-term saving and
:12:36. > :12:40.pensions. But is it fair that at a time when we are all in this
:12:40. > :12:45.together that the vast bulk of pension tax relief should go to
:12:45. > :12:52.those on higher incomes? What we want to do is encourage people to
:12:52. > :12:56.save and encourage investment. can still save �50,000 a year.
:12:56. > :13:01.face-saver less there will be less money available for investment and
:13:01. > :13:06.less money all round. That if you can put �50,000 in your pension pot,
:13:06. > :13:12.if you can afford it, but the wealthy can and deducted. You can
:13:12. > :13:15.get tax relief but only at the basic rate. The problem is his if
:13:15. > :13:18.government keep changing the rules. Gordon Brown started it with the
:13:18. > :13:24.tax on dividend income as for pension funds. If they keep
:13:24. > :13:27.changing the rules people will not pass to be -- will not have faith
:13:27. > :13:32.in what has to be a long-term stable environment and they will
:13:32. > :13:36.not put money into pensions which is bad for investment. The Labour
:13:36. > :13:41.critique is obviously different. It is cutting too fast and too deep,
:13:41. > :13:49.we have heard that many times, and on the face of it should be popular
:13:49. > :13:53.because you are trying to spread the pain out over more time, but
:13:53. > :13:57.some Labour columnists say that more than one senior figure is said
:13:57. > :14:02.to have met Ed Miliband privately to air concerns about Labour's
:14:02. > :14:06.dwindling credibility on the economy. Why's that? We have to
:14:07. > :14:12.continue to focus on the problem of jobs and growth. Two years ago when
:14:12. > :14:18.George Osborne went into Number 11 we had growth returning to the
:14:18. > :14:21.economy and unemployment was coming down, and his policy failed. Yes,
:14:21. > :14:26.there are areas where we need to cut spending, but the principal
:14:26. > :14:30.problem is a lack of income coming into the Treasury, Prince of lust
:14:30. > :14:34.and the City and we need to grow that again. -- principally lost
:14:34. > :14:38.from the city. We need to see growth from small and medium-sized
:14:38. > :14:42.businesses but with the Merlin initiative to lend more money to
:14:42. > :14:51.small and medium-size enterprises has not worked. Hold on, it met the
:14:51. > :14:56.targets. It was only 1 billion less for small businesses. He let it hit
:14:56. > :14:59.74 billion rather than 74 billion - - and the 5 billion, and if the
:14:59. > :15:03.government hit those targets, we would be away at the races.
:15:04. > :15:07.would be, but they are failing every step of the way. George's
:15:07. > :15:10.policies are not delivering the growth and the growth he needs in
:15:10. > :15:14.terms of revenue coming into the Exchequer to reduce the deficit.
:15:14. > :15:18.Over the five-year cycle, his borrowing will be about �120
:15:18. > :15:23.billion more than the predicted. For the problem of the critique is
:15:24. > :15:27.that when it comes to spending but -- cuts, the massive cuts made so
:15:27. > :15:32.far are affecting the economy are actually almost no different from
:15:32. > :15:38.the size of the cuts that Alastair Darling proposed. So it could be
:15:38. > :15:46.that the early growth you had was really a dead cat bounce, as many
:15:46. > :15:51.economies came out of that they all I believe we need some short-term
:15:51. > :15:55.stimulus, that is what we did in 2009, 10 to get the economy growing
:15:55. > :15:59.again, to get people off benefit into work, paying taxes rather than
:15:59. > :16:03.receiving benefits. That is good for redice -- reducing the deficit.
:16:03. > :16:07.Over the medium to long-term we reduce the overall spendling
:16:07. > :16:11.figures so we can get into balance over that period. The Liberal
:16:11. > :16:15.Democrat, if the Daily Politics the right and we will move to the
:16:15. > :16:22.10,000 threshold before you pay tax by 2014. My understanding is what
:16:22. > :16:28.is already in the pipeline will stay for this year, and for 2013
:16:28. > :16:33.own the current target they wouldn't hit it until 2015 so they
:16:33. > :16:40.will double up at 2014. I know the Liberal Democrat also dine out on
:16:40. > :16:44.that and say we did that, we did that, but your report on tax, it
:16:44. > :16:50.recommend the same thing, so how come your party is -- party is
:16:50. > :16:55.allowing the Liberal Democrats to get the credit. I don't know. To be
:16:55. > :17:00.fair, our report also said that it was important to cut the marginal
:17:00. > :17:03.rates of tax because that has a more dynamic effect. That is
:17:03. > :17:07.difficult to sell. One option top story the Chancellor would be to
:17:07. > :17:13.raise the thresholds on the top rate of tax which I would favour.
:17:13. > :17:18.What are you calling the top rate of tax. The 50 pence. When your
:17:18. > :17:23.report came out it was 40 pence. was. You wanted to cut that. Indeed.
:17:23. > :17:27.Shows you how times have changed. When George became Shadow
:17:27. > :17:31.Chancellor he was in a favour of a fat tax. That is when he was
:17:31. > :17:34.talking about sharing the proceeds of growth. I thought that is great,
:17:34. > :17:39.everybody can pay 20 percent. I don't think that is what they meant.
:17:39. > :17:44.Labour has a problem here, it is a, given the mess Gordon Brown made of
:17:44. > :17:49.the 10% band, denying that there was any impact on poorer people,
:17:49. > :17:55.when the rest of his party including backbenchers said it was,
:17:55. > :17:59.taking people out of tax is a popular thing to do. It is, but,
:17:59. > :18:03.the lessen from Gordon's mistake is you have to be careful about
:18:03. > :18:07.announcing thins in a hurry and think you will get away with it T
:18:07. > :18:11.Government is seeing with the work tax credit change, this April f you
:18:12. > :18:16.are earning less than �17,500 a year and working you will lose �70
:18:16. > :18:20.a week. I understand that. But that wasn't what, it is an important
:18:20. > :18:25.point, not the point I asked about. My point was it is going to be
:18:25. > :18:29.difficult for Labour to oppose going to a situation where the
:18:29. > :18:33.first 10,000 of your income isn't taxed. Of course. We have to make
:18:33. > :18:38.sure that it pays people to get into work, and the lowest earners
:18:38. > :18:43.gain the most. That is why we think there are fairness issues attached
:18:43. > :18:47.to cutting the top issue of tax. Even if it meant there was nor
:18:47. > :18:53.revenue and you could do more. think the jury is out on that one,
:18:53. > :18:57.we will have to wait. Before we move on, can we agree, although the
:18:57. > :19:03.headline impact if we when you take, increase the threshold when you
:19:03. > :19:07.start paying tax is to take a lot of very low wage earners out of tax
:19:07. > :19:12.all together, the vast bull of course the billions this cause go
:19:12. > :19:16.to middle income earners. It is not a secret but maybe a hidden tax cut
:19:16. > :19:20.for middle income. That is why I prefer the tax credit subpoena, we
:19:20. > :19:25.will be replaced by the use versele credit. I support what the
:19:25. > :19:29.Government is doing on that, but they have to be careful how they
:19:29. > :19:33.introduce it. Maybe a Liberal Democrat conspiracy to get tax cuts
:19:33. > :19:36.to the middle because that is who vote for them. I think that I think
:19:36. > :19:40.the leader of the opposition was right when he talked about the
:19:40. > :19:43.squeezed middle. People are finding it hard, if they are not within the
:19:43. > :19:46.benefit system, and they are subject to pressure. I mean the
:19:46. > :19:49.fundamental problem is that Government is spending too much,
:19:49. > :19:53.and borrowing too much. There is only one way to deal with that, and
:19:53. > :19:58.that is to reduce the amount that Government takes. It is not growing
:19:58. > :20:03.enough either. That is because the Government is spending too much.
:20:03. > :20:08.There is a circular here. Let us leave that as an unbroken circular.
:20:08. > :20:11.We will let these hang on the table and people can make up their own
:20:11. > :20:15.minds. If you are the Chancellor, keeping your own MPs happy with
:20:15. > :20:20.your budget plans is hard enough, but having to keep someone else's
:20:20. > :20:23.happy is an almost impossible task, there have been reports of tense
:20:23. > :20:27.meetings between the Quad of Nick Clegg and Danny Alexander and David
:20:27. > :20:31.Cameron and George Osborne on the other. As the two side try to
:20:31. > :20:35.thrash out a deal. While the party hierarchies might be satisfys what
:20:35. > :20:37.about the backbenchers ch joins me is John Pugh from the Liberal
:20:37. > :20:43.Democrats and Matthew Hancock from the Conservatives. Welcome to both
:20:43. > :20:47.of you. John Pugh, can I start with you, how will you and your
:20:47. > :20:52.colleagues feel if the 50 pence top rate of tax is scrapped, without
:20:52. > :20:55.meeting your party's key demand for a mansion tax? We lock at the
:20:55. > :21:01.budget in the round and we will consider what the overall effect is.
:21:01. > :21:04.If the broader shoulders bear the most, we can reconcile ourself to
:21:04. > :21:08.any individual detail in the budget. There is a drive on our part to
:21:08. > :21:12.make sure the rich pay more, and hopefully that will be fulfiled by
:21:12. > :21:15.the budget. Would you like to see a mansion tax on the well hi thi in
:21:15. > :21:19.return for the scrapping of that top rate of tax? There are
:21:19. > :21:24.difficulttys with the mansion tax, one advantage is the rich can't
:21:24. > :21:28.hide their mansions, Lord Oakeshott said trying to tax the rich is like
:21:28. > :21:32.trying to nail jelly to a wall. The one thing they can't disstkpwies
:21:32. > :21:39.where they live and the man sthains live in. Taxing that is an idea one
:21:39. > :21:43.has to look at. I would be prepared to consider a tycoon tax. It don't
:21:43. > :21:46.look as if mansion tax is going to happen. So a promise to clampdown
:21:46. > :21:52.as every politician promises to do on tax avoidance, is that enough to
:21:52. > :21:56.get the superrich to pay their fair share? I don't think we can accept
:21:56. > :22:01.hard wired changes in the budget that make life easier for the rich
:22:01. > :22:05.and some promise we will clampdown on tax avoidance as a counter
:22:05. > :22:10.balance to that. We look for centre measures to make sure that people
:22:10. > :22:14.pay their proper level of taxation. A cut for the biggest earners will
:22:14. > :22:19.send a message we are not all in this together? Let us see what is
:22:20. > :22:23.in the budget. Very much agree with what John said, in terms of taking
:22:23. > :22:28.the budget in the round, and it being, no, and this is an important
:22:28. > :22:32.point, and it being a budget for working families there is very
:22:32. > :22:35.strong Conservative support for raising the tax threshold, that is
:22:35. > :22:39.something Conservatives tat last election campaigned for, Liberal
:22:39. > :22:43.Democrats campaigned for it too, and it is something that so far has
:22:43. > :22:47.started to be delivered, so this is something where actually it, I
:22:47. > :22:52.think it is the Government acting together and dare I say it in the
:22:52. > :22:55.national interest, rather than looking at... The Liberal Democrats
:22:55. > :22:58.are very much claim this as a Liberal Democrat initiative they
:22:58. > :23:02.have had to almost put upon whether it is true or not on to George
:23:02. > :23:07.Osborne, so you don't agree that it is a Liberal Democrat initiative,
:23:07. > :23:12.this raising the threshold? it's a Government policy at the end
:23:12. > :23:15.of this Parliament, when the... will be judged on Government
:23:15. > :23:18.policies. We will be judged on the coalition gith Government and you
:23:18. > :23:21.will have whatever is announced tomorrow, you will have a
:23:22. > :23:24.Conservative Chancellor announcing it. It is not like the
:23:24. > :23:28.Conservatives can distance themselvess from a huge and
:23:28. > :23:34.positive and beneficial policy like taking millions of people out of
:23:34. > :23:38.tax. So it is huge and beneficial, hugely beneficial, but the
:23:38. > :23:43.Institute for Fiscal Studies say if it is raised to 10,000 by 2014, the
:23:43. > :23:47.point at which you start paying tax, will it cost the Exchequer �6.5
:23:47. > :23:57.billion a year, now changes to date they say have cost �5 billion a
:23:57. > :23:57.
:23:57. > :24:03.year, is that the best use of all that money? Certainly making sure
:24:03. > :24:08.work pays, and especially reducing very strongly the marginal rates of
:24:08. > :24:12.those earning sx, seven, 8,000 a years mostly part-time worker, the
:24:12. > :24:16.majority women, improving the, how much you take home from that is a
:24:16. > :24:20.big step forward economically, as well as money in people's pockets.
:24:20. > :24:23.John Pugh, doesn't it help people further up the income scale more
:24:23. > :24:28.than it does those people at the bottom end, and of course it is not
:24:28. > :24:31.as progressive as for example you might argue tax credits? I think
:24:31. > :24:35.tax credits were overblown in the sense they went to people who I
:24:35. > :24:42.think shouldn't have been getting them in the first place. This
:24:42. > :24:47.measure is not perfect. No measure is perfect. What we can be assured
:24:47. > :24:53.of is it will be good for the economy. You do admit it helps
:24:53. > :24:57.people further up the income scale more. That is self evident.
:24:57. > :25:01.Although raising the tax threshold as oppose to a cut in the basic
:25:01. > :25:04.rate gives the same amount of benefit to everybody, which is the
:25:04. > :25:09.proportion of your income is bigger the further down the income scale
:25:09. > :25:15.you are, so, you know it is the people who are taken out of tax all
:25:15. > :25:22.together that as a proportion of their take home pay get the biggest
:25:22. > :25:26.advantage. Do you agree the policy on child benefit is anti-family and
:25:26. > :25:31.anti-success? The anomaly has to be dealt with and the Prime Minister
:25:31. > :25:35.is, has said that, you know, a number of times, but, I do think
:25:36. > :25:40.that it is important that people earning small amounts, and on low
:25:40. > :25:44.incomes, aren't paying tax, to give benefits to the very well-off. I
:25:44. > :25:49.think that is an important principle, in terms of child
:25:49. > :25:52.benefit, and it is one that obviously has to be, you know, the
:25:52. > :25:56.government's promised to deal with, and the question of how you make
:25:56. > :26:06.the policy work we will find out tomorrow. OK. We will indeed. Thank
:26:06. > :26:07.
:26:07. > :26:11.you. We are joined now be Dick Newby. Welcome to the Daily
:26:11. > :26:16.Politics. Thanks to the Liberal Democrats, this whole budget
:26:16. > :26:22.process has leaked like a colander, great for journalist, not sure the
:26:22. > :26:26.Treasury Shapy, but has it worked as a strategy to get you away?
:26:26. > :26:31.Budgets have leaked over recent years I seem to remember Gordon
:26:31. > :26:37.Brown was a dab hand at leaking. wouldn't even tell the Prime
:26:37. > :26:41.Minister what was in the budget. told the Sunday Times very often I
:26:41. > :26:44.seem to remember. You may come to regret saying that. Has the
:26:44. > :26:47.strategy worked? I think in terms of Liberal Democrat priorities for
:26:48. > :26:52.the budget it is obvious the key thing we wanted to do was
:26:52. > :26:55.accelerate the raising of the tax, income tax threshold which looks as
:26:55. > :27:00.if it is going to happen. information is rather than
:27:00. > :27:03.happening, getting to 10,000 by 2015 it looks like he will go and
:27:03. > :27:08.get there now by doubling up in 2014 and he hits it then, a year
:27:08. > :27:12.before the election. Will that satisfy you? That is a very good
:27:12. > :27:15.move, for the reasons you have been discussing. Will you, the Liberal
:27:15. > :27:20.Democrats be taking credit for that? Well, it is a policy that we
:27:20. > :27:23.have been pushing very hard, but we as part of the Government will be
:27:23. > :27:27.taking credit. The Government will take credit because the Government
:27:27. > :27:30.has done it. You won't take credit in the sense if the Liberal
:27:30. > :27:34.Democrats had not been in this coalition this would not have
:27:34. > :27:40.happened. We will say this is one of the things happened partly
:27:40. > :27:43.because we put hard for it. What do you say Michael Forsyth? I saw the
:27:43. > :27:47.lowering of the threshold is important because it helps people
:27:47. > :27:52.who are paying the highest marginal rates, people on low incomes can
:27:52. > :27:56.find 95% of what they earn disappearing. That is the substance
:27:56. > :28:00.for doing it. What I am saying are the Liberal Democrats right to be
:28:00. > :28:07.cake -- taking the credit for this? I think they have supported this
:28:07. > :28:11.policy nce. It is a policy we enunciated in opposition, and they,
:28:11. > :28:15.they have embarked, think irresponsibly in the budget process
:28:15. > :28:21.by making arguments in public, and trying to show they are different.
:28:21. > :28:26.I think their best chance of survival at the next election is by
:28:26. > :28:30.seen to be part of a team. Nothing the Government has done couldn't
:28:30. > :28:34.have been done without the Liberal Democrats. So privatising police
:28:34. > :28:38.forced, the break up of the National Health service all the
:28:38. > :28:41.things they try and deny are the fault of the Liberal Democrats as
:28:41. > :28:45.much as the Tories. Can we stick to the budget, because it is tomorrow
:28:45. > :28:50.and we have done these issues before and we will come back to
:28:50. > :28:53.this before. What, well, hold on irresponsible? I don't think it is
:28:53. > :28:58.irresponsible. I think in a coalition the way you do Government
:28:58. > :29:02.is different in a single party Government. Part of that is having
:29:02. > :29:06.more arguments in the open, between the different parts of the
:29:07. > :29:14.coalition. I think it helps the electorate understand what is going
:29:14. > :29:17.on. Every discussion is leaked to the newspapers, people won't have
:29:17. > :29:22.discussions. I don't think people could say there haven't been Frank
:29:22. > :29:26.discussion. But they have been in public. I follow European politics
:29:26. > :29:33.closely f you look at the coalition Governments in Germany or Sweden,
:29:33. > :29:36.to take two gamles, you don't see, they don't have single budget
:29:36. > :29:39.statements but they have economic policy announcements and all the
:29:40. > :29:44.lobbying, all the argument within the coalition is done behind closed
:29:44. > :29:47.door, it is not done in this public way, which you, the Liberal
:29:47. > :29:52.Democrats have made. Well, I think that, we are getting used to
:29:52. > :29:57.running a coalition, I think that the way that Nick has done it,
:29:57. > :30:02.Vince has talked about other tax policies, is a grown up way of
:30:02. > :30:08.doing it. The old budget procedure in the UK was undually secretive.
:30:08. > :30:10.What do you make, it is changed days from Gordon Brown: I regret
:30:10. > :30:15.the end of collective cabinet responsibility. It is a sign of
:30:15. > :30:18.insecurity from the Liberal Democrats, that they see their
:30:18. > :30:22.popularity dwindling away so they want to be defining their
:30:22. > :30:27.difference from the Tories. So you want to talk about the politics, so
:30:27. > :30:32.let me remind you there are 2.7 million people unployed in this
:30:32. > :30:38.country, under a Conservative led coalition, average wages are rising
:30:39. > :30:43.by 1.5%, prices by over 3.4, higher on those prices ofs we all have to
:30:43. > :30:47.buy, so living standards are being squeezed like mad, there is almost
:30:47. > :30:55.no growth in the economy, and the latest poll shows the Conservatives
:30:55. > :30:59.3% ahead of Labour. What has gone We have had a spate of opinion
:30:59. > :31:04.polls that have put us ahead. George Osborne once told me that he
:31:04. > :31:10.expected by the spring of 2012 to beat 15 up to 20 points behind.
:31:10. > :31:13.What happened? I think the period during the leadership election
:31:13. > :31:18.allowed George Osborne and his conservative friends to land the
:31:18. > :31:22.argument that this was all the legacy of a Labour government, but
:31:22. > :31:26.the reality of course was because of a global financial crisis, in
:31:26. > :31:31.the same way that George says some of his problems are because of the
:31:31. > :31:35.euro crisis. You can't have it both ways. He me he was too stupid to
:31:35. > :31:40.understand the truth. I just Vicky has to accessibly landed the
:31:40. > :31:45.argument and it has stuck in people's mind -- I just think he
:31:45. > :31:50.has successfully landed the argument. When will we see the sun
:31:50. > :31:53.lit up plans that Mr Cameron is talking about? The when the
:31:53. > :32:00.government reduces the tax burden and makes it easier to employ
:32:00. > :32:04.people. So not in your lifetime? live in hope. We are talking about
:32:04. > :32:08.income tax, and no one is begetting an important part of taxation which
:32:08. > :32:11.is National Insurance and the cost of employing people there, you can
:32:11. > :32:16.raise the threshold and take people out of tax but they will still have
:32:16. > :32:19.to pay National Insurance. Would you support a cut in National
:32:19. > :32:23.Insurance to encourage younger people to be taken on by small
:32:23. > :32:27.businesses? I would support a cut in income tax or national insurance
:32:27. > :32:32.because I think the government is spending too much and is creating a
:32:32. > :32:37.sclerosis in the economy. That is one at a five-hour a five-point
:32:37. > :32:44.plan for job growth. Just remind you that the Chancellor in the
:32:44. > :32:49.autumn Budget statement did float the idea of getting rid of the
:32:49. > :32:56.pretence that national insurance is attacked by another way and merging
:32:56. > :32:59.the two together. Would that capture the Lib Dem imagination?
:32:59. > :33:09.sounds a technical thing, but virtually no one understands or
:33:09. > :33:10.
:33:10. > :33:14.national insurance is. -- what a National insurances. It is the bit
:33:14. > :33:18.of income tax we are told not to think of as income tax.
:33:18. > :33:22.challenge for all the parties is, if suddenly, what is seen as the
:33:22. > :33:26.headline rate of income tax increases hugely then this is a
:33:26. > :33:30.political challenge to explain it. It is a communications challenge,
:33:30. > :33:34.even though it makes sense in terms of the tax system. It would be a
:33:34. > :33:42.disaster if it was made explicit just how much the government was
:33:42. > :33:48.taking. Is that a good idea, do you think? I can't argue with it. They
:33:48. > :33:57.are being transparent about what government is doing. That is to out
:33:57. > :34:02.of five, almost! -- two out of five. Gentlemen, thank you very much for
:34:02. > :34:06.being with us and we will see what the Chancellor delivers tomorrow.
:34:06. > :34:08.George Osborne is a busy man and would be, and you think the day
:34:08. > :34:12.before the Budget he would be putting the finishing touches to
:34:12. > :34:15.his speech or maybe having a rehearsal. But this morning the
:34:15. > :34:19.Chancellor has been promoting the Government's credit easing scheme.
:34:19. > :34:23.The plans will see �20 billion worth of taxpayers' money to
:34:23. > :34:28.guarantee funding for UK banks, provided the money is lent to small
:34:28. > :34:31.businesses. Here is what Mr Osborne had to say. This is all about the
:34:31. > :34:36.government helping small businesses in Britain to get cheaper loans,
:34:36. > :34:40.helping them to expand and hire more people and create jobs and we
:34:41. > :34:44.are using a good reputation that the government has got in the world
:34:44. > :34:47.by getting control of our debts and passing on the low interest rates
:34:47. > :34:53.we can borrow money at to small businesses around Britain so they
:34:53. > :34:57.can create jobs. Let's get some more details on this with Robert
:34:57. > :35:04.Peston. Robert, is this credit easing scheme going to do what
:35:04. > :35:10.George Osborne would like it to do? It will certainly get marginally
:35:10. > :35:15.cheaper loans out to small businesses. Small businesses who
:35:15. > :35:21.apply for the subsidised loans that will be made available by the Royal
:35:21. > :35:27.Bank of Scotland, Santander, Lloyds, Barclays and some small specialist
:35:27. > :35:34.lenders. They will get loans at about one percentage point lower
:35:34. > :35:38.rate than they would normally have to pay. In the first batch of loans
:35:38. > :35:43.going out, that would represent �50 million worth of subsidies to small
:35:43. > :35:47.businesses, and over the course of the two years where the �20 billion
:35:47. > :35:52.of loans will probably be made available if all goes to plan, that
:35:52. > :35:56.is a �200 million annual subsidy for small businesses. If you are a
:35:56. > :36:00.small business struggling against some difficult economic conditions,
:36:00. > :36:07.getting a subsidy of that sort of scale, that is not trivial. It is
:36:07. > :36:12.quite useful. But will it actually lead to a big stimulus for growth
:36:12. > :36:16.in that sense? It is far too early to make that kind of calculation.
:36:16. > :36:21.I'd be surprised if it was a massive stimulus to growth but it
:36:21. > :36:26.could turn out to be useful. It could be useful in two ways. There
:36:26. > :36:30.are lots of businesses out there who believe that the banks have
:36:30. > :36:35.almost shut up shop when it comes to lending to them and in a sense
:36:35. > :36:39.this is quite allow at first that the banks have got this money and
:36:39. > :36:44.that the government is looking at them to make sure that they provide
:36:44. > :36:50.it. That said, one of the things that many of the critics of the
:36:50. > :36:56.banks would say is that they have become to the risk averse. As you
:36:56. > :37:00.know, in the boom years, up to the great crash of 2007/08, the banks
:37:00. > :37:04.took crazy, reckless risks and now people will say they have gone in
:37:04. > :37:09.the other direction. They are too prudent, not prepared to take
:37:09. > :37:12.enough of a chance on young, growing businesses. But nothing
:37:12. > :37:19.that the Chancellor has announced will encourage the banks to take
:37:19. > :37:23.additional risks. So the kind of businesses that may have lots of
:37:23. > :37:27.potential but are in their early years and have risks, they are not
:37:27. > :37:36.going to get the money and they won't be helped by this. Robert,
:37:36. > :37:41.I am pleased to say joining us for the rest of the shote is the Co of
:37:41. > :37:50.Ariadne capital, and also Mike Cherry from the Federation of Small
:37:50. > :37:55.businesses. We are having taxpayer subsidise loans to small businesses.
:37:55. > :37:59.How will that work. I think it will help certain businesses. It is
:37:59. > :38:05.certainly not going to help access to finance. The government says it
:38:05. > :38:09.will put up 20 billion. It may well be putting up �20 billion but it is
:38:10. > :38:15.only a very, very small amount when you look at the 1% decreasing costs
:38:15. > :38:20.of any loan that the business applies for and succeeds in getting.
:38:20. > :38:23.Is it worth the candle or not worth the candle? It is an initiative to
:38:23. > :38:26.be welcomed at this stage but it is not going to produce tremendous
:38:26. > :38:32.results overnight and we need to be looking at other forms of
:38:32. > :38:37.alternative finance. Such as what? Peer-to-peer lending. What does
:38:37. > :38:42.that mean in English? Business to business lending. There needs to be
:38:42. > :38:47.equity finance for small businesses and all of these need to be better
:38:47. > :38:52.promoted than they are at the mind. A Julie, what do you make of it?
:38:52. > :38:56.There are companies which are peer- to-peer lenders. That is nothing to
:38:56. > :39:00.do with the government. No, but they are good development. The new
:39:00. > :39:05.programme is a signal and it shines a spotlight that this is what the
:39:05. > :39:09.government intends to happen, and whether it is Santander with 200
:39:09. > :39:14.new bank managers or Barclays who say they are loading every minute,
:39:14. > :39:17.who knows whether the statistics are measurable. But the point is it
:39:17. > :39:21.shines a spotlight and says this is a signal that the government
:39:21. > :39:27.intends for small businesses to be backed and it is a national
:39:27. > :39:33.imperative to get the capital up to the companies. Santander is only up
:39:33. > :39:37.for 500 million of this. That is peanuts to them. That is why I
:39:37. > :39:42.mentioned Berkeley's as well. These banks are unable to escape the
:39:42. > :39:46.spotlight that the government is shining -- Barclays Bank. But the
:39:46. > :39:50.government is shining two contradictory spotlight on them.
:39:50. > :39:53.The government and international institutions have been forced far
:39:54. > :39:58.higher capital reserve targets on bank balance sheets. You have to
:39:58. > :40:03.keep a lot more cash and the near cash in the form of low risk assets
:40:03. > :40:07.on your balance sheets. That limits the amount of money that banks can
:40:07. > :40:11.lend because of government action. So the government, having done that,
:40:11. > :40:17.it comes to the other door and says you're not lending enough, so we
:40:17. > :40:25.will subsidise your loans. What is the point? The problem you have got
:40:25. > :40:28.is that you have the reserve ratios, and there is no doubt that our
:40:28. > :40:32.feeling is that will restrict the amount of money that the banks are
:40:32. > :40:35.able to lend. I think what this does give is a message that the
:40:35. > :40:41.banks need to be looking more closely at how they support small
:40:41. > :40:46.businesses, but also we would very much like the report to be adopted
:40:46. > :40:51.in full tomorrow by the Chancellor and the recommendations that came
:40:51. > :40:54.out on Friday. And this is the problem with government action. It
:40:54. > :40:58.moves one way to inhibit lending, and many things we better do
:40:58. > :41:03.something and rather than easing up on the reserve criteria, it says we
:41:03. > :41:07.will find another way of using taxpayers' money to subsidise it.
:41:07. > :41:09.They're always unintended consequences. The more that the
:41:09. > :41:14.government acts in business there are always an intending --
:41:14. > :41:19.unintended consequences. You have two contradictory things, increase
:41:19. > :41:23.your balance sheet, but lend more. But we cannot go back. All I'm
:41:23. > :41:27.saying is that it is an important signal to educate society to the
:41:27. > :41:32.role of those small and medium terms enterprises. The growth, jobs
:41:32. > :41:35.and wealth in the economy comes from those guys, not big business.
:41:35. > :41:38.What would you like to see in the Budget tomorrow? If you have the
:41:38. > :41:42.Chancellor sitting here and there was one thing to say to him that
:41:42. > :41:47.would make a difference to the SMEs, putting aside income tax or
:41:47. > :41:53.fairness issues, but as a businesswoman, what would you
:41:53. > :42:01.saying? In terms of a high-growth technology enabled start-ups, the
:42:01. > :42:07.ones that will create the future semiconductors, the future internet
:42:07. > :42:10.businesses, make it frictionless. Strip out any kind of tax. It is
:42:10. > :42:13.the largest fixed cost the business have until their prop Tau, which
:42:13. > :42:17.could be five years down the line, but it is such a small amount of
:42:17. > :42:23.money to the Treasury but is the biggest fixed cost. Eliminate that
:42:23. > :42:26.in the first couple of years and let the companies grow into
:42:27. > :42:31.billion-pound giants. At the point that they are able to pay large
:42:31. > :42:37.amounts of National Insurance that is fine, but let's create the
:42:37. > :42:40.Giants first. Wait until they are the big guys. Those sort of
:42:40. > :42:44.companies are the ones that will not get those subsidies. They are
:42:44. > :42:49.not going to take the risk. That is right. A high risk companies you
:42:49. > :42:55.are talking about, they will not get the loans. They won't qualify,
:42:55. > :43:00.and most people don't understand that if you are created a future
:43:00. > :43:03.tax, these companies at the beginning they might only have
:43:03. > :43:07.�10,000 worth of National Insurance, but that is a lot of money at the
:43:07. > :43:10.beginning and almost nothing to the Treasury. We would certainly like
:43:10. > :43:13.some reduction in National Insurance contributions, but we
:43:13. > :43:17.would also like the government to seriously look at putting in a
:43:17. > :43:21.proper structure for the medium term around the idea of a Small
:43:21. > :43:31.Business Administration. OK, we will leave it there. We are going
:43:31. > :43:34.
:43:34. > :43:37.to hold you hostage, but we will release you. There are rumblings of
:43:37. > :43:41.independence north of the border, claims that the parliament is too
:43:41. > :43:43.distant and out of touch and a threat to go it alone. But I'm not
:43:43. > :43:46.talking about Scotland, I'm talking about the Shetland and Orkney
:43:46. > :43:48.islands. The two Liberal Democrat members of the Scottish Parliament
:43:49. > :43:51.for the region have submitted a report to the UK government's
:43:51. > :43:53.consultation on Scotland's future suggesting the Northern Isles could
:43:54. > :44:02.be given more powers. And this could mean the oil-rich islands
:44:02. > :44:05.take control of the revenue from North Sea Oil. One of those MSPs,
:44:05. > :44:15.Liam McArthur joins us now from Edinburgh, and Angus MacNeil from
:44:15. > :44:16.
:44:16. > :44:21.Let me guess Edinburgh first. What is you have in mind? -- let me go
:44:21. > :44:25.to Edinburgh first. What we set out in the submission to the
:44:25. > :44:28.consultation is, in a sense, a view that whatever Scotland decides
:44:28. > :44:33.whether the referendum takes place that the distinct and different
:44:33. > :44:37.views of the islanders need to be reflected in that. We are realistic
:44:37. > :44:43.and understanding that in terms of votes the views of those in
:44:43. > :44:50.Shetland and Orkney aren't necessarily aren't going to tilt
:44:50. > :44:53.anything one while the other, but then he's to be a focus from all
:44:53. > :44:57.sides including the one the first miniature -- Minister has placed on
:44:57. > :45:00.the future of energy resources. Therefore we need to use that
:45:00. > :45:07.influence to have, as we said in the paper, as much of a bearing on
:45:07. > :45:11.the future power and control that we have in Orkney and Shetland.
:45:11. > :45:15.I just clarify what one of the options is? He's one that it
:45:15. > :45:22.Scotland votes to become independent, but that the Shetland
:45:22. > :45:31.Isles and Orkney actually voted to stay part of the United Kingdom,
:45:31. > :45:35.that these islands should have the Our view this debate needs to
:45:35. > :45:39.happen over the course of not just the duration of the UK Government...
:45:39. > :45:44.Do you think they should have that option? That option needs to be one
:45:44. > :45:48.that is laid open to them. I hope that Scotland votes now in the
:45:48. > :45:53.referendum. Even if it does, I think even if Scotland remains a
:45:53. > :45:57.part of the UK, I think there is an opportunity here for Orkney and
:45:57. > :46:00.Shetland to set out very clearly the extent of new powers they wish
:46:00. > :46:04.to see. Let us not forget when the Scotland Act that brought into
:46:05. > :46:10.being the Scottish Parliament was signed, special consideration was
:46:10. > :46:15.given to the needs of islanders not just Orkney and Shetland but that
:46:15. > :46:19.represented by Angus. Can I ask you too, would you like to see, even if
:46:19. > :46:22.Scotland voted to stay part of the United Kingdom, you would like to
:46:22. > :46:26.see the islands negotiate a new settlement with Edinburgh and
:46:26. > :46:31.London? What I was going on the say Andrew, over the course of
:46:31. > :46:36.devolution, what we have seen is that the safeguards put in to the
:46:36. > :46:39.Scotland Act have been eroded over time they reflected by the
:46:39. > :46:43.Government policies and attitudes, and what we have seen in the last
:46:43. > :46:48.two or three years is more of a centralisation of power, back in to
:46:48. > :46:54.Edinburgh, into Inverness, and that runs contrary to the spirit of the
:46:54. > :47:00.Scotland Act. Let me bring in Angus McNeill. If Scotland votes to go
:47:00. > :47:09.independent, but the island.En. Which I will, but the islands vote
:47:09. > :47:16.not to, they street stay part of the UK should they have that option.
:47:16. > :47:19.1997 we saw Orkney voted for a Scottish Parliament. We are talking
:47:19. > :47:24.about the tug boats have have been moved from tear. They say it is
:47:24. > :47:28.null and void, it is the first they have heard from the MSPs. I am not
:47:28. > :47:31.asking what the convener o the Shetland lands is saying, I am
:47:31. > :47:36.asking you on a point of principle, if the islands voted to stay part
:47:36. > :47:39.of the UK, while the rest of Scotland voted to go independent,
:47:39. > :47:46.would an independent Scotland allow them that right, to stay part of
:47:46. > :47:51.the UK? Scotland is a nation, that includes all part, that are joined
:47:51. > :47:55.in 1472. I would throibg see within Scotland... So you wouldn't.
:47:55. > :47:59.Absolutely... You would not give them, so the OK anys and Shetlands
:47:59. > :48:04.under an independent Scotland would not have the option of going
:48:04. > :48:09.independent, or joining with the rest of UK? From a Hebridean
:48:09. > :48:15.situation, we see the need for uses of service on the mainland. It is...
:48:15. > :48:19.Not talking about the Hebrides. I know you represent them. I I am
:48:19. > :48:22.asking you whether if people from the Shetland and OK anys wish to
:48:22. > :48:27.stay part of the United Kingdom you would allow them to do so. If there
:48:27. > :48:30.is a big enough drive for self determination that would have for
:48:30. > :48:35.considered. Would you allow them to do so. That would have to be
:48:35. > :48:42.considered. People voted for a Scottish Parliament, and if Liam
:48:42. > :48:47.mechanic arthur, the point s we have seen this idea, the leader of
:48:47. > :48:52.OK anyand Shetland... In the OK anyand Shetland stayed part of the
:48:52. > :48:57.UK, how much oil would stay with them? I mean, I think what we are
:48:57. > :49:04.seeing here a fair fraction of oil. A lot of fraction that is an island
:49:04. > :49:10.group that have the highest fuel prices in the UK. If the Orkneys
:49:10. > :49:13.and Shetland decided to stay part of the UK, your whole economic case
:49:13. > :49:17.collapses. Absolutely not. You are wrong, you are absolutely wrong.
:49:17. > :49:22.Really? When you look at countries the size ot Scotland without oil
:49:22. > :49:26.you sigh them thriving. You could have a great future. So Scotland is
:49:26. > :49:31.going to become a tax haven. Scotland can do loads of things.
:49:31. > :49:35.And make watches. Good luck to you. Am I missing something, I am far
:49:35. > :49:39.away from these things, if you live in the Shetland lands you think
:49:39. > :49:45.Edinburgh is far away, never mind London what do you make of what Mr
:49:45. > :49:48.McNeill is saying? I think the outgoing convener of Shetland would
:49:48. > :49:54.have something to say about the suggestion they were to become a
:49:54. > :49:59.sort of Canton. All we have said, is in relation, in... If you could
:49:59. > :50:03.sum up your point, we running out of time. We have started to debate,
:50:03. > :50:08.there is plenty of time, perhaps we would argue too much time for in
:50:08. > :50:12.debate to take place over the next couple of year, the distinct
:50:12. > :50:15.approach of the people in Orkney and Shetland is the way they see
:50:15. > :50:19.their future, it needs to be reflected in this debate. That is
:50:19. > :50:22.what we have kick-started I hope. We need to leave it there. It is
:50:22. > :50:28.time I paid another visit to the Orkney and Shetland lands. It has
:50:28. > :50:33.been a long time. Do you have any idea what they are talking about.
:50:33. > :50:35.It is like family. We all want to kiss our family goodbye, and yet we
:50:36. > :50:38.somehow know we are stronger together, right. We will see. He
:50:38. > :50:48.doesn't think so. I think the Scotland is better with the
:50:48. > :50:54.Shetland lands, the OK anys. you recognise that tie. I have seen
:50:55. > :50:58.other people wear it. That is it for that bit. We will move on. Now,
:50:58. > :51:01.they have another two years of this! The Government's
:51:01. > :51:04.controversial bill to radically reform the NHS in England is within
:51:04. > :51:08.touching distance of being passed into law. It was well over a year
:51:08. > :51:12.ago that the bill was introduced to Parliament and since then there
:51:12. > :51:17.have been nearly 2,000 amendments agree. A pause for more
:51:17. > :51:21.consultation and a lot of bitter feeling between MPs. Was it worth
:51:21. > :51:28.it? We will ask the Health Minister Simon burn what is changes patients
:51:28. > :51:34.can expect to see once the bill is passed. First here is David
:51:34. > :51:37.Thompson. It is never dull being Health Secretary. You go for a
:51:37. > :51:41.quiet walk down Whitehall and before you know it you are the
:51:41. > :51:44.poster boy for radical change in the NHS. If being slagged off by
:51:44. > :51:48.medics and campaign groups was an Olympic sport Andrew Lansley would
:51:48. > :51:51.be going for gold. The Health Secretary insists his plans to
:51:51. > :51:56.reform the NHS in England will lead to greater efficiency, more choice
:51:56. > :52:00.and a bigger say for patients. Critic says it will be the end of
:52:00. > :52:06.the health service as we know it. Will you and I notice any
:52:06. > :52:10.difference? Having ruled out another top down reorganisations of
:52:10. > :52:13.the NHS before the election, David Cameron and Andrew Lansley
:52:13. > :52:17.announced wholesale reform shortly afterwards. The devil's in the
:52:17. > :52:20.detail but very broadly speaking will it work? Immediately patients
:52:20. > :52:24.will notice very little difference in the reforms. Most care will
:52:25. > :52:28.continue to be provided in the same I was it is today, the real issue
:52:28. > :52:32.in our view is not the change, it is the funding of the Health
:52:32. > :52:36.Service over the next four to six years, there will be no more money
:52:36. > :52:40.in the Health Service, other than to allow for inflation. That means
:52:40. > :52:44.there will be big pressure on doctors and hospitals to maintain
:52:44. > :52:48.short waiting times to improve the quality of patient care. It will be
:52:48. > :52:52.a miracle if they can do that and undertake these huge structural
:52:52. > :52:57.changes in the bill at the same time. There is no privatisation,
:52:57. > :53:01.people will not be charged. Then there is the P word. Privatisation,
:53:01. > :53:05.opponents claim this is about injecting the profit motive into
:53:05. > :53:09.patient care. But is it? expectation is the private sector
:53:09. > :53:13.will play a bigger part over the next four or five years but to talk
:53:13. > :53:16.of wholesale privatisation of the NHS is scaremongering, I don't
:53:16. > :53:20.think in five years' time the private sector role will be more
:53:20. > :53:23.than a small minority of the care that is provided to NHS patients.
:53:23. > :53:28.The political pressure got so intense last year the Government
:53:28. > :53:32.announced a pause in the process, that did lead to concessions, a
:53:32. > :53:36.bigger say for patient u Health Secretary to be held response for
:53:36. > :53:41.delivering a service, but most professional bodies remain opposed.
:53:41. > :53:44.So who is right? I believe David Cameron Nick Clegg and lance when
:53:44. > :53:49.they say they want to retain the founding principles of the health
:53:49. > :53:52.vir to make it better. The problem is the reforms are going too far
:53:52. > :53:56.and too fast in our view, the Government would have been better
:53:56. > :54:00.advices to go down the route of evolution not revolution and
:54:00. > :54:04.building on the great success we have seen in the last decade.
:54:04. > :54:09.if you think this is all over bar the shouting, think again. There is
:54:09. > :54:12.much more controversy to come, even when the bill get tons statute book.
:54:12. > :54:16.We are seeing the hard process of making the legislation work in
:54:16. > :54:20.practise, and what that means is the Health Service will be in the
:54:20. > :54:23.headlines right through this Parliament and beyond, will
:54:23. > :54:27.continue to hear stories about patient care, because it is an
:54:27. > :54:33.issue that matters hugely to the public as well as the staff working
:54:33. > :54:37.in the NHS. Simon Burns is with us now. After listening exercise, 48
:54:37. > :54:41.days of debate on the bill and almost 2,000 amendments agreed, are
:54:41. > :54:45.you convinced this is a better bill than you started off with? I think
:54:45. > :54:48.we have improved it through the listening exercise where the
:54:49. > :54:52.independent future forum came one a number of recommendations, and we
:54:52. > :54:56.accepted all the core once, and through the discussions we have had
:54:56. > :54:59.with people interested in the health economy, with Liberal
:54:59. > :55:03.Democrat cross bench and Conservative and even Labour peers,
:55:03. > :55:07.they have come up with ideas which have, to my mind, improved and
:55:07. > :55:11.strengthened the legislation. then lends itself to saying the
:55:11. > :55:15.bill wasn't right, it wouldn't have worked and if you had gone down the
:55:15. > :55:20.road as was said of evolution, it might not have been such a painful
:55:20. > :55:24.process. I think with all legislation, it studied as you know
:55:24. > :55:28.in committee in the commons and the Lords, and that is the area where
:55:28. > :55:33.one works, to improve legislation. Yes, but this was different. Isn't
:55:33. > :55:37.it because it is the NHS, that the Government has been talking about
:55:37. > :55:40.here, the sacrosanct in so many people's minds there has been so
:55:40. > :55:46.much division and debate and argument over it, and that perhaps
:55:46. > :55:49.you didn't quite foresee that when you started out? What I didn't
:55:49. > :55:53.foresee was certain individuals and groups trying to politicise the
:55:53. > :56:00.issue and turn it into a political football, and even on the
:56:01. > :56:06.amendments you are talking about and there are a large number, 7 a 6
:56:06. > :56:11.were changing the name. What will patients see what will be
:56:11. > :56:16.different? What will be different is there will tht be the day-to-day
:56:16. > :56:21.political micro management from Whitehall, of the NHS, what we will
:56:21. > :56:26.see is doctors taking control of commissioning care for their
:56:26. > :56:30.patients, we will see cutting back on bureaucracy, partly through the
:56:30. > :56:35.bill but also through the quip programme, so that the money that
:56:35. > :56:40.is saved can be reinvested in the NHS. Will patient, when they go
:56:40. > :56:44.most people go to the GP, will they see anything different. Nothing
:56:44. > :56:47.will really change for them will it? It will. We are increasing the
:56:47. > :56:50.choice patient also have. At the moment they have had the choice of
:56:50. > :56:53.which provider they can use. There will be the choice of which
:56:54. > :56:57.consultant they can use, in time the choice possibly of making it
:56:57. > :57:01.easier for choice of GP. They will be empowered with more information
:57:01. > :57:05.about what is going on in their local hospitals, in the local NHS,
:57:05. > :57:11.so they can see how they can exercise that choice, if they wish
:57:11. > :57:14.to do so. Politically though, you worried now, as some people have
:57:14. > :57:19.predicted that anything that goes wrong in the NHS, anything from
:57:19. > :57:23.sort of GP to hospital level, will all come back to what you have done
:57:23. > :57:28.to the NHS via this bill, that politically it will damage you?
:57:28. > :57:33.have no doubt that some politicians, and others, will seek to try and do
:57:33. > :57:38.that, to score political points, but the fact is, I believe that
:57:38. > :57:42.what the Will -- bill is doing in liberates the NHS, giving greater
:57:42. > :57:46.freedoms to clinicians and concentrating on improving outcomes
:57:46. > :57:52.and commissioning of patient also see the NHS strengthen and improve,
:57:52. > :57:55.and we are already seeing over the last year or so, that the
:57:55. > :57:59.performance indicators are stable and doing rather well. Do you agree
:57:59. > :58:02.Julie that, people who have said that the whole idea of
:58:02. > :58:06.privatisation and too much competition will be damaging has
:58:06. > :58:10.been scaremongering and is overblown? Yes, two points to build
:58:10. > :58:13.on something that Simon said, not only is choice a good thing, we
:58:13. > :58:16.should reject the concept that anything can come like ten
:58:16. > :58:21.commandments from on high and never be changed and they are set in
:58:21. > :58:23.stone. There has to be a process, first of all, doctors who are
:58:23. > :58:28.extremely educated people are probably the best people to know
:58:28. > :58:31.how to deliver great care, right, and so if doctors want, maybe local
:58:31. > :58:36.GPs will implement things you asked about how does this affect the
:58:36. > :58:39.patient, maybe he will target certain ways of delivering care
:58:39. > :58:43.through iPads, I don't know what, the doctor knows how to do that.
:58:43. > :58:48.Thank you very much. Thank you both of you. That is it for today but