14/05/2012 Daily Politics


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Afternoon all. When the Government calls on us all to work harder, let


me be the first to respond, as Eric Pickles told me yesterday on the


Sunday politics, "You've got to work harder." Here I am working an


extra Monday shift, for love, for nothing, except for the dili


politics for the love of it N Greece they are working overtime


trying to get together a coalition Government. Here at home, public


sector workers are on the war path, nurses, doctors, the police, all


rejecting calls to tighten their belts. Speaking of war paths the


Ministry of Defence is gearing up to say it has found a way of


disappearing a giant black hole in its long-term procurement budget.


Will it be fit for purpose? It is Alastair Campbell's turn in front


of Lord Leveson this afternoon. Perhaps we will find out how Tony


Blair signs off his texts. Stay tuned for the big news. Well, that


in the next half an hour of solo public service broadcasting. If you


have any thoughts or comments on anything, then you can keep them to


yourself... No, sorry you can Tweet using the hashtag tag. Now with us


for the ride is Michael Howard. Welcome. Thank you.


But first, my own self-less contribution of getting rid of the


deficit. When I read William Hague's suggestions that business


leaders stop complaining and work a wee bit harder then I took it to


hard. Eric Pickles took it to heart, by telling me the same thing to my


face yesterday. I think we should all work harder. I should work


harder. You should work harder. don't have an extra hour in the day.


You are doing Sundays. So you are doing your bit. What evidence do


you have that these people are not working very hard? I think the


point that William is making and it is a very reasonable one and it


comes back to the earlier point is, Government cannot create Government.


It can create the conditions, but we'll only be able to do this if we


all work harder. Well, what can I do? Roll up my sleeves for some


extra hard work. Let's talk about this with Michael Howard. Just how


does this work - politicians, Cabinet ministers lecturing us to


work harder? You've had a great compliment from Eric Pickles who


said you are doing your bit. So you can bask in that reflected glory.


And the - it is a point of Government line - it's not the best


to come up with. It would be very odd if somebody said we don't need


to work as hard as we are working, we should not work harder. People


are working harder. We work longer hours than our European neighbours.


People are working hard from chief executives of big companies to


nurses on the ward. Ifing harder is the answer we'd -- if working


harder is the answer we'd have a boom economy. I travel abroad a


fair bit and it is very frustrating when you go to companies in


different parts of the world and you - countries in different parts


of the world, and you find German companies there exporting. Italian


companies there exporting. And you very often don't find as many


British companies there exporting as you would like. I think there is


something in our business culture - of course there are many, many


great exceptions to this observation - but there is


something in our business culture which has made many of our


businesses less adventurous and perhaps less ambitious in terms of


getting into these export markets and we have to export more. That is


one of the ways in which we'll come out of the economic mess we're


still in. But in terms of per capita, we export more per capita


than any other country in the world. We have to do more. We have to do


better That cannot be working harder... Does it go down well at a


time when it is tough for people, when people's living standards are


being squeezed for longer than any time since the 1920s, for a Cabinet


of millionaires, and inherited wealth to tell us to work harder?


Look, if you have a Trade Minister, Lord Green, who is working hard,


going all over the world, you have others encouraging British business


to get out there and really pitch for the orders that they can win


and create jobs and create wealth in this country, it is perfectly


reasonable to say there is more that can be done and you travel


abroad. You know this is true. There is more that British business


can do to win the orders that are out there, waiting to be won.


is all - this all resonates with what used to happen in Harold


Wilson's day in the 60s, "I'm backing Britain." Nothing wrong in


backing Britain. There is if it doesn't mean anything. It is up to


the Government to create the conditions in which business can


prosper and if you... You say you meet all these businessmen, when


you go abroad, they will tell you that they don't think the


Government's economic policy gives them a chance to prosper. They


don't say that. If we didn't have the determined attempt to bring


down Britain's borrowing then they certainly would not have a chance


to prosper. That is absolutely essential. That is an essential


precondition. As Eric Pickles said, the Government can create


conditions in which wealth can be created, but Government cannot do


it on its own. I put it to you that the real issue is not people


working harder - unless it could be for people who work more


effectively. The real issue facing business and chief executives is


not how hard they work. The fact is they are sitting on a cash pile of


�750 billion and they are not investing it in Britain and the


only reason they cannot be is because they don't think the


Government has created the conditions for business to invest.


Look, you know perfectly... That is true. Not entirely. Of course it is


true they are sitting on a great cash pile, but the reason why...


Why are they not investing in it? Because we live in extremely


uncertain times. I wish we didn't. We live in uncertain times. We will


probably talk about Greece and the euro in a moment or two. We are


indeed. I would love British business to be investing that money.


I don't think you can blame the fact they are not doing so on the


Government. An interesting topic. It's been a slippery market on the


European Stock Markets yet again. With Greece in per pettual


political crisis, questions being asked about the future of the


eurozone, is that any surprise? 125 to the pound, which I guess will


make Europe cheaper this year and does not help our exports T chor us


of disapprove -- the chorus of disapproving voices are in Greece


and Germany. Mrs Merkel lost the biggest state in Germany in local


elections yesterday. There are a few unhappy workers here too.


For austerity, that has been the economic model of choice here and


in Europe and in the last few years across the continent. Political


opposition show nos sign of retreating. Here doctors will start


to vote on whether to take their first industrial action since the


1970s, in a bitter dispute with the Government's controversial


pensionry forms. The Royal College of Nursing is claiming overworked


staff and job cuts have left the NHS facing a desperate situation.


It says that 61,000 posts are at risk across the health service. A


figure which the Government disputes. On Thursday more than


30,000 off-duty police officers, they marched through central London


to protest at cuts in the police service. Europe are chucking out


governors in Greece. Coalition talks appear to be close to


collapse, largely due to disagreements over the austerity


programme forced on them by Europe. Tomorrow the new French President,


Francois Hollande, who came to power on anti-austerity pledge,


well he will meet for the first time the German Chancellor, Mrs


Merkel, to argue for a different approach. Even Mrs Merkel has felt


the displeasure of her people. Her Christian Democrat party suffered a


regional defeat. The result many are interpreting as


a verdict on the austerity programme.


So, pretty grim times all around on this side of the channel and


elsewhere. He joins us now, he is one of Labour's Treasury team.


Welcome to the programme. Let me come to you first - it is a fiscal


nimbyism you see. People accept there'll have to be cuts, to get


the deficit down, to get the debt down, but not in our back yard!


is understandable and not a very surprising reaction. It is easy to


forget the basic economics here. If you have been borrowing too much


and you need to carry on borrowing, the rate of interest you will pay


depends on how credit-worthy you are. If you are seen to be making


determined attempts to bring down your borrowing, you pay lower


interest rates. That is one of the best ways you can encourage your


economy to grow. If you start to borrow even more, the rate of


interest you pay will go up and that would be one of the greatest


imped meants to economic growth. This is not rocket science but it


is something it is easy for people to forget. What do you say to that?


I think you have to have a balanced approach T difficulty is that the


Government don't show much sign of accepting that. Yes, we have to


take action... Ultimately? Ully matly we do. In order -- ultimately


we do. To deal with the high borrowing levels. There are 150


million more than the Chancellor was predicting - you have to get


growth into the economy. The Government seem to be saying it is


just about austerity, it is just about the expenditure side, nothing


about getting the economy moving, generating income, revenue to get


back into the balance. That is all we have been saying for 18 months


now at least. Alistair Darling had it in his plan. Of course there are


tough decisions on expenditure, but we need to get the economy moving.


That is where the Government is failing. You have done nothing to


make people understand that there will have to be cuts. You attacked


the Government for cuts, but you accept there are cuts yourself, but


you never emphasis that. We always said we need a balanced approach.


Yes, we are criticising the Government, as the phrase goes for


going too far and too fast. The key thing here is we have said, yes,


there are certain circumstances where reductions in expenditure are


necessary. I give you the example of policing for example. Instead of


the �20 billion reductions, we... That is the one example you always


bring out. There are other examples elsewhere. Do you think the cuts


have caused -- if you think the cuts are the reasons why the


economy is not growing, how much has been cut since the coalition


came to power? Of course they had their so-called Emergency Budget so


called after the general election. There was a significant amount


taken out of capital eke pen diure. Overall? We have not begun --


expenditure. Overall? We have not begun... In the first two years,


that feast is finished. How much have the coalition cut? I think


they are certainly trying to reduce that sense that the Government are


going to be active in economic policy. How much has been cut from


public spending? Taking the last Year of the Labour Government and


the financial year just finished, which means two full years? I don't


have the figures with me. They are �8 billion. Public spending last


year was �8 billion lower than the last year of Labour and the public


spending had just gone up by �36 million. What I am trying to get to


you is why would an �8 billion cut throw us into recession? There is a


confidence issue and a demand issue here. If you think we've had the


sense of confidence for consumers, the demand in the economy, it's


just not been there. We've had choices taken by the Government


that have removed confidence. If Government isn't there to play a


counter sickicallyal role. If consumers do not spend, if there is


no stimulus then we will go back into recession. We are in recession.


This is a serious situation. We are not generating the revenues to get


ourselves out of the hole. Let me come to Michael Howard N the first


Budget, 2010, the OBR, endorsed by the Government, made predictions


for growth this by now, by now, by the summer of 201, the economy


would have grown by 4.3 -- 2012, the economy would have grown by


4.3%. How much has it grown by? hasn't. It has grown by 0.4% in


these two years, which is one-tenth of what the Government said it


would grow by. When I interviewed Eric Pickles yesterday and other


Government ministers, they seem bereft of any ideas to get growth


going. First of all, you have got to go behind the label of growth.


You have got to examine what people mean. What Chris Leslie means is


borrowing more and spending more. There are things you could do to


encourage growth which don't involve extra spending and


borrowing. You would do things to free up the labour market. The


Government is taking some measures in the de-regulation Bill, which


When the leader of the Opposition went to Barnsley the other day, he


said he wanted to make it more difficult for employers to dismiss


people, more difficult. Sorry Michael... He's going completely


the other way. Is the ideology of the Government that making it


easier to fire people is the best way to get out of the recession?


You've asked me a question and I'll answer it. Everybody who has looked


at these things all over the world knows, if it's ease tkwror fire


people, it's easier to hire people. And more people are hired.


should be making it ease tkwror hire them. So we need, for


example... ALL TALK AT ONCE Can I move onto Greece. We all know


that if the eurozone goes south, that whatever our economic policy


here, it's bad news for Britain. Does the Labour Party have a


position on Greece's future in the eurozone? Is it your view that


Greece should continue with the austerity pact and stay in the


eurozone or actually, that's just going to be so painful it should


get out? There is an anxiety that the obsession with austerity will


be very short lived and might be self-defeating not just in terms of


the growth agenda across Europe, but possibly provoking a reaction


from Greece... There is a reaction already. We know the situation...


Let me explain. It's not necessary for Labour to have a policy. I'm


just asking whether you have. my point of view I think it would


be disastrous to see the eurozone breaking up. It would be very bad


to see... You're opposed to the anti-austerity party's in Greece?


think the key thing, without getting embroiled in the


maccinations of Greek politics, the key thing is there has to be more


effect made to find a longer term solution. Trying to extricate


Greece from the euro would then put the spotlight on what's happening


in Spain, in Italy and elsewhere, Ireland, Portugal, you name it.


Once one country leaves and there's a sense of that exit door there,


it's the fear of contagion. That's not what the Germans are saying and


they're the ones picking up the bills. Speaking personally, should


Greece still make a go of this austerity deal or should it pack it


in and leave the euro? Greece is going to have to face a long time


of austerity whatever it does. There are no easy choices facing


Greece. There would be a great deal of disruption if it left the euro.


And it wouldn't be, that wouldn't make it possible to avoid austerity.


I think they face a very unenviable choices, but there are wider


questions of the future of the euro more generally. JP Morgan, I want


to finish on that, you've seen the 2 billion loss again. What is the


difference between an investment bank and a casino? I think that,


hopefully, we're getting to a position where investment banks are


going to be ring-fence add way from the retail part of the economy, the


thing that cash machines and all the rest of it. We've had the


investment banking and retail banking world so linked that we


need to pull it... That's not the right answer. Shall I give you the


right answer? One is a well managed and has effective risk controls.


The other is an investment bank. ( Boom-boom.


Right. Who's the author of that wonderful definition? I think we


got it on Twitter. We're not very original here! All right. Are we


saying goodbye to Chris Leslie now? It's been a pleasure. Thank you for


having me stphr. Parting is such sweet sorry.


Sometimes we're a party leader stands on an issue and where they


want him to stand is like instructions for line dancing, step


to the left, move to the right, just spin on the spot. Michael


Howard is nodding. He knows I speak the truth on this issue. Since the


Budget and bad local election results the call for David Cameron


has been resolutely to move right, right, right. But will he? Should


he? Gyles has been finding out. A PM doesn't just have to run a


country, but a party. If that's the Conservative Party, then it means


keeping a very broad range of views all happy under one banner. Never


is that job harder than when things aren't going your way in the


country and the people paying the political price are your foot


soldiers, who can go from Councillor to critic in the space


of a count. Since the Budget the Conservatives have gained a


reputation for incompetence. Many people who are not natural


Conservatives assume the Conservatives support the better


off, they're a bit heartless. But they think they're competent and


they get votes from people who say, I don't terribly like their outlook


on life, but they know how to run things. When they lose that bit of


their reputation, as they did for example in the 1990s, they're sunk.


So would a so-called right shift, a move to more stridently


Conservative views on tax, public spending and society give the core


and possibly voters a window of assurance about the future? For


some it's not even about the right, the problem is the middle. At the


top of the party there is almost an obsession with capturing the centre


ground. I think that drives us to take our eye off the ball


occasionally, off those big issues and we get detracted at looking at


issues, such as the redefinition of marriage, or Lord's reform or wind


turbines, which actually, don't make much stopbs people outside.


That's not their main concern in the street. They're not worried


about the red benches. They're more worried about the red lines on


their monthly statements. contribution is let's be positive,


let's say what can make Britain a better place. Let's not be


ideological. There are good ideas out there. They're sometimes called


right, sometimes left. Let's go for the common ground. That's where


more people are in support and recognise where the common ground


is now. It's not where some people say the centre ground is. Such


voices stress they're still supportive of the PM but keen to


give him options. The party doesn't need to lurch to the right.


Elections are fought on the centre ground. David Cameron is more


popular with the public than Conservative Party grandees and


colleagues should remember that. Divided parties lose. That's not in


the interest of our party. Personally I don't think it's in


the interest of our country. Anyone who thinks previous party leaders


haven't presided over their own tugs of war between the party's


wings are delewding themselves. The skill is to be either strong enough


to hold the line you want... lady's not for turning. Or allow


both sides a few victories to hold balance. Which path David Cameron


favours following may be determined less by convincing Conservative


argument, and more by the convines of what coalition will allow.


-- confines of what coalition will allow. What do you say to Tories


who want a more robust Toryism? What the Government has got to do,


what any Government should do, is per sue the policies which are


right for the country. That's got to determine what policies you put


into place. It's complicated by the fact we have a coalition Government.


I support this coalition. I'm in the a great fan of coalitions in


general. I'd much prefer there to be a single party Conservative


Government. We take that for granted, you'd want that. I would.


If we had a majority, but we didn't get a majority. So you have to have


compromises in coalition. You know the criticism of your colleagues,


you know this as well as I do, they know they're in coalition. They


know they can't get everything. They can't get everything for the


very good reason they didn't win the election. Exactly. But they


feel that the Lib Dems, who make up a sixth of Parliament, are getting


a lot more than they're getting, that Mr Cameron listens to the Lib


Dems a lot more than he does his own backbenchs. What do you say to


that? I'm not sure that's right. I'm right in saying that's the


feeling, correct? I think people take that view. I'm not sure it's


right. You put yourself in the shoes of the Prime Minister, he's


got to try and do what's right for the cub tri-- country. He know


what's he think sz right. He has to take into account the views of


coalition partners. On issues like Lord's reform or gay marriage, are


these things the coalition should pursue in the particular economic


climate we've been talking about? Well, I don't know to what extent


Lord's reform is going to be pushed through. It seems to be a bit of an


open question. You don't sound too keen on it. Well, all the parties


work committed to it in their manifestos last time. That's


perfectly true. We're going to have a bill. It's going to start in the


House of Commons. We'll have to see what happens to it. You don't sound


convinced. I agree with those who've said that people in the


street are worried about much other things at this particular time.


I'll take that was a yes. Gay marriage, is that a core


Conservative principle? No, it's not. But it's not in the Queen's


Speech. The Government is consulting about it. It's a


perfectly reasonable thing to consult about. A lot of people hold


up bar ris Johnson and say look, London is a Labour city, but he won


London with a strong populist Tory message. What do you say? I think


that, look, London was essentially ape contest between two person --


essentially a contest between two personalities. It was the nearest


thing we have in this country to a presidential election. You vote


individually. You vote directly for the individuals not indirectly as


we normally do. So personalities played a part in that election to a


greater extent than is usual in our politics. Boris won because he's


Boris. Are you content to put the current woes of the Conservative-


led coalition down to mid-term blues or are you not worried there


is something more fundamental afoot, that these are tough times, people


may be prepared to live with tough times if they see a light at the


end of the tunnel, but if the Government gets a reputation for


incompetence and being out of touch, that's worse than just mid-term


blues? Obviously, that's a danger. All governments go through rough


patches. That's why the term "mid- term blues" has become such an


accepted part of our political jargon. The big question is a lot


of governments come out of those rough patches and recover and go on


to win the next election. Not all governments do. I'm confident that


this is a rough patch, out of which this Government will come.


there was an interesting feature of the elections for Labour, which is


not to the Conservatives' advantage, which is once again Labour began to


establish itself in a party strong in every part of the country. They


held onto Glasgow. They did well in the west of Scotland. They took


back South Wales. They increased their position in the north of


England. They started winning seats again in the Midlands and the south.


Whereas increasingly your party looks like a regional party of


London and the south. No-one is going to pretepbld that the local


elections were a triumph for the Labour Party. I'm saying is that a


trend, does that make you pause to think, this could be more than mid-


term blues? Well, nobody knows. That's an honest answer! Nobody


knows. My take on it, I'm confident that the Government can recover.


Nobody knows for sure. The local elections were not a triumph. We


have to learn lessons from what's happened in the last few weeks. I


think the Government will ref cover, but we'll come back, no doubt in


two or three years' time and know the answer. In two or three years'


time when the coalition parties go their separate way to fight the


election as separate parties and we're agreed they'll do that,


correct? Yes. Should the Conservatives include in their


manifesto a rev dumb on Europe - in -- referendum on Europe -in or out?


You're asking me to write the manifesto two or three years out.


I'm asking what you think? depends entirely on the


circumstances at that time. It might be a sensible thing to do at


that time. It might be idiotic. it just a matter of principle?


at all. One thing I think is pretty clear, lots are going to happen to


the European Union between now and the next election. There are going


to be many developments. In the light of those developments we


should decide that question. 2015 we may not recognise it.


knows. Indeed. I don't know. Whoever thought a


poll significance would tell me that, honesty has broken out.


Police officers from every force in England and Wales are gathering for


their annual conference. Theresa May is due to address them on


Wednesday in what's likely to be a tense encounter. It follows the


march in London last week of 30,000 police officers, protesting at cuts


in the service. Police officers cannot strike. Such is the feeling


within the organisation that there are plans to ballot members on the


subject this Autumn. Paul McKeever is Chairman of the


Police Federation of England and Wales. He joins us from our


Southampton newsroom. Welcome. What kind of reception are you going to


give the Home Secretary this time? The Home Secretary hopefully is


somebody who will listen. You have a former Home Secretary there,


Michael Howard, somebody who we held in very high regard indeed. He


was very successful Home Secretary. He used to listen to us. He would


meet with us and listen. We hope the Home Secretary will do the same.


Michael Howard didn't have to preside over huge cuts. We even had


Labour in here earlier saying that even they would have to cut the


police. Not by as much, but they wo. I ask again, what kind of reception,


what mood are your members in in the way they're going to treat the


Home Secretary when she arrives? She is the Home Secretary and we


have to recognise her office. The questions will be asked of the Home


Secretary will be clear. Why have the coalition Government given


policing such a low priority? Why is it they've chosen to increase


some budgets like overseas development by 34%, which would be


a larger budget than policing? Why, when we're facing what is in effect


a four-year pay freeze and additional contributions to


pensions, like everybody else in the public sector, why are we


facing pay reviews taking more money out of our pockets? We're


trying to be fair about this. When the coalition came into office, we


listened to Sir Denis O'Connor who said we could cut by 12%, we


accepted that. To see 20% and more, it will be disastrous for policing.


Let me put that to the former Home Secretary and Conservative peer.


Why is a Conservative-led Government cutting the police


budget by 20% and increasing Thank you very much about the nice


things he seed about me. The Prime Minister has said and I agree with


him that we're not going to balance our budget on the world's poor.:


Will you on the back of the police instead. The Home Secretary had an


independent look at the terms and conditions of the police and that


has come forth with some recommendations and she's wanting


to put those recommendations into effect. I am sure she'll listen to


what the police have to say. The police have to recognise that we're


in very difficult times and we all have to accept.... Now the Police


Federation have said they think that things can not continue as


they are. It is not just the budget cuts you are against. You continue


like the reforms as well? Some of the reforms are leading to a


fundamental change in British policing T accountability we have


is being lost by the wholesale privatisation in some forces. We


are losing the resilience F you remember last year, during the


riots, we managed to get 16,000 officers out on the streets to


quell those riots. That is almost the number we're looking to lose


over the next few years. We accept there has to be a cut. Education


was set by a similar per cent. The public's safety is being put at


risk by some draconian changes. you accept that the police service


needs to get much more -- do you accept that the police service


needs to get much more efficient? We were the first to call for a


Royal Commission, to look fundamentally at policing to. Have


this piecemeal change which is going on, it will lead to a


different police service. We have questions about the report carried


out by Tom Windsor as well. There are some real doubts in our mind


that we'll be able to keep the public safe. You have a


disillusioned police service. Almost every officer off duty was


in London last week. 35,000 police officers trying to get across how


fundamental these changes are and that public safety is being put at


risk. You have a police service saying we understand there has to


be a cut. You have got the head of the Police Federation there telling


me he understands there are some restrictive practises they have to


get rid of. Despite that attitude, which is not exactly an attitude


akin to Arthur Scargill's miners many years ago. You have managed to


get 30,000 police on to the streets of London against a Conservative-


led Government. Something has gone wrong. I can understand that police


officers feel very strongly about these things, just like the others


that you mentioned at the beginning of this interview, doctors, nurses,


others feel strongly. We live in difficult times, I am afraid.


People who do feel strongly are nevertheless going to have to


accept that the world has changed and because the world has changed,


we've got to change the way we do things. There has to be a dialogue.


I am sure the Home Secretary will listen to what Paul and his


colleagues say. At the end of the day, we have to recognise that


really difficult measures have to be taken because of the


circumstances we're in. Very briefly. I have to say we cannot


understand why the Government has given policing such a last -- low


priority. The protection of citizens is at risk. Well, we're


going to have to let Michael Howard go. He worked hard. Eric Pickles


would be proud of him - your productivity has been huge. We saw


all revelations about the relationships between the press and


politicians since David Cameron came to power, including how he


signs off his text messages. Yes, we deal with the big issues of our


times. This afternoon we will see how it worked out when Tony Blair


was at Number Ten. Alastair Campbell will be in front


of the bench. You must have been aware when you were Tory leader of


this incredibly close, deep relationship between News


International, the Murdoch organisation, and the Government?


Who could be unaware of it. Certainly, I was, yes. Was there


nothing you could do? You needed the support of the Sun and other


papers. Sure. Was it impossible to break into? That's right. I failed.


Do you think that had an impact, on for example the 2005 election?


think you can exaggerate the extent... The Sun took a while to


make up its mind in 2005, didn't it? I had some hopes at some point.


I will tell you, here is a scope for this programme, Andrew.


Excellent! I asked Rupert Murdoch directly for his support at the


2005 election. He said, my heart is with you, but I am afraid my head


isn't. So he'd had enough of new Labour by


then, he kind of wanted to go with you, but he wanted, he thought


better stick with Labour. How interesting.


Well, we will see what Mr Campbell has to say this afternoon. In these


days t Prime Minister didn't do texting and there wasn't so many e-


mails around. I didn't know how to text in 205. I saw you doing it --


2005. I saw you doing it on the way in here today. How did you sign it


off? It was an e-mail. As usual it will be a busy time for us hard-


working and I say it again "hard- working" political journalists Mr


Pickles. Tomorrow will see Ed Miliband shuffle his Cabinet. Peter


Hain says he will stand down. Keep an eye out for whether Blairites


still have a job. On Thursday Francois Hollande is oh -- on


Tuesday Francois Hollande is sworn in as France's new President. He is


expected to hold emergency talks with Angela Merkel to discuss the


continuing crisis. On Wednesday the Treasury will await the employment


figures as well as the Bank of England's inflation report.


Then in the evening, the Conservative 1922 Committee, a sort


of trade union of Tory backbenchers, will vote for positions on the


executive. The Tory leadership will hope for some loyalists to try and


steady the ship. Let's get the views of two hard-working political


journalists. Very hard working - I am told Mr Pickles. Amber Elliott


from Total Politics magazine and the Guardian's Nick Watt.


First of all, are we going to get a Labour reshuffle? Yes, I think we


are. We know there is a vacancy. Peter Hain has said he wants to


resign as Shadow Welsh Secretary. There probably will be a reshuffle.


You will perhaps look at a reshuffle or the thinking about a


reshuffle after that speech tomorrow. The big question is; does


it go further than filling the slot vacated by Peter Hain? What the


Labour Party sources are saying is, look we had a big reshuffle last


year f you like the 2010 reshuffle, when they brought on really


talented people who were elected at the last election. Will they do


something like you just said there? Is Liam Burn going to be moved


aside? There's a battle going on. Blairiates today are saying we --


Blairites today are saying they support him. What do you think? An


extensive reshuffle or just fill the hole left behind by Peter Hain?


I think we'll see a mini-reshuffle. I think Ed Miliband is happy with


where his party is I think we might see Liam Burn lose one of his


positions. Perhaps we will see a reshuffle there. The other thing to


consider is David Miliband's role. There have been rumours and


whispers about where he might head. I am hearing he is not moving.


So we will not see perhaps him move up quite yet. And Nick, this new


mantra from the Government, we had it from Mr Hague yesterday in the


Sunday Telegraph, from Mr Pickles on the Sunday politics - that we


all node to work harder, particularly chief executives need


to work harder - as a spin line, how would you rate that out of ten?


Zero or one? Kit not apply to you, me and Amber because we could not


be working any harder. Think the Government needs to be careful. The


Conservative Party like to think of themselves as the friend of


business and they seem to have found themselves getting into a


spat with business leaders. It is interesting that Peter Mandelson


said one of the reasons high the Labour Party lost the last election


is because they didn't have any business leaders on their side. You


had the Queen speech last week, there appeared to be, as far as


businesses were concerned, not enough measures in there to promote


growth, so they are not happy. If the Tories were in power on their


own, you would probably see some serious supply side reforms coming


through. We talk about the report by the venture capitalist, talking


about it being easier to sack worker who are not working hard.


They are in coalition, so they are slightly ham strung. Cannot do all


they want to do, can the Conservatives. They need to think


carefully. A Government at war with business - not really the right


place to be. Particularly a Conservative-led Government. Amber,


these elections to this 192 committee it is really a - it is a


-- 1922 Committee, it is a test. What are they going to do? Are they


going to put a bunch of loyalists on to that executive? There is a


group among the David Cameron lot called the 301 Group. They tend to


be loyal. Perhaps they are ambitious about where they want to


go. They are standing for a lot of the executive positions. There is a


feeling perhaps it has something to do with David Cameron trying to put


his stamp on the backbenches. The other thing is there is an Old


Guard there at the moment. Perhaps we should not just see it as


Cameron's people trying to put their mark on this, but a younger


group of 2010 intake MPs coming up, saying we want a bigger role in our


backbenchers. I think you have worked hard enough. Take a quick


tea break and be back for another 18-hour shift. With us are Monday's


members, Laura Sandys, Jenny Willott and for Labour Kate Green.


Welcome to you all. Are you excited about the reshuffle? I don't think


it is the biggest story we are thinking about today. We have a


competent team across the Labour Party. Are you waiting by your


phone? I am not waiting by my phone. Who ever it is... I am very happy


with the job I am doing. Who ever is doing whatever job we are a


strong team and we are sharing ideas together. That is


controversial for a member to say. Just ask you to be independent for


a few seconds - would you like, in your own view, to see a


minireshuffle or an extensive reshuffle? I -- mini-reshuffle or


an extensive reshuffle? I don't think there is any need for an


extensive reshuffle. We are getting our message across to more and more


of the voters. I don't see the need for a major reshuffle. Would you


like to see David Miliband? I think he has tremendous strengths. Would


you like to see him brought back in? I am happy to see him in.


are happy in or out? I think David has his own views. Is there


anything about David you would not be happy about? He must have the


opportunity... You will not express a view. He will be a huge asset to


the team, but it is up to David to say what he wants to. Even I know


that bit. I was interested in your opinion. That is what we do on


shows like this. Tell me about this working harder nonsense? What it is,


it's about as a country we need to regain some of our ambition. I


didn't see the exact quote directed at business. No William Hague


talked about justice King, the person who runs Sainsbury's. He


picked out the head of the British Chambers of Commerce and said, they


should work harder. Why are you picking a fight with people who


already work hard? Having run two businesses myself I know how hard


business people work. What is important is that we get that


sepbts of ambition internationally. I think -- sense of ambition


internationally. There is a lot Government can do when it comes to


exports. That is an area we have not, as a country, over the past 15


years we have left it. coalition Government didn't say


Government and ministers and business - we've got to get


together more and push the export drive. It said, you business folk


I can't say what William Hague intended by his comments. What bit


didn't you understand? You can't solve everything by legislation.


Government can't solve everything itself. In my constituency I


represent a city centre. There say huge diverse range of businesses


there. Actually, a lot of the medium sized businesss are doing


well. They're very ambitious, taking on new staff. When they can


get bank loans, they're expanding very often. The issues facing


businesses and holding some of them back are a whole range of different


issues, many of which are outside the hands of the Government itself.


I think that it's up to everybody to be playing their part in it to


make sure that we build the economy. You can't solve everything by


legislation? Absolutely. Do you go to Lib Dem conferences? I've been


going to Lib Dem conferences for years. Every problem there is,


there's a demand for legislation. think it's clear thaw can't


actually solve everything by legislation. You say that -- will


you say that at the Lib Dem conference this year? We have been


saying for years, if you have too much legislation you can make


things very, very difficult for businesses. Too much regulation


makes things more complicated. do you think about the work harder


mantra? Businesses in my constituency will be shocked and


offended. The reason some of them are sitting on piles of cash is


because of a lack of confidence. And uncertainty. Exactly, Andrew.


The smaller businesses are saying they can't get credit. They're


struggling many of them to get finance out of the banks, despite


the reforms that the Government apaifrptly has tried to put in.


totally agree that legislation is not what we need. What we need is


growth. That comes from businesses. One of the measures I would have


suggested one looks at into the future is how we kin sent vice


those cash mountains -- can incentivise those cash mountains to


be releezed. We used to have the business expansion scheme. One way


to do it may be not to lecture businessmen to work harder and


encourage them to invest more. would love to see some of those


businesses invest in their supply chain, in smaller businesses within


their supply environment. Well, supply chain interesting, because I


want to move on, don't go away. Talking about the biggest supply


chain in the country in a second. In a little over an hour's time the


Defence Secretary will be giving a statement to the House of Lords on


defence spending. The details are pretty closely guarding, but the


one thing to come out over the weekend is that Mr Hammond believes


he's found a way of making the �38 billion black hole in the MoD


budget disappear. Sent this magic man to Greece, if this is true.


Here on the Daily Politics, we're old and suspicious enough to want


to wait and read the fine print. Commander John Muxworthy Commander


John Muxworthy of the UK National Defence Association, which


campaigns on defence spending and strategy is in our Plymouth studio.


Thank you for joining us. Do you think, is he going to pull off this


magic, is the procurement budget back on track? There's a well known


saying that I'll corrupt that it's financial talk that, if you can


make anything you like, there's lie, damn lies and Treasury statistics.


If they've clear today fine, but what is so damaging is the cuts


that they've done to the military, the navy in particular, not just


because it's my service, but it's all interdependent. The savings,


the cuts are supposed to have provided whether it's �38 billion


or whatever, I don't necessarily believe it, but the savings have


not been justified. The throw ago way of Ark Royal and the Harriers,


for instance, didn't save money. It cost the Libyan campaign three


times what it would have cost if we hadn't had that cost. It wasn't a


saving. The other thing, if I might add it, when there were the Nimrods


that they didn't want and they changed their minds, they threw


away �4 billion, now that emaciated the armed forces, so did the


carriers and there are no savings. It's not right because defence is


the first priority of any Government and so says the Prime


Minister. Indeed. Of course, we've just had


the police on the programme saying they're the first front line


service as well. You all seem to be, any time TV presenters will be


claiming to be the first fronts line, though that obviously won't


be too credible. You talk about the cuts. As a commander, you're a


naval man, you're getting two of the biggest aircraft carriers the


Royal Navy has ever had in its long and distinguished history. Thank


goodness. You have astute class subMarines, which are state-of-the-


art, even Americans don't have subMarines as good of that. You


have a destroyer which cost �1 billion a piece, ahead of anything


else in the field, what more do you want? It's not nearly enough.


There's a three to one ratio in anything in the military. If you


wanted a ship on station for some operation, you need three. Because


one will be in maintenance, one will be training and it's the same


with service personnel. We can't afford three aircraft carriers,


commander. We'll probably make do with two, but it's the silly idea


that we would then maybe put them into storage. Of course, I missed


out of course, you're getting the new jump jet strike 35 fighter as


well. That means you won't have to put one in storage, you'll have the


two. There's no logic to that. Don't get me... That would take a


whole new programme. What I have to say, they're trying to get defence


on the cheap. Give me the one example you said of the type 45


which are superb ships. Six isn't enough because when SDSR98, the


really serious review, because SDR 10 was rubbish, just financially


driven, merely financially driven, the navy asked for 14 type 45s,


they were cut down to 12, that was rdge. That was going to cost �12


billion. In fact, they then changed their minds, the Government changed


their minds, not the board, they were well advised, it took three


years for that decision, but now we get six. And the price has doubled,


not because of the military's fault, but because of Government, the MoD


and Treasury constantly changing their minds. All right. Defence is


being emaciated. All right. Stick with us. I'm going to speak to the


politicians and see what you think. When you were campaigning at the


last election, did you think you would be pre-siding in a Government


with this cutting down process by 20%, giving us the smallest Army


since we fought the Boar war. Which didn't go very well I should point


out. Having worked at the Centre for Defence Studies for many years,


actually I think we needed a realignment of our capabilities. I


appreciate that we had �38 billion of black hole. No-one wants defence


to be cut, but we've got to rationalise it and also, in my view,


make it much more flexible and nimble for a different set of


defence requirements and defence threats that we have. He says it's


going to be too small, we won't have enough. To do what? I think we


should be looking very clearly at what we need to do in terms of


international trade, which is very much the naval sector. We need to


be looking to invest more in cyberdefence and we need tone sure


that we have a capability that's flexible. We have got a lot of


static or have in the past had a lot of static platforms and I think


that actually, what we're doing is designing a defence system for the


future, but yes, appreciate it's on a budget. We still spend more on


defence than 99% of the world's countries. About �40 billion a year.


All we ever hear from the military is we want more and we never get a


great bang for the buck. Here's a radical idea to get steam coming


out of your ears, why do we need three separate services in Britain


now, with all the generals and admirals and all their, wing


commanders, why don't we have one massive UK/US style marine force


that does everything? That would be brilliant. I wish we had the


numbers of the US Marine Corps. We have just flogged all our Harriers


to them for �1 million an aircraft. Do you know how much it cost us?


�20 million. The approach this this has been wrong. The whole country


lacks military experience now. 30, 40 years ago, they'd been in World


War II, they'd had conscription. Now we don't have it. There's no


understanding in politics on the whole, there are a handful of


people in Parliament who have got military experience. We, the UK


national defence association, with admirals, generals, civilians, all


sorts of people, have submitted seven major reports in detail, by


experienced people. It's all been turned down and ignored. This is


where it is going wrong. One quick one... I'm sorry. I'm sorry to


interrupt. We've given you a fair run. I need to move on and get on


some other subjects. Thank you for joining us. You're welcome. Let me


come to you, aren't you getting concerned that the longer time goes


on, the more elusive economic growth seems to be, that you're


doing the cuts, though you've only just started, you've put taxes up.


We have an economy that's flatlining. We saw some progress


last year, which has gone backwards, which is disappointing. There are


measures both in the Budget and in the Queen's Speech that will make a


difference. There's going to be a significant amount of investment in


renewable technologies, in the Green Investment Bank. The


Government's bringing forward legislation... You don't expect


that to kick off economic growth, do you? I think it will make a real


part in some parts of the country. Some of the green jobs we've looked


at recently, which you're so proud of, have cost �300,000 a piece.


don't know what in particular you're referring to, Andrew. Nick


Clegg's regional development fund as well, one of the jobs he created


there cost �200,000. That's not going to mop up unemployment.


talking about different things now. I'm talking about both. Talking


about the investment bank, the Government putting in �1 billion.


How many jobs will that create? idea is that will leverage in


private investment to create a pot of money that's available for


invstment in jobs and new technologies. The solar power


people have just said they're pulling out, they've cut the


subsidies. That's not what I'm finding in my area. They have said


they are pulling out. I am finding... We're going to get this


economy growing through a Green Revolution? If you want to know the


great renewable story is in my constituency where we have the


largest windfarm in the world. 5,000 people have been coming in


and out of Ramsgate harbour over the last couple of months and it is


going to be, they're looking to reinvest... What are these 5,000


people doing, building an off-shore windfarm. They're looking to get


more off the back of the reform. is seriously your investment that


growth comes back to the economy because of a Green Investment Bank?


There are small businesses which we support and have always supported


as a coalition. The deregulation... They can't get money to invest.


deregulation legislation coming through is going to be focused on


them. Then you look at the big infrastructure projects.


Electricity market reform will invite a lot of engineering jobs


into the sector. What would Labour do to get growth going? We wouldn't


have taken so much money out of the economy. And we would put it back


in more quickly. The Green Investment Bank is not going to be


lending for another five years. We can't wait. We need money in the


economy now. Where would you get that money from? It's a mix of


first, not rushing to cut rates of tax for the wealthiest and to make


sure that we keep money flowing around the economy. You'd borrow


more? The borrowing, the starting point, wouldn't start from here,


the borrowing is larger now than the Government had planned as a


result of their failure. Would you borrow more yes or no? If we


started today we would live what we're inheriting from this


Government, which is higher borrowing. Would you borrow more or


not? I have time for one word? know you're not going to get one


word. We'll leave it there. That's all for today. Thanks to our guests.


The One o'clock news is starting over on BBC One now. Jo is back


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