21/05/2012 Daily Politics

Good afternoon and welcome to the Daily Politics. Is the coalition

heading for another rocky ride, this time over workers' rights?

Controversial recommendations on the form of Britain's employment

laws are set to be published this week. It has been reported that

David Cameron may back plans to bring in no fault dismissal. Vince

Cable has allegedly called the idea bonkers.

Is your head in a spin over tax? Do you know your National Insurance

rate from capital gains? Proposals for complete reform of the system

today. Could we ever see Labour and the

Lib Dems smooching in the rose garden? We will be asking if the

two parties could ever form a coalition.

And the press of Westminster often get a bad press. Quentin will be

delving into their world. Someone once said that the relationship

between politicians and journalists was that of a lamp-post and a dog.

But who is the lamp-post? I will refrain from answering that!

All that in the next hour. With us for a first half is the former

Labour foreign secretary and now crossbench peer Lord Owen. Welcome

to the programme. Let's talk about the NATO summit in Chicago. World

leaders have the meeting there and Afghanistan was top of the agenda,

of course. -- have been meeting. They are talking about a road that

for withdrawal. Are you confident or in any way reassured, that when

the withdrawal comes, 2014 for America and Britain, that

Afghanistan will be able to run itself? Afghanistan will be able to

run itself but that is not the way we would like to be able to run it.

That is the trouble. We have gone in and tried to recreate a new

Afghanistan on the basis of Western attitudes to democracy and

everything else, and it has not worked, it will not work and it was

never going to work. So we have to get out. We are doing our best to

put the Afghan Government in a position where they can negotiate

with some measure of strength with the Taliban, but they are going to

have to live with each other. There are two Afghanistans. The North of

Afghanistan will largely be stable. The problem is Helmand Province,

the Taliban and the Pakistani military, overtly supporting the

Taliban. There are problems there around the USA and Pakistan, as

well, recently over closures of that supply routes because of the

NATO airstrike which killed lots of Pakistani soldiers. That is going

on as well. It is a very important issue. When you are withdrawing,

that is when you and your most vulnerable. Every soldier fears

withdrawal under fire and you need to have good access routes out. The

Russians have been rather helpful. I think a lot of material will go

out through the North. It is more expensive, longer, but relying

totally on the Pakistanis and coming out through Karachi is much

too vulnerable. Yes, and unreliable. What about the issue of Money? The

other matter they are talking about is the amount of money. 4 billion a

year was talked about to help build up the Afghan security forces and

maintain it. Who do you think should pay for that? We made a

great mistake really when we first went in. We did not have enough and

lightened aid projects. We had Western views about what we were

going to do about opium trading and everything like that and we

destabilised a lot of their economy. We can help them and we should help

them but a lot is now going to depend on the Afghans. I went to

that country when I was 21 and I lived in the mountain areas, with

the nomad tribes. These are very self-reliant people. They have seen

of many empires before and they will see of others. They will not

take occupation. They will find a solution. It will be different from

what we would come up with, but we can help them at least to have some

strength and not have the Taliban overrun Kabul with the disastrous

consequences that happened previously. All right. Thank you

for that. Instead of our usual quiz we are

going to be brave. Oh, no! It is a caption competition. Clock this and

send us your caption. This picture has made most of the national

newspapers and was taken on Saturday night at Camp David, when

world leaders took a break from saving the world economy to watch

the Champions League final. Exciting it was, too. Chelsea beat

Bayern Munich on penalties, of course. Tweed or email your best

suggestions, but keep them respectable! -- tweet. At the end

of the show we will read out the best ones.

A while ago the venture capitalist and Tory donor Adrian Beecroft was

commissioned by Downing Street to come up with ideas to cut business

red tape. He delivered his report in October but it has not been

published before now. Apparently because some of the suggestions

were too controversial. After receiving Freedom of Information

requests, the Government has now decided the report will be released

this week. The Beecroft Report has been gathering dust on Vince

Cable's shelf in the business department for months. But it will

be published this week potentially leading to further tensions between

coalition partners. Leaks from the report suggested calls for delays

on making parental leave more flexible, a cap on the amount of

money tribunals can award for loss of earnings, and perhaps most

controversially the introduction of so-called no fault dismissal. David

Cameron is said to be for this idea, speeding up the pace of reform. But

Vince Cable has dismissed no fault dismissal as bonkers and other Lib

Dem MPs are just as hostile. The director general of the Institute

of Directors, Simon Walker, is in our Westminster studio. Thank you

for joining us. Have company bosses been calling for no fault

dismissal? I think they have. They are certainly calling for a

simplification of the system we have got. Half of our members are

discouraged from taking someone on over the past couple of years

because they are worried about what will happen if it does not work out.

I think it is getting away from yes and them mentality, which applies

to so much of business today. -- Ahsan them. We have seen example at

General Motors of what you can achieve when you are showing

flexibility. I think no fault dismissal, like no fault the 4th,

it removes the stigma from a situation where you just cannot get

on. -- no fault divorce. No employer wants to get rid of a good

and productive employee who is delivering. But people are

frightened about taking on someone who does not work out and then

being hit with an unfair dismissal claim. On that basis, if you say

they are calling for it, are you also saying that you would see a

dramatic increase in the number of people being taken on by small and

medium-sized firms if this policy came into force? I think we

certainly would. We are not talking about firing people at will. Isn't

that what it comes to? necessarily. It is an agreed form

of compensation if it was decided between you and your and were that

it was not working out. There would be a statutory proportion. -- you

and your employer. You would not go to court, which costs thousands for

the employer, which is quite a deterrent. They know that �10,000

of legal fees can be the cost if you go to court. And some firms

have gone to court and gone and even though they have won. Do we

want a situation where people are frightened to take on people

because they are frightened they might not work out? Do you think

Vince Cable is an anti- Business Secretary? I don't think so. I

think he has some good ideas for business much of the time. I don't

think I agree with him on this but I don't know the exact scope of

what is in the report because we have not seen it yet. And I don't

know the exact scope of his opinion on it. But I am very hopeful that

there will be some common ground, perhaps allowing this to apply to

companies with fewer than 10 employees. For them it really is a

burden having to deal with complicated, bureaucratic

regulations. That �10,000 really hurts if you are running a business

with just four people and you incur legal fees. Thank you.

Chuka Umunna, the shadow Business Secretary, is with us now. Let's

pick up on that. You accept that the burden of regulation adds as a

deterrent to hiring staff? I will say a couple of things. There are

lots of different opinions on this. If you speak to the managing

director of Mars, Fiona Dawson, she has said she would not want to see

workers' rights being compromised. Yes, but that is a very big company.

What about... I was also going to say that before being elected I

acted as an employment lawyer and I have acted for many of Simon's

members. I don't think people are looking to fire at will, if you

like, and that is what no fault dismissal would allow employers to

do. We are talking about a lot of people watching this programme.

Over 90% of our businesses in this country are small businesses and we

have 3.6 million people employed in firms of fewer than 10 employees.

This measure would allow people to, regardless of your performance, to

fire at will with the payment of a set sum. This is not left or right,

it is wrong. And it misses the point. This is being done in the

name of growth. If you look at the plethora of different issues

affecting businesses... But Simon things it would result in growth if

people hire more people. If you are making a marginal decision and you

are a small company with 10 or 20 employees, that could be the very

thing, that makes you take on an extra couple of people because you

will not have to have a big battle if it does not work out. We already

have the third most flexible labour market. Only the US and Canada have

more flexible regimes than ours. It is the most flexible labour market

in Europe. There is no evidence whatsoever, if you listen to

leading economists like David Blanchflower, the former member of

the monetary committee of the Bank of England, they have all said that

there is no evidence of doing away with people's rights helping us out

of the double-dip recession and reducing the numbers of people out

of work. We should not even be talking about this. There are

bigger issues in business. If we look at the CIPD survey on big

concerns in business, 50% say that the lack of skills in the work

force is their number one issue. 28% of them talk about banking.

Let's look at measures that make a difference. A National Insurance

broker do much more to encourage micro businesses to take on more

employees. -- National Insurance break would do much more. I spoke

to businesses in the Midlands, and they said that regulation and

labour reforms would make a huge difference. It would make a huge

difference to their confidence to invest and employ people. You must

admit it must be part of the package and something can be done

to make it easier to hire and fire. In terms of the substantial rights,

which the Government is talking about doing away with, I don't

think they should be doing that because it is wrong. You can reform

how the employment tribunals are working, for example. And they have

set up a review and I think that is welcome. Looking at procedures is

one thing, but tearing away people's basic rights at work is

quite another. You agree with Vince Cable that it is bonkers,

basically? I think it is bonkers. Do you think it would encourage

business to take on more people? You are standing in a very

difficult area and it is probably not wise to choose a close friend,

contributed to the Tory party, the venture capitalist, to lead this

sensitive subject. Chancellor Schroder 10 years ago made the

German economy competitive even within the eurozone. He did it by a

whole series of measures, broadly by agreement. These sorts of

things? Yes. I have been an employer for 17 years. Nobody goes

to one of these tribunals easily. You also have to have them for

employers on your doorstep all the time, advising you on how to deal

with it. -- you also have to have employment lawyers. It is difficult

and it has to be done with trade union support and the Institute of

Directors, with delicacy and care, but this country has to be more

competitive in world markets. Our unit costs have got to come down.

We have devalued, which has helped us. We have not had as big an

advantage from that devaluation as I had hoped. Our growth has been

appalling in the last two years and it has been a very bad thing, the

way the economy has dipped down. you do think it would help? I think

there are a halt range of measures. These are small but important

measures. The fundamental thing is austerity being the dominant

element or growth? Demand. That is the problem businesses have. Demand

is basic. The thing is about this, it is a distraction. Demand is the

problem. We are seeing issues with access to finance, which is why we

are looking at plans for British investment bank, which the Chambers

of Commerce have argued for. Things like sorting out finance, and

National Insurance brick, getting infrastructure spending going,

those have been argued for more prominently by business. Not

tearing away people's rights. We are not in a double-dip recession

because of the unfair dismissal regime. Listening to ministers and

the Treasury and Number 10, you would think that because people

watching this programme have rights at work that that cause of the

problems that we have. So you will not support any of the issues

surrounding it no fault dismissal? Bring the consultation period down

Lord Owen is right. We have not seen the small print.

Is it true that Vince Cable has discussed his views and you know,

response to this with Labour, with Ed Miliband?

Well, we have discussed it with him in the House of Commons. But what

about privately? There are reports now, you know, you said, you agree

with with Vince Cable, the idea would be bonkers, so you share

views in response to Beecroft. Are you talking to Vince Cable? I speak

to Vince regularly, but I know nothing about the conversations to

which you have referred now. Would you be pleased if Vince Cable

was talking to Ed Miliband about this privately? I think where we

agree on things, it is good to work in a cross party basis. We have in

too much of a dire situation, looking at the economy, an economy

which hasn't grown for so long. Where I can work with Vince and

I've done that around executive remuneration and he is struggling

to get anywhere with the road blocks to reform in the treasury

and Downing Street and I will work with him on this issue.

Is that what he said? He is struggling, he is worried that

deatial and the coalition -- David Cameron and the coalition will take

on these issues? It has become a back water because he doesn't have

the backing of treasury. He doesn't have the buy in in Number Ten, they

are wedded to the old thatcher right orthodoxies.

Now, with fresh elections in Greece called for 17th June, but with the

crisis showing no signs of abating, spare a thought for my counterpart

on the Greek version of the Daily Politics. Here she is, on Focus TV,

trying to keep the peace in a discussion between Petros

Tatsopoulos from the left-wing party Syriza and Stelios Stavridis

Apology for the loss of subtitles for 48 seconds

Well, I'm thankful to say that hasn't happened to me yet. Chuka

Umunna left happy and Lord Owen is still with us. Here to talk about

the situation in the eurozone and Greece, do you think Greece will be

in the eurozone by the time of the next election? I doubt it. I think

quite a few country, we will have a eurozone. Germany won't go back to

the deutschemark. There will be a eurozone, like economies, the

present variation within the eurozone of the economies I think

is probably unsustainable. I am against us predicting what will

happen. The Greek people are having an election. They will fight

against austerity. That's the big issue.

Should it be seen as a referendum in the way David Cameron

characterised it as to whether or not they stay in the euro? David

Cameron needs to be careful. His job is to look after British

interests. It is not to grap headlines. -- grab headlines. The

thing Europe wants to know from Britain and America, what structure

from Europe would be both in the interests of the eurozone and in

the interests of the single market. The single market is very important

to the UK. In fairness to Angela Merkel, she said she understands

we're not going to go for a federalist. There is no majority

for federalism. This in or out issue, we need to restructure the

European future and there will have to be a referendum and fairly soon

in this country, but it will be on a very different question to the

one of in, out. What would be the question be on

then? I'm clear. It is a British interest to remain in the single

market and the single market ought to embrace and does already embrace,

more than just the EU. Norway is a member of the economic area. I

would like to see Turkey becoming part of this. At the moment it is a

a associate member. We could have them in the single market and it

would be an ang advantage. -- advantage. I want to see the

British Government talking more about what Britain is going to

contribute to the problems, in some sense we are right to say, "The

eurozone is yours. Do what you like with it. "I thought it was flawed.

I campaigned against it when Tony Blair tried to take us in. We

ensured he couldn't win a Forum because public opinion stayed

against it. Public opinion will not take nuse a federalist -- us into a

federal Europe or a eurozone. The Government would argue that

they are to some extent shouting from the sidelines because what

happens to Greece, will affect British interests. If Greece does

fall out of the euro and it is disorderly and there are the issues

we have talked about which are contagion. It is not standing and

trying to be heard on a subject that wouldn't affect Britain?

he had a very good opportunity now in G8, in Washington in the Camp

David and also in the margins of the NATO meeting in Chicago to have

quiet talks with Angela Merkel inside the eurozone. It tale ci and

erm erm -- Italy and Germany. He had an opportunity to talk to the

new president of France who is against the undue austerity. He

wants a balance between austerity and growth. Quiet diplomacy, making

sure they understand what Britain is ready to put up with, otherwise

we're going to have a nasty argument inside the European Union

in the next two or three months. We will be talking about this over

the coming weeks. The Parliamentary Commissioner for

Standards, Sir John Lyon launched an investigation into whether

Jeremy Hunt failed to register several donations from media

companies. Ben Geoghegan join us now. Can you give us more detail,

Ben? This goes back to the days when the the Conservatives were in

opposition. There were a series of meetings set-up by private

companies, media companies, companies in the creative

industries and they were set-up in order, it seems, to brief the

Conservative frontbench teams about developments in the industry. Now,

one person who was at eight of these meetings was Ed Vaizey, Mr

Hunt's deputy and in the register of financial interests, he declares

these various meetings and he says that they amounted in value to

about �27,000. Now these are not cash donations, but the cost that

it would have been for the companies to set-up these meetings.

And he also says that Jeremy Hunt was at these meetings with him. But

when you look at Jeremy Hunt's entries, these meetings do not

appear and so, that led to a complaint a few weeks ago by Steve

McCabe and it is that the commissioner is looking into.

So more pressure on Jeremy Hunt and coming weeks before he is due to

appear, no it must be days before he is due to appear at the Leveson

Inquiry? Yes, Adam Smith will be appearing this week and Labour have

been calling on the Culture Secretary to resign saying that he

has probably misled Parliament and so on. Remember though, that he

thinks that he has acted with integrity. On this issue about the

declaration in the register, he says that he only went to three out

of these eight meetings and he wants to amend the register so it

seems as though his argument will be there has been some kind of

mistake in recording the details. Ben Gay dan, Ben Geoghegan, thank

you. Let's look at May 2015. What's that,

I see, Ed Miliband and Tim Farron walking through the Rose Garden?

Surely not. The two parties appear to be at jagger's drawn or --

May 2010 and everything in the garden, was, you know, rosy. It

seemed like everyone agreed with Nick. Well, almost everyone.

Ma Vast majority, dislike and despise the Liberal Democrats.

LAUGHTER You might, Ian, but the boss

doesn't. I hope the Liberal Democrats will

recognise that the Government is taking the country in a a direction

which many people did not vote at the general election. I hope they

will come and talk to us and work against the direction of this

Government. Senior Labour figures are reaching

out to the Lib Dems in an attempt to find the kind of common ground

which could pave the way to a coalition should the next election

produce a hung parliament. The thing is, there is more than a few

Lib Dems out there, who are ready to play ball. Richard Grayson is a

speech writer to Charles Kennedy. Most recently however, his policy

input has been to the Labour Party. I accepted an invitation from Ed

Miliband after a discussion with him to encourage Lib Dems to have

dialogue with Labour, that happened. We talked to people like Liam Byrne,

we talked to a number of other Labour MPs in policy groups so

there was a dialogue between grass- roots Liberal Democrats and people

at a fairly senior level of the Labour Party. It is not just about

shared values, this is about power. Ar hung parliament again -- a hung

parliament again is a likely prospect, I think. And that means

the Liberal Democrats, although they will suffer badly at the polls,

could play a role and their natural place, their natural allies

historically have been Labour. the Lib Dems get into bed with with

Labour, what does that mean for the future of the party and its leader?

I think it will be difficult for Nick to do a deal with Labour. I

think that's partly because he is just ideologicalically closer to

the Conservatives. And maybe there does have to be a change in

leadership, but strange things happen in politics.

Well, I can't see how the Lib Dem, the current Lib Dem leadership,

having sold the past to the Tories on this right-wing agenda can do

another backflip and go in with Labour. So I would have thought

they will go in one direction and the party will resume its historic

radical liberal tradition and go to look for alliances with progressive

forces particularly Labour after the next election.

Any alliance with Labour could come at a high cost to the party's

current leadership. But would it be worth the price? I think for the

Liberal Democrats, we have always wanted to influence policy and see

that centre-left policies get implemented. Sadly we are

influencing policy on the margins and collaborating with a broadly

centre-right economic agenda at the moment. If we want to see our most

important policies implemented, then we have to have dialogue with

Labour. Tony Blair and Paddy Ashdown trying to work together in

1997, but their parties won't wear it. The lib-lab pact of the 70s and

that didn't work. A deal with Labour in 2015? Well, three years a

long time, but it is a work in Phil Collins joins us now. Looking

to your crystal ball, could you see Labour and the Liberal Democrats

doing a deal ahead of or into the next election? Not ahead of, but I

could see it being a necessity after the election. There is a

couple of long-term trends that make hung parliaments more likely.

The two main parties, Labour and Conservative don't get as large a

share as they used to in the 50s and 60s and there are nowhere near

as many marginals. So it is much harder to win. And that makes a

hung parliament a possibility and the arth ma particular looks like

it is -- arithmetic looks like it will be a coalition. If the ar rith

ma particulars -- arth ma particulars work. We heard from one

Labour MP saying how much distrust there is, but there is dislike and

contempt from senior Labour figures for Liberal Democrats or is that

just public rhetoric and actually they would be happy to work with

them? Well, both things are true. There is serious dislike... Does

that not prevent that coalition? it dissipates quickly if the

prospect of power is looming. For the Liberal Democrats there would

be something remarkable on the table, they would have ten years in

Government. People in their early 20s who would say, I have known

nothing but a Liberal Democrat Government all my chance. For

Labour, there would be a chance to come back. That sense will change

if that were the option on the table.

Would it be possible if Nick Clegg was still leader of the Liberal

Democrat Party, would it be the case, I am not asking for

predictions of how well or not the Liberal Democrats will do, but

would it have to be a different person at the helm of the Liberal

Probably, but I don't think one should get tough on this issue. A

much more important thing is what is happening with the British

economy. I think that if you have the opportunity to form a

Government, and say Labour has the largest number of MPs, with the

largest number of votes, they will obviously work with whoever is most

compatible. That would probably be almost certainly the Liberal

Democrat. But they have been at opposing end of the spectrum

economically, haven't they? It is an aberration. On whose part? The

Liberal Democrats? A did not join the Liberal Democrats, but I worked

with them. I was part of the Government, and foreign secretary

at the time of the Lib-Lab pact. There was a fairly good and open

relationship at that time. David Steel chose to end it before the

election and he thought that was an important thing and to this day he

does. I don't think it is necessary to see this coalition carrying on

for full five years. They could split away, while still supporting

the Conservatives. Or if they found on the economy that the

Conservative policies were so antipathetic to them, then they

might decide to allow Labour to come in. We have a fixed term

Parliament. Tories talk as though David Cameron can have a general

election whenever he wants, but he cannot. I think this coalition is

coming under ever increasing strain. They have failed on the basic issue

of the economy. We are now in a double-dip recession. In my view,

we probably have six months more of the general public giving them the

best... Of then you think it will fall apart? If they are still in

economic difficulty in six months' time, there will be big questions

about whether or not this coalition can continue. Just listening to

that, at in terms of whether or not the coalition can last until 2015,

on this core economic message, if Liberal Democrats signed up to

austerity, then they could have an agreement with Labour? I do. Nick

Clegg often says that �7 out of every �8 would have been cut under

Alistair Darling's plan. You have to think of this from the Liberal

Democrat point of view. They don't see themselves as an adjunct to

another party, in complete agreement with either of them, but

as the liberalising influence on them. I do not see this as an

overwhelming barrier to them changing sides and we will probably

have to get used to that. briefly, Ed Miliband and Vince

Cable's conversation? Not surprising? Not at all. I think

they share a lot, as people in lots of parties do. And a good social

democrat. We can no longer assume that one party will be elected with

an overall working majority. The last election, I was part of a

group which had a website dealing with a hung Parliament. It was

obvious it was going to be a hung Parliament for three months before

the election. To David Cameron's credit, he offered a generous offer

of coalition and Miliband would do the same. Thank you. We let you go

at this stage. We have got VAT, National Insurance,

CJ tea and a whole alphabet spaghetti of taxes. Enough to leave

even Carol Vorderman confused, bemused and discombobulated. They

are trying to make the trip up! How about simplifying everything to the

30% rate of income tax? And omnitax, if you like. The Institute of

Directors has suggested just that. Mathew Sinclair is from the

taxpayers Alliance. Isn't it just and fair in the end to have this? -

- not fair. If you earn twice as much, you pay twice as much. If you

earn 10 times as much, you pay 10 times as much, and that is what

would beat the case under our system. -- would be the case. It

would be advantages to the poorest. What is really not fair, is that

people, by paying in a certain way, through a company, through share

buy-backs, pay less. The critical thing is to have a single tax rate

which applies however your income comes. However that income finds

its weight to the end consumer. higher earners benefit more than

lower owners, don't they? Yes, they do. They deserve to pay twice as

much. We are talking about a proportionate tax. This term can

throw people but we are still talking about a tax system that

would have a very heavy contribution. I think that we

should be looking towards a system that would make sure that everybody

pays less. That is why we should not be going down at the root of

revenue neutral reform. -- down the route. The real basic rate is not

30%. Including both forms of National Insurance, it is 40% and

we think that should be cut to 30% to give everyone a better deal.

Thank you for joining us. We are joined by the Lib Dem Lorely Burt,

James Morris from the Conservatives and their Alan Sugar from Labour.

Is that music to your ears? -- Gavin Shuker from Labour.

really. They want to raise the personal tax allowance even more to

�10,000, which is building on what the Chancellor announced in the

Budget. They want to devolve financial autonomy to local

authorities and allow local authorities to build up more tax.

Just on the income tax rate, is that something you would like to

see in theory? Some sort of flat rate of tax? I think it is an

aspiration over the long term. We have a lot of very profound

difficulties in the economy at the moment that we need to deal with.

Getting the deficit under control, dealing with the eurozone crisis.

In the long term it is an aspiration and I would be

interested to read the detailed recommendations in the report.

Would it help the economy to do something as radical on income tax?

There are other things that we can do. We cannot that the supply-side

of the economy. I think we need to focus on employment law. What do

you think about having a simpler tax system? Gordon Brown was always

criticised for having an over the complicated tax system. Is it the

Government's role to redistribute at that level? The key question is

what would it do for the economy and on that question, I think

Matthew is out of touch. The report is saying that we should cut back

the size of the state. He is saying put more money in people's pockets.

If more money is in their pockets and they can spend more of their

income, doesn't that help the economy? Chuka Umunna has just said

the real problem is demand. Doesn't that boost demand? Absolutely,

which is why you need to target tax decreases in areas where it get

people spending. Reducing VAT, for instance. A lot of people out there

now feel that because they are paying National Insurance and

income tax and various other stealth taxes, that they are not

keeping enough of their own income to spend up there. We are talking

about how you divide up the pie, and we can have that conversation,

but the Tax Payers Alliance is saying that we should reduce the

price so extremely that public services will go. -- the eye.

want those with the broadest shoulders paying the greatest

proportion of tax. So a flat tax? understand that it will cost �50

billion to implement, which goes straight into the deficit, so I

don't think that is a particularly good idea. I think we should have

fairer taxes for people on higher earnings. And lower taxes for

people on lower earnings. It does not fit in with that. Which tax

would you get rid of? National Insurance? Golly, I don't know! Yes,

why not? National Insurance does not do what it says on the tin. It

does not do what it was set up to do. Would you get rid of it?

necessarily. We need to reduce business tax is much more radically,

corporation tax, which we have already reduced. I think there is

more scope for further reduction in corporation tax. Would you like to

see more wealth taxes? More tax on unearned wealth, as they

characterise it, rather than on income? I prefer that to the system

we have at the moment, giving a tax break to millionaires were people

on low incomes are suffering. Conservatives are suffering because

that rhetoric has just come home. The reality was that in the Budget

we brought in stamp duty on properties over �2 billion and we

are bringing in more taxes than were ever raised by the 50p rate. -

- over �2 million. We need to reduce the rate of income tax that

low earners have to pay and that should be the focus and it is the

focus of the coalition Government. But you want to see more wealth

taxes, don't you? We don't want people to be punitively taxed, but

I think everyone should pay their tax fairly. Just going on to this

mythical 45p, in actual fact, the OBR have calculated that our tax

changes will increase the amount of money that the rich pay by five

times. Labour only introduced it a few days before the last general

election, and quite a cynical attempt, I think, to put us in a

difficult position. The key question is getting growth going in

the economy and if you can do that in a fair way, let's do it, but

this is not the right way. Traffic wardens, estate agents, second-hand

car dealers, who is missing? Journalists and politicians! You

can find both of these in abundance in the dark corridors of

Westminster. Is it a world of backbiting, schmoozing, scheming?

If anybody knows, Quentin Letts does.

J is for a journalist. Parliament and the media, not an easy marriage.

Someone once said that the relationship between politicians

and journalists was that of a lamp- post and a dog. But who is the

lamp-post? A little light reading. This is the

BBC office in the House of Commons press gallery. Many of the offices

are shared. The Financial Times used to share with the News of the

World! It is a right little rabbit warren of offices. Not much has

changed since Charles Dickens worked here as a parliamentary

reporter in 1831. Around 200 media swaps toil at the Palace of

Westminster, including little old me. I am a gallery reporter. That

means I sit in House of Commons gallery, watching events. Others

are in the lobby. That means that they have more intimate access with

MPs. The lobby! They are a secretive lot. The chief privilege

of being a lobby reporter is having access to the House of Commons

lobby just outside the chamber, where they can mix with MPs and be

told things on lobby terms. We don't get to know who said what.

The other privilege of being a lobby reporter, daily briefings

from 10 Downing Street. Hello? Two pints of something very bitter,

please, and a discreet table. Thank you very much. Much of our work is

done around the Westminster village in pubs like this, maybe. A quiet

pint with a disgruntled former minister, or some thrusting Schema,

and you can learn interesting You could argue that journalists

are sly, skivvy creatures, and you could be right. -- scurvy. But

could the same adjectives not be applied to politicians, too? Set a

thief to catch a Thief, that is the How very informative, as always,

from Quentin Letts! Do you describe journalists as sly, skivvy

creatures? Not to their faces! -- scurvy. To paraphrase, some of my

best friends are journalists and we do get along. Do you have lunches

with journalists? No, but I am open to invitations! I am sure we can

set something up! Are you friendly with journalists? Do you avoid

them? Of course one is friendly to journalists. It is an important

part of the parliamentary progress and it has a long history and you

have to be careful about what you say. Do you give stories to them?

Certainly not. Nobody is going to take you out for lunch! What about

you? Do you give stories to journalists if you go out with

them? Absolutely. I am just waiting for the drinking invitations to

come rolling in. I generally get my phone calls from my favourite

journalist when I am in the middle of doing the shopping in a

supermarket, you know. You just say the first thing that comes into

your head and afterwards you wonder if you should have said it! They

have worked out the best time to call you! They have! The Leveson

Inquiry has put a serious spotlight on the relationship between

journalists and politicians. Do you think it will fundamentally change

that relationship? I don't think fundamentally. There is a parallel

with the MP's expenses crisis. The pendulum swing, the clear up, and

then interest goes down. It may be the same as the leather CERN

inquiry clears itself up. I think there ever -- as the Leveson

Inquiry clears itself up. I think that we will have to respond to the

Leveson Inquiry. The point is that you do not want to be transparent.

We are not supposed to reveal our sources. From the public point of

view, I think the Leveson Inquiry is raising the issue of the

relationship between politics and the media, which is helpful in a

sense of shining a light and getting transparency on the issues

that we need to confront. Now we go to College Green, where we have

bagged ourselves a couple of sly, scurvy creatures. Actually they are

very nice! And I don't think they have got scurvy. Helen Lewis from

the New Statesman and the editor of James, David Cameron shouting at

the Germans, are they going to listen to a British Prime Minister

and what to do about the the eurozone? David Cameron on the one

hand pressuring Angela Merkel to do more and on the other hand trying

to do her dirty work in saying to the Greeks if you vote for the

anti-bail out parties. What the Europeans want the message to the

Greeks, if you vote for an anti- bail out party, you are voting to

leave a currency that you don't want to leave.

When it comes to the Greek election in a month. Is David Cameron in a

place where he can't do anything except shout? I don't think we can.

Merkel's intervention in Greece goes down badly. She is seen as a

domineering German figure. Cameron outside of a currency and Britain

with its detached relationship from the eurozone is more able to make

the arguments to the Greeks. How well they will go down in Athens

remains to be seen. The view of the of the euro crisis,

as far as Britain is concern, is the worry about a run on the banks.

Is that where the concern should be? Well, it is hard to look

forward when everything is up in the air. We have seen a lot of talk

about the possible default and the elections will be the next thing

that people are looking to, but the trouble is you have got a situation

where Nobel prize winning economists don't have an idea. No

one knows what is going to happen next.

They are trying to look at how to to boost growth, that's the other

part of this equation in the eurozone to make countries more

competitive and here with the Beecroft proposals due out this

week, is this another focus of coalition tension that will be

difficult for David Cameron? think it sounds - it sounds like it

will be kicked into fairly long grass. Vince Cable's remarks have

been strong and the the noises coming out of his coughs calling it

"bonkers" the more contentious suggestions will be shelved and a

few of the smaller ones will be put through.

Do you think it will be shelved? We keep hearing that David Cameron is

favourable to the ideas. The controversial ones being no no no

fault dismissal? The interesting thing is this has been a long

running row between Vince Cable and Steve Hilton. Steve Hilton has left.

In the last few days people close to Nick Clegg and David Cameron

have been suggesting there will be a more co-operative attitude to

coalition growth. There will be some deregulation and maybe some

things to promote infrastructural spending. Like project bonds for

Britain. I think what is is interesting, Vince is out of tune

with the mood music that Nick Clegg is pushing. It will be interesting

to see if Clegg pushes Cable back and bit and tries to take on on

some of the things in Beecroft. When you mention the Beecroft

report, you get this reaction from the Liberal Democrats now.

Helen, we were talking about chillax, about how hard the Prime

Minister is working. A bit unfortunate. At one time it was to

his advantage to look like a normal bloke. You heard William Hague

saying bosses must work hard. You hear about him him playing Fruit

Ninja and having a nap. People don't work at their best when they

are spending all hours of the day. On the other hand, I think for him,

this has been an image problem. Has it become an image problem,

James? People are thinking he is complacent or is it a timing issue?

There is a perception problem. Our attitudes to politicians is

contradictory. We want them to be well-balanced normal people with a

family life and want them to work 24/7 and strain every sinew, but

there is an issue that, Cameron needs to do more to show that he is

getting a grip and it comes back to this competence question which has

been rolling and riling in the coalition in the last few months.

Now, just time before we go to give you the results of our caption

competition. This was the picture and here are some of our favourites.

I did love these! From Calum May, "Word leaders await

the election results.". David Cameron comes in on top in G8 Fruit

Ninja knockout. Angela Merkel a distant seventh. Trevor Ottaway,

"Put your hand up if you are a posh boy." Rich Williams, "Joy for

Cameron as Boris gets run over by a new Routemaster bus.". What do you

think? I was worried about how many Tottenham Hotspur fans weren't

happy because they were looking for another result. We have got to

expect politicians to relax. Prime Ministers need to relax. People

need them to relax in order to make the right decisions tor the country.

-- doctor the country. What do you think? The only thought

I was was maybe Theresa May had booked the return tickets back to

the UK and they got an extra day out of it!

Very good. Very good. I was going to go with the Fruit Ninja. Showing

that football match, you know, with Cameron and Merkel sort of standing

next to each other, perhaps was not the best thing for the entente

cordiale, but it is only a game! On the entente cordiale, we spoke

to the two journalists about the situation in the eurozone. Do you

think David Cameron's strategy of standing outside the euro and

trying to tell them what to do now is going to do anything? I think it

is the right approach. Britain's not in the eurozone and we are

approaching a crisis point. We are in the middle of a crisis. We need

to do everything we can to get the eurozone stabilised and he is right

to say what he is saying and the most important thing is we need to

protect Britain's national interests and be prepared for any

eventuality. How can they protect the national

interests? On the broad point, Britain is an outward facing

country. We need to be continuing to drive exports to emerging

economies. Well, that's long-term. What can

they do now? If Greece drops out of the euro and there is a run on the

banks or the pressure on Spain. What can Britain... The eurozone

countries need to ensure that we have a correct firewall to prevent

con tainlg oon, -- contagion, but we need to be preparing for all

eventualities. The problem is, you can't do any of

this stuff without growth. You are seeing the reaction in the UK as

well. That's not going to save Greece either, is it? We should be

doing all we can to keep Greece in the euro and it would be easier if

David Cameron was around the table leading as in 2008 when we had the

last big financial crisis rather than standing on the edge of Dover

and shouting across insults. Is that what the Liberal Democrats

want to see, David Cameron shouting at the European counterparts?

with the G8 doing as much as he can to try to encourage the right

result in Europe. What is the right result, Greece

staying in or Greece going out? Well, it is difficult. I would

suggest it is Greece staying in. Why? Why? Because as far as

Britain's interests are concerned, 60% of our exports and our trade is

with Europe. But what difference Greece being in

or out make? I think because if you get a collapse then that's going to

have very bad repercussions. Greece won be able to buy our -- won't be

able to buy our products and the whole thing is in danger of

actually collapsing. You are saying David Cameron and

privately, the leadership would like Greece to go? It is not in

Britain's national interest for there to be a disorderly default

from Greece. It is not in anyone's interests so we need to be working

in our position, not part of the eurozone, but as a key influence

and player to ensure that a solution is found. However, we need

to be preparing as a responsible Government should do, for all

eventualities in relation to the Greek situation given the

volatility and the elections. The subject of growth has come up,

you know, here with the Beecroft proposals that will come out this

week. Do you agree with the main thrust of them? Would you like to

see those come into place? should be looking at deregulation

in that particular area. I mean I ran two small businesses before I

got into Parliament. I know the difficulties of take on people. The

amount of effort you need to put in to take on people. We need to sure

we look at these proposals. We need to create more private sector jobs

to get the growth that everybody wants.

Only with this Government, the way to boost employment is to make it

easier to sack people. There isn't business confidence.

Do you agree with James and with a lot of Tory MPs that deregulation

is what is needed and making it easier to hire and fire people is

what is needed? There is a lot of stuff in Beecroft which is fine. I

have had my own businesses as well, as well as having an HR background

and I don't think anybody ever worked harder or or more

productively because they were under threat of having the sack.

Nobody is arguing for fire at will. Anybody who has run a small

business will know one of the first things you need to do is create a

good cull do you remember in your company -- culture in your company.

One of the problems with employment law it created unintended

circumstances and that has held British small business back.

We are doing that already with with a lot of the legislation, there

will be more con sillation before this aspect starts to kick in now.

He is talk being growth and this is getting private sector employment,

stimulating enterprise is how we're going to grow the economy and he is

silent on what his plans would be. Where is the growth? Ellesmere Port,

motor manufacturing is booming. all the the factors and measures of

the economy, yes, there is is not growth. There hasn't been.

Unemployment fell last week. Gavin is not welcoming the fact there has

been huge investment in manufacturing in Ellesmere Port.

Do you agree with Vince Cable that it is bonkers to be looking at fire

at will and no fault dismissal. I can't see how it would help. It

would hinder the situation and lot of the stuff that we are bringing

in will really be the helping factor for business and for people

as well. It has to be a balance there.

We're going to be glutons for punishment and go back to the to

the caption. Let's look at that picture from the G8 Summit. Nick

says, "Tony Blair's return to front-line politics will the USA.".

Ian, "The euro suffers another slide against the pound." "English

football hooligan breaks into G8 Summit.". Which one? The first one.

The leaders wait for the election result.

I have thought thought - Gordon Brown makes a surprise appearance.

Thank you to our guests and the One O'Clock News is starting over on