:00:46. > :00:56.Afternoon, folks. Welcome to our first Liberal Democrat Daily
:00:56. > :00:58.
:00:58. > :01:01.Gategate rumbles on. Conservative Chief Whip Andrew Mitchell returns
:01:01. > :01:05.to the gates outside Number 10 to apologise but still refuses to say
:01:05. > :01:10.what words he actually used. I am very clear about what I said and
:01:10. > :01:14.what I did not say. I did not use the words that have been attributed
:01:14. > :01:21.to me. The Liberal Democrats continue their autumn conference
:01:21. > :01:24.shindig in Brighton. Today it is the turn of Vince The Cable to wow
:01:24. > :01:27.the party faithful. We will ask Lib Dem bigwigs Jeremy Browne and Simon
:01:27. > :01:30.Hughes why they want to tax the affluent until the pips squeak. And
:01:30. > :01:40.we will test the mood of the party's foot soldiers. Are they
:01:40. > :01:48.
:01:48. > :01:54.ready to forgive and forget? I am sorry if. I am of so, so Surrey
:01:55. > :02:01.bus-stop -- so, so sorry. All that in the next hour. And, with us for
:02:01. > :02:07.the duration, Miranda Green. She's a journalist who used to be press
:02:07. > :02:12.secretary to Paddy Ashdown when he was Lib Dem leader. That does not
:02:12. > :02:18.make a bad person. Let's start of the row over what Andrew Mitchell
:02:18. > :02:26.did what did not save two police officers in an incident over
:02:26. > :02:33.bicycle rage. The Sun says it has seen a police lock confirming that
:02:33. > :02:40.Mr Mitchell did swear at the officers. It does confirm, they say,
:02:40. > :02:45.he used the politically toxic word, peps. The Chief Whip denies using
:02:45. > :02:54.that language. We were told Mr Major would be making a statement
:02:54. > :03:01.at those very same Downing Street gates. He ditched the ministerial
:03:01. > :03:06.car for a Polo. Much smaller but German. What exactly did you say to
:03:06. > :03:10.those police officers outside Downing Street? First of all, a
:03:10. > :03:16.want to reiterate the apology I made last week after the incident
:03:16. > :03:22.on Wednesday night in Downing Street. It had been the end of a
:03:22. > :03:25.long and extremely frustrating day. That is not an excuse. I did not
:03:25. > :03:30.show the police the amount of respect and should have done. They
:03:30. > :03:35.do an incredibly difficult job. I have apologised to the police and
:03:35. > :03:41.the police officer involved and he has accepted my apology. I hope we
:03:41. > :03:46.can draw a line underneath it. police a clear about what was said.
:03:46. > :03:51.You do not seem to be. I am clear about what I said and what they did
:03:51. > :04:01.not say. I did not use the words that have been attributed to me. I
:04:01. > :04:03.
:04:03. > :04:10.am going to get on with my work. What did you say? Did that achieve
:04:10. > :04:14.anything? I think he fluffed it badly. Yesterday, it seemed the
:04:14. > :04:23.heat was living off this slightly. It seems to have stoked the fire
:04:23. > :04:29.once again. -- was moving off this slightly. Can Downing Street be
:04:29. > :04:34.advising him? If they are, why would they let him do that?
:04:34. > :04:38.Chief Whip is supposed be an invisible figure. The Chief Whip
:04:38. > :04:44.visibly it is an embarrassment to the Government. One I would anyone
:04:44. > :04:48.advising him think, getting out of that car and speaking for about a
:04:48. > :04:53.minute, saying what he said, was going to do any good for him
:04:53. > :05:03.whatsoever? It just gives it legs and everyone more material to roll
:05:03. > :05:10.with for another 24 hours. I do think this question of the key word,
:05:10. > :05:18.what attitude does it expose? speak to Tom Newton Dunn, the
:05:18. > :05:24.journalist who broke the story and Kevin Maguire of the Daily Mirror.
:05:24. > :05:31.Have you seen the police contemporaneous account - the
:05:31. > :05:41.police statement - of what they said happened? Yes, we have. Well,
:05:41. > :05:41.
:05:41. > :05:46.I have. It was a full report filed by the main police constable. It
:05:46. > :05:51.was a WPC to begin with and a male PC afterwards, who stepped in to
:05:51. > :06:00.help pad his embattled female colleague. The male constable wrote
:06:00. > :06:06.down everything of the exchange. He used both his note in his pocket
:06:06. > :06:10.Burke and the contemporaneous note in the pocket book of his WPC and
:06:10. > :06:15.father report to his supervisors. He said the reason why he filed it
:06:15. > :06:21.is because he was worried about what Mr Mitchell was going to do as
:06:21. > :06:29.a result of this. The final words to him were, you have not heard the
:06:29. > :06:36.last of theirs. You are saying it is a policeman and a police woman
:06:36. > :06:41.involved. I'll be saying that Mr Mitchell swore at the police woman?
:06:41. > :06:49.-- are you saying? It is not entirely sure that Mr Mitchell did
:06:49. > :06:57.swear at the police were month. It is not reported that he did. -- the
:06:57. > :07:03.Police woman. The police women said she could not open the gates. The
:07:03. > :07:11.Mail PC came over. From that moment onwards, he did start swearing and
:07:11. > :07:17.the insults. -- the male policeman. According to the record of the
:07:17. > :07:22.police, it shows that he used the word, plebs. It is a bit more
:07:22. > :07:32.colourful than that. No aspect of blushes with the Anglo Saxon word
:07:32. > :07:33.
:07:33. > :07:40.that came before it. By roughly get it. I am of a gentle disposition. -
:07:40. > :07:44.- I roughly get it. When you hear what Tom has said and what The Sun
:07:44. > :07:50.has done, can you see what the point is that of the appearance by
:07:50. > :07:57.Mr Mitchell at 8 o'clock this morning? Only if it was to make it
:07:57. > :08:03.worse. Probably the worst apology since Ron Davies was out in words,
:08:03. > :08:09.it said to be out to encounter a man and he said he was looking for
:08:09. > :08:16.badgers in broad daylight. It was absolutely crazy. He has to say,
:08:16. > :08:23.did he call them plebs or not? He said he did not use the words
:08:23. > :08:29.attributed to him. What were they? We want to know. He needs to come
:08:29. > :08:38.back out and say what he said. He has evaded it. People will reap the
:08:38. > :08:44.very worst into a performance by him today. -- read. Do you think we
:08:44. > :08:49.can see a facsimile of the notebook? Anything like that?
:08:49. > :08:58.leave it for the moment that we have seen it? I took a verbatim
:08:59. > :09:04.note of it in my notebooks. We have the pull transcript. My short hand
:09:05. > :09:11.is so bad, it is worse than a vending you with Anglo Saxon
:09:11. > :09:16.language. A want to get on to the Lib Dems was up -- offending youth.
:09:17. > :09:22.Where does the story go from here? It is not going to go anywhere from
:09:22. > :09:28.here. It is not going to go away. What we were expecting this morning,
:09:28. > :09:31.our colleagues back in Westminster in the lobby, was for the spokesman
:09:31. > :09:37.of the Prime Minister to say the Cabinet Office and the Cabinet
:09:37. > :09:41.Secretary have risen to calls from very senior policemen and Yvette
:09:41. > :09:48.Cooper, the Shadow Home Secretary, to actually tried to look into this.
:09:48. > :09:53.They have talked to the police, anything to try to get to the
:09:53. > :09:57.bottom of he says, she says. That is where we are now. What I find
:09:57. > :10:02.staggering is that the spokesman for the Prime Minister has said,
:10:02. > :10:07.move on, there is no story here. The Prime Minister believes the
:10:07. > :10:13.account of Mr Mitchell. That is saying I believe the camp by Mr
:10:13. > :10:17.Mitchell over the words of some of the best offices the Met has. --
:10:17. > :10:25.the account. I think the Prime Minister has made an enormous error
:10:25. > :10:31.in doing that. Are the Lib Dem delegates buying the economy from
:10:31. > :10:36.Mr Clegg and the bash the rich rhetoric? Is that allowing him to
:10:36. > :10:43.live another day? Did they think at some stage we will have to ditch
:10:43. > :10:49.him? I think they know it is over for him. Privately, he may feel
:10:49. > :10:54.that as well. Conference is a very tribal affair. All the rhetoric is
:10:54. > :10:59.against the Conservatives. It is almost as if Labour does not exist.
:10:59. > :11:04.All the fire is focused on the coalition partner. It is very hard
:11:04. > :11:11.to get on and work closely with the people you have spent the week
:11:11. > :11:16.slagging off in very colourful terms. How do you read it? There is
:11:16. > :11:24.no leadership challenge this week. You can confirm that, I think. What
:11:24. > :11:30.happens after that? It is a bit like the Tories. And the fortunes
:11:31. > :11:35.of Cameron to a lesser extent. If the economy starts picking up and I
:11:35. > :11:39.get decent growth results for the next quarter, two months of growth
:11:39. > :11:45.by the end of January, pressure might alleviate a bit. If it does
:11:45. > :11:55.not go anywhere, Norman Clegg is in the same position next year as the
:11:55. > :12:04.
:12:04. > :12:14.ship, he will be in enormous Thank you for joining us from
:12:14. > :12:18.
:12:18. > :12:24.It is clear the strategy of Mr Clegg. This has come on the eve of
:12:24. > :12:31.the conference. There is a lot of bashed the rich rhetoric coming out.
:12:31. > :12:35.Will it work? -- bash. There is a move to try to move on into a new
:12:35. > :12:42.phase with the apology. The idea that over the summer something that
:12:42. > :12:49.was put to bed was the dream of House of Lords reform. Saying they
:12:49. > :12:55.will not thank the boundary changes for the House of Commons. That is
:12:55. > :12:59.very messy and unpleasant. Both sides got nothing for nothing.
:12:59. > :13:04.is behind us. Now they are saying they need to move forward and make
:13:04. > :13:09.it absolutely clear they are concentrating front and centre on
:13:09. > :13:17.the economy. Everything this week is about the economy. That is right
:13:17. > :13:22.and proper. Putting that reform agenda behind them with it -- with
:13:22. > :13:32.the economy - a rubber Withey apology. Whether that goes over
:13:32. > :13:32.
:13:32. > :13:38.with the public, that is another matter. -- behind them with the
:13:38. > :13:48.apology. Now it is time for the daily quiz. Which Lib Dem has not
:13:48. > :13:53.
:13:53. > :14:01.been texting Ed Miliband and other At the end of the show, the Randa
:14:01. > :14:04.will have the correct answer. Now the theme of this party conference
:14:04. > :14:11.is to put a bit of yellow water between the Lib Dems and their
:14:11. > :14:21.Conservative coalition partners. Nick Clegg has dug his heels in
:14:21. > :14:22.
:14:22. > :14:27.over extra cuts in public spending. He has said he will not allow any
:14:27. > :14:32.more up to the end of the next spending round. He is concentrating
:14:32. > :14:39.on taxing the rich further. Mr Clegg wants to bring in more money
:14:39. > :14:45.by targeting the better off. He made a thinly veiled strike at
:14:45. > :14:48.George Osborne, saying they will not allow some of the wild
:14:48. > :14:54.suggestions from the right of politics that all the savings will
:14:54. > :15:01.come from welfare. He plans to target the top 10% - that means
:15:01. > :15:05.anyone earning over �50,500 a year before tax. Plans for a so-called
:15:05. > :15:09.Pensham property scheme, whereby savers could use lump sums in
:15:09. > :15:15.pension pots to guarantee part of the mortgage taken up by children
:15:15. > :15:22.or grandchildren. Some estimates suggest about 12,000 people would
:15:22. > :15:27.take up the offer. People over 55 can already cash up to 25% of their
:15:27. > :15:32.pension pot tax free. Vince Cable will announce today plans to set up
:15:32. > :15:38.any business bank. He will save 1 billion has been found to help set
:15:38. > :15:42.up the bank, which it is hoped will increase lending to small and maybe
:15:42. > :15:45.a medium-sized businesses. It is unclear where the Treasury has
:15:46. > :15:52.banned this money, nor has any private funding been pledged to
:15:52. > :15:59.Joining me now from Brighton is the Liberal Democrat Home Office
:15:59. > :16:07.minister Jeremy Browne. Grew to see you. We are missing New Delhi here!
:16:07. > :16:12.I am missing you, too. -- We Are Missing You. Anyway, your leader
:16:12. > :16:16.once more taxes on the most affluent 10% of the country and he
:16:16. > :16:22.wants that before the election. What sort of taxes does he want on
:16:22. > :16:27.the top 10%? There has been some misrepresentation about this in the
:16:27. > :16:32.media today. The Daily Mirror said Nick Clegg is targeting the poor.
:16:32. > :16:37.The Daily Mail said Nick Clegg is targeting the rich. The reality is,
:16:37. > :16:43.he is explaining that we as a country are in a big hole, we have
:16:43. > :16:47.a big deficit still, and to use a slightly dated terminology, we need
:16:47. > :16:53.a collective effort to make sure that we get national finances back
:16:53. > :16:59.on track. I understand that but let me ask my question again. I
:17:00. > :17:05.understand all of that. But Nick Clegg said he wants the top 10% to
:17:05. > :17:11.contribute more so I ask you again, in what way should the top 10%
:17:11. > :17:15.contribute more? We have had some changes, you will remember at the
:17:15. > :17:20.last Budget one of the announcements that was made, it did
:17:20. > :17:25.not get as much attention as some of the others, was stamp duty on
:17:25. > :17:32.more expensive properties. There have been changes on capital gains
:17:32. > :17:37.tax. But he says he wants more. I know what has happened... What does
:17:37. > :17:46.he want? I know what he has done. Please tell the viewers, what more
:17:46. > :17:50.does he want the 10% to do? I have never in my memory in politics seen
:17:50. > :17:56.announcements about budget measures made at a party conference on a
:17:56. > :18:00.programme like yours. There will be an autumn statement in a couple of
:18:00. > :18:05.months' time, there will be a budget, and what will be at the
:18:05. > :18:08.heart of that budget is a Lib Dem commitment that we will get to
:18:08. > :18:13.grips with the terrible public finances but we will make sure that
:18:13. > :18:16.the people who have a means to make a contribution are asked to make a
:18:16. > :18:21.contribution rather than that burden falling on the poorest
:18:21. > :18:26.people who have the least ability to make their contribution.
:18:26. > :18:32.understand that. You know I am not asking you for a Budget statement.
:18:32. > :18:36.I am not even asking for the Autumn Statement, which will come first. I
:18:36. > :18:43.am simply asking you, since your leader has at the top 10% needs to
:18:43. > :18:49.do more, what ways with your party do more? Let me help you. Let me
:18:49. > :18:57.ask a question. The top 10% in this country of income earners account
:18:57. > :19:04.for 55% of all income tax paid. The top 10% account for 55% of all
:19:05. > :19:09.income tax paid. Should they pay more? Well... I don't dispute the
:19:09. > :19:15.figure. The point I am making is that there are a number of ways
:19:15. > :19:20.that the most affluent people can make a greater contribution. You
:19:20. > :19:25.have used one crude measurement based on income tax. We tend to say
:19:25. > :19:28.as a party that we want people to be incentivised to work and to keep
:19:28. > :19:33.a reasonable proportion of their income. We would rather the burden
:19:33. > :19:37.of taxation fell in a different place than penalising enterprise
:19:37. > :19:43.and endeavour and hard work. I don't think the party is
:19:43. > :19:48.instinctively drawn... I imagine you are talking about the basic
:19:48. > :19:53.rate and upper rate of taxation but this will be in the Budget. There
:19:53. > :19:58.are a number of ways that people can pay more tax. I have given you
:19:58. > :20:06.a couple of examples. A you have not given me any examples.
:20:06. > :20:11.government increased capital gains tax. Should it increase it more?
:20:11. > :20:15.introduced a stamp duty for the most expensive homes. That fell
:20:16. > :20:21.disproportionately on the most affluent as well. There are tax
:20:21. > :20:24.measures where you can, without changing income tax levels, get
:20:24. > :20:29.some additional revenue from people who are most able to make a
:20:29. > :20:33.contribution to make a bigger effort to try and have this huge
:20:33. > :20:38.project of national renewal, which is that we are borrowing and
:20:38. > :20:42.billion pounds every three days... I understand that. Nick Clegg is
:20:42. > :20:47.not saying that this can all be achieved by taxing the rich and
:20:47. > :20:51.that everybody else needs to stand back and let the richest people in
:20:51. > :20:56.society sort the problem out. That is not the solution. Everybody is
:20:56. > :21:01.going to have to realise that we are in a deep hole as a country.
:21:01. > :21:06.understand that. But Nick Clegg is saying that the people at the top
:21:06. > :21:11.will have to be asked to make a contribution... I understand that
:21:11. > :21:15.but I can't get you to tell me what it means. Let me try you again in a
:21:15. > :21:21.different way. If I can't tell you what will be in the Budget. We will
:21:21. > :21:28.go round and round. I am asking what your party things. Nick Clegg
:21:28. > :21:34.has called for the top 10% in our society to do more. The top 10%, in
:21:34. > :21:39.terms of income, includes primary- school Deputy Head Teachers, police
:21:39. > :21:45.inspectors and senior nurses. Should they be contributing more?
:21:45. > :21:50.am not sure he did say top 10% in terms of income. I think the figure
:21:50. > :21:56.in terms of income... That was how the media chose to interpret it.
:21:56. > :21:59.What is it then? There are very wealthy people who have very modest
:21:59. > :22:04.incomes. This is the debate we have with Mitt Romney in the United
:22:04. > :22:13.States of America, who has a lot of wealth but his income for income
:22:13. > :22:17.tax purposes is a relatively modest, so people have wealth without
:22:17. > :22:21.necessarily earning large amount of income, so there are a number of
:22:21. > :22:26.ways that the government could look at how we can have additional
:22:26. > :22:34.revenue from the most affluent people to try to make sure that...
:22:34. > :22:39.OK, all right. To try to get down the deficit. Enlighten us, Mr Brown.
:22:39. > :22:45.If he is not talking about the top 10% of income earners, what 10% is
:22:45. > :22:51.he talking about? The point I am making, I have just made it but I
:22:51. > :22:54.will try to make it again, that you can be a wealthy person without
:22:54. > :23:00.necessarily earning that much income. You could have inherited a
:23:00. > :23:07.lot of wealth, for example. That is why we changed the rate of taxation
:23:07. > :23:12.for capital gains tax from 18% up to 22% earlier in the parliament. I
:23:12. > :23:19.think there are a number of ways that the Treasury can look, at the
:23:19. > :23:23.Autumn Statement and in the Budget, to have the public expenditure we
:23:23. > :23:28.need and the revenue we need to address the deficit. But there is
:23:28. > :23:32.no magic alternative plan. People in newspaper columns talk as if
:23:32. > :23:37.only Ed Balls were Chancellor tomorrow we would have growth and
:23:37. > :23:45.no unemployment. The truth is, whoever is in government, we have
:23:45. > :23:49.got to get to grips with the fact that we have a problem with the big
:23:49. > :23:52.deficit left to us by a Labour, which will mean that people with
:23:52. > :23:58.the greatest of means will make a contribution to eradicate that
:23:58. > :24:01.deficit. Thank you for joining us. Whether he will buy me a drink
:24:01. > :24:03.after that is another matter! So as Nick Clegg's bruised and
:24:03. > :24:06.battered party troops wander round the rain-soaked conference centre
:24:06. > :24:09.in Brighton, are they their usual happy-go-lucky selves? Or is their
:24:09. > :24:13.mood a little more despondent? Down? Depressed? Nick Clegg tried
:24:13. > :24:17.his best last week to cheer them all up by apologising for his
:24:18. > :24:22.tuition fees pledge. A move which led to a remixed version set to pop
:24:22. > :24:27.music entering the charts at number 143. It is a bit like their poll
:24:27. > :24:30.ratings. But are the Lib Dems in a forgiving mood? Our Adam has taken
:24:30. > :24:36.the Daily Politics mood box to the seaside to find out.
:24:36. > :24:41.All the talk is about Nick Clegg saying sorry over tuition fees, but
:24:41. > :24:48.are the delegates are ready to forgive him? Yes or no?
:24:48. > :24:54.Do you forgive him? Yes. Why is he deserving of forgiveness? Because
:24:54. > :25:02.he said it from the heart. It is a mission of how he feels. I feel
:25:02. > :25:06.that. -- it is an admission. We had no apology for Iraq. We have had no
:25:06. > :25:12.apology for the mess the last government left us with financially.
:25:12. > :25:16.And they were huge! I do for give him but I cannot forgive him for
:25:16. > :25:20.the fact he made that promise and went against it. That is the number
:25:20. > :25:25.one barer a politician can make. The press should be asking
:25:25. > :25:29.forgiveness for all the students to put off going to university by
:25:29. > :25:37.misrepresenting the policy. I think he was right to apologise but he
:25:37. > :25:45.should have done it two years ago. Am I ready to forgive him? Yes, and
:25:45. > :25:49.know. Too little, too late. -- yes, and no. Somebody has said to me
:25:49. > :25:57.that quite a lot of people quit the party over tuition fees so they are
:25:57. > :26:01.not even here to vote no. # I'm sorry, I'm sorry #.
:26:01. > :26:07.# It is very hard to say that I'm sorry #.
:26:07. > :26:13.You have saved me 79p. Thank you very much!
:26:13. > :26:18.Do you think it has done damage? Definitely. That is why an apology
:26:18. > :26:23.was needed and was welcome. All of us have learnt things from this
:26:24. > :26:33.episode. I said the other day, we are a party that prides itself on
:26:33. > :26:38.integrity. Nick said sorry. Do you forgive him? Yes! Anything you want
:26:38. > :26:43.to apologise for? I would echo his apology on a pledge that we made
:26:43. > :26:48.but sadly could not keep. I would have forgiven him if his apology
:26:48. > :26:53.had been accompanied by his letter of resignation. What do you say to
:26:53. > :26:58.the people who do not want to forgive him? We are not in North
:26:58. > :27:04.Korea. We are a Liberal Party in one of the most liberal-minded
:27:04. > :27:13.countries in the world, not everybody is required to agree.
:27:13. > :27:20.Have a look at what I have just That will be a collector's item!
:27:20. > :27:26.Miranda Green is still with us. Am I right in getting a sense that at
:27:26. > :27:31.this conference, the Lib Dems are kind of talking to themselves, and
:27:31. > :27:34.they have to? I think that is absolutely right. It is quite an
:27:34. > :27:39.inward-looking week for the Lib Dems and they don't have much
:27:39. > :27:44.choice about it. This journey they have been on in the last two years,
:27:44. > :27:47.and coalition has turned out to be even more painful than they
:27:47. > :27:53.anticipated, they really need to have a very hard think about not
:27:53. > :27:58.just positioning but fundamental questions, who are we for and to do
:27:58. > :28:02.we appeal to in the next general election? Those people on the soft
:28:02. > :28:07.left, who always used to be drawn to the Lib Dems, are not
:28:07. > :28:12.necessarily coming back. The whole thing coming out of the Lib Dem
:28:12. > :28:18.conference has been, let's find ways to tax the affluent. Nick
:28:18. > :28:23.Clegg used the figure of the top 10%. But Mr Brown was unable to
:28:23. > :28:28.give me one example. That does not stand the test. If you can do the
:28:28. > :28:32.aspiration but not give the detailed, what is the point?
:28:32. > :28:38.think they are very conscious that George Osborne's decision to lower
:28:38. > :28:43.the top income rate in the Budget has turned out to be very unpopular.
:28:43. > :28:47.They did not want it to happen so they have to position themselves as
:28:47. > :28:54.the party in a coalition who will ensure that as austerity goes on
:28:54. > :28:58.for much longer than anybody thought... I totally agree, there...
:28:58. > :29:02.If they are going to go into negotiation with George Osborne and
:29:02. > :29:09.say, you want to cut welfare benefits and freeze the payments?
:29:09. > :29:14.You will have to do these things to the most affluent. Whoever it is.
:29:14. > :29:16.But they have to have a shopping- list of decent proposals.
:29:16. > :29:21.Earlier this morning, conference debated how to generate growth and
:29:21. > :29:24.jobs in a time of austerity. There have been grumblings by some party
:29:24. > :29:34.members that the current coalition policy isn't working and that it is
:29:34. > :29:39.
:29:39. > :29:45.time to do something different. The UK economy is not a solace at
:29:45. > :29:50.auction room - a mechanism - it is a seething mass of hopes and fears,
:29:50. > :29:55.where government decisions shape the behaviour of millions of
:29:55. > :30:03.workers and savers and consumers. Government needs a dynamic, not a
:30:03. > :30:11.book-keepers model. The Governor is telling Mr Osborne not to be
:30:11. > :30:16.obsessed with simple arithmetic. We need intelligent policy makers.
:30:16. > :30:24.want, in particular, the Chancellor to stop attacking green industries.
:30:24. > :30:28.He must choose between sustainable and predictable framework. The
:30:28. > :30:33.Government needs to choose between be sustainable economy this party
:30:33. > :30:40.has argued for four decades or right-wing Tory Party dogma. They
:30:40. > :30:45.need to choose between a work strategy that works or Mr Osborne.
:30:45. > :30:51.No longer can deficit reduction, by means of cuts in public spending,
:30:51. > :30:55.beat the top priority. The priority must be boosting the economy and
:30:55. > :31:01.reducing cuts or spreading them over a longer period. Let me say
:31:01. > :31:08.one last thing. When spending begins to rise, the private sector
:31:08. > :31:15.will regain its confidence. It is the poorest who can always be
:31:15. > :31:20.counted to spend every penny they have. Forgive the rich tax cuts.
:31:20. > :31:24.They will often not spend that money but invest it in foreign
:31:24. > :31:29.investments. The poorest will spend all I have because it is the only
:31:29. > :31:34.way they can try to maintain a reasonable standard of living. The
:31:34. > :31:39.very worst way to boost our economy is to cut the benefits for the
:31:39. > :31:46.poorest and to give tax cuts to the rich. I think the point of this
:31:46. > :31:53.debate is about saying, what are we for as Liberal Democrats? I know
:31:53. > :31:57.what I am for as a Liberal Democrat. I am for fairness. I am for social
:31:57. > :32:04.justice and I am for a war on poverty. Danny Alexander does not
:32:04. > :32:09.want us to be timid. Colleagues, neither do I. Can we stand by in
:32:09. > :32:14.the vain hope that more liquidity will slosh around the banks and
:32:14. > :32:20.find its way to the real economy? That is not enough. They cannot
:32:20. > :32:26.afford to stick to a broken ideology. There are those in this
:32:26. > :32:31.room who think that any deflection away from the Plan A will lead to a
:32:31. > :32:35.massive spike in borrowing costs. We will become the next Greece or
:32:35. > :32:43.Spain. That is patent rubbish. David Hall-Matthews, the chair of
:32:43. > :32:47.the Social Liberal Forum, is in Brighton. You supported an
:32:47. > :32:56.amendment calling on the coalition to adopt further measures to help
:32:56. > :33:02.the economy. What Buddy's further measures? We need to introduce
:33:02. > :33:08.wealth taxes and use those to pay for further investment in jobs. --
:33:08. > :33:12.what are these further measures? We have a deficit and the recession.
:33:12. > :33:18.The recession has been going on far too long and the deficit reduction
:33:19. > :33:25.plan is worsening it. It is time to tackle the recession by focusing on
:33:25. > :33:31.employment, jobs and growth. We need to distinguish ourselves from
:33:31. > :33:38.George Osborne. He is going down the wrong track. What you mean by a
:33:38. > :33:42.wealth tax and how much will it raise? -- what do you mean? We need
:33:42. > :33:48.to tax Mansions, land and the houses that pub built on it. We
:33:48. > :33:57.need to look at ways to increase inheritance tax. -- that are built
:33:57. > :34:05.on end. We need to increase capital gains tax further. On top of the
:34:05. > :34:12.28% it has been raised to? Do you have any idea how much it would
:34:12. > :34:15.raise - all of it? I cannot give the precise figures. If we added it
:34:15. > :34:19.altogether, you would be getting close to the 10 billion that George
:34:19. > :34:25.Osborne wants to save by cutting benefits to the very poorest and
:34:26. > :34:31.most vulnerable. It is important to first target the most affluent. The
:34:31. > :34:36.most vulnerable have been hit hard enough and the pips have already
:34:36. > :34:43.squeaked. In a 1.5 trillion pounds economy, it your big idea is an
:34:43. > :34:49.extra 10 billion in taxes too then invest in jobs. It is pretty
:34:49. > :34:53.marginal, isn't it? To then invest. George Osborne was top of that - as
:34:53. > :34:58.a good talking about taking 10 billion out of the welfare budget.
:34:59. > :35:05.-- George Osborne was talking about. He began this interview by saying,
:35:05. > :35:09.you take all this extra money from wealth taxes. You would take all
:35:09. > :35:17.this extra money and invest it in the country, not music to stop
:35:17. > :35:25.cutting the welfare bill. You said you would spend it. -- not to use
:35:25. > :35:30.it. There is the Bank of England... It has money saved. The Government
:35:30. > :35:35.is selling bonds effectively to itself was up there is money
:35:35. > :35:43.sitting there, which could be used to invest directly in the economy.
:35:43. > :35:47.-- to itself. It is time for the Government to start stimulating in
:35:48. > :35:54.the old fashioned Keynesian way because we're not going to get out
:35:54. > :35:59.of the recession. You have a vicious circle we need to turn into
:35:59. > :36:04.a virtuous circle by releasing government funds, which were then
:36:04. > :36:09.unlock the private sector. You may be right, you may be wrong
:36:09. > :36:12.economically. Politically, you are not get any of that from the
:36:12. > :36:17.Conservatives. You're in the wrong coalition with the wrong party. Why
:36:17. > :36:27.don't you go into coalition with Labour? They agree with everything
:36:27. > :36:30.
:36:30. > :36:35.you have set foot stuck it is not up to me. -- everything you have.
:36:35. > :36:42.It is self- evidently have a different approach to the economy
:36:42. > :36:45.from the Conservatives. -- self evident that we have. We need to
:36:45. > :36:51.recognise as Liberal Democrats that the way things are going are not
:36:52. > :36:55.the way they should be. The planning is not working. It is not
:36:55. > :37:01.producing the results and the deficit is not coming down very
:37:01. > :37:05.fast and we are in recession. As Liberal Democrats we need to say
:37:05. > :37:09.that and argue for that in public and in private. The more we say it
:37:09. > :37:15.in public the more likely we are to get things at of the Conservatives
:37:15. > :37:23.and the more the public will realise that is what we believe in.
:37:23. > :37:27.-- out of the Conservatives. Thank you for joining me from Brighton.
:37:28. > :37:32.Most people want things they were never get from the Conservatives.
:37:32. > :37:36.Everything he has listed will not happen with Mr Osborne and Mr
:37:36. > :37:42.Cameron that could happen with Labour. They must think they are in
:37:42. > :37:46.coalition with the wrong party. There are two answers to that. The
:37:46. > :37:52.activists who come to conference are not the same as the membership.
:37:52. > :37:55.The membership is not the same as the voters. Not everyone who is
:37:55. > :38:02.drawn to the Liberal Democrat party would agree with that set of
:38:02. > :38:07.priorities. It queues up a -- at it flags up a key problem. They need
:38:07. > :38:12.to negotiate a Spending Review compromised to differentiate the
:38:12. > :38:17.two parties in the lead-up to the general election. It needs to
:38:17. > :38:22.fashion a coherent programme to go through to 2016, in terms of tax
:38:22. > :38:29.and spending are what you do about the deficit and the debt. They're
:38:29. > :38:36.trying to fashion a narrower correct economic coalition plan
:38:36. > :38:40.with a lot of the activist parties out of step. Two parties in one
:38:40. > :38:43.government with radically different philosophies on tax. Sounds like a
:38:43. > :38:47.recipe for confusion, at best. But that's what we've got with the
:38:47. > :38:50.Coalition. Is it possible to blend the Lib Dem and Conservative
:38:50. > :38:53.approaches to the pound in your pocket and, when it comes to tax,
:38:53. > :39:02.do politicians of whatever party actually go after the right things?
:39:02. > :39:05.Here's David Thompson. The city many gallery of the British Museum,
:39:05. > :39:09.a fascinating history of the stuff that makes the world go round and
:39:09. > :39:14.Harry tried to keep it out of the clutches of others. For as long as
:39:14. > :39:18.there has been money, there has been tax. Politicians are very keen
:39:18. > :39:24.to get their hands on our cash. This government is much the same,
:39:24. > :39:29.except for this - there are two parties in it with different ideas
:39:29. > :39:35.on what to tax and who should pay. George Osborne has been right in
:39:35. > :39:41.terms of getting the deficit down. 80% has to be down to savings and
:39:41. > :39:48.reductions in public spending and only 20% on tax rises. Otherwise,
:39:48. > :39:53.the real risk of putting taxes up his the take may even come down.
:39:53. > :39:58.Maybe not. The Tories basically have a view you need taxes as low
:39:58. > :40:05.as possible. In my view, the Duke of Liberal Democrats, you need a
:40:05. > :40:10.decent rate of tax and a fair rate of tax to have a civilised society.
:40:10. > :40:16.We want a fair tax. The Tories have an instinct that says, of the less
:40:16. > :40:23.we can be taxed, the better. According to the experts, that
:40:23. > :40:26.Disconnect matters. If you look at the last Budget, there was an
:40:26. > :40:34.increase in the personal allowance and the cut in the top rate of
:40:34. > :40:38.income tax. That left a hole. More money needed to be found. Frankly,
:40:38. > :40:44.they made a muddle of failing that whole with pasty tax and doing
:40:44. > :40:49.things to the pension or allowance. It was seen as a quick-fix way to
:40:49. > :40:54.fill a hole and put the two policies together. Overall, they do
:40:54. > :40:58.not have a policy or strategy for the tax system. Nor did the last
:40:58. > :41:03.government. It is more obvious when you have to coalition partners
:41:03. > :41:07.trying to do the same things. it comes to tax, politicians of
:41:07. > :41:11.whatever party are more scared of us than we are of them. It is very
:41:11. > :41:16.easy to make a case to say the rich will pay more. There are very few
:41:16. > :41:21.rich people. It is the middle- income, middle-class people, of
:41:21. > :41:26.whom there are so many. You can bring in some quite significant
:41:26. > :41:30.numbers. They make up the floating voters who determine any election.
:41:30. > :41:35.That is the reason why there has to be a worry that, if you to maximise
:41:35. > :41:39.that element of the tax take, he will pay a heavy political and
:41:39. > :41:45.electoral price before too long. They still managed to hit us where
:41:45. > :41:48.it hurts, where they were Lib Dem, Tory or a Time Lord, it seems tax
:41:48. > :41:51.will always be taxing. David Thompson reporting. We're joined
:41:51. > :41:57.now by Labour's Chris Leslie. He's the Shadow Financial Secretary to
:41:57. > :42:05.the Treasury. When you hear the Lib Dems talking about the top 10%
:42:05. > :42:09.making a bigger contribution, a mansion tax, changing the onus of
:42:09. > :42:14.inheritance tax so it falls on recipients and other ways of
:42:14. > :42:19.increasing taxes on the rich, the mass think this is a party we can
:42:19. > :42:24.do business with? If you believe them. If you believe that they want
:42:24. > :42:32.to see a fair tax system, that is not the experience we have seen. In
:42:32. > :42:39.the Budget in March, we saw Nick Clegg happily cut the tax on
:42:39. > :42:43.earnings over �150,000. He did not do it happily. That is a
:42:43. > :42:49.misrepresentation. We do not know other than his actions. There are
:42:49. > :42:52.lots of words in this conference today. It is quite clear they are
:42:52. > :42:58.lobbying the Conservatives to raise taxes on the better off. Do you
:42:58. > :43:03.agree with that? We will see whether they will do it. They may
:43:03. > :43:08.well be lobbying them. We have said we disagree with the reduction in
:43:08. > :43:15.the millionaire's tax. That was a fundamental dividing line. Which
:43:15. > :43:19.you put the top rate back up to 50%? In this Parliament, of course,
:43:19. > :43:26.that was the wrong choice for them to make. There are other choices.
:43:26. > :43:33.Let me mention one thing... Of Bankers bonus levy. How much would
:43:33. > :43:37.that raised? I think we said �2 billion. That would prioritise
:43:37. > :43:44.construction for social housing and give money for a youth jobs
:43:44. > :43:48.programme. What about the mansion tax? Are you in favour of that?
:43:48. > :43:55.is almost a dance of the seven veils we're getting from Vince
:43:55. > :44:03.Cable. Are you doing your own work on that? We have heard they are
:44:03. > :44:10.talking about its, the Labour Party. His Ed Balls looking at the mansion
:44:11. > :44:15.tax or not? We have a five-point plan for growth. So, is he not
:44:15. > :44:24.looking at the mansion tax? We are happy to look at whatever the Lib
:44:24. > :44:29.Dems put on the table. It is just hot air. If they say it will be on
:44:29. > :44:34.houses over �2 million and on a particular timescale, we want the
:44:34. > :44:39.details. How can we, as an opposition, react to the tax plans?
:44:39. > :44:46.They do totally the opposite of what they say and even improve
:44:46. > :44:52.things behind the scenes. I am not talking about the Lib Dems. You are
:44:52. > :44:56.the opposition. In opposition, you have to have a look at a range of
:44:56. > :45:02.policies. Are you looking at the mansion tax as a possible policy
:45:02. > :45:07.for the next manifesto? We have talked about how much money we want
:45:07. > :45:15.to raise in our five-point plan for star of IUD looking at the mansion
:45:16. > :45:21.tax or not? -- in our five-point plan. Are you looking at the
:45:21. > :45:27.mansion tax or not? If Nick Clegg persuades George Osborne they will
:45:27. > :45:34.float more detail about this that we will look at it then. Ed Balls
:45:34. > :45:39.was quoted... I am trying to find a way you may be able to do business.
:45:39. > :45:45.Ed Balls was quoted in September saying, at the likes of a mansion
:45:45. > :45:50.tax needs to be on the table of. is not on the table. There is a
:45:51. > :46:00.headline. You up on the Labour table. You could say, why do we not
:46:01. > :46:02.
:46:02. > :46:12.make this a six. Plan? We have said where we meet to have many come up
:46:12. > :46:22.on new house building. -- we need to have money - on new housing. It
:46:22. > :46:22.
:46:22. > :46:26.The Lib Dems want to move the inheritance tax to the recipients
:46:26. > :46:31.because it is harder to get around that. At the moment, it falls on
:46:31. > :46:35.the person who is leaving the money behind. The Lib Dems say you should
:46:35. > :46:41.tax the people who receive it, because that way it is much harder
:46:41. > :46:46.to get around it. Do you agree? That is a false distinction. Of
:46:46. > :46:52.course the person who is requesting it will not be taxed because they
:46:52. > :46:56.are no longer around -- bequeathing it. The person who receives it is
:46:56. > :47:06.paying it. Again, where is the detail? Is this fantasy politics
:47:06. > :47:06.
:47:06. > :47:14.from the Liberals? They should put it in a song. You got that lining!
:47:14. > :47:19.-- line in. Vince Cable has been speaking to conference. We were
:47:19. > :47:26.waiting for some coded messages about the leadership!
:47:27. > :47:31.I am a realist, but deep down an optimist. We cannot recreate this
:47:31. > :47:37.false paradise of the pre-crisis era but we are perfectly capable of
:47:37. > :47:41.sustaining growth in this country. And to that end, I believe we need
:47:41. > :47:47.an industrial strategy, which is a positive, ambitious vision built
:47:47. > :47:53.around long term investment in innovation and skills and science.
:47:53. > :47:59.We are so good at so many things in this country. But for far too long,
:47:59. > :48:02.the mirage of growth based on property speculation and financial
:48:02. > :48:12.gambling has hidden the heart of virtues of making things
:48:12. > :48:12.
:48:12. > :48:19.productively. APPLAUSE. So we have got to get behind successful
:48:19. > :48:23.British-based firms, in vehicles and aerospace, life sciences and
:48:23. > :48:29.creative industries, and world- class scientists at University. I
:48:29. > :48:34.have been working to make that happen. Despite spending cuts, we
:48:34. > :48:38.have increased apprenticeships by over 60%. We have launched German-
:48:38. > :48:43.style innovation centres so that British industry can access the
:48:43. > :48:47.newest technologies are in advanced manufacturing, by geosciences,
:48:47. > :48:51.sustainable energy and digital. We are bringing lost supply chains
:48:51. > :48:56.back to Britain. The Green Investment Bank is getting up and
:48:56. > :49:02.running, to finance the green industries of the future. We have
:49:02. > :49:07.had some real successes. That is working with the American Chiefs of
:49:07. > :49:17.General Motors, and British trades unions, to save thousands of a
:49:17. > :49:21.
:49:21. > :49:25.Working with the Indian owners of Jaguar Land Rover to create a
:49:25. > :49:31.global hub in the West Midlands for design and vehicle engineering.
:49:31. > :49:35.APPLAUSE. And boosting research to keep Britain as the second
:49:35. > :49:41.Aerospace economy in the world, and working with Siemens and others to
:49:41. > :49:47.develop offshore renewables engineering in Hull, a key local
:49:47. > :49:54.and Industry. There are some common threads to this. One is an
:49:54. > :50:00.understanding that it markets fail and that governments can and should
:50:00. > :50:10.sensibly intervene. The other is the will to fight the British curse
:50:10. > :50:15.
:50:15. > :50:23.of short term-ism. The strategy can only work if fine and supports
:50:23. > :50:29.business investment and growth and currently it does not. -- only work
:50:29. > :50:35.if government supports. Our leading banks to traditional banking
:50:35. > :50:42.relationships out and sold useless and dodgy derivatives instead, and
:50:42. > :50:49.useless insurance. And public anger at the greed and stupidity in this
:50:49. > :50:59.industry will continue for a long time. But I want to look forward. I
:50:59. > :51:00.
:51:00. > :51:07.want to work with a new generation of sensible... To support the
:51:07. > :51:11.economy. We must now influence the pioneering possibility of splitting
:51:11. > :51:21.investments banks from mainstream personal banking, as in the figures
:51:21. > :51:23.
:51:23. > :51:30.report. -- Vickers report. Without Liberal Democrats in government,
:51:31. > :51:37.you can be absolutely sure this would not have happened. APPLAUSE.
:51:37. > :51:42.But there is still so much to do. Four years ago, a massive taxpayer
:51:42. > :51:49.bail-out stopped RBS from dragging the whole economy over a cliff, and
:51:49. > :51:56.two years ago there was even talk of an early sell-off. That is
:51:56. > :52:02.history. It is now getting more shipshape and it needs direction
:52:02. > :52:10.from us, after all, we own it, to get it off steam and lend more to
:52:10. > :52:17.British businesses. This is no time for the state to be stepping back.
:52:17. > :52:21.APPLAUSE. We need a new British business bank with a clean balance
:52:21. > :52:26.sheet and an ability to expand lending rapidly to the
:52:26. > :52:32.manufacturers, the exporters, a high-growth companies that power
:52:32. > :52:35.the economy and I can announce today that we will have that.
:52:35. > :52:39.Cable, speaking to the Lib Dem Conference in Brighton just a few
:52:39. > :52:43.moments ago. He also said he thought coalition government of
:52:43. > :52:48.some sort was here to stay, that the British people would not choose
:52:48. > :52:54.one party at the next election to run the country. Some people
:52:54. > :52:58.thought it was a big "come on" to the Labour Party, and an active
:52:58. > :53:02.role for the state. And we can talk now to the Lib Dem deputy leader,
:53:02. > :53:07.Simon Hughes. He was texting away there just before he came on air,
:53:07. > :53:14.probably sending a few messages to Ed Miliband and Ed Balls. Just
:53:14. > :53:18.teasing! The government is only putting a billion pounds into this
:53:18. > :53:23.state bank. We don't even know where that money is coming from and
:53:23. > :53:29.it won't even start for 18 months. It will do nothing for small
:53:29. > :53:33.businesses in the recession. Correct? You are correct it will be
:53:33. > :53:38.a billion pounds government down payment, it will be matched by
:53:38. > :53:41.private finance. The idea is it will produce about 10 billion and
:53:41. > :53:45.it is specifically addressed so that in this parliament, the
:53:45. > :53:51.problem that has bedevilled small and medium businesses, which is
:53:51. > :53:55.getting money from the banks, will be dealt with. It is the second
:53:55. > :54:02.initiative because we have already started and Investment Bank
:54:02. > :54:07.specifically for green products. -- an investment bank. You are going
:54:07. > :54:12.to ask the taxpayer to guarantee funds. They will go into small
:54:12. > :54:16.businesses that have already been turned down by the commercial banks.
:54:16. > :54:21.What collateral will we get for these loans? The bank will work out
:54:21. > :54:26.a way of doing it that so despise them, and for the government that
:54:26. > :54:32.it is a viable lending proposition -- that satisfy his them. How can
:54:32. > :54:39.we be sure you will not lose their money? You can never be sure, of
:54:39. > :54:47.course. When a vet any bank lens, the state needs to take actions to
:54:47. > :54:52.protect the taxpayer -- went any bank lents. But we thought we
:54:52. > :54:57.should have some influence in what the banks do. From my experience in
:54:57. > :55:01.south London, it is no different to anywhere else in the country, that
:55:01. > :55:07.small businesses that have a good record struggle to get the lending
:55:07. > :55:12.they need. Most people in Britain do not work for big businesses. We
:55:12. > :55:18.need to make sure that sector continues to grow. It has already
:55:18. > :55:23.created 900,000 jobs since the recession began. Jobs are going
:55:23. > :55:29.down obviously in the public sector. We have now got the Vince Cable
:55:29. > :55:34.Bank but we will not have it for 18 months. We have got the green bank.
:55:34. > :55:38.How much has that loaned to people so far? I don't know the answer to
:55:38. > :55:43.that question, perhaps I should. The answer is nothing because it is
:55:43. > :55:53.only now up and running. How much has the "big society" bank loaned
:55:53. > :55:53.
:55:53. > :56:00.to people? Again, this is like a quiz programme, Andre's. -- and
:56:00. > :56:05.drugs. The Yuki creating banks that don't do anything! -- Andrew. You
:56:05. > :56:09.keep creating banks that don't do anything. The "big society" was
:56:09. > :56:14.about volunteering and the charitable sector. I assumed to be
:56:14. > :56:18.Greenbank had started to lend but we only just passed the legislation.
:56:18. > :56:22.The whole idea is to make sure places like the north-east get the
:56:22. > :56:31.support for the renewable energy industry, we make sure got a blog
:56:31. > :56:35.we know what it is meant to do. The answer is, we are a committee...
:56:35. > :56:42.The plan is to make sure there is Public Investment without
:56:42. > :56:46.penalising the taxpayers to stimulate the economy. There will
:56:46. > :56:49.be the ability for people to use their pension pots to help the
:56:49. > :56:55.children and grandchildren to have the Investment and security to get
:56:55. > :57:00.on the housing ladder. Vince Cable says he wants the bank to
:57:00. > :57:04.concentrate on lending money for people to make things. Can I give
:57:04. > :57:10.you a brief history of this? British Leyland, British
:57:10. > :57:15.shipbuilding, Phoenix. These were great successes, weren't they!
:57:15. > :57:20.remember those, as you do, but you also know the great debate last
:57:20. > :57:24.year was why we did not support our companies to get contracts for the
:57:24. > :57:31.railway industry's when it is self evident that other countries within
:57:31. > :57:35.the EU were able to do that. We have a more robust attitude on this.
:57:35. > :57:42.You are not allowed to unfairly state-subsidised to distort
:57:42. > :57:46.competition but you are allowed to persist if you play by the rules.
:57:46. > :57:50.We need to make sure that wherever possible we support companies, not
:57:50. > :57:59.that are going down the plughole, but those industries, like the
:57:59. > :58:04.motor industry and the aerospace industry, with a very good record.
:58:04. > :58:12.We have run out of time, thank you of every match. The answer to the
:58:12. > :58:17.quiz? I assume there is none Dublin on.
:58:17. > :58:24.It has been cruelly exposed by the newspapers -- there is none going