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Conference Special

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Afternoon, folks. Welcome to our first Liberal Democrat Daily

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Gategate rumbles on. Conservative Chief Whip Andrew Mitchell returns

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to the gates outside Number 10 to apologise but still refuses to say

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what words he actually used. I am very clear about what I said and

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what I did not say. I did not use the words that have been attributed

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to me. The Liberal Democrats continue their autumn conference

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shindig in Brighton. Today it is the turn of Vince The Cable to wow

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the party faithful. We will ask Lib Dem bigwigs Jeremy Browne and Simon

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Hughes why they want to tax the affluent until the pips squeak. And

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we will test the mood of the party's foot soldiers. Are they

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ready to forgive and forget? I am sorry if. I am of so, so Surrey

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bus-stop -- so, so sorry. All that in the next hour. And, with us for

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the duration, Miranda Green. She's a journalist who used to be press

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secretary to Paddy Ashdown when he was Lib Dem leader. That does not

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make a bad person. Let's start of the row over what Andrew Mitchell

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did what did not save two police officers in an incident over

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bicycle rage. The Sun says it has seen a police lock confirming that

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Mr Mitchell did swear at the officers. It does confirm, they say,

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he used the politically toxic word, peps. The Chief Whip denies using

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that language. We were told Mr Major would be making a statement

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at those very same Downing Street gates. He ditched the ministerial

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car for a Polo. Much smaller but German. What exactly did you say to

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those police officers outside Downing Street? First of all, a

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want to reiterate the apology I made last week after the incident

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on Wednesday night in Downing Street. It had been the end of a

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long and extremely frustrating day. That is not an excuse. I did not

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show the police the amount of respect and should have done. They

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do an incredibly difficult job. I have apologised to the police and

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the police officer involved and he has accepted my apology. I hope we

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can draw a line underneath it. police a clear about what was said.

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You do not seem to be. I am clear about what I said and what they did

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not say. I did not use the words that have been attributed to me. I

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am going to get on with my work. What did you say? Did that achieve

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anything? I think he fluffed it badly. Yesterday, it seemed the

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heat was living off this slightly. It seems to have stoked the fire

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once again. -- was moving off this slightly. Can Downing Street be

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advising him? If they are, why would they let him do that?

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Chief Whip is supposed be an invisible figure. The Chief Whip

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visibly it is an embarrassment to the Government. One I would anyone

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advising him think, getting out of that car and speaking for about a

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minute, saying what he said, was going to do any good for him

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whatsoever? It just gives it legs and everyone more material to roll

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with for another 24 hours. I do think this question of the key word,

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what attitude does it expose? speak to Tom Newton Dunn, the

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journalist who broke the story and Kevin Maguire of the Daily Mirror.

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Have you seen the police contemporaneous account - the

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police statement - of what they said happened? Yes, we have. Well,

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I have. It was a full report filed by the main police constable. It

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was a WPC to begin with and a male PC afterwards, who stepped in to

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help pad his embattled female colleague. The male constable wrote

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down everything of the exchange. He used both his note in his pocket

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Burke and the contemporaneous note in the pocket book of his WPC and

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father report to his supervisors. He said the reason why he filed it

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is because he was worried about what Mr Mitchell was going to do as

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a result of this. The final words to him were, you have not heard the

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last of theirs. You are saying it is a policeman and a police woman

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involved. I'll be saying that Mr Mitchell swore at the police woman?

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-- are you saying? It is not entirely sure that Mr Mitchell did

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swear at the police were month. It is not reported that he did. -- the

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Police woman. The police women said she could not open the gates. The

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Mail PC came over. From that moment onwards, he did start swearing and

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the insults. -- the male policeman. According to the record of the

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police, it shows that he used the word, plebs. It is a bit more

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colourful than that. No aspect of blushes with the Anglo Saxon word

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that came before it. By roughly get it. I am of a gentle disposition. -

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- I roughly get it. When you hear what Tom has said and what The Sun

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has done, can you see what the point is that of the appearance by

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Mr Mitchell at 8 o'clock this morning? Only if it was to make it

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worse. Probably the worst apology since Ron Davies was out in words,

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it said to be out to encounter a man and he said he was looking for

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badgers in broad daylight. It was absolutely crazy. He has to say,

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did he call them plebs or not? He said he did not use the words

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attributed to him. What were they? We want to know. He needs to come

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back out and say what he said. He has evaded it. People will reap the

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very worst into a performance by him today. -- read. Do you think we

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can see a facsimile of the notebook? Anything like that?

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leave it for the moment that we have seen it? I took a verbatim

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note of it in my notebooks. We have the pull transcript. My short hand

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is so bad, it is worse than a vending you with Anglo Saxon

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language. A want to get on to the Lib Dems was up -- offending youth.

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Where does the story go from here? It is not going to go anywhere from

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here. It is not going to go away. What we were expecting this morning,

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our colleagues back in Westminster in the lobby, was for the spokesman

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of the Prime Minister to say the Cabinet Office and the Cabinet

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Secretary have risen to calls from very senior policemen and Yvette

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Cooper, the Shadow Home Secretary, to actually tried to look into this.

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They have talked to the police, anything to try to get to the

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bottom of he says, she says. That is where we are now. What I find

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staggering is that the spokesman for the Prime Minister has said,

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move on, there is no story here. The Prime Minister believes the

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account of Mr Mitchell. That is saying I believe the camp by Mr

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Mitchell over the words of some of the best offices the Met has. --

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the account. I think the Prime Minister has made an enormous error

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in doing that. Are the Lib Dem delegates buying the economy from

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Mr Clegg and the bash the rich rhetoric? Is that allowing him to

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live another day? Did they think at some stage we will have to ditch

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him? I think they know it is over for him. Privately, he may feel

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that as well. Conference is a very tribal affair. All the rhetoric is

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against the Conservatives. It is almost as if Labour does not exist.

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All the fire is focused on the coalition partner. It is very hard

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to get on and work closely with the people you have spent the week

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slagging off in very colourful terms. How do you read it? There is

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no leadership challenge this week. You can confirm that, I think. What

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happens after that? It is a bit like the Tories. And the fortunes

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of Cameron to a lesser extent. If the economy starts picking up and I

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get decent growth results for the next quarter, two months of growth

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by the end of January, pressure might alleviate a bit. If it does

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not go anywhere, Norman Clegg is in the same position next year as the

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ship, he will be in enormous Thank you for joining us from

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It is clear the strategy of Mr Clegg. This has come on the eve of

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the conference. There is a lot of bashed the rich rhetoric coming out.

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Will it work? -- bash. There is a move to try to move on into a new

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phase with the apology. The idea that over the summer something that

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was put to bed was the dream of House of Lords reform. Saying they

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will not thank the boundary changes for the House of Commons. That is

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very messy and unpleasant. Both sides got nothing for nothing.

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is behind us. Now they are saying they need to move forward and make

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it absolutely clear they are concentrating front and centre on

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the economy. Everything this week is about the economy. That is right

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and proper. Putting that reform agenda behind them with it -- with

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the economy - a rubber Withey apology. Whether that goes over

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with the public, that is another matter. -- behind them with the

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apology. Now it is time for the daily quiz. Which Lib Dem has not

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been texting Ed Miliband and other At the end of the show, the Randa

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will have the correct answer. Now the theme of this party conference

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is to put a bit of yellow water between the Lib Dems and their

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Conservative coalition partners. Nick Clegg has dug his heels in

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over extra cuts in public spending. He has said he will not allow any

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more up to the end of the next spending round. He is concentrating

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on taxing the rich further. Mr Clegg wants to bring in more money

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by targeting the better off. He made a thinly veiled strike at

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George Osborne, saying they will not allow some of the wild

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suggestions from the right of politics that all the savings will

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come from welfare. He plans to target the top 10% - that means

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anyone earning over �50,500 a year before tax. Plans for a so-called

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Pensham property scheme, whereby savers could use lump sums in

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pension pots to guarantee part of the mortgage taken up by children

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or grandchildren. Some estimates suggest about 12,000 people would

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take up the offer. People over 55 can already cash up to 25% of their

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pension pot tax free. Vince Cable will announce today plans to set up

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any business bank. He will save 1 billion has been found to help set

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up the bank, which it is hoped will increase lending to small and maybe

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a medium-sized businesses. It is unclear where the Treasury has

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banned this money, nor has any private funding been pledged to

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Joining me now from Brighton is the Liberal Democrat Home Office

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minister Jeremy Browne. Grew to see you. We are missing New Delhi here!

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I am missing you, too. -- We Are Missing You. Anyway, your leader

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once more taxes on the most affluent 10% of the country and he

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wants that before the election. What sort of taxes does he want on

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the top 10%? There has been some misrepresentation about this in the

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media today. The Daily Mirror said Nick Clegg is targeting the poor.

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The Daily Mail said Nick Clegg is targeting the rich. The reality is,

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he is explaining that we as a country are in a big hole, we have

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a big deficit still, and to use a slightly dated terminology, we need

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a collective effort to make sure that we get national finances back

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on track. I understand that but let me ask my question again. I

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understand all of that. But Nick Clegg said he wants the top 10% to

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contribute more so I ask you again, in what way should the top 10%

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contribute more? We have had some changes, you will remember at the

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last Budget one of the announcements that was made, it did

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not get as much attention as some of the others, was stamp duty on

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more expensive properties. There have been changes on capital gains

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tax. But he says he wants more. I know what has happened... What does

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he want? I know what he has done. Please tell the viewers, what more

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does he want the 10% to do? I have never in my memory in politics seen

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announcements about budget measures made at a party conference on a

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programme like yours. There will be an autumn statement in a couple of

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months' time, there will be a budget, and what will be at the

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heart of that budget is a Lib Dem commitment that we will get to

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grips with the terrible public finances but we will make sure that

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the people who have a means to make a contribution are asked to make a

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contribution rather than that burden falling on the poorest

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people who have the least ability to make their contribution.

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understand that. You know I am not asking you for a Budget statement.

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I am not even asking for the Autumn Statement, which will come first. I

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am simply asking you, since your leader has at the top 10% needs to

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do more, what ways with your party do more? Let me help you. Let me

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ask a question. The top 10% in this country of income earners account

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for 55% of all income tax paid. The top 10% account for 55% of all

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income tax paid. Should they pay more? Well... I don't dispute the

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figure. The point I am making is that there are a number of ways

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that the most affluent people can make a greater contribution. You

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have used one crude measurement based on income tax. We tend to say

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as a party that we want people to be incentivised to work and to keep

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a reasonable proportion of their income. We would rather the burden

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of taxation fell in a different place than penalising enterprise

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and endeavour and hard work. I don't think the party is

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instinctively drawn... I imagine you are talking about the basic

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rate and upper rate of taxation but this will be in the Budget. There

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are a number of ways that people can pay more tax. I have given you

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a couple of examples. A you have not given me any examples.

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government increased capital gains tax. Should it increase it more?

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introduced a stamp duty for the most expensive homes. That fell

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disproportionately on the most affluent as well. There are tax

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measures where you can, without changing income tax levels, get

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some additional revenue from people who are most able to make a

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contribution to make a bigger effort to try and have this huge

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project of national renewal, which is that we are borrowing and

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billion pounds every three days... I understand that. Nick Clegg is

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not saying that this can all be achieved by taxing the rich and

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that everybody else needs to stand back and let the richest people in

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society sort the problem out. That is not the solution. Everybody is

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going to have to realise that we are in a deep hole as a country.

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understand that. But Nick Clegg is saying that the people at the top

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will have to be asked to make a contribution... I understand that

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but I can't get you to tell me what it means. Let me try you again in a

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different way. If I can't tell you what will be in the Budget. We will

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go round and round. I am asking what your party things. Nick Clegg

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has called for the top 10% in our society to do more. The top 10%, in

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terms of income, includes primary- school Deputy Head Teachers, police

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inspectors and senior nurses. Should they be contributing more?

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am not sure he did say top 10% in terms of income. I think the figure

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in terms of income... That was how the media chose to interpret it.

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What is it then? There are very wealthy people who have very modest

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incomes. This is the debate we have with Mitt Romney in the United

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States of America, who has a lot of wealth but his income for income

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tax purposes is a relatively modest, so people have wealth without

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necessarily earning large amount of income, so there are a number of

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ways that the government could look at how we can have additional

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revenue from the most affluent people to try to make sure that...

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OK, all right. To try to get down the deficit. Enlighten us, Mr Brown.

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If he is not talking about the top 10% of income earners, what 10% is

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he talking about? The point I am making, I have just made it but I

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will try to make it again, that you can be a wealthy person without

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necessarily earning that much income. You could have inherited a

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lot of wealth, for example. That is why we changed the rate of taxation

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for capital gains tax from 18% up to 22% earlier in the parliament. I

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think there are a number of ways that the Treasury can look, at the

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Autumn Statement and in the Budget, to have the public expenditure we

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need and the revenue we need to address the deficit. But there is

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no magic alternative plan. People in newspaper columns talk as if

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only Ed Balls were Chancellor tomorrow we would have growth and

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no unemployment. The truth is, whoever is in government, we have

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got to get to grips with the fact that we have a problem with the big

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deficit left to us by a Labour, which will mean that people with

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the greatest of means will make a contribution to eradicate that

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deficit. Thank you for joining us. Whether he will buy me a drink

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after that is another matter! So as Nick Clegg's bruised and

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battered party troops wander round the rain-soaked conference centre

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in Brighton, are they their usual happy-go-lucky selves? Or is their

:24:06.:24:09.

mood a little more despondent? Down? Depressed? Nick Clegg tried

:24:09.:24:13.

his best last week to cheer them all up by apologising for his

:24:13.:24:17.

tuition fees pledge. A move which led to a remixed version set to pop

:24:18.:24:22.

music entering the charts at number 143. It is a bit like their poll

:24:22.:24:27.

ratings. But are the Lib Dems in a forgiving mood? Our Adam has taken

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the Daily Politics mood box to the seaside to find out.

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All the talk is about Nick Clegg saying sorry over tuition fees, but

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are the delegates are ready to forgive him? Yes or no?

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Do you forgive him? Yes. Why is he deserving of forgiveness? Because

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he said it from the heart. It is a mission of how he feels. I feel

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that. -- it is an admission. We had no apology for Iraq. We have had no

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apology for the mess the last government left us with financially.

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And they were huge! I do for give him but I cannot forgive him for

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the fact he made that promise and went against it. That is the number

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one barer a politician can make. The press should be asking

:25:20.:25:25.

forgiveness for all the students to put off going to university by

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misrepresenting the policy. I think he was right to apologise but he

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should have done it two years ago. Am I ready to forgive him? Yes, and

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know. Too little, too late. -- yes, and no. Somebody has said to me

:25:45.:25:49.

that quite a lot of people quit the party over tuition fees so they are

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not even here to vote no. # I'm sorry, I'm sorry #.

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# It is very hard to say that I'm sorry #.

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You have saved me 79p. Thank you very much!

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Do you think it has done damage? Definitely. That is why an apology

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was needed and was welcome. All of us have learnt things from this

:26:18.:26:23.

episode. I said the other day, we are a party that prides itself on

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integrity. Nick said sorry. Do you forgive him? Yes! Anything you want

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to apologise for? I would echo his apology on a pledge that we made

:26:38.:26:43.

but sadly could not keep. I would have forgiven him if his apology

:26:43.:26:48.

had been accompanied by his letter of resignation. What do you say to

:26:48.:26:53.

the people who do not want to forgive him? We are not in North

:26:53.:26:58.

Korea. We are a Liberal Party in one of the most liberal-minded

:26:58.:27:04.

countries in the world, not everybody is required to agree.

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Have a look at what I have just That will be a collector's item!

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Miranda Green is still with us. Am I right in getting a sense that at

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this conference, the Lib Dems are kind of talking to themselves, and

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they have to? I think that is absolutely right. It is quite an

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inward-looking week for the Lib Dems and they don't have much

:27:34.:27:39.

choice about it. This journey they have been on in the last two years,

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and coalition has turned out to be even more painful than they

:27:44.:27:47.

anticipated, they really need to have a very hard think about not

:27:47.:27:53.

just positioning but fundamental questions, who are we for and to do

:27:53.:27:58.

we appeal to in the next general election? Those people on the soft

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left, who always used to be drawn to the Lib Dems, are not

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necessarily coming back. The whole thing coming out of the Lib Dem

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conference has been, let's find ways to tax the affluent. Nick

:28:12.:28:18.

Clegg used the figure of the top 10%. But Mr Brown was unable to

:28:18.:28:23.

give me one example. That does not stand the test. If you can do the

:28:23.:28:28.

aspiration but not give the detailed, what is the point?

:28:28.:28:32.

think they are very conscious that George Osborne's decision to lower

:28:32.:28:38.

the top income rate in the Budget has turned out to be very unpopular.

:28:38.:28:43.

They did not want it to happen so they have to position themselves as

:28:43.:28:47.

the party in a coalition who will ensure that as austerity goes on

:28:47.:28:54.

for much longer than anybody thought... I totally agree, there...

:28:54.:28:58.

If they are going to go into negotiation with George Osborne and

:28:58.:29:02.

say, you want to cut welfare benefits and freeze the payments?

:29:02.:29:09.

You will have to do these things to the most affluent. Whoever it is.

:29:09.:29:14.

But they have to have a shopping- list of decent proposals.

:29:14.:29:16.

Earlier this morning, conference debated how to generate growth and

:29:16.:29:21.

jobs in a time of austerity. There have been grumblings by some party

:29:21.:29:24.

members that the current coalition policy isn't working and that it is

:29:24.:29:34.
:29:34.:29:39.

time to do something different. The UK economy is not a solace at

:29:39.:29:45.

auction room - a mechanism - it is a seething mass of hopes and fears,

:29:45.:29:50.

where government decisions shape the behaviour of millions of

:29:50.:29:55.

workers and savers and consumers. Government needs a dynamic, not a

:29:55.:30:03.

book-keepers model. The Governor is telling Mr Osborne not to be

:30:03.:30:11.

obsessed with simple arithmetic. We need intelligent policy makers.

:30:11.:30:16.

want, in particular, the Chancellor to stop attacking green industries.

:30:16.:30:24.

He must choose between sustainable and predictable framework. The

:30:24.:30:28.

Government needs to choose between be sustainable economy this party

:30:28.:30:33.

has argued for four decades or right-wing Tory Party dogma. They

:30:33.:30:40.

need to choose between a work strategy that works or Mr Osborne.

:30:40.:30:45.

No longer can deficit reduction, by means of cuts in public spending,

:30:45.:30:51.

beat the top priority. The priority must be boosting the economy and

:30:51.:30:55.

reducing cuts or spreading them over a longer period. Let me say

:30:55.:31:01.

one last thing. When spending begins to rise, the private sector

:31:01.:31:08.

will regain its confidence. It is the poorest who can always be

:31:08.:31:15.

counted to spend every penny they have. Forgive the rich tax cuts.

:31:15.:31:20.

They will often not spend that money but invest it in foreign

:31:20.:31:24.

investments. The poorest will spend all I have because it is the only

:31:24.:31:29.

way they can try to maintain a reasonable standard of living. The

:31:29.:31:34.

very worst way to boost our economy is to cut the benefits for the

:31:34.:31:39.

poorest and to give tax cuts to the rich. I think the point of this

:31:39.:31:46.

debate is about saying, what are we for as Liberal Democrats? I know

:31:46.:31:53.

what I am for as a Liberal Democrat. I am for fairness. I am for social

:31:53.:31:57.

justice and I am for a war on poverty. Danny Alexander does not

:31:57.:32:04.

want us to be timid. Colleagues, neither do I. Can we stand by in

:32:04.:32:09.

the vain hope that more liquidity will slosh around the banks and

:32:09.:32:14.

find its way to the real economy? That is not enough. They cannot

:32:14.:32:20.

afford to stick to a broken ideology. There are those in this

:32:20.:32:26.

room who think that any deflection away from the Plan A will lead to a

:32:26.:32:31.

massive spike in borrowing costs. We will become the next Greece or

:32:31.:32:35.

Spain. That is patent rubbish. David Hall-Matthews, the chair of

:32:35.:32:43.

the Social Liberal Forum, is in Brighton. You supported an

:32:43.:32:47.

amendment calling on the coalition to adopt further measures to help

:32:47.:32:56.

the economy. What Buddy's further measures? We need to introduce

:32:56.:33:02.

wealth taxes and use those to pay for further investment in jobs. --

:33:02.:33:08.

what are these further measures? We have a deficit and the recession.

:33:08.:33:12.

The recession has been going on far too long and the deficit reduction

:33:12.:33:18.

plan is worsening it. It is time to tackle the recession by focusing on

:33:19.:33:25.

employment, jobs and growth. We need to distinguish ourselves from

:33:25.:33:31.

George Osborne. He is going down the wrong track. What you mean by a

:33:31.:33:38.

wealth tax and how much will it raise? -- what do you mean? We need

:33:38.:33:42.

to tax Mansions, land and the houses that pub built on it. We

:33:42.:33:48.

need to look at ways to increase inheritance tax. -- that are built

:33:48.:33:57.

on end. We need to increase capital gains tax further. On top of the

:33:57.:34:05.

28% it has been raised to? Do you have any idea how much it would

:34:05.:34:12.

raise - all of it? I cannot give the precise figures. If we added it

:34:12.:34:15.

altogether, you would be getting close to the 10 billion that George

:34:15.:34:19.

Osborne wants to save by cutting benefits to the very poorest and

:34:19.:34:25.

most vulnerable. It is important to first target the most affluent. The

:34:26.:34:31.

most vulnerable have been hit hard enough and the pips have already

:34:31.:34:36.

squeaked. In a 1.5 trillion pounds economy, it your big idea is an

:34:36.:34:43.

extra 10 billion in taxes too then invest in jobs. It is pretty

:34:43.:34:49.

marginal, isn't it? To then invest. George Osborne was top of that - as

:34:49.:34:53.

a good talking about taking 10 billion out of the welfare budget.

:34:53.:34:58.

-- George Osborne was talking about. He began this interview by saying,

:34:59.:35:05.

you take all this extra money from wealth taxes. You would take all

:35:05.:35:09.

this extra money and invest it in the country, not music to stop

:35:09.:35:17.

cutting the welfare bill. You said you would spend it. -- not to use

:35:17.:35:25.

it. There is the Bank of England... It has money saved. The Government

:35:25.:35:30.

is selling bonds effectively to itself was up there is money

:35:30.:35:35.

sitting there, which could be used to invest directly in the economy.

:35:35.:35:43.

-- to itself. It is time for the Government to start stimulating in

:35:43.:35:47.

the old fashioned Keynesian way because we're not going to get out

:35:48.:35:54.

of the recession. You have a vicious circle we need to turn into

:35:54.:35:59.

a virtuous circle by releasing government funds, which were then

:35:59.:36:04.

unlock the private sector. You may be right, you may be wrong

:36:04.:36:09.

economically. Politically, you are not get any of that from the

:36:09.:36:12.

Conservatives. You're in the wrong coalition with the wrong party. Why

:36:12.:36:17.

don't you go into coalition with Labour? They agree with everything

:36:17.:36:27.
:36:27.:36:30.

you have set foot stuck it is not up to me. -- everything you have.

:36:30.:36:35.

It is self- evidently have a different approach to the economy

:36:35.:36:42.

from the Conservatives. -- self evident that we have. We need to

:36:42.:36:45.

recognise as Liberal Democrats that the way things are going are not

:36:45.:36:51.

the way they should be. The planning is not working. It is not

:36:52.:36:55.

producing the results and the deficit is not coming down very

:36:55.:37:01.

fast and we are in recession. As Liberal Democrats we need to say

:37:01.:37:05.

that and argue for that in public and in private. The more we say it

:37:05.:37:09.

in public the more likely we are to get things at of the Conservatives

:37:09.:37:15.

and the more the public will realise that is what we believe in.

:37:15.:37:23.

-- out of the Conservatives. Thank you for joining me from Brighton.

:37:23.:37:27.

Most people want things they were never get from the Conservatives.

:37:28.:37:32.

Everything he has listed will not happen with Mr Osborne and Mr

:37:32.:37:36.

Cameron that could happen with Labour. They must think they are in

:37:36.:37:42.

coalition with the wrong party. There are two answers to that. The

:37:42.:37:46.

activists who come to conference are not the same as the membership.

:37:46.:37:52.

The membership is not the same as the voters. Not everyone who is

:37:52.:37:55.

drawn to the Liberal Democrat party would agree with that set of

:37:55.:38:02.

priorities. It queues up a -- at it flags up a key problem. They need

:38:02.:38:07.

to negotiate a Spending Review compromised to differentiate the

:38:07.:38:12.

two parties in the lead-up to the general election. It needs to

:38:12.:38:17.

fashion a coherent programme to go through to 2016, in terms of tax

:38:17.:38:22.

and spending are what you do about the deficit and the debt. They're

:38:22.:38:29.

trying to fashion a narrower correct economic coalition plan

:38:29.:38:36.

with a lot of the activist parties out of step. Two parties in one

:38:36.:38:40.

government with radically different philosophies on tax. Sounds like a

:38:40.:38:43.

recipe for confusion, at best. But that's what we've got with the

:38:43.:38:47.

Coalition. Is it possible to blend the Lib Dem and Conservative

:38:47.:38:50.

approaches to the pound in your pocket and, when it comes to tax,

:38:50.:38:53.

do politicians of whatever party actually go after the right things?

:38:53.:39:02.

Here's David Thompson. The city many gallery of the British Museum,

:39:02.:39:05.

a fascinating history of the stuff that makes the world go round and

:39:05.:39:09.

Harry tried to keep it out of the clutches of others. For as long as

:39:09.:39:14.

there has been money, there has been tax. Politicians are very keen

:39:14.:39:18.

to get their hands on our cash. This government is much the same,

:39:18.:39:24.

except for this - there are two parties in it with different ideas

:39:24.:39:29.

on what to tax and who should pay. George Osborne has been right in

:39:29.:39:35.

terms of getting the deficit down. 80% has to be down to savings and

:39:35.:39:41.

reductions in public spending and only 20% on tax rises. Otherwise,

:39:41.:39:48.

the real risk of putting taxes up his the take may even come down.

:39:48.:39:53.

Maybe not. The Tories basically have a view you need taxes as low

:39:53.:39:58.

as possible. In my view, the Duke of Liberal Democrats, you need a

:39:58.:40:05.

decent rate of tax and a fair rate of tax to have a civilised society.

:40:05.:40:10.

We want a fair tax. The Tories have an instinct that says, of the less

:40:10.:40:16.

we can be taxed, the better. According to the experts, that

:40:16.:40:23.

Disconnect matters. If you look at the last Budget, there was an

:40:23.:40:26.

increase in the personal allowance and the cut in the top rate of

:40:26.:40:34.

income tax. That left a hole. More money needed to be found. Frankly,

:40:34.:40:38.

they made a muddle of failing that whole with pasty tax and doing

:40:38.:40:44.

things to the pension or allowance. It was seen as a quick-fix way to

:40:44.:40:49.

fill a hole and put the two policies together. Overall, they do

:40:49.:40:54.

not have a policy or strategy for the tax system. Nor did the last

:40:54.:40:58.

government. It is more obvious when you have to coalition partners

:40:58.:41:03.

trying to do the same things. it comes to tax, politicians of

:41:03.:41:07.

whatever party are more scared of us than we are of them. It is very

:41:07.:41:11.

easy to make a case to say the rich will pay more. There are very few

:41:11.:41:16.

rich people. It is the middle- income, middle-class people, of

:41:16.:41:21.

whom there are so many. You can bring in some quite significant

:41:21.:41:26.

numbers. They make up the floating voters who determine any election.

:41:26.:41:30.

That is the reason why there has to be a worry that, if you to maximise

:41:30.:41:35.

that element of the tax take, he will pay a heavy political and

:41:35.:41:39.

electoral price before too long. They still managed to hit us where

:41:39.:41:45.

it hurts, where they were Lib Dem, Tory or a Time Lord, it seems tax

:41:45.:41:48.

will always be taxing. David Thompson reporting. We're joined

:41:48.:41:51.

now by Labour's Chris Leslie. He's the Shadow Financial Secretary to

:41:51.:41:57.

the Treasury. When you hear the Lib Dems talking about the top 10%

:41:57.:42:05.

making a bigger contribution, a mansion tax, changing the onus of

:42:05.:42:09.

inheritance tax so it falls on recipients and other ways of

:42:09.:42:14.

increasing taxes on the rich, the mass think this is a party we can

:42:14.:42:19.

do business with? If you believe them. If you believe that they want

:42:19.:42:24.

to see a fair tax system, that is not the experience we have seen. In

:42:24.:42:32.

the Budget in March, we saw Nick Clegg happily cut the tax on

:42:32.:42:39.

earnings over �150,000. He did not do it happily. That is a

:42:39.:42:43.

misrepresentation. We do not know other than his actions. There are

:42:43.:42:49.

lots of words in this conference today. It is quite clear they are

:42:49.:42:52.

lobbying the Conservatives to raise taxes on the better off. Do you

:42:52.:42:58.

agree with that? We will see whether they will do it. They may

:42:58.:43:03.

well be lobbying them. We have said we disagree with the reduction in

:43:03.:43:08.

the millionaire's tax. That was a fundamental dividing line. Which

:43:08.:43:15.

you put the top rate back up to 50%? In this Parliament, of course,

:43:15.:43:19.

that was the wrong choice for them to make. There are other choices.

:43:19.:43:26.

Let me mention one thing... Of Bankers bonus levy. How much would

:43:26.:43:33.

that raised? I think we said �2 billion. That would prioritise

:43:33.:43:37.

construction for social housing and give money for a youth jobs

:43:37.:43:44.

programme. What about the mansion tax? Are you in favour of that?

:43:44.:43:48.

is almost a dance of the seven veils we're getting from Vince

:43:48.:43:55.

Cable. Are you doing your own work on that? We have heard they are

:43:55.:44:03.

talking about its, the Labour Party. His Ed Balls looking at the mansion

:44:03.:44:10.

tax or not? We have a five-point plan for growth. So, is he not

:44:11.:44:15.

looking at the mansion tax? We are happy to look at whatever the Lib

:44:15.:44:24.

Dems put on the table. It is just hot air. If they say it will be on

:44:24.:44:29.

houses over �2 million and on a particular timescale, we want the

:44:29.:44:34.

details. How can we, as an opposition, react to the tax plans?

:44:34.:44:39.

They do totally the opposite of what they say and even improve

:44:39.:44:46.

things behind the scenes. I am not talking about the Lib Dems. You are

:44:46.:44:52.

the opposition. In opposition, you have to have a look at a range of

:44:52.:44:56.

policies. Are you looking at the mansion tax as a possible policy

:44:56.:45:02.

for the next manifesto? We have talked about how much money we want

:45:02.:45:07.

to raise in our five-point plan for star of IUD looking at the mansion

:45:07.:45:15.

tax or not? -- in our five-point plan. Are you looking at the

:45:16.:45:21.

mansion tax or not? If Nick Clegg persuades George Osborne they will

:45:21.:45:27.

float more detail about this that we will look at it then. Ed Balls

:45:27.:45:34.

was quoted... I am trying to find a way you may be able to do business.

:45:34.:45:39.

Ed Balls was quoted in September saying, at the likes of a mansion

:45:39.:45:45.

tax needs to be on the table of. is not on the table. There is a

:45:45.:45:50.

headline. You up on the Labour table. You could say, why do we not

:45:51.:46:00.
:46:01.:46:02.

make this a six. Plan? We have said where we meet to have many come up

:46:02.:46:12.

on new house building. -- we need to have money - on new housing. It

:46:12.:46:22.
:46:22.:46:22.

The Lib Dems want to move the inheritance tax to the recipients

:46:22.:46:26.

because it is harder to get around that. At the moment, it falls on

:46:26.:46:31.

the person who is leaving the money behind. The Lib Dems say you should

:46:31.:46:35.

tax the people who receive it, because that way it is much harder

:46:35.:46:41.

to get around it. Do you agree? That is a false distinction. Of

:46:41.:46:46.

course the person who is requesting it will not be taxed because they

:46:46.:46:52.

are no longer around -- bequeathing it. The person who receives it is

:46:52.:46:56.

paying it. Again, where is the detail? Is this fantasy politics

:46:56.:47:06.
:47:06.:47:06.

from the Liberals? They should put it in a song. You got that lining!

:47:06.:47:14.

-- line in. Vince Cable has been speaking to conference. We were

:47:14.:47:19.

waiting for some coded messages about the leadership!

:47:19.:47:26.

I am a realist, but deep down an optimist. We cannot recreate this

:47:27.:47:31.

false paradise of the pre-crisis era but we are perfectly capable of

:47:31.:47:37.

sustaining growth in this country. And to that end, I believe we need

:47:37.:47:41.

an industrial strategy, which is a positive, ambitious vision built

:47:41.:47:47.

around long term investment in innovation and skills and science.

:47:47.:47:53.

We are so good at so many things in this country. But for far too long,

:47:53.:47:59.

the mirage of growth based on property speculation and financial

:47:59.:48:02.

gambling has hidden the heart of virtues of making things

:48:02.:48:12.
:48:12.:48:12.

productively. APPLAUSE. So we have got to get behind successful

:48:12.:48:19.

British-based firms, in vehicles and aerospace, life sciences and

:48:19.:48:23.

creative industries, and world- class scientists at University. I

:48:23.:48:29.

have been working to make that happen. Despite spending cuts, we

:48:29.:48:34.

have increased apprenticeships by over 60%. We have launched German-

:48:34.:48:38.

style innovation centres so that British industry can access the

:48:38.:48:43.

newest technologies are in advanced manufacturing, by geosciences,

:48:43.:48:47.

sustainable energy and digital. We are bringing lost supply chains

:48:47.:48:51.

back to Britain. The Green Investment Bank is getting up and

:48:51.:48:56.

running, to finance the green industries of the future. We have

:48:56.:49:02.

had some real successes. That is working with the American Chiefs of

:49:02.:49:07.

General Motors, and British trades unions, to save thousands of a

:49:07.:49:17.
:49:17.:49:21.

Working with the Indian owners of Jaguar Land Rover to create a

:49:21.:49:25.

global hub in the West Midlands for design and vehicle engineering.

:49:25.:49:31.

APPLAUSE. And boosting research to keep Britain as the second

:49:31.:49:35.

Aerospace economy in the world, and working with Siemens and others to

:49:35.:49:41.

develop offshore renewables engineering in Hull, a key local

:49:41.:49:47.

and Industry. There are some common threads to this. One is an

:49:47.:49:54.

understanding that it markets fail and that governments can and should

:49:54.:50:00.

sensibly intervene. The other is the will to fight the British curse

:50:00.:50:10.
:50:10.:50:15.

of short term-ism. The strategy can only work if fine and supports

:50:15.:50:23.

business investment and growth and currently it does not. -- only work

:50:23.:50:29.

if government supports. Our leading banks to traditional banking

:50:29.:50:35.

relationships out and sold useless and dodgy derivatives instead, and

:50:35.:50:42.

useless insurance. And public anger at the greed and stupidity in this

:50:42.:50:49.

industry will continue for a long time. But I want to look forward. I

:50:49.:50:59.
:50:59.:51:00.

want to work with a new generation of sensible... To support the

:51:00.:51:07.

economy. We must now influence the pioneering possibility of splitting

:51:07.:51:11.

investments banks from mainstream personal banking, as in the figures

:51:11.:51:21.
:51:21.:51:23.

report. -- Vickers report. Without Liberal Democrats in government,

:51:23.:51:30.

you can be absolutely sure this would not have happened. APPLAUSE.

:51:31.:51:37.

But there is still so much to do. Four years ago, a massive taxpayer

:51:37.:51:42.

bail-out stopped RBS from dragging the whole economy over a cliff, and

:51:42.:51:49.

two years ago there was even talk of an early sell-off. That is

:51:49.:51:56.

history. It is now getting more shipshape and it needs direction

:51:56.:52:02.

from us, after all, we own it, to get it off steam and lend more to

:52:02.:52:10.

British businesses. This is no time for the state to be stepping back.

:52:10.:52:17.

APPLAUSE. We need a new British business bank with a clean balance

:52:17.:52:21.

sheet and an ability to expand lending rapidly to the

:52:21.:52:26.

manufacturers, the exporters, a high-growth companies that power

:52:26.:52:32.

the economy and I can announce today that we will have that.

:52:32.:52:35.

Cable, speaking to the Lib Dem Conference in Brighton just a few

:52:35.:52:39.

moments ago. He also said he thought coalition government of

:52:39.:52:43.

some sort was here to stay, that the British people would not choose

:52:43.:52:48.

one party at the next election to run the country. Some people

:52:48.:52:54.

thought it was a big "come on" to the Labour Party, and an active

:52:54.:52:58.

role for the state. And we can talk now to the Lib Dem deputy leader,

:52:58.:53:02.

Simon Hughes. He was texting away there just before he came on air,

:53:02.:53:07.

probably sending a few messages to Ed Miliband and Ed Balls. Just

:53:07.:53:14.

teasing! The government is only putting a billion pounds into this

:53:14.:53:18.

state bank. We don't even know where that money is coming from and

:53:18.:53:23.

it won't even start for 18 months. It will do nothing for small

:53:23.:53:29.

businesses in the recession. Correct? You are correct it will be

:53:29.:53:33.

a billion pounds government down payment, it will be matched by

:53:33.:53:38.

private finance. The idea is it will produce about 10 billion and

:53:38.:53:41.

it is specifically addressed so that in this parliament, the

:53:41.:53:45.

problem that has bedevilled small and medium businesses, which is

:53:45.:53:51.

getting money from the banks, will be dealt with. It is the second

:53:51.:53:55.

initiative because we have already started and Investment Bank

:53:55.:54:02.

specifically for green products. -- an investment bank. You are going

:54:02.:54:07.

to ask the taxpayer to guarantee funds. They will go into small

:54:07.:54:12.

businesses that have already been turned down by the commercial banks.

:54:12.:54:16.

What collateral will we get for these loans? The bank will work out

:54:16.:54:21.

a way of doing it that so despise them, and for the government that

:54:21.:54:26.

it is a viable lending proposition -- that satisfy his them. How can

:54:26.:54:32.

we be sure you will not lose their money? You can never be sure, of

:54:32.:54:39.

course. When a vet any bank lens, the state needs to take actions to

:54:39.:54:47.

protect the taxpayer -- went any bank lents. But we thought we

:54:47.:54:52.

should have some influence in what the banks do. From my experience in

:54:52.:54:57.

south London, it is no different to anywhere else in the country, that

:54:57.:55:01.

small businesses that have a good record struggle to get the lending

:55:01.:55:07.

they need. Most people in Britain do not work for big businesses. We

:55:07.:55:12.

need to make sure that sector continues to grow. It has already

:55:12.:55:18.

created 900,000 jobs since the recession began. Jobs are going

:55:18.:55:23.

down obviously in the public sector. We have now got the Vince Cable

:55:23.:55:29.

Bank but we will not have it for 18 months. We have got the green bank.

:55:29.:55:34.

How much has that loaned to people so far? I don't know the answer to

:55:34.:55:38.

that question, perhaps I should. The answer is nothing because it is

:55:38.:55:43.

only now up and running. How much has the "big society" bank loaned

:55:43.:55:53.
:55:53.:55:53.

to people? Again, this is like a quiz programme, Andre's. -- and

:55:53.:56:00.

drugs. The Yuki creating banks that don't do anything! -- Andrew. You

:56:00.:56:05.

keep creating banks that don't do anything. The "big society" was

:56:05.:56:09.

about volunteering and the charitable sector. I assumed to be

:56:09.:56:14.

Greenbank had started to lend but we only just passed the legislation.

:56:14.:56:18.

The whole idea is to make sure places like the north-east get the

:56:18.:56:22.

support for the renewable energy industry, we make sure got a blog

:56:22.:56:31.

we know what it is meant to do. The answer is, we are a committee...

:56:31.:56:35.

The plan is to make sure there is Public Investment without

:56:35.:56:42.

penalising the taxpayers to stimulate the economy. There will

:56:42.:56:46.

be the ability for people to use their pension pots to help the

:56:46.:56:49.

children and grandchildren to have the Investment and security to get

:56:49.:56:55.

on the housing ladder. Vince Cable says he wants the bank to

:56:55.:57:00.

concentrate on lending money for people to make things. Can I give

:57:00.:57:04.

you a brief history of this? British Leyland, British

:57:04.:57:10.

shipbuilding, Phoenix. These were great successes, weren't they!

:57:10.:57:15.

remember those, as you do, but you also know the great debate last

:57:15.:57:20.

year was why we did not support our companies to get contracts for the

:57:20.:57:24.

railway industry's when it is self evident that other countries within

:57:24.:57:31.

the EU were able to do that. We have a more robust attitude on this.

:57:31.:57:35.

You are not allowed to unfairly state-subsidised to distort

:57:35.:57:42.

competition but you are allowed to persist if you play by the rules.

:57:42.:57:46.

We need to make sure that wherever possible we support companies, not

:57:46.:57:50.

that are going down the plughole, but those industries, like the

:57:50.:57:59.

motor industry and the aerospace industry, with a very good record.

:57:59.:58:04.

We have run out of time, thank you of every match. The answer to the

:58:04.:58:12.

quiz? I assume there is none Dublin on.

:58:12.:58:17.

It has been cruelly exposed by the newspapers -- there is none going

:58:17.:58:24.

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