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Afternoon, folks. Welcome to this two-hour daily politics special on | :00:46. | :00:49. | |
the Tory Party conference in Birmingham. We are on from now | :00:50. | :00:56. | |
until one owe owe -- 1.00. We will bring you the Chancellor's | :00:56. | :00:59. | |
address live and uninterrupted. George Osborne says he will make | :00:59. | :01:02. | |
sure the rich pay their fair share as he prepares to cut welfare | :01:02. | :01:06. | |
spending by another �10 billion after the election. Will there be a | :01:06. | :01:11. | |
new tax on the rich? And exactly where will the welfare axe fall? | :01:11. | :01:13. | |
David Cameron says he wants Britain to renegotiate its relationship | :01:13. | :01:17. | |
with the rest of Europe and that fresh consent from the British | :01:17. | :01:21. | |
people will be sought. But does the party think the Prime Minister | :01:21. | :01:27. | |
should commit to a referendum now? We need a referendum on the euro as | :01:27. | :01:31. | |
soon as possible but the key issue is it should be a proper referendum, | :01:31. | :01:36. | |
in or out. We will be talking about that bungled rail franchise deal | :01:36. | :01:42. | |
that's going to cost taxpayers tens of millions of pounds. The | :01:42. | :01:47. | |
Transport Secretary, Patrick McLoughlin, joins us. We will be | :01:47. | :01:52. | |
asking Philip Hammond if the Government has any hope of sticking | :01:52. | :01:56. | |
to its plans for balancing the nation's books. | :01:56. | :01:59. | |
All that's in the next two hours. With us for the duration Norman | :01:59. | :02:03. | |
Fowler, a member of Margaret Thatcher's Cabinet back in the day, | :02:03. | :02:07. | |
now a member of the House of Lords. Welcome. Thank you very much. | :02:07. | :02:10. | |
start with George Osborne's speech. We are told he will be on his feet | :02:10. | :02:14. | |
before noon but he's already been a busy boy this morning, setting the | :02:14. | :02:19. | |
scene making it clear that he needs to find another �10 billion in | :02:19. | :02:24. | |
savings from the welfare bill from the year 2015 onwards. This is what | :02:24. | :02:29. | |
he had to say earlier. Conservative Party, the modern | :02:29. | :02:33. | |
Conservative Party, is on the side of people who want to work hard and | :02:33. | :02:37. | |
get on and we are very clear that dealing with these enormous debts | :02:37. | :02:41. | |
this Government inherited has to be done fairly, that the rich have to | :02:41. | :02:45. | |
pay the greatest share. But it's an illusion to think that you can | :02:45. | :02:50. | |
leave in tact a very expensive welfare state where some people are | :02:50. | :02:53. | |
better off, not in work, than going out and looking for work and that's | :02:53. | :02:56. | |
precisely what we are tackling and people watching your programme this | :02:56. | :03:00. | |
morning who are getting up, getting ready to go out to work, are angry | :03:01. | :03:05. | |
at the fact that some of their taxes are going to support those | :03:05. | :03:08. | |
who enjoy a lifestyle on benefits which, frankly, they wouldn't be | :03:08. | :03:14. | |
able to enjoy in work. Mr Osborne going there for welfare | :03:14. | :03:18. | |
t plays well in the focus groups in the opinion polls. This is a | :03:18. | :03:22. | |
Chancellor that's got to rescue his credibility, hasn't he? One of the | :03:22. | :03:28. | |
worst received Budgets in living memory and the Tories poll position | :03:28. | :03:32. | |
has not recovered since. Inevitably that's the case, perhaps not | :03:32. | :03:35. | |
inevitably, but it is the case and we have been going through a rough | :03:35. | :03:38. | |
period for one reason or another. It's interesting what he is saying | :03:38. | :03:42. | |
about welfare and the joint position of Iain Duncan Smith and | :03:42. | :03:46. | |
the Chancellor on this. It's going to be very difficult. I used to be | :03:47. | :03:50. | |
social security Secretary for six years. I went all through this with | :03:50. | :03:55. | |
Nigel Lawson. The only thing one hopes is that it doesn't get in the | :03:55. | :03:59. | |
way, it doesn't devalue the universal credit which is going to | :03:59. | :04:03. | |
come in, which is a major reform. Treasury aren't particularly | :04:03. | :04:07. | |
interested in social reform, they just want the money but this is | :04:07. | :04:10. | |
rather important reform that's taking place and it would be a | :04:10. | :04:15. | |
great shame if it got tarred by saying this is simply a money- | :04:15. | :04:19. | |
cutting exercise, which it isn't. Although the Chancellor and Mr Iain | :04:19. | :04:23. | |
Duncan Smith wrote a joint article this morning in The Mail, we know | :04:23. | :04:28. | |
they've been at loggerheads. We know there's been a huge battle | :04:28. | :04:31. | |
between the Treasury and Department of Work and Pensions over welfare. | :04:31. | :04:36. | |
It's inevitable. Having done it with Nigel Lawson, I tell you it's | :04:36. | :04:38. | |
absolutely inevitable. The Treasury want as much money as they can get | :04:38. | :04:44. | |
out of the welfare budget and for many good reasons at times. But I | :04:44. | :04:48. | |
think battles between the social security Secretary and the | :04:48. | :04:52. | |
Chancellor, you should only be surprised if there aren't such | :04:52. | :04:59. | |
battles. I had horrendous battles with Nigel Lawson. We took - major | :04:59. | :05:04. | |
proposition off the cabinet table and postponed a whole meeting | :05:04. | :05:07. | |
because Nigel in his usual way put in something like, could we have an | :05:07. | :05:13. | |
extra �2 billion at 24 hours' notice. So these kind of battles | :05:13. | :05:18. | |
inevitably take place. It's what happens after that. If anyone kind | :05:18. | :05:22. | |
of comes along and says that's not the case that's rubbish. The other | :05:22. | :05:27. | |
thing I think about welfare is this, we always talk about the young | :05:27. | :05:32. | |
people and young people and certainly it's the case they must | :05:32. | :05:37. | |
be encouraged into work. We should also remember that things have | :05:37. | :05:47. | |
:05:47. | :05:48. | ||
changed since skaf Beveridge's time. People are retired. We should look | :05:48. | :05:53. | |
at that area. Politicians and Chancellors and Prime Ministers, | :05:53. | :06:00. | |
don't much like looking at that. Good to have you here. Let's get a | :06:00. | :06:07. | |
sense of the mood at conference and talk to to -- Polly Toynbee and | :06:08. | :06:11. | |
Peter Oborne. What does David Cameron need to do this week. | :06:11. | :06:15. | |
of all he has to unite his party. They're fractious here, the way | :06:15. | :06:20. | |
parties are when they're not doing well. If you are falling in the | :06:20. | :06:23. | |
polls, you see virtually no sign of being able to improve your position | :06:23. | :06:27. | |
at the next election because no sitting Government has ever | :06:27. | :06:30. | |
improved its position while in power. So they look as if they're | :06:30. | :06:35. | |
destined to either coalition again, which they hate, or to failure. So, | :06:35. | :06:38. | |
inevitably there is a lot of arguments going on. He needs to | :06:38. | :06:41. | |
talk to his party, but of course he needs to talk to the people and | :06:41. | :06:45. | |
needs to perspwaeud them -- persuade them he is the nice man | :06:45. | :06:48. | |
they thought they had elected. Difficult in the face of these | :06:48. | :06:52. | |
incredible cuts which run against any notion of compassion. OK, Peter, | :06:52. | :06:58. | |
what about answering Ed Miliband last week who, broadly, consensus | :06:58. | :07:04. | |
was he did a good job? Yes, I rather disagree with what Polly is | :07:04. | :07:07. | |
saying there, I think David Cameron has to do more than unite his party. | :07:07. | :07:13. | |
He has to stand up to his party. He has to say, look, let's go back to | :07:14. | :07:19. | |
the decent, honest vision we brought into politics in 2010. | :07:19. | :07:23. | |
Let's stand up for the coalition, stand up for the big society, let's | :07:23. | :07:29. | |
say that - point out the real one nation party is David Cameron's | :07:29. | :07:35. | |
Conservatives and not Ed Miliband's audacious attempt to grab the | :07:35. | :07:39. | |
middle ground last week F he does what some people, most people may | :07:39. | :07:44. | |
be want, and lurches off into the right, I think he will cause | :07:44. | :07:48. | |
himself short-term gain but a lot of long-term trouble. On that issue, | :07:48. | :07:53. | |
we have been talking about welfare cuts. Nothing new there. They're | :07:53. | :07:56. | |
talking again about this ten billion savings and it's populist, | :07:56. | :08:00. | |
would that help regain the credit ground or is that slipping to the | :08:00. | :08:05. | |
right? Before answering that, can we point out Norman Fowler you had | :08:05. | :08:14. | |
on earlier was was probably - many of the problems the welfare states | :08:14. | :08:20. | |
faces today are down his total failure to grasp the issues. Thank | :08:20. | :08:26. | |
you very much, Peter! Yes, you were useless, Norman. All right, let's | :08:26. | :08:36. | |
concentrate on today. It is very odd, something has happened here | :08:36. | :08:40. | |
which is that we had IDS, Iain Duncan Smith, at loggerheads with | :08:41. | :08:47. | |
the Treasury and he has agreed, has he? I would like to see what they | :08:47. | :08:51. | |
the cuts are. One thing Norman Fowler said I agreed with, he has | :08:52. | :08:56. | |
to keep that universal credit and if he doesn't, this programme of | :08:56. | :09:00. | |
welfare reforms is finished. presumes on that basis that Iain | :09:00. | :09:05. | |
Duncan Smith has been persuaded that that measure of cuts can now | :09:05. | :09:10. | |
be taken from the welfare budget but is it just rhetoric? Will they | :09:10. | :09:15. | |
be found even if Iain Duncan Smith has agreed to it? I am sure that | :09:15. | :09:19. | |
now he's agreed they will be found and I am sure that they've | :09:19. | :09:23. | |
earmarked whatever they are. We have to remember is that the �18 | :09:23. | :09:30. | |
billion already cut is according to the institute for fiscal studies by | :09:30. | :09:33. | |
almost any historical or international comparison the | :09:33. | :09:38. | |
biggest cut anyone has made, another �10 billion? A lot of them | :09:38. | :09:43. | |
haven't come in yet. Next April there is going to be when the | :09:43. | :09:46. | |
disability cuts come in, when two thirds of families with disabled | :09:46. | :09:49. | |
children lose their disability living allowance altogether. When | :09:49. | :09:54. | |
large numbers of people lose their mobility, that means their mobility | :09:54. | :09:58. | |
scooters are going to be repossessed. At the same time, | :09:58. | :10:04. | |
council tax benefits o comes in for the first time, very like the poll | :10:04. | :10:08. | |
tax, collecting small sums of money from large numbers of poor people | :10:08. | :10:12. | |
who won't and can't pay. At that point popular opinion is going to | :10:12. | :10:16. | |
turn around and they're going to say these cuts weren't a good idea | :10:16. | :10:21. | |
after all. One of the other issues that's is in danger of splitting | :10:21. | :10:25. | |
the Tory Party is the issue of Europe. David Cameron seems to have | :10:25. | :10:29. | |
ruled out an in-out referendum, somehow that going down? I don't | :10:29. | :10:32. | |
know actually. I haven't sort of sussed out what's going on. He | :10:32. | :10:38. | |
would have been completely mad to give in to calls for a referendum. | :10:38. | :10:41. | |
I think he needs one of the messages the Prime Minister must | :10:41. | :10:45. | |
get across this week is that we have got a national economic crisis. | :10:45. | :10:50. | |
We have got a really serious programme of Government reforms in | :10:50. | :10:57. | |
education and welfare. You lurch off into some mad-Referendum at a | :10:57. | :11:01. | |
time of massive distraction from politics on a domestic level, he | :11:01. | :11:07. | |
would have lost the plot. What about palpable excitement of Boris | :11:07. | :11:13. | |
Johnson's arrival? Well, you know, he's fun. He makes people laugh. | :11:13. | :11:20. | |
They'll enjoy him. He will be preposterous and outrageous, I | :11:20. | :11:25. | |
don't think he is much trouble to Cameron right now. He is not even | :11:25. | :11:28. | |
in in parliament, let alone in the cabinet and I don't think this | :11:28. | :11:36. | |
party is crazy crazy - he is standing in the wings looking | :11:36. | :11:39. | |
rather glamorous, popular after the Olympics, as if he had run the | :11:39. | :11:44. | |
Olympics, which he didn't. And he is an irritant but I don't think | :11:44. | :11:49. | |
it's serious, it doesn't seem there is an important idea logical | :11:49. | :11:54. | |
difference. They're cut from the same cloth. Do you agree or is | :11:54. | :11:58. | |
there more worry and fear at the centre of the Number 10 operation | :11:58. | :12:04. | |
about Boris Johnson's popularity? This is one of the great non- | :12:04. | :12:09. | |
stories of our time, the Boris Johnson versus David Cameron story. | :12:09. | :12:13. | |
The fact are he is not an MP. He is the Mayor of London. He won't | :12:13. | :12:16. | |
become an MP until sometime after the Prime Minister steps down. | :12:16. | :12:21. | |
Where I think there is a potential in this hypothetical scheme of this | :12:21. | :12:26. | |
non-story, a potential issue is between saying Boris Johnson and | :12:26. | :12:29. | |
George Osborne, which ever other leadership contender emerges after | :12:29. | :12:34. | |
David Cameron. But this is one of the great fabrications, a space | :12:34. | :12:43. | |
filler, it's no reality. Tpwu works well. Thank you both very much. | :12:43. | :12:49. | |
We need to let Norman Fowler respond to that unprovoked and some | :12:49. | :12:56. | |
may say unnecessary attack. He is repraising his performance on | :12:56. | :13:00. | |
Newsnight. What would you like to say? I have always made it a rule | :13:00. | :13:05. | |
in political life never to take the slightest bit of notice of Peter | :13:06. | :13:10. | |
Oborne. It's a mutual love affair. What's the history to that, why did | :13:10. | :13:15. | |
he decide to have a go at you at a position you held years ago? | :13:15. | :13:23. | |
think it's all personal. It's really important! Absolutely no | :13:23. | :13:27. | |
idea. The one point I would make about my period is that if the | :13:27. | :13:32. | |
Government had taken my advice and taken my proposals back in the | :13:32. | :13:37. | |
1980s and we had abolished the second pension, the second state | :13:37. | :13:41. | |
pension and had a compulsory private pension, we would be in a | :13:41. | :13:44. | |
much better public spending position today and that's why I am | :13:44. | :13:49. | |
very anxious that when we come to the public spending and the welfare | :13:49. | :13:54. | |
cuts now that we don't make the same mistake and we forget about | :13:54. | :13:58. | |
the reform. OK, we won't put you and Peter together, or maybe we | :13:58. | :14:04. | |
should! I think we will! It's time for our daily quiz and this weekend | :14:04. | :14:08. | |
David Cameron has finally joined the micro-blogging site Twitter. | :14:08. | :14:14. | |
But so far he is not following many other people, not tpoting me, yet. | :14:14. | :14:20. | |
Why not? I have sent him a note. Shall I have a word with him? | :14:20. | :14:30. | |
:14:30. | :14:36. | ||
At the end of the show Norman Fowler will give us the kregt | :14:36. | :14:39. | |
answer. -- correct answer. You have time to think about it! Do you know | :14:39. | :14:46. | |
the right answer? Don't tell us. So, just over half an hour to the | :14:46. | :14:52. | |
Chancellor's big speech. We can talk to Mr Osbourne's cabinet, | :14:52. | :14:55. | |
Philip Hammond, the Defence Secretary. He's turned up on time | :14:55. | :15:00. | |
today, unlike yesterday! I do occasionally, Andrew. It's not like | :15:00. | :15:04. | |
you have police outriders to get you, oh, you do and you were still | :15:04. | :15:08. | |
late. Never mind. I have only come from the hotel across the way. | :15:08. | :15:11. | |
have people with blue lights getting you over there, too. Let's | :15:11. | :15:15. | |
get down to business and follow up what I wanted to do yesterday. Mr | :15:15. | :15:18. | |
Os Osbourne is making it clear, it was in the red book but he is | :15:18. | :15:23. | |
talking openly about it, that he needs another �10 billion in in | :15:23. | :15:29. | |
welfare cuts. Has he shared with cabinet colleagues any idea of how | :15:29. | :15:39. | |
:15:39. | :15:41. | ||
$:STARTFEED. He and Iain Duncan Smith had extensive discussions | :15:41. | :15:45. | |
about how they are going to take forward an an agenda which | :15:45. | :15:50. | |
addresses the fairness question and the affordability question. Taking | :15:50. | :15:53. | |
out another substantial chunk of cost from the welfare budget, costs | :15:53. | :15:57. | |
that was pushed into that budget during the period of the Labour | :15:57. | :16:02. | |
Government simply isn't affordable and doing it in a way that supports | :16:02. | :16:05. | |
our fairness agenda. Addressing the questions that have been | :16:05. | :16:10. | |
articulated this week about the fairness of people who are not in | :16:10. | :16:13. | |
work, being able to afford and enjoy lifestyles that people who | :16:13. | :16:17. | |
are in work frankly would struggle to afford. | :16:17. | :16:20. | |
I understand that and that's the principle behind it, but that's not | :16:20. | :16:23. | |
what I asked you. I asked you how is the �10 billion going to be make | :16:23. | :16:29. | |
up? Do you have any inkling of where the cuts will come? Well, for | :16:29. | :16:34. | |
example, we have already floated the question as to whether young | :16:35. | :16:39. | |
people leaving school should be able to receive housing benefit | :16:39. | :16:45. | |
before they have been in the workplace. Whether there should be | :16:45. | :16:49. | |
a minimum age threshold for accessing housing benefit, trying | :16:49. | :16:52. | |
to ensure that people who are out of work, with the support of | :16:52. | :16:56. | |
benefits, enjoy a lifestyle no better, no more generous than | :16:56. | :16:59. | |
people who go out to work and earn their living. | :16:59. | :17:04. | |
But is this... It is one area that we will be looking at. | :17:04. | :17:08. | |
But you are only looking at. Are you only floating ideas for the �10 | :17:08. | :17:11. | |
billion? Are we going to have a national debate about it or do you | :17:11. | :17:15. | |
have any plans? The �10 billion is a clear figure. | :17:15. | :17:23. | |
It won't be achieved until 2016/17. So there is time for Iain Duncan | :17:23. | :17:27. | |
Smith as the Secretary of State responsible to work out proposals | :17:27. | :17:31. | |
to consult as necessary, to introduce any legislation or | :17:31. | :17:36. | |
regulations that are required to ensure that by the time we get to | :17:36. | :17:39. | |
2016/17 we have taken out a further �10 billion. | :17:40. | :17:46. | |
But hold on... Did it in a way that's consistent with our broader | :17:46. | :17:50. | |
objectives of fairness and making sure that work work pays. | :17:50. | :17:58. | |
The Chancellor told us these cuts have to start in 2015? 2015/16, the | :17:58. | :18:04. | |
the �10 billion is the 16/17 Budget figure. It will build up through | :18:05. | :18:13. | |
15/16 to �10 billion in 2016/17. So you have to start the cuts in | :18:13. | :18:19. | |
2015/16 and they will Total �16 billion? No, �10 billion. | :18:19. | :18:22. | |
In welfare, but he has to find savings of �16 billion? That's | :18:22. | :18:26. | |
right. That's right. Where is the other �6 billion going to come | :18:26. | :18:31. | |
from? The Chancellor made made very clear, the welfare figure that he | :18:31. | :18:34. | |
has identified is based on the assumption that across the | :18:34. | :18:41. | |
remainder of Government on average, departments continue the percentage | :18:41. | :18:44. | |
rate of reduction in budget that they have had over this Spending | :18:45. | :18:49. | |
Review period. It means extending the squeeze on departmental budgets | :18:49. | :18:53. | |
by one further year into 15/16 and then delivering these welfare | :18:53. | :18:58. | |
savings on top of that. The Chancellor and the Prime | :18:58. | :19:02. | |
Minister have said that the rich are paying their fair share at the | :19:02. | :19:05. | |
moment and should continue to pay their fair share, but does this | :19:05. | :19:12. | |
mean that there will be new specific measures on the rich to | :19:12. | :19:16. | |
pay more or they will just continue to pay what they pay? | :19:16. | :19:21. | |
Well, let's be clear, first of all. The rich are paying a higher share | :19:21. | :19:26. | |
of taxes in this country every year than they were in any year under | :19:26. | :19:31. | |
the 13 years of a Labour Government and that's even after we've | :19:31. | :19:35. | |
abolished the damaging 50 pence rate of tax. So the rich are paying | :19:35. | :19:40. | |
a higher share and they will go on paying a higher share. That's | :19:40. | :19:44. | |
because everybody else's salary has frozen. That's only because average | :19:44. | :19:50. | |
earnings are static? No, I don't think so. It is because | :19:51. | :19:54. | |
George Osborne introduced additional taxes which hit the rich. | :19:54. | :19:58. | |
Over every Budget this chancellor has presented to Parliament, has | :19:58. | :20:05. | |
increased the share of taxes paid by the rich. So will there be more | :20:05. | :20:09. | |
measures? Well, let me just finish this point. This is the most | :20:09. | :20:12. | |
important specific measure. It is about making sure that people on | :20:12. | :20:16. | |
high incomes or people with high wealth pay the tax that they are | :20:16. | :20:21. | |
supposed to pay. It is about clamping down on aggressive | :20:21. | :20:26. | |
avoidance and evasion and we have made massive strides in that area | :20:26. | :20:29. | |
where Labour over 13 years failed to do anything effective at all. So | :20:29. | :20:34. | |
the rich are paying a higher share. Tax evasion and avoidance will | :20:34. | :20:37. | |
continue to be clamped down on and that means the rich will go on | :20:38. | :20:40. | |
paying a higher share of the total tax bill. | :20:40. | :20:45. | |
Well, we know what he ruled out. He ruled out a mansion tax. He ruled | :20:45. | :20:52. | |
out a wealth tax. He ruled out new council tax bands. So what is left | :20:52. | :20:56. | |
if he wants to do something additional? There there be | :20:56. | :21:02. | |
something additional or not or is it just the old chestnut of tax | :21:02. | :21:06. | |
avoidance? It is not an old chestnut, by the way. We have | :21:06. | :21:11. | |
brought in over the life of this Spending Review, we will have | :21:11. | :21:14. | |
collected something like an additional �18 billion by clamping | :21:14. | :21:19. | |
down on tax evasion and aggressive tax avoidance. | :21:19. | :21:24. | |
By doing what governments are meant to do, collect tax? And what the | :21:25. | :21:28. | |
last Government failed to do over 13 years so we are tackling that | :21:28. | :21:32. | |
problem. We have grasped it and we are dealing with it. As far as | :21:32. | :21:36. | |
additional and any additional or new taxes or changes in rates are | :21:36. | :21:39. | |
concerned that is a matter for the Chancellor that he will announce in | :21:39. | :21:43. | |
his Budget in the usual way. Do you accept that if he is to get | :21:43. | :21:48. | |
the support of the Lib Dems for �10 billion in welfare cuts that he has | :21:48. | :21:53. | |
to come up with something more more for taxing the better off? Yes or | :21:53. | :21:59. | |
no? No, I think what the Lib Dems will want to see is a fair solution | :21:59. | :22:05. | |
where they are assured that at each turn of the handle those most able | :22:05. | :22:09. | |
to pay are contributing an appropriate share and that the | :22:09. | :22:16. | |
rich... What will the next turn of handle be on the rich? You are | :22:16. | :22:21. | |
going to take �10 billion away from the poor people in society. What's | :22:21. | :22:25. | |
the next turn of handle for the rich in the society? We are going | :22:25. | :22:29. | |
to remove costs that are no longer affordable that was put in there by | :22:29. | :22:33. | |
the Labour Party who increased welfare spending by �75 billion a | :22:33. | :22:38. | |
year. That was money the country never could afford... Mr Hammond | :22:38. | :22:42. | |
you are not not answering my question. Could you please answer | :22:42. | :22:45. | |
the question, it is only right? I can't speak for the Liberal | :22:45. | :22:49. | |
Democrats, but I know that the Liberal Democrats regard as very | :22:49. | :22:53. | |
important the continuing raising of the lower threshold four income tax. | :22:53. | :22:59. | |
A measure which helps those who are working on relatively low incomes | :22:59. | :23:02. | |
very significantly. I would expect the Liberal Democrats to want to be | :23:02. | :23:06. | |
reassured that we're going to be able to continue to pursue that | :23:06. | :23:09. | |
agenda as part of the chancellor's overall package. | :23:09. | :23:17. | |
I know you have to go. I want to ask you major defence merger. You | :23:17. | :23:22. | |
must have a huge interest in this. As it stand this is Monday morning, | :23:22. | :23:25. | |
the decision has to be taken by Wednesday. Does it look to you as | :23:25. | :23:29. | |
if this merger is going to go ahead or not? Well, the decision that has | :23:29. | :23:33. | |
to be taken by Wednesday, by the company, is whether they feel they | :23:33. | :23:37. | |
are close enough to getting agreement between the the | :23:37. | :23:41. | |
shareholders on both sides, between the two companies, between the four | :23:41. | :23:43. | |
governments including the US Government that are involved in | :23:43. | :23:49. | |
signing off this deal. Whether they are close enough to make it worth | :23:49. | :23:52. | |
asking the Stock Exchange to extend the deadline. I don't think there | :23:52. | :23:57. | |
is any chance of getting the deal done by Wednesday, but the company | :23:57. | :24:02. | |
will make the call tomorrow whether it wants to apply for an extension | :24:02. | :24:07. | |
of Government. -- extension of of time. | :24:07. | :24:11. | |
The French Government having 9% of the merged group. The German | :24:11. | :24:14. | |
Government having 9%, but the British Government, the British | :24:14. | :24:17. | |
people would have none. Is that your position? | :24:17. | :24:21. | |
Well, it depends on the other protective arrangements put in | :24:21. | :24:26. | |
place. We will want to make sure that British jobs, British | :24:26. | :24:29. | |
interests, British defence interests... What's the the answer | :24:29. | :24:35. | |
to my question, Mr Hammond? think it could be done with a | :24:35. | :24:38. | |
reduced French Government stake. If the French Government is prepared | :24:38. | :24:41. | |
to reduce its stake and dismantle arrangements which have given it | :24:41. | :24:45. | |
the ability to control the company then with the addition of | :24:46. | :24:49. | |
safeguards, and national security agreement for example, safeguards | :24:49. | :24:52. | |
about where the business will be headquartered, what the composition | :24:52. | :24:56. | |
of the board will be, we think it will be possible... So the French | :24:56. | :25:00. | |
Government will have a stake in this new entity, but the British | :25:00. | :25:04. | |
will not? Is that your your position? The French Government has | :25:04. | :25:08. | |
a very large stake at the moment. Our position is that they will have | :25:08. | :25:14. | |
to make a considerable reduction... But we won't take a stake, and the | :25:14. | :25:19. | |
French will still have one. It is a simple question and it demands a | :25:19. | :25:22. | |
simple answer for our biggest manufacturing company in this | :25:22. | :25:25. | |
country. The French will continue to have a stake and the Germans, we | :25:25. | :25:29. | |
won't. Is that the British position? As long as that stake | :25:30. | :25:34. | |
does not give them effective control or an ability to interfere | :25:34. | :25:38. | |
in the management of the company and that means it has to be below' | :25:38. | :25:42. | |
certain level, putting them on a par with big institutional | :25:42. | :25:47. | |
investors who will own significant single digit percentage stakes in | :25:47. | :25:50. | |
the merged group. What we can't have is this business going forward | :25:50. | :25:54. | |
with the French or the German State able to direct its activity. That | :25:54. | :26:04. | |
:26:04. | :26:05. | ||
would not be acceptable. OK, Mr Hammond, thank you. | :26:05. | :26:09. | |
What we have heard from the Defence Secretary, the British want the | :26:09. | :26:14. | |
French, the French and the Germans have 15%, maybe more each at the | :26:14. | :26:18. | |
moment and what he is saying, if they come down to 9%, we will | :26:18. | :26:22. | |
accept that. So the French would have 9%, the Germans would have 9%, | :26:22. | :26:25. | |
we would have none. Does that seem sensible to you? | :26:25. | :26:29. | |
I thought what Philip was saying was actually sensible because what | :26:29. | :26:34. | |
he is trying to say is, what he was saying effectively, was that we | :26:34. | :26:40. | |
shouldn't get into a position where the French and indeed the German | :26:40. | :26:43. | |
stake overwhelmed the company to the point that they had control. | :26:43. | :26:47. | |
That's the point... Between them they would 18% and the British | :26:47. | :26:51. | |
Government would have zero percent. That's my point? I understand the | :26:52. | :26:54. | |
point you are making. All right. | :26:54. | :26:58. | |
It wouldn't be a Tory Party conference if we didn't talk about | :26:58. | :27:04. | |
Europe. So don't worry, we will! David Cameron has dangled the | :27:04. | :27:07. | |
prospect of a referendum on Europe, but not now. The Prime Minister is | :27:07. | :27:13. | |
out to appease Tory Euro-sceptics, but the delay of his words | :27:13. | :27:18. | |
infuriates them. Adam has been doing his referendum with the Daily | :27:18. | :27:21. | |
Politics Balls. Let's test the mood on this idea of | :27:21. | :27:25. | |
a European referendum. Specifically the timing. Would delegates like to | :27:25. | :27:29. | |
have one later as David Cameron has suggested or go ahead and get on | :27:29. | :27:33. | |
with it now? We need to wait and see what happens in places like | :27:33. | :27:38. | |
Greece, Italy, Ireland, and possibly Germany as well before we | :27:38. | :27:44. | |
make any decisions really. We have had our first ball in the | :27:44. | :27:50. | |
no box, but the lady who did it wanted to do it anonymously. | :27:50. | :27:53. | |
want to see a different European Union not the sort we have got now, | :27:53. | :27:59. | |
but is that enough to say we should be altogether? That's why it is the | :27:59. | :28:02. | |
wrong time to ask it. It is not the best time to be | :28:02. | :28:07. | |
worrying about who is in the EU. I am in a rush. It takes ten | :28:07. | :28:14. | |
seconds. If it stops people people voting | :28:14. | :28:21. | |
for UKI. We don't need the infighting and | :28:21. | :28:26. | |
let's get on with running the country. Hi, Andrew, great show. | :28:26. | :28:29. | |
REPORTER: Do you trust David Cameron to deliver a referendum | :28:29. | :28:39. | |
:28:39. | :28:40. | ||
now? Not in the month ever Sundays! Would you like to vote? Du want to | :28:40. | :28:43. | |
have it sooner than the Prime Minister Prime Minister sounds like | :28:43. | :28:49. | |
he wants to have it? I think it has got to be in the fullness of time. | :28:49. | :28:54. | |
How about that? Nice and vague. Oh, that's the no box. | :28:55. | :29:04. | |
:29:05. | :29:16. | ||
When should the EU referendum be, I think we need a referendum on the | :29:16. | :29:20. | |
EU as soon as possible, but the key issue is it should be a proper | :29:21. | :29:24. | |
referendum, in or out. David Cameron wants it to be later, | :29:24. | :29:27. | |
doesn't he? I am not sure what David Cameron wants. The position | :29:27. | :29:32. | |
is developing, but I think sooner or later it will have to be in or | :29:32. | :29:37. | |
out and I look forward to that. When would you like to have it? | :29:37. | :29:39. | |
Today. This afternoon would be convenient. | :29:39. | :29:44. | |
I found a red ball. How did that get in there? Secretary of State, | :29:44. | :29:47. | |
would you like to do our Daily Politics survey? Do you remember | :29:47. | :29:50. | |
the days when you were on the Daily Politics every day? I do pretty | :29:50. | :29:54. | |
much, yeah. Good. Happy memories then. When | :29:54. | :29:59. | |
shall we have the EU referendum, now or later? We have Not had the | :29:59. | :30:02. | |
chance to vote for several years. Give us the chance now. | :30:02. | :30:07. | |
In the end, it looks like a small majority have sided with David | :30:07. | :30:10. | |
Cameron and feel now is not the time for an EU referendum, but it | :30:10. | :30:20. | |
:30:20. | :30:32. | ||
Let's talk to Mark Reckless and Richard Ashworth. You want a | :30:32. | :30:38. | |
referendum but David Cameron has ruled out an in-out referendum. | :30:38. | :30:42. | |
want a referendum sooner than later and I think it's important that's a | :30:42. | :30:45. | |
real referendum that gives people a choice as to whether they want to | :30:45. | :30:50. | |
stay part of the EU and that's what I want to see. Sooner rather than | :30:50. | :30:53. | |
later and a real referendum on EU membership. You are not going to | :30:53. | :30:56. | |
get either of those, are you? David Cameron made it clear he doesn't | :30:56. | :31:02. | |
want it on in-out and doesn't want it now. Well, I think it has to | :31:02. | :31:06. | |
give people the opportunity choose whether or not we stay part of it. | :31:06. | :31:10. | |
Whether the other side of that referendum is the status quo or | :31:10. | :31:15. | |
something new with a eurozone or a few powers back, I think that | :31:15. | :31:19. | |
question is open. But I don't think we can go to the next election | :31:19. | :31:22. | |
saying we are going to try and persuade the other 26 countries to | :31:22. | :31:26. | |
let srus a few powers back and by the way, if you vote Conservative | :31:26. | :31:31. | |
we are going to take that as your consent to stay in the EU. So David | :31:31. | :31:36. | |
Cameron's making a mistake by not offering a substancive referendum | :31:36. | :31:41. | |
before 2015? Well, I don't think the policy is entirely clear at the | :31:41. | :31:47. | |
moment. I think it is. If you listen to David Cameron, he said I | :31:47. | :31:51. | |
think the trouble with the straight yes or no is we stand today is I am | :31:51. | :31:55. | |
not happy with the status I do so I don't want to say yes to that but I | :31:55. | :32:00. | |
don't think would be right to leave right now. No referendum on in-out | :32:00. | :32:04. | |
and no referendum on sooner rather than later. As we go into the next | :32:04. | :32:08. | |
election and the European election for Richard, we will hope to be | :32:08. | :32:12. | |
clearer about what our policy is. I think, if David Cameron's able to | :32:12. | :32:16. | |
go in there and try and get powers back, if we can say to the civil | :32:16. | :32:20. | |
service by the way, the people are going to get a vote on whether we | :32:20. | :32:25. | |
stay in on that base to say will be a inkrepb I have to try and get | :32:25. | :32:27. | |
powers back. The key thing is ultimately the Conservative Party | :32:28. | :32:32. | |
has to allow the people of Britain a choice as to whether we stay in | :32:32. | :32:36. | |
the EU or we become an independent country again trading with Europe | :32:36. | :32:39. | |
but governing ourselves. On that last point do you agree there has | :32:39. | :32:45. | |
to be at some stage, preferably before 2015 a referendum on whether | :32:45. | :32:49. | |
we stay in or leave? It's difficult to determine the timing of a | :32:49. | :32:53. | |
referendum. Indeed the way that you will do it. The Prime Minister was | :32:53. | :32:57. | |
exactly right when he said in November we have got some very | :32:57. | :33:00. | |
critical negotiations about the seven-year budget. Shortly after | :33:00. | :33:07. | |
that we have got the negotiations for the 17 eurozone countries to | :33:07. | :33:11. | |
integrate more. Now, that's an opportunity for the United Kingdom | :33:11. | :33:16. | |
to redefine our relationship. It would be wrong, therefore, for us | :33:16. | :33:18. | |
to prejudice Britain's position going into those negotiations by | :33:18. | :33:23. | |
having a very early referendum but more to the point, you wouldn't | :33:23. | :33:28. | |
know what kind of Europe and who kind of relationship with Europe | :33:28. | :33:31. | |
you are describing to the British people without having that | :33:31. | :33:41. | |
:33:41. | :33:42. | ||
negotiation first. Not now... you advising David Cameron use his | :33:42. | :33:48. | |
veto? I am certain he will, there are big issues the United Kingdom | :33:48. | :33:54. | |
can't agree to, inkraoezing size of the budget, abolition of rebate, I | :33:54. | :33:58. | |
am certain the veto will will be used if they come up. Are you | :33:58. | :34:06. | |
saying no to an in-out referendum? It's not as easy as that. Why not? | :34:06. | :34:10. | |
Because the Prime Minister now has the opportunity to redefine | :34:10. | :34:13. | |
Britain's relationship with the European Union. Actually if you | :34:13. | :34:17. | |
said to the people, do you want a trading relationship with a very | :34:17. | :34:22. | |
important trading partner, which does not involve degracious, | :34:22. | :34:26. | |
actually -- integration, gives us the opportunity to bring some | :34:26. | :34:30. | |
powers back from Brussels. That's the position Wye like to be. | :34:30. | :34:40. | |
:34:40. | :34:42. | ||
need to wait, we need to know what we are dealing with and what sort | :34:42. | :34:44. | |
of Europe there's going to be before we have a referendum on what | :34:44. | :34:48. | |
we don't know? I think it's a fair point that Europe is in a state of | :34:48. | :34:50. | |
flux. The important thing for me is once we have had those negotiations | :34:50. | :34:53. | |
that then the people get an opportunity to decide whether we | :34:53. | :34:57. | |
want to stay in the EU on that basis or whether we prefer a | :34:57. | :35:00. | |
relationship more like that of Switzerland where they sort of | :35:00. | :35:03. | |
trade freely with the EU but they're not part of the | :35:03. | :35:09. | |
institutions, they're only paying a small amount towards it. Their | :35:09. | :35:12. | |
people can govern themselves. you like Britain to be like | :35:12. | :35:17. | |
Switzerland? No, I wouldn't. Firstly, because Britain isn't like | :35:17. | :35:20. | |
Switzerland, we are a bigger nation. We have a different kind of economy. | :35:20. | :35:24. | |
We play a bigger part in the world. I would like to have far more say | :35:24. | :35:27. | |
in Europe than Switzerland does, for example. I don't see the | :35:27. | :35:31. | |
attraction of that. I don't see the attraction of a major manufacturing | :35:31. | :35:35. | |
nation like Britain having to be like Norway or Switzerland, waiting | :35:35. | :35:38. | |
to find out what the regulations are Brussels are imposing and then | :35:38. | :35:42. | |
having to apply them all to the letter, to the word, without any | :35:42. | :35:47. | |
say. Also, may I say, making every bit as big a contribution to the | :35:47. | :35:52. | |
funding of the European Union as we do, as members. There you go, Mark | :35:52. | :35:57. | |
Reckless. Well, I think the Norwegian and Swiss contributions | :35:57. | :36:02. | |
are significantly smaller than ours, but... I am sorry, they're not. | :36:02. | :36:06. | |
am sure we can look at the numbers after this. What I would like to | :36:06. | :36:09. | |
say is in Switzerland, as in the United States or Japan, for | :36:09. | :36:13. | |
instance, if you want to export to the EU you have to meet EU | :36:13. | :36:17. | |
regulations on your exports to the EU. They don't have to apply all | :36:17. | :36:20. | |
those EU regulations to their exports outside the EU and their | :36:20. | :36:24. | |
own domestic economy. I just think economically we could be so much | :36:24. | :36:29. | |
better off if we weren't paying �19 billion a year for the privilege of | :36:29. | :36:35. | |
having 26 other countries make our laws for us. That is a gross cost, | :36:35. | :36:38. | |
without the money that you get back, for example, to regional funding | :36:38. | :36:44. | |
and to the common agricultural policy so the net cost is not | :36:44. | :36:46. | |
anything like that. But the contribution per person is about | :36:46. | :36:50. | |
the same as the contribution per person from Norway. Why else would | :36:50. | :36:55. | |
the European Union allow somebody else to have a free ride if | :36:55. | :36:58. | |
Britain's to have a free ride, then the poles and Germans or French | :36:58. | :37:02. | |
would say we will have a free ride, too. Because they sell more to us | :37:02. | :37:06. | |
than we do to them and they sell almost as much to Britain as to the | :37:06. | :37:10. | |
United States and Japan together T would be highly unusual for people | :37:10. | :37:14. | |
selling that much to want to cut off perhaps their most important | :37:14. | :37:19. | |
partner. The critical point of that argument is it is 50% of our trade | :37:19. | :37:23. | |
but to the whole of the European Union we are 11% of their trade. So | :37:23. | :37:27. | |
you are hardly having an even debate. Fascinating though this is, | :37:27. | :37:30. | |
about the economics of it, the politics is clearly demonstrated by | :37:30. | :37:34. | |
the two of you, that the issue would split the party. Do you want | :37:34. | :37:41. | |
that? Well, what we should do is just allow the people to decide on | :37:41. | :37:44. | |
this absolutely crucial question for our country that no one under | :37:44. | :37:50. | |
the age of 55 has had an opportunity to vote on. But your | :37:50. | :37:54. | |
party doesn't agree on that. should agree to offer people that | :37:54. | :37:58. | |
vote to allow the people to decide, and then allow anyone within our | :37:58. | :38:03. | |
party and outside to make their own arguments as to which side they | :38:03. | :38:08. | |
want to be on. Afterwards we come together just as these issues have | :38:08. | :38:12. | |
been discussed in the past. Do you trust David Cameron? The real | :38:12. | :38:17. | |
debate we should be having is that actually under the Labour Party, | :38:17. | :38:21. | |
Labour signed us up to the Lisbon Treaty, Labour signed up to about | :38:21. | :38:27. | |
100,000 pages of regulations. The British Conservative Party offers | :38:27. | :38:32. | |
the British people the opportunity to redefine that relationship, get | :38:32. | :38:36. | |
away from that regulation. That's where we are both joined together. | :38:36. | :38:39. | |
My concern about Labour is what happens to the Conservative Party | :38:39. | :38:43. | |
if they offer a referendum on the EU, whether we stay part of it | :38:43. | :38:49. | |
before we do. Thank you. That's right. There is a risk they could | :38:49. | :38:52. | |
outflank you on this issue. Thank you very much. Would you like a | :38:52. | :38:57. | |
taste of the krfrpbs now? -- conference now? All right then. | :38:57. | :39:00. | |
Don't say I am not good to you! Conservative Party members were | :39:00. | :39:05. | |
treated to a speech from the leader of the Conservatives in Scotland, | :39:05. | :39:07. | |
Ruth Davidson. She spoke about the importance of keeping the union | :39:07. | :39:11. | |
together, as she would. Here is a flavour of her speech. Global | :39:11. | :39:15. | |
security, international trade, a stable currency, low interest rates, | :39:15. | :39:19. | |
the strongest social cultural and economic bonds with consistent | :39:19. | :39:24. | |
welfare across the nation. These are all powerful examples of the UK | :39:24. | :39:28. | |
in action. It is no coincidence that these are the very things that | :39:28. | :39:32. | |
separatists want to assure Scottish voters will not disappear. If | :39:32. | :39:35. | |
things are going to change in Scotland, the SNP seems to say, | :39:35. | :39:41. | |
everything must stay the same. But things wouldn't stay the same. | :39:41. | :39:43. | |
Scotland's relations with every nation and institution, in | :39:43. | :39:49. | |
particular the EU, would be reset and have to start from scratch. We | :39:49. | :39:52. | |
know that the campaign to keep our country together will be long and | :39:52. | :39:55. | |
sometimes tough and we don't underestimate the challenge that we | :39:55. | :40:02. | |
face but for all Alex Salmond's bluster, this is not a done deal. | :40:02. | :40:08. | |
Polls today show that fewer than a third of Scots support independence, | :40:08. | :40:11. | |
just 28%. And the more people see the SNP's offering, the less | :40:11. | :40:15. | |
appealing it becomes. That's why the Scottish Government is spending | :40:15. | :40:19. | |
hundreds of thousands of pounds in courts trying to keep information | :40:19. | :40:23. | |
from the Scottish people. That's why they're refusing to publish the | :40:23. | :40:27. | |
future costs of their free electoral bribes and that's why | :40:27. | :40:31. | |
they're twisting and turning on fundamentals like the Queen, the | :40:31. | :40:35. | |
current and membership of NATO. Indeed, in the parliament in | :40:35. | :40:39. | |
Edinburgh every policy, every bill, every SNP act must fit in with | :40:39. | :40:43. | |
their overall goal of bringing the United Kingdom as we know it to an | :40:43. | :40:47. | |
end. And that's something which affects every one of us, not just | :40:47. | :40:53. | |
Scots. Victory for the UK and the referendum must be emphatic. It | :40:53. | :40:57. | |
can't be by an inch, it has to be by a mile to provide the stability | :40:57. | :41:01. | |
essential for our continued prosperity. And that's where all of | :41:01. | :41:07. | |
you can help. Ruth Davidson there. What is the tactic from the | :41:07. | :41:12. | |
Conservative side in terms of the issue of Scottish independence, | :41:12. | :41:22. | |
:41:22. | :41:23. | ||
We should put out the advantages of the union which are many. I | :41:23. | :41:27. | |
remember John Major putting these clearly when he was Prime Minister. | :41:27. | :41:30. | |
Shouldn't you allow the other pro- unionist parties, because of the | :41:30. | :41:34. | |
level of unpopularity of the Tories in Scotland? No I don't think you | :41:34. | :41:37. | |
can do that. You can't just withdraw from the political field. | :41:37. | :41:42. | |
There was a time when we had more seats in Scotland than anybody else. | :41:42. | :41:48. | |
But those times, I do concede, have long gone. But I think we should, | :41:48. | :41:53. | |
the Conservative Party above all, should be arguing for the union and | :41:53. | :41:57. | |
should be arguing, not in a strideent way but in a way that | :41:57. | :42:00. | |
says new Scotland have got everything to gain from it as well | :42:00. | :42:03. | |
as the rest of the United Kingdom. And briefly, just to continue the | :42:03. | :42:08. | |
debate we were having about a referendum on membership of Europe | :42:08. | :42:13. | |
or whatever can be agreed, the last point there by Mark Reckless that | :42:13. | :42:17. | |
Labour could possibly outflank the Conservatives here by offering a | :42:17. | :42:22. | |
referendum before, that's a real risk? I think, I mean, the other | :42:22. | :42:26. | |
argument is we will be outflanked by UKIP. The Conservative Party | :42:26. | :42:31. | |
just has to decide what they're going to do and I think that the | :42:31. | :42:34. | |
real danger is, and you almost saw it with that discussion today, we | :42:35. | :42:42. | |
get back to the old days and John Major's Government of two MPs on | :42:42. | :42:47. | |
the green debating Europe. We don't want to go down that. If we should | :42:47. | :42:51. | |
have learned anything from those years, it's that totally counter | :42:51. | :42:54. | |
productive. It gives the impression we are a divided party. If we go to | :42:54. | :42:59. | |
the election and went into the... Well, you are divided. To the 97 | :42:59. | :43:05. | |
election still arguing about this... How do you prevent it, do you offer | :43:05. | :43:10. | |
that referendum and say so now? way do you it is you set out, or | :43:10. | :43:14. | |
David Cameron sets out exactly what it is that he wants, which I think | :43:14. | :43:19. | |
the most sensible thing to do would be to say look, we are going to | :43:19. | :43:22. | |
negotiate, redefine the position and then we will put it to a | :43:22. | :43:26. | |
referendum. As it happens, I am not against referendums. I was arguing | :43:26. | :43:29. | |
for one a long time ago. But I do think that actually to have a | :43:29. | :43:32. | |
referendum at this point with Europe in crisis would be | :43:32. | :43:39. | |
absolutely crazy. So the big event of today is a few moments away. | :43:39. | :43:42. | |
George Osborne's speech to the party conference is going to kick | :43:42. | :43:46. | |
off in probably about five minutes, although they usually run late. | :43:46. | :43:56. | |
:43:56. | :44:00. | ||
It's been a turbulent few months For the Chancellor after his budget | :44:00. | :44:06. | |
sparked weeks of negative headlines. Who is the man behind the red box? | :44:06. | :44:12. | |
We have been speaking to some of his colleagues past and present. | :44:12. | :44:16. | |
He is the Chancellor who brought in spending cuts, the Conservative MP | :44:16. | :44:19. | |
who is close toast the Prime Minister -- close toast the Prime | :44:20. | :44:22. | |
Minister. A family man with a wife and two children but what kind of | :44:22. | :44:26. | |
man is George Osborne? I worked with him and he was political | :44:26. | :44:31. | |
Secretary to William Hague before he got into parliament in 2001. He | :44:31. | :44:36. | |
was a bright guy, a loyal guy. Occasionally brash, because we all | :44:36. | :44:41. | |
are in our late 20s, early 30s but he was clearly a guy who was going | :44:41. | :44:45. | |
places and everybody knew it. George, whose first stphaeupl | :44:45. | :44:48. | |
Gideon until he changed it as a teenager, became the youngest | :44:48. | :44:52. | |
Conservative MP ever when he was elected after Martin Bell choose to | :44:52. | :45:02. | |
:45:02. | :45:14. | ||
stand elsewhere. He rose up the Tory ranks quickly, becoming Shadow | :45:14. | :45:16. | |
Chancellor in 2005. Claire Perry worked with him two years later and | :45:16. | :45:19. | |
says he was the kinds of man who was always juggling work and family | :45:19. | :45:22. | |
life. I used to see his diary and it would be crammed, take Liberty | :45:22. | :45:25. | |
to school, go to Luke's play, look at the schools with him in the | :45:25. | :45:28. | |
midst of the run on Northern Rock or whatever it was, he does try to | :45:28. | :45:31. | |
be a good dad and father in the constraints that we all face of a | :45:31. | :45:33. | |
busy working life. His wife, here with him at the Royal wedding, is | :45:33. | :45:35. | |
the daughter of David Howell, a former cabinet Minister under | :45:35. | :45:38. | |
Thatcher. Osbourne was privately schooled at St Paul's in London and | :45:38. | :45:41. | |
went on to read modern history at Oxford where he was a member of the | :45:41. | :45:51. | |
:45:51. | :46:02. | ||
He was a boy growing up in London. Cheered here ahead of his Mansion | :46:02. | :46:07. | |
House speech, George Osborne has been booed by by crowds a the | :46:07. | :46:13. | |
Olympics and he is aware of his unpopularity according to Nick Nigh. | :46:13. | :46:18. | |
He used to work work with him. He knows what his strengths and his | :46:18. | :46:21. | |
weaknesses are particularly the way he can come across sometimes in | :46:21. | :46:25. | |
public, which is one of the reasons why he limits his appearances and | :46:25. | :46:29. | |
he adopts what people call the submarine strategy of emerging when | :46:29. | :46:33. | |
he has something to say and says it and goes quiet. | :46:34. | :46:36. | |
A loyal friend and second in command to the Prime Minister, | :46:36. | :46:39. | |
theirs is a different relationship to that of their predecessors. | :46:39. | :46:43. | |
There is a large door between Number Ten and number 11 and it | :46:43. | :46:51. | |
used to be lock and guarded by a policeman. Now, it is open. The | :46:51. | :47:01. | |
:47:01. | :47:04. | ||
little Camerons are trotting in, there is an Osbourne family bud gee. | :47:04. | :47:09. | |
For now George Osborne's plan is to get the economy growing and his | :47:09. | :47:19. | |
:47:19. | :47:19. | ||
This is Nick Robinson at the conference in Birmingham. Nick, | :47:19. | :47:24. | |
let's talk about the man for a minute. He produce add Budget whose | :47:24. | :47:29. | |
aftermath was probably the worst received in living memory. It | :47:29. | :47:33. | |
resulted in Tory polling falling and not recovered. His personal | :47:33. | :47:37. | |
ratings falling and not recovered. There is a lot hanging for him, | :47:37. | :47:41. | |
never mind the Government, in this speech? | :47:41. | :47:45. | |
Not just on this speech, Andrew. But on what happens in eight weeks | :47:45. | :47:49. | |
time. I think the way you should judge this speech is what it tells | :47:49. | :47:54. | |
us about what will happen in eight weeks time. On 5th December, the | :47:54. | :47:58. | |
Chancellor stands up and delivers what most viewers would regard as a | :47:58. | :48:02. | |
Budget. It is called the autumn statement. It is one of the two big | :48:02. | :48:06. | |
statements that happen in the year. That statement will unveil the | :48:06. | :48:11. | |
official forecasts, no no longer written by by politicians, about | :48:11. | :48:16. | |
whether he is on course to meet his borrowing targets. We know now, not | :48:16. | :48:20. | |
what they are saying, but we know clearly they will say he is off | :48:20. | :48:26. | |
course and therefore, what he says here will provide a framework for | :48:26. | :48:32. | |
the script of what he will have to announce on 5th December. The the | :48:32. | :48:38. | |
headlines will be, "Sticking to the course course" and that phrase he | :48:38. | :48:42. | |
used when the Tories were in opposition in 2009, "We are still | :48:42. | :48:47. | |
in it together.". The problem they face Nick, as you well know, and I | :48:47. | :48:50. | |
heard you talk about it. They may say they are sticking to the court | :48:50. | :48:56. | |
martial, but when -- sticking to the course, but when it comes to | :48:56. | :48:59. | |
deficit reduction, they have they have been blown off course. That's | :48:59. | :49:03. | |
the glue of the coalition. This is meant to be the purpose of the | :49:03. | :49:07. | |
coalition? That's right. He cannot stand up | :49:07. | :49:13. | |
today and say, "We are on course to deal with the debt or deal with the | :49:13. | :49:17. | |
deficit." There is a figure you will hear every Tory spokesman use | :49:17. | :49:20. | |
at every opportunity which is the deficit is 25% lower than when they | :49:20. | :49:24. | |
took over. Of course, what they don't say is what you have riferd | :49:24. | :49:27. | |
to is -- referred to in this financial year, in the first four | :49:28. | :49:36. | |
or five months, borrowing up, not down, by 20%. As a result, debt is | :49:36. | :49:39. | |
geght bigger, not -- getting bigger, not smaller. What will he do? What | :49:40. | :49:44. | |
you have seen the Chancellor prepare for is to say, "Yes, come | :49:44. | :49:48. | |
5th December, the Budget-style statement, I might have to rewrite | :49:48. | :49:52. | |
the so-called fiscal rules. The rules that say to the financial | :49:52. | :49:56. | |
community "this is what we are going to do about borrowing. But I | :49:56. | :50:03. | |
don't have to recite my spending cuts -- rewrite by spending cuts." | :50:03. | :50:07. | |
Our credibility comes from a willingness of a Government to cut | :50:07. | :50:11. | |
spending and increase taxes, to carry on cutting spending and | :50:11. | :50:15. | |
increasing taxes for much longer than they originally planned to do, | :50:15. | :50:17. | |
way beyond the end of this Parliament, into the next one, | :50:18. | :50:24. | |
after the next general election and to say that's where his credibility | :50:24. | :50:28. | |
comes from, not the fact that the economy is off course. | :50:28. | :50:33. | |
Nick, we are going to dip in and look at what our cameras can see in | :50:33. | :50:43. | |
:50:43. | :50:44. | ||
the conference hall. That's the chap from the Olympics. | :50:44. | :50:49. | |
The Government has to find �10 billion in cuts. It wants wants the | :50:49. | :50:55. | |
rich to pay their fair share of taxes. But I am right in thinking | :50:55. | :51:01. | |
we don't know hat welfare cuts - what the welfare cuts will amount | :51:01. | :51:07. | |
to and I have not been able to find out if the rich are going to pay | :51:07. | :51:11. | |
additional taxes or carry on paying what they are paying? I am told | :51:11. | :51:18. | |
they will pay additionam additional taxes. You are at the beginning | :51:18. | :51:22. | |
afcoalition negotiating process. We are unfamiliar with this. We think | :51:22. | :51:26. | |
that ministers can wait for their speech and unveil what they are | :51:26. | :51:29. | |
going to do even though they haven't managed to tell you how | :51:29. | :51:33. | |
they are going to do it. If George Osborne wants to put taxes up on | :51:33. | :51:37. | |
the rich, as he says he does, he has to get the scale, the type | :51:38. | :51:41. | |
agreed with Nick Clegg. What he is doing in public is negotiating with | :51:41. | :51:45. | |
Clegg saying, "You want a mansion tax. You are not getting one from | :51:45. | :51:52. | |
the Conservatives. You want higher council tax bands from the rich? | :51:52. | :51:57. | |
You are not going to get get them from the Conservatives." He wants | :51:57. | :52:04. | |
to go and say, "I would be willing to consider this. He put up | :52:04. | :52:09. | |
stoovrpd -- stamp duty. He has to do that. He will go to the Lib Dems | :52:09. | :52:12. | |
and say, "Here is my starting position. �10 billion worth of | :52:12. | :52:18. | |
welfare cuts. This is how I would do it, A, B, C, D and they would | :52:18. | :52:25. | |
have to say, "We are not not doing this. You saw Nick Clegg say, "I | :52:25. | :52:30. | |
would not sign up to a freeze on benefit rates." It is what the Tory | :52:30. | :52:36. | |
wants to do, but Nick Clegg said no. But he left the door open to | :52:36. | :52:40. | |
increasing the rate of benefits lower than the rate of inflation. | :52:40. | :52:43. | |
You are seeing a public negotiation. One coalition partner with the | :52:43. | :52:53. | |
other. How is Mr Osbourne's stock with the | :52:53. | :52:57. | |
Tory faithful. Chancellors become unpopular, people like Nigel Lawson | :52:57. | :53:01. | |
and Ken Clarke, they remain popular with their party faithful. Can the | :53:01. | :53:10. | |
same be said of Mr Osbourne? No. For the reasons you said in in | :53:10. | :53:15. | |
your opening session. They lost faith in a guy they knew was no | :53:15. | :53:25. | |
:53:25. | :53:25. | ||
great public performer, but thought had a a bit of the magic Alastair | :53:25. | :53:30. | |
Campbell dust. When he stands up in a few seconds time, he has to say, | :53:30. | :53:34. | |
"Go back to basics. I was right in the past, I am right now.". | :53:34. | :53:37. | |
Prime Minister joining the Chancellor in the hall. He is going | :53:37. | :53:40. | |
to listen to his chancellor's speech. No surprise there. Lets | :53:40. | :53:44. | |
hear the Chancellor of the Exchequer, George Osborne. Thank | :53:44. | :53:54. | |
:53:54. | :53:58. | ||
you for delivering the Games and making Britain proud. | :53:58. | :53:59. | |
APPLAUSE You are joining a strong team at | :53:59. | :54:03. | |
the Treasury. Chief secretary Danny Alexander and our Conservative | :54:03. | :54:11. | |
colleagues, Greg Clarke, David, James, Greg Hands, and David | :54:11. | :54:14. | |
Merritt, thank you for the support that you give me and the great job | :54:14. | :54:24. | |
:54:24. | :54:40. | ||
you are doing for our country. APPLAUSE | :54:40. | :54:42. | |
Now, ladies and gentlemen, in 1972, when a Conservative Prime Minister, | :54:42. | :54:45. | |
two years into office was faced with economic problems and over | :54:45. | :54:47. | |
powerful unions, we buckled and we gave up. The result was higher | :54:47. | :54:52. | |
inflation, more strikes, and the three day week. A decade later, in | :54:52. | :54:56. | |
1981, when another Conservative Prime Minister and Conservative | :54:57. | :55:01. | |
chancellor two years into office were faced with economic problems | :55:01. | :55:07. | |
and powerful unions, we did not give up, but pressed on and | :55:07. | :55:17. | |
:55:17. | :55:24. | ||
overcame. APPLAUSE | :55:24. | :55:27. | |
Today, in the face of the great economic challenges of our age, we | :55:27. | :55:37. | |
:55:37. | :55:38. | ||
here resolve, we will press on, we shall overcome. | :55:38. | :55:40. | |
APPLAUSE We made a promise to the British | :55:40. | :55:42. | |
people that we would repair our badly broken economy. That promise | :55:42. | :55:48. | |
is being fulfilled. The deficit is down by a quarter. There are one | :55:48. | :55:55. | |
million more private sector jobs. The economy is healing. That | :55:55. | :56:00. | |
healing is taking longer than we hoped because the damage was | :56:00. | :56:04. | |
greater than we feared. But let the message from this conference be | :56:04. | :56:14. | |
:56:14. | :56:33. | ||
clear, we will finish the job that we have started. | :56:33. | :56:35. | |
APPLAUSE And there is another promise we | :56:35. | :56:38. | |
made - on the eve of the conference, on the eve of the election, I told | :56:38. | :56:41. | |
this conference, "We are all in this together." It was more than a | :56:41. | :56:43. | |
slogan. It spoke of our values and of our intent. That there would be | :56:44. | :56:46. | |
sacrifices and cuts that would be tough to make, that everyone was | :56:46. | :56:50. | |
going to have to play their part and that in return, we would build | :56:50. | :56:58. | |
an economy that works for all. We took the risk. Few political | :56:58. | :57:03. | |
parties anywhere in the world are prepared to take before an election. | :57:03. | :57:09. | |
Quite simply we told the people the truth about the hard road ahead. | :57:09. | :57:17. | |
Now some say we paid a price for that. But at this -- but of this I | :57:17. | :57:23. | |
am sure, our country would have been all but ungovernable if we had | :57:23. | :57:26. | |
not been straight with the public before asking them to cast their | :57:26. | :57:36. | |
:57:36. | :57:46. | ||
vote. APPLAUSE | :57:46. | :57:49. | |
So three years later my message remains the same - we're not going | :57:49. | :57:52. | |
to get through this as a country if we set one group against another, | :57:52. | :57:55. | |
if we divide, denounce and demonise. We need an effort from each and | :57:55. | :57:57. | |
everyone, one nation working hard together. We are still all in this | :57:57. | :58:07. | |
:58:07. | :58:07. | ||
together. APPLAUSE | :58:07. | :58:10. | |
We know what the British people mean by fair. That those who put | :58:10. | :58:16. | |
something in should get something out. That we support those who | :58:16. | :58:22. | |
aspire so we can help those most in need. That the cost of paying off | :58:22. | :58:29. | |
our debts cannot possibly be borne by one section of society alone. | :58:30. | :58:39. | |
:58:40. | :58:48. | ||
Let's be clear, those with the most should contribute the most. | :58:48. | :58:49. | |
APPLAUSE Each one, each one of my Budgets | :58:49. | :58:52. | |
has increased taxes overall on the very richest. In every single year | :58:52. | :58:54. | |
of this Parliament, the rich will pay a greater share of our nation's | :58:54. | :59:04. | |
:59:04. | :59:13. | ||
tax revenues than in anyone of the 13 years that Labour were in office. | :59:13. | :59:14. | |
APPLAUSE And we've achieved that while | :59:15. | :59:17. | |
getting rid of a cripplingingly uncompetitive 50 pence rate that | :59:17. | :59:27. | |
:59:27. | :59:31. | ||
raised no money and cost jobs. APPLAUSE | :59:31. | :59:33. | |
It is a completely phoney conception of fairness that you | :59:33. | :59:35. | |
stick with a tax rate, you know raises no money, that you know | :59:35. | :59:38. | |
drives away jobs and investment. That you know weakens the economy | :59:38. | :59:40. | |
just to say you have kicked the rich. The people who pay the price | :59:40. | :59:43. | |
for that, are not the rich, but the poor looking for work and there is | :59:44. | :59:53. | |
:59:54. | :00:26. | ||
It's wrong that it's possible for someone to be better off on | :00:26. | :00:29. | |
benefits than they would be in work and we are right to change that, | :00:29. | :00:39. | |
:00:39. | :00:43. | ||
too. APPLAUSE That's why I insisted on a cap on | :00:43. | :00:47. | |
benefits so no family can earn more out of work than the average family | :00:47. | :00:57. | |
:00:57. | :01:01. | ||
earns in work. And can you believe it? Labour voted against that. All | :01:01. | :01:05. | |
that talk about something for something and they've learned | :01:05. | :01:14. | |
nothing about anything. Where is the fairness? Where is the | :01:14. | :01:18. | |
fairness we ask for the shift worker, leaving home in the dark | :01:18. | :01:23. | |
hours of the early morning, who looks up at the closed blinds of | :01:23. | :01:27. | |
their next door neighbour sleeving off a life on benefits? When we say | :01:27. | :01:31. | |
we are all in this together, we speak for that worker. We speak for | :01:31. | :01:37. | |
all those who want to work hard and get on. This is the mission of the | :01:37. | :01:47. | |
:01:47. | :01:52. | ||
modern Conservative Party. We represent, not the factional | :01:52. | :02:00. | |
interests of organised Labour, nor do we indulge in the lazy politics | :02:00. | :02:04. | |
of envy. We leave it to other parties to mark people by their | :02:04. | :02:09. | |
background, to divide, to try to reorder and pre-distribute society | :02:09. | :02:16. | |
by the rules of their favourite sociology textbook. We modern | :02:16. | :02:21. | |
Conservatives represent all those who aspire, all who work, save and | :02:21. | :02:27. | |
hope, all who feel a responsibility to put in, and not just take out. | :02:27. | :02:32. | |
Whether it's the owner of the corner shop, staying open until | :02:32. | :02:38. | |
midnight to support their family. Or the teacher preferred to defy | :02:38. | :02:43. | |
her union and stay late to take the after school club or the commuter | :02:43. | :02:47. | |
who leaves home before the children are up, comes back long after | :02:47. | :02:51. | |
they've gone to bed because they want a better life for them. Or the | :02:51. | :02:55. | |
pensioner who saved all their life and doesn't want to spend it all as | :02:55. | :02:59. | |
they want to pass something on to their children and grandchildren. | :02:59. | :03:02. | |
Or the entrepreneur who doesn't cash out and pack up, but devotes | :03:02. | :03:06. | |
their flair and energy to building the next success story. They are | :03:06. | :03:11. | |
all part of one nation, one nation working together to get on. That is | :03:11. | :03:15. | |
the nation we represent. These are the people I will serve as | :03:15. | :03:25. | |
:03:25. | :03:32. | ||
Chancellor. APPLAUSE and by the way, that's what being a | :03:32. | :03:39. | |
party of one nation is all about. It's about a whole programme for | :03:39. | :03:45. | |
Government. It is rissable to believe you can become a party of | :03:45. | :03:49. | |
one nation simply by repeating the words one nation over and over | :03:50. | :03:55. | |
again. Of course we all know why he did it. The Labour leader wants to | :03:55. | :03:59. | |
pretend he is moving to the centre, when all can see he is moving to | :03:59. | :04:09. | |
:04:09. | :04:11. | ||
the left. But as it is revealed as an empty | :04:11. | :04:15. | |
gesture, people will be more let down by the reality than they were | :04:15. | :04:23. | |
attracted by the pretense. You can imagine Benjamin Disraeli's | :04:23. | :04:27. | |
disappointment, moments after the joy of being told there really is | :04:27. | :04:37. | |
:04:37. | :04:42. | ||
reincarnation, he discovers he's come back as Ed Miliband. To the | :04:42. | :04:47. | |
people of Britain I say this, whoever you are, wherever you come | :04:47. | :04:53. | |
from, if you're working for a better future, we are on your side. | :04:53. | :04:58. | |
Ladies and gentlemen, I see this this Conservative Prime Minister, | :04:58. | :05:03. | |
David Cameron, close-up. He is an outstanding Prime Minister of | :05:03. | :05:13. | |
:05:13. | :05:20. | ||
judgment and integrity. APPLAUSE. But more than that, he is leading a | :05:20. | :05:27. | |
Government of change, of profound long-lasting change. Beneath the | :05:27. | :05:33. | |
sound and fury of the daily debate, a silent revolution is taking place. | :05:33. | :05:38. | |
Some of the biggest issues in politics, so big people thought | :05:38. | :05:44. | |
them too controversial to fix, we have been prepared to tackle. A | :05:44. | :05:49. | |
state that had become too expensive to pay for. Public sector pensions | :05:49. | :05:57. | |
we couldn't afford. People earning low incomes but still paying income | :05:57. | :06:03. | |
tax. Businesses fleeing Britain because our taxes were too high. In | :06:03. | :06:09. | |
welfare, policing, and education, services that were crying out for | :06:09. | :06:14. | |
reform. Government that had become too centralised, the constant drip- | :06:14. | :06:22. | |
drip of powers to Europe. When you are tackling all of these big | :06:22. | :06:27. | |
issues, of course the mid-term politics are difficult. But I tell | :06:27. | :06:31. | |
you this, I'd rather have these difficulties because we are | :06:31. | :06:36. | |
tackling these big challenges, than wake up like Tony Blair did after a | :06:36. | :06:46. | |
:06:46. | :06:54. | ||
decade in power and discover he Let us all, all of us, be proud | :06:54. | :06:58. | |
that we're contributing to the most radical and reforming period of | :06:58. | :07:04. | |
Government this country has seen for a generation. Yes, we've done | :07:04. | :07:14. | |
:07:14. | :07:16. | ||
it in coalition. But we could have done none of it without a coalition. | :07:16. | :07:22. | |
Here's a fact about our constitution that we all know, what | :07:22. | :07:27. | |
David, you might call a magnet factor, you can't win the votes you | :07:27. | :07:32. | |
need in parliament for each and everyone of these changes without a | :07:32. | :07:38. | |
majority. And the Conservative Party at its best has always known | :07:38. | :07:42. | |
its responsibility. We would rather confront the choices and dilemmas | :07:42. | :07:52. | |
of Government, than bask in the blissful irrelevance of opposition. | :07:52. | :08:01. | |
APPLAUSE Now, we face more hard choices this | :08:01. | :08:06. | |
autumn. The truth is that the damage done by the debts and the | :08:06. | :08:11. | |
banking crisis was worse than we feared. The rise in the world oil | :08:11. | :08:16. | |
price has been larger than anyone forecast. Sadly, the predictions | :08:16. | :08:20. | |
that you made, that I made, that almost everyone here made, about | :08:20. | :08:26. | |
the euro, turned out to be all too true. This makes the job more | :08:26. | :08:33. | |
difficult, but it doesn't make it any less urgent. Yes, we've cut the | :08:33. | :08:39. | |
budget deficit by a quarter. But it tells you something about just how | :08:39. | :08:43. | |
big it was that the deficit is still higher today than when a | :08:43. | :08:50. | |
British Government went begging to the IMF in the 1970s. Now this | :08:50. | :08:56. | |
Wednesday I am also going to a meeting of the IMF. Don't worry, | :08:56. | :09:00. | |
because of the resolve of the British people, I go representing a | :09:00. | :09:05. | |
country that is seen as part of the solution, not part of the problem. | :09:05. | :09:12. | |
That is only because of the credibility our plans have earned. | :09:12. | :09:18. | |
Now I know our plans have been criticised, but the critics don't | :09:18. | :09:25. | |
seem to agree. Some say we're going too fast. We should be spending and | :09:25. | :09:31. | |
borrowing even more. They're curious -- their cure kwrougs | :09:31. | :09:37. | |
suggestion Kuerten kwrougs suggest -- in good times and bad, in boom | :09:37. | :09:43. | |
and bust, their answer is always to spin and borrow more. And they | :09:43. | :09:46. | |
think -- spend and borrow more. They think there is such a thing as | :09:46. | :09:51. | |
a free lunch. They They think that extra borrowing could pay for | :09:51. | :09:55. | |
spending or temporary tax cuts in an attempt to put money in the | :09:55. | :10:00. | |
pockets of consumers. But the extra borrowing would come at the cost of | :10:00. | :10:04. | |
higher interest rates and everyone would know that there will be | :10:04. | :10:09. | |
higher taxes to pay for it coming down the track. The higher interest | :10:09. | :10:13. | |
rates would pick the very pockets of the working people you are | :10:13. | :10:18. | |
trying to help. And the fear of extra taxes would undermine their | :10:18. | :10:25. | |
confidence. In other words, our critics would gamble everything. | :10:25. | :10:28. | |
Our credibility, our financial stability, our low interest rates, | :10:28. | :10:33. | |
the cost of our debt. They would risk everything on the dubious idea | :10:33. | :10:37. | |
that a few billion more of spending would dramatically improve the | :10:37. | :10:42. | |
fortunes of the trillion and a half pound British economy. I will not | :10:42. | :10:52. | |
:10:52. | :10:59. | ||
take that risk with the British economy. In that 70-minute speech | :10:59. | :11:03. | |
last week to the Labour conference, do you know how many times Ed | :11:03. | :11:10. | |
Miliband mentioned the deficit? Not once. Not once. No mention of | :11:10. | :11:16. | |
perhaps the most acute problem facing the country. People | :11:16. | :11:21. | |
marvelled at Ed Miliband's feat of memory. And so did I. He spoke for | :11:21. | :11:25. | |
over an hour about the problems of Britain and forgot to mention that | :11:25. | :11:35. | |
:11:35. | :11:37. | ||
we had a Labour Government running He told us about his life story, | :11:37. | :11:42. | |
but forgot to mention he spend a third of his life working for | :11:42. | :11:46. | |
Gordon Brown. Maybe someone hit him over the head with a mobile phone? | :11:46. | :11:50. | |
What was the biggest memory laps of all? He forgot to say the three | :11:50. | :11:55. | |
things that the British people want to hear from the Labour Party - | :11:55. | :12:05. | |
:12:05. | :12:07. | ||
we're sorry, we spent too much, we don't do it again. APPLAUSE | :12:07. | :12:11. | |
Now he may be trying to forget, we're never going to let him. | :12:11. | :12:21. | |
:12:21. | :12:26. | ||
Labour must now be trusted to run the country's public finances again. | :12:26. | :12:31. | |
Now as well as those critics saying we're cutting too fast, there are | :12:31. | :12:36. | |
those who say we're cutting too slow. Because some of those who say | :12:36. | :12:41. | |
this are our friends on the debt issue, I want to address the point | :12:41. | :12:46. | |
very carefully. I am the first to say we should have lower taxes and | :12:46. | :12:49. | |
a smaller Government. And I am the Chancellor who is cutting the size | :12:50. | :12:55. | |
of Government faster than anyone in modern times. We are reducing the | :12:55. | :13:01. | |
size of Government from almost 50% of our national income, to just 40% | :13:01. | :13:07. | |
in just five years. I just don't think it's realistic to cut a great | :13:07. | :13:12. | |
deal faster than that. And as we reduce employment in the public | :13:12. | :13:17. | |
sector, we have to do it at a pace that allows the private sector to | :13:17. | :13:22. | |
fill the gap. We promised the British people we would protect | :13:22. | :13:27. | |
decent public services as we dealt with the deficit and so we will. We | :13:27. | :13:33. | |
have never argued that you stop what economists call the automatic | :13:33. | :13:36. | |
stableisers from operating. The lower tax receipts and extra | :13:36. | :13:42. | |
Government payments that follow, if, for example, the global economy | :13:42. | :13:46. | |
turns down. Our public spending plans were designed to give us | :13:46. | :13:51. | |
flexibility and credibility. The flexibility to respond to the | :13:51. | :13:55. | |
economic conditions in the world around us. The credibility that | :13:55. | :14:03. | |
each day earns for us record low interest rates in the world bond | :14:03. | :14:08. | |
markets. Our detailed tax and spending plans have brought us | :14:08. | :14:14. | |
stability, but they only cover the next two years. And we must now | :14:14. | :14:20. | |
take some very serious decisions about what we do after that. Let me | :14:20. | :14:27. | |
tell you about my approach to these decisions. Our published plans | :14:27. | :14:34. | |
already require us to find �16 billion of further savings. As I | :14:34. | :14:39. | |
have said, the broadest shoulders will continue to bear the greatest | :14:39. | :14:44. | |
burden. But I am not prepared to contemplate things that make no | :14:44. | :14:49. | |
economic sense, and destroy jobs. So we won't have some kind of | :14:49. | :14:54. | |
temporary wealth tax, even Dennis Healey thought that was a bad idea. | :14:54. | :14:58. | |
Our future lies as a country where wealth creation is not something to | :14:58. | :15:04. | |
be penalised, but encouraged. And nor am I going to introduce a new | :15:04. | :15:14. | |
:15:14. | :15:19. | ||
tax on people's homes. APPLAUSE. would be sold as a mansion tax but | :15:19. | :15:23. | |
once the tax inspector has his foot in the door you would soon find | :15:23. | :15:26. | |
most of the homes in the country labelled a mansion, homes people | :15:26. | :15:31. | |
have worked hard to afford and already paid taxes on, it's not a | :15:31. | :15:35. | |
mansion tax, it's a homes tax and this party of home ownership will | :15:35. | :15:45. | |
:15:45. | :15:57. | ||
When it comes to the richest, the first place I will look is those | :15:57. | :16:01. | |
who are not paying the taxes we expect them to pay today. We will | :16:01. | :16:06. | |
continue our ruthless pursuit of tax evasion. We will make | :16:06. | :16:11. | |
aggressive tax avoidance more and more uncomfortable. This is not | :16:11. | :16:16. | |
idle rhetoric, thanks to our action, we are collecting �4 billion more | :16:16. | :16:21. | |
every year from those who avoid or evade tax and we will take new | :16:21. | :16:26. | |
measures to collect even more. The Conservatives are the party of low | :16:27. | :16:36. | |
:16:37. | :16:48. | ||
taxes for the many, not the party of no taxes for the few. | :16:48. | :16:50. | |
APPLAUSE If there are other ways to increase | :16:50. | :16:52. | |
revenue from the very top without damaging the enterprise economy, we | :16:52. | :16:54. | |
will look for them. But our country's problem is not that | :16:54. | :16:57. | |
working people pay too little tax, it is that Government spends too | :16:57. | :17:07. | |
:17:07. | :17:10. | ||
much of their money. APPLAUSE | :17:10. | :17:13. | |
And I'm determined that once again the great bulk of savings must come | :17:13. | :17:23. | |
:17:23. | :17:25. | ||
from cutting Government spending, not increasing taxes. | :17:25. | :17:27. | |
APPLAUSE Now I have said before that 80% of | :17:27. | :17:30. | |
our total effort to cut the deficit must come from reduced spending and | :17:30. | :17:33. | |
that should remain the case. As we have shown in the last two years, | :17:33. | :17:35. | |
it is possible to do that while improving our public services. | :17:35. | :17:40. | |
Crime has fallen. Hospital waiting lists are down. School standards | :17:40. | :17:45. | |
are higher. In Government, this party, this party is achieving | :17:45. | :17:49. | |
something invaluable. We're destroying the left-wing myth that | :17:49. | :17:52. | |
the success of a public service is measured only by how many pounds we | :17:52. | :17:58. | |
spend on t not by whether it heals our sick our he had kates our our | :17:58. | :18:02. | |
children or makes our streets safe. This is because we are doing it | :18:02. | :18:07. | |
carefully and doing it right. And if we want to go on doing that and | :18:07. | :18:13. | |
limit the cuts to departments, then we have to find greater savings in | :18:13. | :18:19. | |
the welfare bill. �10 billion of welfare savings by the first full | :18:19. | :18:25. | |
year of the next Parliament. Iain Duncan Smith and I are committed to | :18:25. | :18:29. | |
finding these savings while delivering the most radical reforms | :18:29. | :18:34. | |
of our welfare system for a generation with a Universal Credit | :18:34. | :18:37. | |
so that work always pays because it is not just about the money. It | :18:37. | :18:43. | |
comes back to fairness and to enterprise. Four how can we justify | :18:43. | :18:47. | |
the incomes of those out of work rising faster than the incomes of | :18:47. | :18:52. | |
those in work? How can we justify giving flats to young people who | :18:52. | :18:56. | |
have never worked when working people twice their age are still | :18:56. | :19:00. | |
living with their parents because they can't afford their first home? | :19:00. | :19:10. | |
:19:10. | :19:22. | ||
How can we justify... APPLAUSE | :19:22. | :19:25. | |
How can we justify a system where people in work have to consider the | :19:25. | :19:27. | |
full financial costs of having another child while those out of | :19:27. | :19:37. | |
:19:37. | :19:46. | ||
work don't? APPLAUSE | :19:46. | :19:49. | |
And here is the broader point - how could a country, that wants to | :19:49. | :19:51. | |
compete in the world economy possibly explain that it is cutting | :19:51. | :19:53. | |
budgets on things like schools and science because it couldn't summon | :19:53. | :19:56. | |
the political will to control welfare? For in this country, we | :19:56. | :19:58. | |
face something even greater than recovery from recession and the | :19:58. | :20:01. | |
problems of the past. We face the shock of the future. Something my | :20:01. | :20:05. | |
great friend William Hague talked to us about yesterday and what a | :20:05. | :20:15. | |
:20:15. | :20:26. | ||
brilliant Foreign Secretary he is. APPLAUSE | :20:26. | :20:29. | |
William told us yesterday, I will tell you today, the economic crisis | :20:29. | :20:31. | |
has accelerated a change that was already happening in our world. | :20:31. | :20:33. | |
Prosperity and the power it brings is shifting to new corners of the | :20:33. | :20:41. | |
globe to Asia, and the Americas and even now Africa. I'm proud of our | :20:41. | :20:44. | |
commitment to international development, but the truth is that | :20:44. | :20:48. | |
free enterprise is lifting hundreds of millions of people out of | :20:48. | :20:51. | |
poverty, more quickly than all the Government aid programmes of the | :20:51. | :20:57. | |
world put together. That's good news for them. And good news for us | :20:57. | :21:03. | |
too. It creates vast new markets for British exports, but only if we | :21:03. | :21:10. | |
rise to the challenge. Western democracies like ours is is being | :21:10. | :21:15. | |
without without worked, kout competed, outsmarted by these new | :21:15. | :21:18. | |
economies and the economy for countries like Britain is this - | :21:18. | :21:26. | |
are we going to sink or swim? And the truth is some western western | :21:26. | :21:31. | |
countries won't keep up. They won't make the the changes needed to | :21:31. | :21:33. | |
welfare, education and tax. They will fall further and further | :21:33. | :21:37. | |
behind. They will become poorer and poorer. I am determined that will | :21:37. | :21:47. | |
:21:47. | :21:53. | ||
not be the Britain I leave to my children or you leave to yours. | :21:53. | :21:55. | |
APPLAUSE And it need not be. If we go on | :21:55. | :22:00. | |
making the fundamental, deep rooted changes needed so that our country | :22:00. | :22:05. | |
can grow and compete and prosper. Delivering the further cuts to | :22:05. | :22:11. | |
business tax that we have promised. Supporting Michael Fallon's | :22:11. | :22:17. | |
deregulation plans, seeing through Michael Gove's school reforms and | :22:17. | :22:21. | |
by the way those school reforms are the single most important long-term | :22:21. | :22:31. | |
:22:31. | :22:36. | ||
economic investment this country can make. | :22:36. | :22:37. | |
APPLAUSE Our entire economic policy is an | :22:37. | :22:40. | |
enterprise policy. We will be the Government for people who aspire | :22:40. | :22:45. | |
like the people who start a new business and who work in that | :22:45. | :22:49. | |
business and want to own shares in it. Today, we are setting out | :22:49. | :22:55. | |
proposals for a radical change to employment law. I want to thank | :22:55. | :23:05. | |
:23:05. | :23:08. | ||
Adrian Bee croft for the work he has done in this area. | :23:08. | :23:10. | |
APPLAUSE Now this idea is particularly | :23:10. | :23:12. | |
suited to new businesses starting up and small and medium sized firms. | :23:12. | :23:14. | |
It is a voluntary, three-way deal. You the company, give your | :23:15. | :23:20. | |
employees shares in the business. You the employee, replace your old | :23:20. | :23:25. | |
rights of unfair dismissal and dedone dancy with new rights of | :23:25. | :23:28. | |
ownership. And what will the Government do? We will charge no | :23:29. | :23:33. | |
capital gains tax at all on the profits you make on your shares. | :23:33. | :23:43. | |
:23:43. | :23:48. | ||
Zero percent, capital gains tax for these new employee owners. | :23:48. | :23:49. | |
APPLAUSE Get shares and become owners of the | :23:49. | :23:52. | |
company you work for. Owners, workers and the taxmen all in it | :23:52. | :24:02. | |
:24:02. | :24:10. | ||
together, workers of the world unite. | :24:10. | :24:12. | |
APPLAUSE M I am a low tax, small Government | :24:12. | :24:15. | |
xiv, but I never thought the State is without a role to play in the | :24:15. | :24:16. | |
economy. We're Conservatives, not anarchists. | :24:16. | :24:21. | |
We have never allowed uncontrolled capitalism free reign. It was these | :24:21. | :24:24. | |
Labour politicians, not Conservatives, who let the banks | :24:24. | :24:28. | |
run rampage because they didn't understand that to work for | :24:28. | :24:33. | |
everyone, markets need rules. I am the Chancellor in a Government that | :24:33. | :24:39. | |
has done more to reform finance and banking than any before it, | :24:39. | :24:44. | |
commissioning and implementing the Vickers Report, ring-fencing the | :24:44. | :24:47. | |
high street banks when Labour wouldn't. Putting the Bank of | :24:47. | :24:52. | |
England back in charge and working with them to fund new lending. New | :24:52. | :24:58. | |
creating a British business bank. And when we find those Backers | :24:58. | :25:02. | |
involved in scandals like LIBOR, we are not going to give the money | :25:02. | :25:05. | |
back to the banks as Labour did, we are giving the money instead to | :25:05. | :25:09. | |
those who represent the very best values in our country, our veterans | :25:09. | :25:19. | |
:25:19. | :25:29. | ||
and our injured soldiers. APPLAUSE | :25:29. | :25:31. | |
Ladies and gentlemen, we're reforming banking so it serves our | :25:31. | :25:33. | |
economy and supports families and businesses. That is part of our | :25:34. | :25:37. | |
interprice strategy -- enterprise strategy. People ask how are we | :25:37. | :25:41. | |
going to earn our way in the world? This is how -- with an enterprise | :25:41. | :25:46. | |
strategy that safeguards low interest rates. With an enterprise | :25:46. | :25:51. | |
strategy that reduces taxes on entrepreneurs and the low paid. | :25:51. | :25:55. | |
With an enper price strategy that creates confidence that this | :25:55. | :26:00. | |
country has a Government Government can pay its bills. We will pay our | :26:00. | :26:02. | |
way through the skills and the talents of the British people. | :26:02. | :26:05. | |
Ensuring our scientists, our engineers and our apprentices are | :26:05. | :26:10. | |
the best in the the world. We will be activists, building | :26:10. | :26:14. | |
infrastructure, roads and power plants and broadband, we will be | :26:14. | :26:20. | |
activists for high-speed rail and air capacity, and cut through the | :26:20. | :26:24. | |
delays and red tape, and where was there more red tape than in our | :26:24. | :26:29. | |
planning laws and enterprise enterprise strategy, means | :26:29. | :26:39. | |
:26:39. | :26:41. | ||
investing in renewable energy. We are today consulting on a generous | :26:41. | :26:47. | |
new tax regime for shale gas so Britain is not left behind as gas | :26:48. | :26:52. | |
prices tumble on the other side of the Atlantic. | :26:52. | :26:55. | |
Our enterprise strategy is accepting Britain faces competition | :26:55. | :27:01. | |
from all over the world and backing what we're good at. When I hear | :27:01. | :27:04. | |
about Britain's global lead in aerospace, I want to extend it. | :27:04. | :27:08. | |
When I see Britain's genius in animation, media and computing, I | :27:08. | :27:14. | |
want to promote it. When I read of the new frontiers in synthetic | :27:14. | :27:19. | |
biology and reagaintive medicine, I want us to pioneer them. Together, | :27:19. | :27:22. | |
with some of our leading businesses and universities, we today announce | :27:22. | :27:26. | |
�1 billion of new science investment in the areas where we | :27:26. | :27:31. | |
lead the world. That is a modern industrial policy and I am its | :27:31. | :27:41. | |
:27:41. | :27:48. | ||
champion. Let's get on with it. APPLAUSE | :27:48. | :27:51. | |
And throughout, let's hold in mind who we do it for. That corner shop | :27:51. | :27:57. | |
owner, that teacher, that commuter, that pensioner, that entrepreneur, | :27:57. | :28:01. | |
that shift worker leaving their home in the early morning. They | :28:01. | :28:08. | |
strive for a better life. We strive to help them. Ladies and gentlemen, | :28:08. | :28:13. | |
I have shared with you today the challenges and the decisions I have | :28:13. | :28:19. | |
to confront in the coming months. I asked for your support and your | :28:19. | :28:25. | |
trust and your resolve as we go through these challenges together. | :28:25. | :28:31. | |
We knew two years ago that the task we were taking on was a great one. | :28:31. | :28:37. | |
It isn't too much to say that the future prosperity of our country, | :28:37. | :28:42. | |
the future of a free enterprise system under law, even the | :28:42. | :28:48. | |
stability of Europe is in question in a way it is not -- it has not | :28:48. | :28:52. | |
been before in my lifetime. I cannot pledge to you simple answers | :28:52. | :28:59. | |
or a quick solution. This year has shown we are a country confronted | :28:59. | :29:03. | |
on all sides by great difficulties, but this year has also shown we | :29:03. | :29:09. | |
live in a country of courage and creativity. A country that can can | :29:09. | :29:14. | |
do incredible things and succeed when we pull together. We never | :29:14. | :29:20. | |
forget that to be the Government of such a country is an honour and | :29:20. | :29:24. | |
when we make the hard decisions, we do not make them alone because we | :29:24. | :29:28. | |
have the British people at our side and together we can deliver. | :29:28. | :29:38. | |
:29:38. | :29:39. | ||
Thank you very much. The Chancellor of the Exchequer | :29:39. | :29:43. | |
finishes his annual address at the Conservative Party Conference. He | :29:43. | :29:47. | |
said that the damage they inherited from the economy was much worse | :29:48. | :29:54. | |
than they feared. This was why the austerity is going to last until | :29:54. | :29:59. | |
2018. He blamed oil prices, the size of the deficit and the | :29:59. | :30:03. | |
continued troubles in the eurozone. He claimed the deficit was higher | :30:03. | :30:10. | |
now than when the IMF were brought in in 1976. No change, no U-turn | :30:10. | :30:16. | |
kind of speech here. He did announce however a new change in a | :30:16. | :30:21. | |
labour law which is that if you give up some of your employment | :30:21. | :30:26. | |
rights then you will get shares in the company that you are with and | :30:26. | :30:32. | |
you will get the shares with the capital gains tax free when you | :30:32. | :30:40. | |
come to sell them. The shares maybe worth nothing, but there has been | :30:40. | :30:43. | |
lots of proposals like this. It is the first time this has been linked | :30:43. | :30:49. | |
to a change in employment law, that's probably the new thing there. | :30:49. | :30:53. | |
A muted applause for Mr Osbourne, he didn't bring them on fire there | :30:53. | :30:59. | |
and he is a man that has to establish his reputation with the | :30:59. | :31:09. | |
:31:09. | :31:16. | ||
Vicky Young is saying the - - Lib Dems. There will be a joint | :31:16. | :31:20. | |
spending plan agreed to this parliament. Mr Osbourne is talking | :31:20. | :31:25. | |
about making cuts of �10 billion in welfare, ten is part of the 16, | :31:25. | :31:30. | |
over two years. It's likely this will mean finding �6 billion in | :31:30. | :31:34. | |
welfare cuts in the first year of 2016. | :31:34. | :31:38. | |
The Lib Dems are still insisting that they will consider the welfare | :31:38. | :31:45. | |
cuts only if the Conservatives agree to the the... That's an | :31:45. | :31:48. | |
announcement through the BBC. We heard the Chancellor's speech. We | :31:48. | :31:52. | |
are joined now by the shadow Treasury Minister, Chris Leslie and | :31:52. | :31:57. | |
Norman Fowler, is still here. It's your party, what did you make of it, | :31:57. | :32:01. | |
the speech? I thought it was a good speech. I mean, the fact is that | :32:01. | :32:06. | |
what he was saying is we are going to press on. It's quite a difficult | :32:06. | :32:11. | |
speech in that sense. You were right in your analysis that what he | :32:11. | :32:15. | |
was saying was we are going to continue with the policies and | :32:15. | :32:18. | |
therefore, it is a difficult speech as you well know in conference | :32:18. | :32:23. | |
terms to make. I thought the very interesting phrase he used was that | :32:23. | :32:30. | |
the economy is healing. I hadn't heard him use that phrase. It's the | :32:30. | :32:34. | |
official buzzword. Mr Hammond used it in an interview for a Sunday | :32:34. | :32:37. | |
paper. I think even Mr Osbourne used it in another interview. | :32:37. | :32:41. | |
Healing is the new green shoots. Well, it's the new green shoots. | :32:41. | :32:45. | |
It's a better phrase, incidentally than the green shoots. You can tell | :32:45. | :32:51. | |
that to your friend Norman Lamont. I will! I think the issues, you | :32:51. | :32:55. | |
know, we have already gone into the major issue about welfare, it's | :32:55. | :33:00. | |
going to be difficult. And of course the fact of the matter is | :33:00. | :33:05. | |
that we did inherit the most God awful mess from the last Labour | :33:05. | :33:09. | |
Government. I think that is now well-established and I think what | :33:09. | :33:13. | |
Labour have to do is saying, not so much having a bash here and bash | :33:13. | :33:19. | |
there, but what actually would you cancel of the things that apart | :33:19. | :33:22. | |
from 50p tax? We are going to go to Birmingham in a second to hear from | :33:23. | :33:29. | |
our political editor, Nick Robinson. Before I do, Chris Leslie, there is | :33:29. | :33:32. | |
a certain irony about the Chancellor talking about more cuts | :33:32. | :33:35. | |
to come in later years, when we know the deficit in this financial | :33:35. | :33:39. | |
year is rising, not falling. But if I could park that for a minute, | :33:39. | :33:44. | |
because we have talked about it, we are agreed on that... I may need to | :33:44. | :33:48. | |
come back to it. I wouldn't stop you. But will you now have to get | :33:48. | :33:55. | |
involved in this argument over what cuts are going to be made in 2015- | :33:55. | :34:01. | |
16 and 2016-17? Can you avoid saying anything about that. We are | :34:01. | :34:04. | |
two and a half years away from that general election and the beginning | :34:04. | :34:08. | |
of that spending period. The cuts have to be decided or spending | :34:08. | :34:12. | |
plans before. The key thing is this, the reason we have benefits bills | :34:12. | :34:17. | |
soaring so much is because we've got growth totally flat. We are in | :34:17. | :34:21. | |
recession. To hear the Chancellor, you would think that all was rosy | :34:22. | :34:26. | |
in the garden. He didn't mention unemployment, he didn't really | :34:26. | :34:30. | |
confront that issue, as you have parked about borrowing actually | :34:30. | :34:36. | |
quite significantly high, 22% higher this year. Surely what our | :34:36. | :34:42. | |
task is now before 2015 is to focus on job creation. We can start to | :34:42. | :34:48. | |
range in some of that welfare cost, start to boast revenues for the | :34:48. | :34:53. | |
Exchequer. At no point did we hear anything new about job creation and | :34:53. | :34:56. | |
growth. That's the frustrating thing that makes me and others | :34:56. | :34:59. | |
angry outside. They look at this Chancellor and see a man in denial. | :34:59. | :35:04. | |
This is a Chancellor who thinks we can go steady as she goes, no | :35:04. | :35:07. | |
particular changes and we have a crisis of youth unemployment, a | :35:07. | :35:10. | |
crisis of long-term unemployment and it's hitting us all in the | :35:10. | :35:14. | |
pocket because of the welfare bill is soaring, directly as a result of | :35:14. | :35:19. | |
the recession he's caused. Pause your thoughts. We are going to go | :35:19. | :35:23. | |
back to Birmingham. Nick, it's hard to tell from here, you were there, | :35:23. | :35:29. | |
for a man who has to restore his credibility, even popularity with | :35:29. | :35:34. | |
his own party, never mind the wider country, it didn't seem much of a | :35:34. | :35:38. | |
great ovation at the end. Did we get that wrong? No, there wasn't | :35:39. | :35:43. | |
much of an ovation. He choose to walk straight off the stage, | :35:43. | :35:46. | |
presumably knowing that he wasn't likely to get one. He did one | :35:46. | :35:51. | |
simple thing, though, he did something to appeal to an older | :35:51. | :35:55. | |
Conservative audience, most of them in there are, who remember the | :35:55. | :36:00. | |
1980s, when Margaret Thatcher in 1981, two years into Government | :36:00. | :36:06. | |
said, the lady's not for turning. He said, we will press on, we shall | :36:06. | :36:10. | |
overcome. His message in a sense can be boiled down to that. I know | :36:10. | :36:14. | |
it's not going to plan, I know in effect that in a few weeks' time in | :36:14. | :36:18. | |
the autumn statement I may have to stand up and say borrowing is | :36:18. | :36:22. | |
growing, the deficit is growing, debt is growing, but my message is, | :36:22. | :36:26. | |
we plough on. We stick with the course because it is, in his view, | :36:26. | :36:31. | |
the right course. By that autumn statement, though we should start | :36:31. | :36:36. | |
calling it the winter statement, it is on December 5th, he has a | :36:36. | :36:41. | |
strange idea of what autumn is. If we then have the third quarter | :36:41. | :36:45. | |
growth figures, the growth, if there is any in the economy, for | :36:45. | :36:51. | |
July, jug, September. -- July, August, September. If the figures | :36:51. | :36:55. | |
disappoint that will be given what he said today that's a terrible | :36:55. | :37:00. | |
backdrop to the winter statement? It is absolutely a terrible | :37:00. | :37:03. | |
backdrop if it happens. Of course you heard Ministers talk rather | :37:04. | :37:07. | |
carefully about how the economy is healing. They want to avoid using | :37:07. | :37:12. | |
that language again that dates back a while, Norman Lamont in the 1990s | :37:12. | :37:15. | |
talked about green shoots of recovery, got very badly damaged by | :37:15. | :37:18. | |
claiming that too early. They want to avoid that so they're talking | :37:18. | :37:22. | |
about the economy healing. Behind the scenes Minister after Minister | :37:22. | :37:26. | |
says to me we think these growth figures aren't quite right. We | :37:26. | :37:29. | |
think the employment figures look better than the growth figures. We | :37:29. | :37:33. | |
think they're measuring something real, people in jobs. Whereas the | :37:33. | :37:38. | |
so-called GDP figures are a kind of economist's estimate of what's | :37:38. | :37:40. | |
happening in the economy. I don't think the figure will lead them to | :37:41. | :37:45. | |
change their mind tpwu would make the political and economic backdrop | :37:45. | :37:48. | |
harder. The crucial thing they're waiting for is not that figure, but | :37:48. | :37:52. | |
the forecast of the Office of Budget Responsibility. That new | :37:53. | :37:56. | |
office is tasked with a job of saying whether the Chancellor is or | :37:56. | :38:02. | |
is not on course to meet his own fiscal targets. The targets for | :38:02. | :38:05. | |
Government borrowing, in other words F they say he is off course | :38:05. | :38:08. | |
and remember they don't simply say off or on course, they tend to give | :38:08. | :38:13. | |
a percentage. He is this many percent likely to meet this or not | :38:13. | :38:16. | |
to meet it. That will be the toughest thing for him to do. In a | :38:16. | :38:21. | |
sense, he's told us a huge amount actually about the future. He's | :38:21. | :38:27. | |
given us, not specific details but he's said come December 5th, I | :38:27. | :38:31. | |
carry on as I have done up until now, wanting to cut spending by | :38:31. | :38:35. | |
four times as much as raising taxes, but still willing to raise taxes a | :38:35. | :38:39. | |
bit more, willing to cut welfare much more than cutting other | :38:39. | :38:42. | |
spending, because he thinks it's economically right and politically | :38:42. | :38:46. | |
popular. That he will do that on December 5th statement, and in a | :38:46. | :38:49. | |
spending round that will probably follow in the following year in | :38:49. | :38:54. | |
order to be announced as the spending cuts for 2015. So in a way | :38:54. | :38:58. | |
it may feel like you have learned nothing, you have in one sense | :38:58. | :39:06. | |
learned a huge amount. Thank you very much. | :39:06. | :39:12. | |
We will be bringing you here on BBC2 live full coverage of this | :39:12. | :39:15. | |
increasingly important statement, autumn statement, winter statement, | :39:15. | :39:22. | |
I am going to rechristen it, on December 5th. Norman, a political | :39:22. | :39:28. | |
question, how much misery can a Government continue to pile on a | :39:29. | :39:32. | |
nation nation, as an election gets closer, before it's too late for | :39:32. | :39:37. | |
people to think things are getting better? I think it's all down to | :39:37. | :39:40. | |
public perception. I don't think there's any particular time that | :39:40. | :39:43. | |
you can actually put on that. Obviously, by the time of the next | :39:43. | :39:47. | |
election, as we come into the next election, I don't think the opinion | :39:47. | :39:52. | |
polls matter quite so much. But by the time, 12 months, coming into | :39:52. | :39:59. | |
the next election, I think the country have got to see that things | :39:59. | :40:04. | |
are improving. I think before one just throws out Norman Lamont's | :40:04. | :40:07. | |
statement about green shoots, one should remember that there were | :40:07. | :40:15. | |
green shoots. That was the truth. You then went on to lose by the | :40:15. | :40:20. | |
biggest defeat I think since Lord Liverpool. Even you weren't around | :40:20. | :40:24. | |
that time. Not quite. It had nothing to do with that. The fact | :40:24. | :40:28. | |
was, as is recognised, we actually at the end, this is the tragedy of | :40:28. | :40:33. | |
that election, we had the strongest economy we had had for years, with | :40:33. | :40:38. | |
Ken Clarke taking over from Lamont. OK, let's stick with now! | :40:38. | :40:42. | |
The political difficulty I would suggest for Labour it seems from | :40:42. | :40:47. | |
the polls that your leader is not robust -- the lead is not robust | :40:47. | :40:50. | |
tphouf survive an outbreak of growth in the economy if it happens. | :40:50. | :40:54. | |
In other words, a sense that things were getting better. I don't know | :40:55. | :40:59. | |
about that. I think the public want to see a Government that's united | :40:59. | :41:03. | |
and has a plan for actually moving the country forward, not just | :41:03. | :41:07. | |
questions about reducing the deficit and dealing with debt but | :41:07. | :41:10. | |
also where are we going as a society? This is the one nation | :41:10. | :41:14. | |
Britain that Ed Miliband was talking about. But you can't have a | :41:14. | :41:19. | |
Chancellor who is essentially a recession denier, who is basically | :41:19. | :41:23. | |
saying no, well, our plans will continue to change as they set them | :41:23. | :41:27. | |
out in 2010. Somebody who promised to balance the books, remember by | :41:27. | :41:30. | |
2015 and now he can't do that because of all these soaring | :41:30. | :41:35. | |
welfare bills that he's provoked. He is refusing to change course. | :41:35. | :41:39. | |
It's so overwhelmingly necessary to stand up for those aspiring people, | :41:39. | :41:43. | |
the Chancellor talked about people wanting to get on. What about all | :41:43. | :41:47. | |
those people whose careers have been stunted? The 33,000 businesses | :41:47. | :41:50. | |
that have gone bust since the general election? All those one | :41:50. | :41:53. | |
million young unemployed, it's the youngest people actually in society | :41:53. | :41:58. | |
who are really hurting most of all. That's why we have got to get a | :41:58. | :42:02. | |
change of Government because we need an economic plan that can get | :42:02. | :42:07. | |
us on the right... I apologise, I have to go to Birmingham. Thank you. | :42:07. | :42:11. | |
You may want to stay and listen to this, we are going to talk to | :42:11. | :42:18. | |
almost your opposite number. The economic Minister to the Treasury, | :42:18. | :42:22. | |
Sajid Javid. Good afternoon to you. Can I ask you this, the Prime | :42:22. | :42:28. | |
Minister spoke yesterday on the BBC saying that he was rebalancing the | :42:28. | :42:35. | |
economy away from debt, not the deficit, rebalancing the economy | :42:35. | :42:40. | |
away from debt. In that rebalancing, can you tell us by how much he's | :42:40. | :42:46. | |
cut our debt? Well, you will know the first step to dealing with the | :42:46. | :42:49. | |
national debt under the previous Government tripled, is to deal with | :42:49. | :42:52. | |
the deficit. The deficit is the amount that we borrow each year | :42:52. | :42:55. | |
that's added to the debt. So the important thing is that the deficit | :42:55. | :42:59. | |
is falling, and the good news is that in the last two years the | :42:59. | :43:04. | |
deficit is down by a quarter. have talked about how it's rising | :43:04. | :43:08. | |
this year so far. I don't want to go that way. I want to stake with | :43:08. | :43:15. | |
debt. -- I want want to stick with debt. The figures is you inherited | :43:16. | :43:25. | |
a national debt of about 650 billion pounds. By 2015 it will be | :43:25. | :43:28. | |
1.4 trillion. In other words, it will double under your watch. Could | :43:28. | :43:33. | |
you explain to viewers how that's rebalancing the economy away from | :43:34. | :43:38. | |
debt? You are doubling it. Well, actually first of all we inherited | :43:38. | :43:43. | |
a national debt of about 920 billion, about 100 billion higher | :43:43. | :43:47. | |
than the number you gave. When the previous Government came to power | :43:47. | :43:51. | |
in 97 it was about 300 billion. First of all, it tripled and that's | :43:51. | :43:54. | |
important because that shows the size of the mess that we have to | :43:54. | :43:57. | |
deal with. Under this Government clearly the debt will continue to | :43:57. | :44:01. | |
rise until the deficit is brought under control. I think as the | :44:01. | :44:06. | |
Chancellor just said in his speech, that you can't turn around a | :44:06. | :44:11. | |
deficit which is equal to 10% of GDP, the largest of any | :44:11. | :44:14. | |
industrialised country overnight. It has to be a gradual process. | :44:14. | :44:17. | |
That's what we have been doing. That's why we have cut it by a | :44:17. | :44:21. | |
quarter. The Chancellor is right that we have got to continue with | :44:21. | :44:25. | |
that strategy because the first step to lowering debt is to lower | :44:25. | :44:28. | |
the deficit and that's what we need to do to build business confidence. | :44:28. | :44:32. | |
You are quite right, the eventual debt was around 900 billion, it was | :44:33. | :44:37. | |
about 650 billion before the efforts that were taken to stop the | :44:37. | :44:40. | |
banking system collapsing and we went into recession. I take that. | :44:40. | :44:46. | |
My point to you is that it's continuing to rise to reach 1.4 | :44:46. | :44:52. | |
trillion. I don't understand how that's a rebalancing this side of | :44:52. | :44:56. | |
2015 but I will be happy to listen to an explanation. Could we now | :44:56. | :45:02. | |
both admit because we know it to be true, that you will fail to hit | :45:02. | :45:12. | |
:45:12. | :45:18. | ||
your target of reducing debt by We have a clear target. Because it | :45:18. | :45:21. | |
is independent, unlike previous governments where epegsly under | :45:21. | :45:24. | |
Gordon Brown he would just fiddle the numbers who suit whatever he | :45:24. | :45:29. | |
wants to say, this Government can't do that. We set-up an independent | :45:29. | :45:34. | |
vigorous process and we will have to see what they say in December. | :45:34. | :45:39. | |
We come back to this phrase. I ask you again if you are adding, let's | :45:39. | :45:43. | |
take your calculations, half a trillion more to the national debt, | :45:43. | :45:47. | |
if as is clear to everybody including the Financial Times that | :45:47. | :45:52. | |
you will fail to hit your debt target, I don't understand how you | :45:52. | :45:58. | |
are making progress on rebalancing the economy away from debt? | :45:58. | :46:03. | |
Let me explain that, Andrew. The deficit is the key part to getting | :46:03. | :46:06. | |
the debt under control at the beginning. The deficit is the | :46:06. | :46:12. | |
amount we add to the debt each year. The deficit was �159 billion when | :46:12. | :46:19. | |
the Government came to to power it is down by a quarterment that will | :46:19. | :46:25. | |
keep coming down. That's the objective for this Government. | :46:25. | :46:29. | |
Clearly, you cannot get rid of a deficit of that size overnight. No | :46:29. | :46:32. | |
one would recommend that. As the Chancellor just said, we have got | :46:32. | :46:35. | |
to deal with this problem because we can see what happens to | :46:35. | :46:38. | |
countries that don't have a credible plan, although it takes | :46:38. | :46:42. | |
time, it is a credible plan, the financial markets understand that | :46:42. | :46:46. | |
and that's key as we are having to sell bonds in the market and if we | :46:46. | :46:56. | |
:46:56. | :46:57. | ||
Apology for the loss of subtitles for 53 seconds | :46:57. | :47:50. | |
Are you predicting the deficit will be smaller this year than last year | :47:50. | :47:55. | |
despite the figures of the first five months? Because we have an | :47:55. | :48:00. | |
independent process of setting - coming up with numbers and setting | :48:00. | :48:04. | |
predictions it's not my job. can't do that? What I will tell you | :48:04. | :48:10. | |
is that I think you have Chris Leslie there, the independent IFS | :48:10. | :48:15. | |
has said this year under Labour's plans the debt would be 200 billion | :48:15. | :48:18. | |
higher than under this Government. Although it's taken us time to | :48:18. | :48:21. | |
bring it under control, the point is that under Labour it would be | :48:21. | :48:24. | |
far higher which means our economic challenge would continue for a lot | :48:24. | :48:29. | |
longer. Let me put that point to Mr Leslie? This is a man and | :48:29. | :48:32. | |
Government that don't understand what drives a deficit and drives | :48:32. | :48:37. | |
the debt situation. Not a single mention there about the health of | :48:37. | :48:41. | |
the economy, if you have a poorly economy, you are going to see your | :48:41. | :48:49. | |
deficit... What about the point on the IMF forecast? There's been | :48:49. | :48:54. | |
forecasts have been proven flakely before. They were saying... | :48:54. | :49:00. | |
would be higher. Otherwise you macro economic stimulus is | :49:00. | :49:09. | |
meaningless. What we have to do is have a focus on long-term deficit | :49:09. | :49:16. | |
reduction. You have to stimulate the economy, get people back into | :49:16. | :49:20. | |
work. The economy shapes the deficit. They don't understand that. | :49:20. | :49:30. | |
:49:30. | :49:37. | ||
$:STARTFEED. They think the answer to a debt problem is more debt. | :49:37. | :49:42. | |
The Chancellor maybe the main event in Birmingham today, but other | :49:42. | :49:45. | |
Cabinet Ministers are getting a look in on the conference stage. | :49:45. | :49:52. | |
This morning, the new Transport Secretary Patrick McLoughlin gave | :49:52. | :50:00. | |
his speech. If I may, I would like to tell you | :50:00. | :50:04. | |
moi my story -- you my story. I am the son of a miner. I am the | :50:04. | :50:09. | |
grandson of a miner. I went to work in the Staffordshire coalfields up | :50:09. | :50:17. | |
the road from here. Before I go on, I want to make one point clear - if | :50:17. | :50:24. | |
you want to understand one nation, Mr Miliband, I'll show you one | :50:24. | :50:34. | |
:50:34. | :50:35. | ||
nation. APPLAUSE | :50:35. | :50:38. | |
He is He is standing at this podium. I am a one nation Tory and it is | :50:38. | :50:40. | |
this party over the generations that has given people the | :50:40. | :50:50. | |
:50:50. | :51:08. | ||
opportunity from whatever their background. | :51:08. | :51:09. | |
APPLAUSE Now, some things have changed since | :51:09. | :51:12. | |
I first went on the ground at the Upton colliery, in the year that | :51:12. | :51:15. | |
Margaret Thatcher won her first general election, I put on a few | :51:15. | :51:18. | |
pounds, well a few more than that! I put on a suit. My hair has gone a | :51:18. | :51:21. | |
bit greyer, but one important thing has not changed and that is our job | :51:21. | :51:26. | |
in Government today is exactly the same as it was all those years ago. | :51:26. | :51:32. | |
To deal with our debts, to go for growth, and to get this country | :51:32. | :51:38. | |
moving again. And as Transport Secretary, I will be doing my bit. | :51:38. | :51:45. | |
I don't hide from the challenge. There will be setbacks as well as | :51:45. | :51:51. | |
successes. Last week, when we hit one on the West Coast line I came | :51:51. | :52:01. | |
:52:01. | :52:02. | ||
straight out and confronted it and we will put things right. | :52:02. | :52:04. | |
APPLAUSE Well, that was Patrick McLoughlin | :52:04. | :52:06. | |
on the conference stage and he joins us now from Birmingham. | :52:06. | :52:10. | |
Welcome to the Daily Politics. Let's talk about the West Coast | :52:10. | :52:14. | |
Main Line rail franchise, Philip Hammond said yesterday he would | :52:14. | :52:18. | |
have checked the figures on a deal like this when he was Transport | :52:18. | :52:25. | |
Secretary. Did just teen Greening check it? Ministers asked for | :52:25. | :52:30. | |
robust reassurance. They were given that. The errors that were exposed | :52:30. | :52:35. | |
last week which I made the announcement, came out late after a | :52:35. | :52:40. | |
substantial getting ready for a legal case. As soon as I saw the | :52:40. | :52:44. | |
legal advice, I made the announcement I made. | :52:44. | :52:48. | |
Justine Greening didn't check the figures, she just took the advice | :52:48. | :52:52. | |
given to her? No, it wasn't a Minister for Ministers to check | :52:52. | :52:57. | |
that advice. The way in which ministers have to deal with these | :52:57. | :53:00. | |
procurement measures, they are kept separate from the process and | :53:00. | :53:04. | |
actually, if ministers did start to get involved in the process down | :53:04. | :53:09. | |
the line, I think there would be acsays that somehow we were trying | :53:09. | :53:12. | |
to influence the outcome. There has to be a completely impartial | :53:12. | :53:16. | |
approach by ministers to the companies which are bidding and | :53:16. | :53:21. | |
that's what Justine did. Is it fair to say that civil | :53:21. | :53:23. | |
servants, the ones dealing with the figure that is you are talking | :53:23. | :53:28. | |
about are to blame? Surely, as a minister, as a Secretary of State, | :53:28. | :53:32. | |
you are responsible for what goes on in your department? | :53:32. | :53:37. | |
Well, look, I set-up two inquiries. One to look at happened as far as | :53:37. | :53:41. | |
the department is concerned and the other to look at the wider issues | :53:41. | :53:45. | |
for franchising and I don't want to prejudge the outcome of those | :53:45. | :53:51. | |
inquiries. This particular lesson, this issue I have been hit and the | :53:51. | :53:55. | |
lessons I have got to learn from it and the lessons the Government has | :53:55. | :54:00. | |
to learn are serious and a lot of money has been wasted and I deeply | :54:00. | :54:07. | |
regret that and it is untenable. Are you happy to say that ministers | :54:07. | :54:12. | |
must take some responsibility for that too? No, I want to see what | :54:12. | :54:16. | |
the inquiry actually comes forward with. As I say, ministers do not | :54:16. | :54:19. | |
get involved in the detailed process of of what happens with | :54:19. | :54:22. | |
those bids. Let's look at the franchise system | :54:23. | :54:27. | |
then. Does the system need to to change? Is it fundamentally flawed | :54:27. | :54:30. | |
to expect companies companies bidding for the franchises to | :54:30. | :54:35. | |
predict revenue revenue over a period of 15 years? Well, what I | :54:35. | :54:42. | |
say, there are different lengths and they are not 15 years. OK, but | :54:42. | :54:46. | |
it is a long period of time? let me deal with the point. Because | :54:46. | :54:51. | |
that's what I set-up an inquiry. I don't want to prejudge what the | :54:51. | :54:54. | |
inquiry will tell me. It would be silly to say, "I have set this | :54:54. | :55:02. | |
inquiry up. By the way this is what I think what has gone wrong in this | :55:02. | :55:06. | |
process process." That's what the inquiry is for. I asked a respected | :55:06. | :55:11. | |
person from the rail to do the one on franchising and I I asked | :55:11. | :55:14. | |
someone else to do another one on the department. | :55:14. | :55:19. | |
What about asking Virgin to continue to run the line while you | :55:19. | :55:24. | |
sort this out? There are, I will be making a statement next week to | :55:24. | :55:28. | |
Parliament and I will be able to deal with this issue then. | :55:28. | :55:32. | |
So you will detail whether Virgin will be continuing to run that | :55:32. | :55:34. | |
line? I hope to be in the position to | :55:34. | :55:39. | |
make a full stapelght next Monday to Parliament -- statement next | :55:40. | :55:43. | |
Monday to Parliament and I hope to set out the position. | :55:43. | :55:49. | |
The other is that State rail takes it over. When it comes to the to | :55:49. | :55:59. | |
:55:59. | :56:01. | ||
the franchises being open again for bidders, why didn't you let | :56:01. | :56:06. | |
directly operated bid for that too? The private sector has done a lot | :56:06. | :56:09. | |
to increase passenger numbers. The rail industry in this country has | :56:09. | :56:14. | |
been a success, because we have seen growth in rail travel like no | :56:14. | :56:16. | |
other European country and that has been brought about having the | :56:16. | :56:19. | |
private sector involved. You have the French and the Dutch | :56:19. | :56:26. | |
State owned companies bidding for the franchises, why not have | :56:26. | :56:34. | |
Directly Operated Rail? We want to get into the sector Directly | :56:34. | :56:42. | |
Operated Rail. The Government underwrites it. While we have got | :56:42. | :56:45. | |
Directly Operated Rail operate ago particular franchise because under | :56:45. | :56:49. | |
the last Government the franchising system that they had failed. | :56:49. | :56:52. | |
You would be happy for foreign State owned companies to run the | :56:52. | :56:57. | |
line rather than our own? I would be happy to get good | :56:57. | :57:02. | |
railway services in this country for the public to use. The taxpayer | :57:02. | :57:06. | |
is putting a huge amount of money into the rail lines and what I have | :57:06. | :57:12. | |
got to do, what my job is to do is to make sure the taxpayer gets a | :57:12. | :57:15. | |
return for the investment it makes and we get good services too. | :57:15. | :57:25. | |
:57:25. | :57:29. | ||
But why not open it up to our own state owned Directly Operated Rail? | :57:29. | :57:33. | |
I would prefer to see private companies running it. | :57:33. | :57:38. | |
Timetable for the inquiries. Can you tell how long they will last? | :57:38. | :57:42. | |
The first inquiry should report to me by the 31st October. That is not | :57:42. | :57:48. | |
far away. That's the departmental one. The Richard Brown inquiry, I | :57:48. | :57:53. | |
asked him to report by the 31st December. They are on tight time | :57:53. | :57:57. | |
scales. But I hope they will be able to to report in that time. | :57:57. | :58:01. | |
On to rail fares. Now there has been discussion about rail fares | :58:01. | :58:06. | |
being capped at 1% over inflation. It was going to be at 3% over | :58:06. | :58:10. | |
inflation. What changed your mind? Well, we are looking, we are always | :58:10. | :58:13. | |
looking at the best way we can help the consumer. And that's what | :58:13. | :58:18. | |
changed our minds. We want to help the consumer. Those people as the | :58:18. | :58:22. | |
Chancellor said today, the hard- pressed workers doing the right | :58:22. | :58:26. | |
thing. The commuter and the long distance traveller too. | :58:26. | :58:29. | |
Thank you very much. We have run out of time. | :58:29. | :58:34. | |
Just to find out the answer to our quiz. Which famous name is David | :58:34. | :58:43. | |
Cameron following on Twitter? Do we know what the answer is? | :58:43. | :58:50. |