03/12/2012 Daily Politics

Welcome to the Daily Politics. MPs have denounced multinational

companies who pay little or no tax on their earnings in Britain as

immoral. In a report, the Public Accounts Committee describes some

of the evidence it heard from large corporations such as Starbucks and

Google, as difficult to believe. All eyes will be on George Osborne

on Wednesday when he delivers his Autumn Statement. We'll be taking a

look ahead. Playing tough with Israel. Its ambassador in London

has been summoned to the Foreign Office, following the Israeli

government's decision to build new settlements in east Jerusalem. And

we'll be asking if God and politics All that in the next hour. And with

us for the whole programme today is the vicar, Giles Fraser. He's a

regular contributor to the Today programme's Thought for the Day. So,

we're expecting big things from him on today's Daily Politics. Now,

first this morning, let's talk about sentencing because a range of

new criminal offences and sanctions come into force today in England

and Wales. They include a new offence of aggravated knife crime,

which would in most cases result in a custodial sentence, and mandatory

life sentences for anyone committing a second serious violent

or sexual offence. The Government has also introduced what are called

Extended Determinate Sentences, under which offenders must serve at

least two-thirds of their prison term. This is what the Justice

Secretary, Chris Grayling, had to say this morning. There are some

areas where, society as a whole, expects politicians to say there is

a minimum - a clear message to people who are attempted to carry

knives and wave them around in an aggressive way - that you should

and would go to jail. It is not about saying to the judges, you

lose discretion. In some cases, sentences would be much longer.

ETA's about saying, when somebody behaves in an aggressive way with a

knife, they should and would go to jail. What is your response

generally? I live in a part of South London Wedd there is knife

crime. I understand the problems it causes in a community. The question

is whether the politicians should be doing the sentencing for the

judges. They should be free to make decisions on a case-by-case basis.

What is going on is politicians same, we do not trusted to make

these decisions. The public would agree with politicians in many

cases where they fear of not tough enough sentences are brought down

on the offenders. It is dangerous to bandy about slogans. I think we

ought to trust our judiciary more than politicians, who are

grandstanding electioneering on a case-by-case basis. They do a good

job in tackling things like this. You have said you do a good job

with victims of knife crime. It is a very violent and often fatal

crime. It should be treated consistently. That is perhaps where

judges have fallen down. If they were given a guideline on a minimum,

perhaps they can use their discretion. If people have done a

terrible offence, they will go to prison for it and for a long time.

The question is, whether we trust the judges to make decisions or

prefer politicians to do it. What do you say to Sadiq Khan? With the

two strikes policy, it is only when you commit a second violent offence,

you get alive sentence. Innocent victims of the second offence with

be right in questioning why more was not done to stop after the

first offence. An enormous amount has to be done to tackle problems

in the inner cities. It is not necessarily through the judiciary

and through the loft. Some of these problems are to do with the way

inner-cities are constructed. We need to look much more broadly at

the problems in the inner-cities, which create conditions for life

crime. On to something somewhat different. Now it is fair to say

the Public Accounts Committee was not very impressed with a number of

very large corporations who gave evidence to MPs last month. This

morning the Public Accounts Committee described it as

unconvincing and accused Amazon, Starbucks and Google of using the

letter of tax laws both nationally and internationally to immorally

minimise their tax obligations. Here is a taste of the committee in

action. If you have made losses in the UK, which is what you are

filing, over 15 years, what on earth are you doing doing business

here? We must be in the UK to be a successful global company. But you

are losing money. Why not focus on the US way you say you are making

money? We have had tremendous optimism about our company.

have given it 15 years and you are still making losses. Yet you are

carrying on - if it is true. I will have to go to Victoria Street and

had a Starbucks coffee. You are in such a bad way. 14 years of trading

in this country and you have paid 1.6 million in corporation tax. You

are either running the business very badly, or there is a fiddle

going on. Your entire activity is here and you pay no UK tax. That

really riles us. We do pay corporation tax. Our accounts...

Tiny - a tiny amount. I love the service you provide. Having bought

this biography of John Major, you may be interested also in 50 Shades

Love to -- I am interested in how you paid so little tax. We do pay

corporation tax and tax on any profits that we make. The rough

treatment in the Public Accounts Committee. Well, today, the Public

Accounts Committee called for a change in the mindset at Her

Majesty's Revenue and Customs, so that it became more aggressive in

its policing and prosecuting companies that paid too little tax.

And the Chancellor, George Osborne, has announced plans for a �10

billion tax dodge clampdown. We're joined now by the chair of the

Public Accounts Committee, Margaret Hodge, and by the Conservative MP,

Jesse Norman. The Government is doing far more on tax avoidance and

evasion. The Government has committed more money to HMRC. The

number of prosecutions for evasion has quadrupled. What else do want

them to do? Last year, they collected over �6 billion less in

corporation tax than they did the year before. That is year 11/ --

year 11 Macro/yr 12 Macro. That is 2011/2012. It is about whether or

not a global company pays corporation tax. It is not fair to

small businesses, the bookshop - local bookshop - having to compete

with Amazon. That is not fair for the corner Copy Shop -- coffee shop

to compete. You have talked about naming and shaming. We will find

out whether that is a good line to tread. Also about taking more of

these cases to court. Can you do that with avoidance? HMRC can be

tougher. It is not a black-and- white issue. At the moment, it is a

bit like David and Goliath with the company is being supported with

very experienced, highly paid accountants and employers. We went

two up the game from HMRC. They can take more cases to court. They're

not taking any avoidance cases to court. We buy it a lot of stuff and

we will not buy from companies... You want to advocate boycotts?

is good citizenship. There is stuff the Americans and Germans do now,

which we could do. The Americans are much more open with the

accounts. The Germans, in some of these devices that companies do,

they have just out log them. So could we. Let's pick up on the way

you deal with it. Would you like to see companies named and shamed and

cases going to court? It is not a voluntary thing, paying corporation

tax. ICU to Margaret full of the work she has done. There is no

doubt there is a lot of avoidance that is abusive avoidance of tax. -

- I salute Magritte for the work she has done. The corporation tax

held up better than she expected because rates came down. I am not

in favour of boycotts. They are not found guilty of breaking any laws.

It is fantastic that Starbucks has started to come to the table.

Public information has been put on the table by good journalism and

not because the Government has got into the very messy, and possibly

dubious business, of naming and shaming. This is the situation we

should be handing over. We should be allowing our excellent press to

ferret out these facts. Do you a Greek - if you say you admire what

Margaret Hodge and the committee have done - do you accept the

Government has turned a blind eye to it up until now? They're

completely different from each other. HMRC was the flagship of the

British public administration. It has gone through a series of minor

disasters over the last decade. Let's be clear. Under the last

government, it was merged with Excise. Vast numbers of people were

let go, including some of the best tax inspectors. What is happening

now is a slow process of pulling it back to the dignity and energy it

had before. Do you see it as a disincentive - naming and shaming

companies - might they withdraw their business? Is it bad idea?

Company should not be paying tax out of the goodness of their heart.

They should not do this because of public pressure. Paying tax is not

something there needs to be a consumer boycott about in order to

get everyone to do it. That needs to be changed. We must find the

system in which people pay their fair share of tax. I am not an

accountant. It is not beyond the wit the people who can move money

around so brilliantly to avoid tax to find a way in which people can

pay their fair share. It should not be about boycotts or four Starbucks

to very generously pay their tax. Can we unilaterally design a system

which make sure that big multinationals paid their full

allocation of tax, even if they do not have to? You cannot get rid of

all of it. You do need co-operation. What to do not want to happen is

for that to be used as an excuse for inaction in the short term.

About naming and shaming, we name and shame benefit cheats. By now

taken through the courts. If we took more cases through the courts

on avoidance - not evasion - those companies that get caught under

that also thought to be named and shamed. I agree we should get the

law right. But does not like paying PAYE. This is negotiation between

HMRC and the global companies about what is admissible and what is not

admissible. There, I do not think we are tough enough. HMRC needs to

get a grip foot of it is not just resources, it is culture. -- and

HMRC needs to get a grip. benefit cheat is someone who has

been found guilty of a process between tribunal and lot and has

been named and shamed when their name has been made public anyway.

They have not been found guilty of any crime. It cannot be found

guilty of a crime on avoidance up for there is a raw on that. The

Government is bringing in a general anti-avoidance rule. -- on

avoidance. There is a rule on that. I love the idea it is a question of

negotiation. The next time the tax man rings me up and asked me to

take my tax, I will say, let's discuss a cup of coffee. The idea

that this is compared with benefits cheats - people who are poor and

vulnerable without brilliant lawyers - are they the ones who get

dumped upon. Those with fantastic lawyers pay nothing will stop it is

much more expensive to be poor. When you said they need to be

tougher and negotiate harder, if you negotiate, you will have deals.

HMRC has been criticised for making deals. There would be a lack of

consistency and transparency and you would get the same problems all

over again. It is interesting territory. The moment you get

transparency, Starbucks comes to the table. This is so complicated.

Companies can quite legitimately say, if they are global companies,

some of their expenditure is Head Office expenditure. It depends

where that is amazing it is in tax havens. What you decide his profits

from real trading in the UK is difficult to define. That is what

the hassle is over. At the moment they are hassling much more

strongly. They are of the Goliath The poorest in society, the level

above that, have difficult tax rates, and it is true that some

very large companies do pay their tax. We are picking on the

multinationals as a result of an enormously complicated tax codes

among many jurisdictions. We need to be tough and clear and properly

organised. Margaret Hodge, on your own tax affairs there have been

reports that a company which you have major financial associations

with does not pay any UK tax. wrong, scurrilous and I am afraid

it is defamatory. The what are you doing in terms of responding?

Taking action. I hear that loud and clear. This government has been

very clear about trying to appear fair. We will hear more about that

in the Autumn Statement. Do you think fairness just comes down to

equality? It is an important part of equality. The issue with paying

tax is the extent to which these large companies contribute to the

paying good. I have taken over the fairness commission in Tower

Hamlets. Half the children living child poverty there and yet the

average wage for the people who work there is �70,000 a year,

because of Canary Wharf's. It is extraordinary. The money does not

trickle down to the poorest. The this trickle-down economics, the

idea that the wealthy in Canary Wharf spend their money, but they

do not spend it to the benefit of the people who live near them and

the other low earners in the capital, but the money does not

benefit the wider community? There is a lot of truth in that. Trickle-

down has never been good economics, least of all now, because if you

look at the very richest, they live in a payment world of their own.

They do not spend and when they spent at the margin, they are

paying for things and the only way you can tax them is on VAT that

gets paid by all members of society. That does not work. The great

tragedy of the current situation is that we have allowed this crony

capitalism, as I have described it, to blow good capitalism, are people

working in a day's work for eight day's pay, generating social

benefit. -- a day's pay. Labour failed. They closed the gap a tiny

bit but in terms of... Over a 30 year period, it was not very

impressive. Is that because you cannot successfully legislate?

cannot legislate but you can run expenditure programmes and that is

how you use goods -- good public spending, to raise the aspirations

of the poorest in community. What is sad is that we never Keith these

things time -- we never gives. I was involved in Sure Start and the

only use programs and I think they would have Paul Ince -- they would

have borne fruit, and now they are closing, and all of that investment

in children under five, wasted. We could have transformed their life

chances. Lots of studies suggested that represented poor value for

money. No, that is not true. key thing is to have an ethos of

people who have made money giving back. Briefly, do you think

unfairness has become the norm in society and everybody accepts that

that is the way it is? No, but I think we are at risk of it. One of

the hopeful things that may come out of this deep recession is a

problem we calibration of public values. Do you think unfairness is

the norm? I think we live in a very unfair society at the moment,

shockingly unfair for many people. If you live in Notting Hill and you

get the Central line to Bethnal Green, 10 stops and you use a year

of your life if you live there, from Notting Hill to Bethnal Green

-- you lose a year. How unfair is that? Is it the norm? I think

fairness is the one value that people care most about, so the

pursuit of SEN this I think brings people together. -- the pursuit of

fairness. Thank you. The Israeli ambassador in London has been

summoned to the Foreign Office, following the Israeli government's

decision to build new settlements in east Jerusalem. Ministers have

warned Israel that going ahead with the plans would provoke a strong

reaction. Or world affairs correspondent is outside the

Foreign Office. The Israeli ambassador has been summoned. That

is one thing. Withdrawing Britain's ambassador to Israel is another.

Will that happen? It does not look like it at the moment. Officials

say they are not at that stage. It is in the realms of speculation.

There has been a statement from Number Ten saying they are not

proposing to do that. However, officials say they want to see how

Israel reacts. QB Britain, France, others are piling on the pressure

to reconsider this decision to build 3,000 new homes in a very,

very sensitive area in east Jerusalem and the West Bank. To see

whether Israel will reconsider this. If they don't, then I think that

Foreign Office are certainly making it clear that other steps will be

taken. Whether that will lead to the withdrawal of the ambassador to

Israel is not clear. It is still a strong stand by the British

Government. Why now particularly, when settlement building by the

Israeli government is not new? Why make this strong stand now? It is

the scale of what the Israelis are planning to do. 3,000 new homes in

an area which the Palestinians say would effectively cut the West Bank

in two and woodcut of East Jerusalem from the West Bank, and

the Palestinians want East Jerusalem to be the capital of any

future Palestinian state -- and it would cut off East Jerusalem from

the West Bank. This is particularly sensitive. The other thing is, at

the moment be international community is hoping, after the

conflict we have seen in the Gaza Strip and having negotiated a

ceasefire, the international community wants to see some renewed

effort for negotiations and I think the belief is that if Israel were

to go ahead with the settlement building programme, that would stop

any chances of any resumed negotiations, so they are piling on

the pressure. Not just Britain. France as well. Everyone is looking

out towards the United States. that is the key, isn't it. Britain

and France have made the strong and symbolic dance but it is what the

US does that counts. -- symbolic stance. They are the only ones that

can put real pressure on. Not the only ones but certainly the

Americans are absolutely the key country because they provide so

much financial assistance every year to Israel and so that

relationship is vital. Israel generally have to listen when

Washington tells it something. We saw that in the last few weeks.

Hillary Clinton's arrival in Israel, going to Egypt, and her role was

pivotal in brokering the ceasefire that ended the recent conflict, so

they can apply a lot of pressure. The question is whether they will

do in this case. Israel's reviewed the Palestinian moved for increased

recognition at the UN as a blow for peace negotiations. Do you see this

as a response to that? It is almost a petty act of revenge, and not

petty, it is not insignificant, for what happens at the United Nations.

Israel saw that as provocative. is very popular, it has widespread

support. Not from the US. No, and six other countries. It was eight.

Building 3,000 new settlements east of East Jerusalem is an extremely

provocative act that the Israeli government really have to

demonstrate that they believe in the peace process. This is a wilful

defiance of the will of the international community, that there

needs to be a return to negotiation in that part of the world. The do

you think the proposals for a two state solution is in tatters now?

hope not. I know that is the view of the UN, that it is almost dead.

I really hope that is not the case. The two estate solution seems to me

to be the only way to go, the only thing I can think of to make sense

of this -- to state solution. Israel say they are committed to

this. Apparently but you have to judge them by their actions and

this is defiant of any attempt to construct a two state solution. I

feel great despair for peace in the Middle East, for both Israel and

Palestine. Frankie. -- thank you. Two subjects almost guaranteed to

spark controversy, politics and religion, which is why a lot of MPs

try very hard to avoid mixing them. For a long time, it seemed to be an

unwritten Westminster rule that personal faith was just that,

personal, with politicians from Tony Blair down reluctant to speak

publicly about their beliefs. But some people think that may be

changing. Holy Trinity Church in London. If

you want to do God, this is a pretty good place to come. It was

Alastair Campbell who famously said "we don't do God", but rather than

making a grand statement of intent, he was just trying to finish an

interview, but it was an interesting point. Should personal

faith and policy-making be kept well away from each other?

Allister's old boss felt he needed to wait until leaving office before

converting to Catholicism and speaking frequently about his faith.

If you are in the American political system, you can talk

about safe and it is something people respond to naturally. You

talk about it in our system and people think you are a matter.

those times could be changing for. I think there are more politicians

who are actively religious in parliament than in the general

population, and I think that is a growing phenomenon, particularly

with the new Conservative intake. Their religious beliefs are very

important for them and informs their politics. But only one of

them leads the party. Only David Cameron is a confirmed churchgoer

but he does not go as often as he would like. Does our political

system allow politicians to do God. To some degree. Most members of

parliament have values and beliefs which stem either from religion and

safe or a belief in certain ways of living, whether they are humanist

or everything else. We may describe it as something else but we

probably do do religion, perhaps not necessarily God. But some

people think that is not all were as healthy. There is a danger when

people allow their religious beliefs to override empirical

evidence. The abortion debate, it is clearly people's religious

argument that abortion is wrong which leads people to try to make

the facts fit their argument. people and politicians come to

decision making opportunities with principles, beliefs, values, and it

is important that that is taken into account. Otherwise what is the

point of politicians? And she has no qualms about politicians telling

God's voices on earth what they should do. We should debate whether

we should disestablish the Church of England, which politicians

should not interfere with, but it is part of the constitutional

settlement in the country. The Queen is the sovereign head of the

Church of England, so it is right that parliament puts forward its

use to the Church of England about how it should behave. They say you

should never discuss religion and politics in the pub. In parliament,

God seems to be everywhere, whether This is probably your subject when

it comes to whether religion and politics should mix. Was Alastair

Campbell right but you should not do religion if you are a

politician? My problem with politicians not saying anything

about got is that I want to know where they come from. -- about God.

I want to know what motivates them - the values. The idea it is an

important part of what motivates them and they are not prepared to

talk about, I find quite difficult. I want the menu laid out before me

and what motivates people. I can then decide if I want to vote for

them or not. There will be a lot of people out there who are not

religious, who will say, I do not want a member of parliament or a

minister who is guided by religious belief rather than the evidence

before me. Everybody comes from a... They have a background of values.

Something which fundamentally informs them. I want to know what

shapes people morally and politically. If people are

embarrassed by where they come from, it does not seem to need to be a

very good reason to separate religion and politics. It is a

pragmatic reason and not a principled reason. They should be

separated at the level of policy will start it is essential. I have

thought about this for a very long time. I am against the issue of

bishops in House of Lords. On a personal level, I want to know

where they come from. You want more honesty. People should say if they

have a religious background. When it comes to issues like abortion,

and when it comes to issues of gay marriage, or even religious beliefs

in education - if it is based schools - do you think people with

strong beliefs should not be serving in those positions in

government? They would not be able to distinguish between personal

believes and what is in the interests of the country at large.

I have a view on all of those subjects will stop if I was

standing for office, I would tell people my view on all those

subjects and see if I had got voted for or not. You have a thing called

a collective responsibility. That is not specific to people with

religious faith. That would be the same for someone with passionate

humanist values. Are we going to be open about what motivates us or are

we going to hide it? The problem with, we do not do got we will not

talk about him, it is like people not displaying their moral workings.

-- not do got. With the Iraq war, many people were feeling he was

being guided to match by a zealous belief. A zealous belief in George

Bush! Whatever it was. Yes. If people had voted for him on not

voted for him, that would have been a very straightforward way to go. I

disagree with Tony Blair and his decisions on the war. I would have

liked again to have seen his workings - his theological workings

of. On that one, they were over done. There was a lot of

scaremongering. People hearing whispers in their ear from got to

do this. That is not how it works. It is about real fundamental values

are, where you are formed and way you are shaped. We'll be following

be Twitter? It is not going to be very exciting, we get? -- Will you

be following him on Twitter? last week, Westminster was

dominated by the Leveson Report into press standards. Will it be

different this week? Well, no, because this afternoon MPs debate

Lord Justice Leveson's Report on the reform of press regulation, as

their party leaders attempt to reach a consensus on the way

forward. Home Secretary Theresa May has until 3pm to decide whether to

appeal against a recent judgment preventing Abu Qatada's extradition.

The season of goodwill hits Downing Street this evening, as this which

is flicked on to light up the Prime Minister's Christmas tree. On

Wednesday, we find out whether it is Scrooge or Santa as George

Osborne delivers the Autumn Statement and we find out what the

Dickens is going on with the deficit reduction plan. On Thursday,

the European Council is due to respond to the UK's continuing

defiance of the Court of Human Rights ruling on voting rights for

prisoners. But, later that day, harmony will prevail with the

parliamentary carol concert, when for at least once a year MPs of all

parties can be heard singing from Joining as is James from the Daily

Telegraph and Kieran from the Financial Times. It does not look

good in terms of George Osborne and his targets. What do you think he

will do in order to try and present and -- a credible plan? It is a

good question. One thing we must remember is what Nick Clegg said

during the Lib Dem party conference. He said he did not want to see a

penny more of a penny less taken away from the fiscal plan. If he

gets his way on Mant, George Osborne will not do much more to

pay off the debt. -- on that. What George Osborne has to say is, I

have got my plan, I am continuing to cut. I will carry on doing that.

That is the only way to eliminate the deficit as we understand it now.

One big announcement he will make on Wednesday is he will not hit his

target of having debt falling as a ratio of GDP by the end of

Parliament. That will pass a lot of people buy. It is technical

measurement. It is worth remembering that on the two key

tests of his fiscal plan, the one to have debt falling and also to

have eliminated the structural deficit by 2014, he has failed on

them both. Having set them out, some of it might pass people buy.

Economically, let's put that to one side. Politically, what does he

have to do? He needs to try to distract from the points Keiran is

making - the economic signs of failure. He needs to last longer.

He has missed targets. The politics, he needs to say that with one hand

he is smiting welfare claimants. With the other, he is smiting the

rich. The idea it is he can look middle England in the eye and say,

I am in the Middle with You. I am against the undeserving poor and

the undeserving rich. If he gets to Wednesday night, a Thursday morning,

and he is being attacked by left and right for the Autumn Statement,

he will be happy with that. Let's take a look at Leveson. Will the

debate achieve anything? Very little. We had faith they have -- a

flavour of it in the debate following the announcement of a

report last week. It became a slanging match across the Commons

was up 1 1/2 said they want statutory regulation and the other

half said they did not. Is the main body of opinion, as far as the

Leveson Report those in the House, it is a shifting? There is a

gradual change and a wave. David Cameron came out very quickly and

said, no. -- under way. Lots of people thought that was bowled. He

was going up against hacked off Hugh Grant and the others. Since

then, a few signs that, in Parliament, opinion is drifting his

way. Some of the Conservative backbenchers who had previously

suggested he was in favour of a statutory option, they are saying,

maybe not. Ed Miliband is trying to calibrate his position. He had

given the impression that the Labour Party was signing up to

Leveson are. He is now saying, if you got that impression, it is not

the case. We're more questioning in our approach. The direction of

travel has gone a little bit in the direction of David Cameron but only

slightly. The idea of there being a new law, at some underpinning, at

layback and the Liberal Democrats together could outvote the Prime

Minister. -- Labour and the Liberal Democrats. They cannot force him to

legislate. David Cameron has data at his position. He says he is

reluctant to cross that Rubicon, in his phrase. The fact he might have

to do so, he is not going to legislate on this. One thing that

will help him is, if Labour wants to mount a public campaign in

support of the Leveson proposals come at it will not get much favour

from the press. -- the Levison proposals, it will not get. I am

sure that has not pass them by. I am sure it you will be listening to

that debate this afternoon. So, as we've been hearing, all eyes will

be on George Osborne this Wednesday, when he delivers his Autumn

Statement. The Chancellor was on the Andrew Marr Show yesterday.

This is what he had to say. Very clear going forward. We need to

deal with the deficit. It will take longer. It needs to be done fairly.

The richest have to bear their fair share and a whale. That means more

than they are paying at the moment. -- it they will. The mansion tax

business has been kicked around. There will not be a mansion tax. We

have made that clear. Can I just say this? There is another

conception of fairness - the fairness for the individual who

goes out to work and the next on Labour is living a life on benefits.

It is unfair for that individual. Make the rich pay but also made

sure you are tackling the welfare system which is deeply unfair.

Welcome to the three of you. How much has deficit being cut? It has

been cut substantially. We're trying to turn round a very

difficult economy. Highlight what George was saying on the PC just

played. -- I liked what George was saying on the piece you just played.

Youth unemployment has improved. There are very positive steps but

we need to do a lot more. You say the deficit has been cut

substantially. Cutting it by 25% is the figure Tory politicians have

used, and a Liberal Democrat ones as well. You only get to 22% if you

go to March and stop counting. You could find you have only reduce the

deficit by 2%. That is not much at all. Which figure do you disagree

with? 5% seems the exact figure. Let's see what the OBR says on

Wednesday. We are second guessing what everyone is going to say.

use the current budget balance, which is used by most rating

agencies, as of October, 2012, the deficit has only been reduced by 2%.

If you stop counting in March. we go forward, it will get better.

Do you accept that? That is the right figure. A quarter over the

last two and a half years. When the coalition government came to power,

we had the largest peacetime deficit of any country. It has been

very difficult to turn that around. When the Chancellor talks about the

deficit, and we can argue in disagree about how it has come down

and at what point, debt is going up. Don't you think it is disingenuous

to talk about death is becoming damn about talking about debt?

People get confused. -- debt is coming down. There has been more

borrowing. We would not like to have had so much borrowing. They

are different issues. We have differentiated them very well.

you listen to the Liberal Democrats and the Conservatives, they say

they have brought the deficit down by a quarter. What is Labour

complaining about? People will be amazed at the level of complacency.

Debt is going up. Now of the Chancellor has had to borrow an

extra �150 billion over the parliament because he is not

meeting his own debt targets - his own target. That is because the

economy is stalling. We need gross, demands, government policies and

the strategy to get the economy going there again. That is what

businesses say every time I meet them. It is not what the Chancellor

is offering. To call for more spending? I hope he looks at

bringing investment for it and using the G four dividend to invest

in housing. -- investment forward. What about paying down the debt? If

you are worrying about the debt rising, which it is, why not use

that money to pay down the debt? You cannot pay down the debt whilst

the economy is shrinking. That is the problem that George Osborne has.

We need to get the economy moving. And the targets and all this seemed

economic growth which has that happened. How embarrassing is it?

Everyone accepts he will shift deficit-reduction targets. Make the

five years start later and that he We are trying to turn around the

economy in a very difficult time. He set those targets himself based

on that. You attempt to meet them but you cannot legislate for the

fact that that eurozone is going to hell in a handcart, those are

things beyond control. If your number of three and four customers

in the European economy go bust, that will clearly affect our

economy. He will have to try to find more savings if he is going to

reduce the deficit. Are you pleased he will be looking again at welfare

and possibly a freezing benefit payments? The test for me is

whether it is good for the economy, whether we go for growth and reduce

the deficit, but whether it is fair, and my view is you have to start at

the top, and make sure those on very high incomes are paying their

fair share of tax. We saw today the �170 million that George Osborne

and Danny Alexander have announced to target tax avoidance. We need to

start at the top. You will be happy for benefits to be frozen? We have

to look at benefits on a case-by- case basis. I am sceptical about

the need to remove housing benefit for those under 25. I do not want

to see a general freeze on benefits overall. But we have to make sure

the measures are fair and that means starting at the top,

companies and individuals dodging tax, and working down, so that

everybody has a fair burden. terms of Lib Dem performance in

budgets, no mansion tax, top rate of income tax increased, up tuition

fees troubled... The first policy of our manifesto was to raise the

income tax threshold to �10,000 and that has been delivered. Jo, you

cannot just Roelof analyst... Some of those are accurate -- you cannot

just read a list. A Liberal Democrat pledge has been delivered.

When you look at the Lib Dem approach to the Budget on Wednesday,

the Autumn Statement, it is crucial that it is a fair distribution of

pain. You have mentioned the tax avoidance and you want to hit the

rich. Well cutting the annual allowance for pension savings be

enough to mitigate, for Lib Dems, a freezing of benefits? Up I do not

have a crystal ball... Do you think that would be fair? We will have to

look at a packet when it comes out on Wednesday. I cannot say without

making sure that when I see the overall package that the Chancellor

has done everything he can to make sure those on higher incomes pay

their fair share. What would you be doing if the swing Labour's ought

to misstatement? -- if this were Labour's Autumn Statement? What

else? One of the things we would not be doing and that we would take

out is the tax cut for the richest, the tax cut for millionaires, which

means that on 1st April, the same day that pensioners will find their

tax going up, and many will find their benefits have been cut or

removed, on that day it millionaires, 8,000 of them, will

be getting a tax cut of at the �100,000. That does not stack up

well with your SEN this equation? For 13 years... -- with your friend

this -- a... If you meant what you said, you would have had a 50 pence

tax rate for 13 years and you did not, you had it for 30 days. We had

the greatest financial crisis that we have had since the Depression

and as a response we brought in tax changes. The consequence of the

financial crisis is still with us will stop his VAT at the right

level? I do not think it should be changed. It is a big money earner

for the Treasury. We put VERY strongly for fuel duty to remain

frozen -- we put VERY strongly. It is a matter for the Chancellor. I

have made the point very strongly to him that I wanted see particular

address to the cost of living issues. I loved what he is doing on

energy, I support that, I particularly believe that you all

in my part of the world, it rural Northumberland, it is not a luxury,

it is a necessity, and it has a great impact on business. I believe

it contrasts very strongly with what the Labour Party did which was

repeatedly put up fuel prices throughout their government and

they would be higher now. We have frozen it. I accept boat, and this

is important, if we freeze certain duties, that means less money to

the economy and we will have to make tougher decisions on other

issues and that is a very tough calls for the Chancellor to make,

but I do believe it is responsible thing to do, and if you talk about

growth, fuelled price is the key. Right.

Talks between the coalition and Labour about how to respond to the

Leveson Report on press regulation have resumed today. Sir Brian

Leveson's proposals for an independent body, backed by

legislation, will also be debated in the Commons this afternoon. This

is what the Labour leader had to say a little earlier. I think we

owe it to the victims like Milly Dowler's parents and Madeleine

McCann's parents to make change happen, and we are seeing a large

majority of the public also warned that change. That is why we are

going to draughts legislation -- draft legislation to show that

Independent sold regulation guaranteed by law can work. The

government said they want to produce legislation that can't work,

but we believe it can. Which of you has wrecked the whole report? 2000

pages? 550 pages. Is it a good read? Or no, it is very serious.

You cannot read about Christopher Jefferies and Milly Dowler without

filling revulsion at the action of some journalists. It is a serious

and sensible piece of work. There are over 100 recommendations. And I

have looked at some of the world on Criminal Justice and data

protection, and I have looked strongly at be individual points in

relation to Ofcom. Not every single point will be adopted. There is

allotted to discuss. What about the central recommendation? -- there is

a lot to discuss. You said you could not not feel revulsion. Buzz

that mean there should be a guaranteed part of law that compels

newspaper editors to be part of the regulation? My view is that there

will be a derivation of the PCC and the 0 black and Lord Hunt proposals,

I question whether a statutory regulation underpinned by a Ofcom

is the right way forward. I think it is the thin end of the wedge. I

also think it is not workable. You said that means that all newspapers

would have to be signed up to it. Isn't it pointless otherwise?

is the point. But you cannot force newspapers to do that. You would

have a statutory system that says, we have this regulation, but nobody

would sign up to it. If you look at the specific regulation, 75 in the

summary, he says, I accept some people would not sign up to this.

They read newspapers have said they would not. But if there is some

sort of law that underpins the regulator...? No. This is a locking

in the last chance saloon for a press that has shown itself to be

reckless in targeting innocent people across the country and

exposing them to the full force of the media, often without a

correction, often without an apology. Some of the writing in the

Leveson Report is very difficult. I think we do need to see a legal

fail-safe to make sure that we have an independent regulator, free from

editors on the board, three from politicians on the board, which is

able to properly address the concerns that innocent people have

when they had been abused by the press. Did you want to respond?

Congratulations on 500 pages. He said not every point is capable of

being implemented. Let's not forget statutory underpinning is said by

Leveson Report to be essential, it is not a detail. It is essential to

ensuring that victims have the kind of protection that they need, and

the Prime Minister promised that. He said unless it would be bonkers,

he would implement it. Einstein said that insanity is doing the

same thing again and again and again and expecting different

results. You will not get different results without change. Nobody is

expecting this present status quo to stay the same. The PCS seat...

Nobody wants the PCC to remain. Lord Black and Lord Hunt's

recommendations are not far enough and everybody in the House of

Commons that the same thing. What they have not said is if there

should be statutory regulation. Ofcom, that is a political

appointment by the Minister for Culture, Media and Sport. I am very

nervous about that political appointment. I do not think it

should be a political appointment. You can cherry-pick bits of the

report but paragraph 65 so has by far the best option would be for

all publishers to choose to sign up to a self regulatory regime and in

order to be able to make them do so, convincing incentives are required.

If you have not got people party to it, the statutory scheme fails

totally. A what do you say to the victims? How do you justified...?

Is it is a breach of criminal law! A not always, it was often

professional standards. But in a note in a five-year-old's school

back to influence their mother, that is not criminal law. That is

be criminal offence. What we need is statutory underpinning. One of

the recommendations is regarding the Data Protection exceptions,

which the press already have, so the press are happy to have

statutory underpinning for protection but not for protection

for the victims. Labour are drawing up their own draft legislation.

Should the Liberal Democrat support that legislation and then you can

vote together and defeats David Cameron? Cross-party talks are

happening at the moment. I think they will be productive. I am quite

sure that Nick Clegg will be making the case to David Cameron

powerfully that we want to see a legal fail-safe that guarantees the

independence of the self regulatory system. We are not talking about

abolishing a free press. Everybody wants to see a free press...

how do you stop...? We do not want the press to bully the innocent

without redress. Everybody wants that. The point raised by its Guy

Opperman is that if you go down the route of statutory regulation, how

do you stop it getting to the stage where editors phone up the

regulator and say, is this OK before I publish it? Where does

that stop? We have to make sure that those issues are properly

addressed. I am sure that one of the issues she has just mentioned,

the exemption of the press under data protection legislation. If the

press are pursuing an individual and that individual can ask for all

the data the press have, that is clearly nonsense and would harm

investigative journalism... I will have to stop you there. You have