27/02/2013

:00:10. > :00:15.Bonjour, and welcome to the Daily Politics live from the European

:00:15. > :00:18.Parliament in Brussels. Like Britain, the eurozone is mired

:00:18. > :00:24.in stagnation, crippled by debt, but in Brussels they were beginning

:00:24. > :00:34.to think the worst was over, to the Italian elections now mean the

:00:34. > :01:04.

:01:04. > :01:06.eurozone is back in crisis? -- to The result touches us all, said the

:01:06. > :01:12.Spanish Foreign Minister in reaction to the Italian elections.

:01:12. > :01:16.We have jumped into the void. Italy is the big story of the week here

:01:16. > :01:20.in the European Parliament. By voting strongly against EU imposed

:01:21. > :01:24.austerity and electing a raft of Euro-sceptic politicians, the

:01:24. > :01:28.Italians have laid down the gauntlet to the Euro-elite here in

:01:28. > :01:32.Brussels. We will try to discover what happens next.

:01:32. > :01:37.David Cameron is promising an in- out referendum on our relationship

:01:37. > :01:41.with his place, but not until 2017. What do the men and women who work

:01:41. > :01:46.here make of that? We will be meeting one MEP who

:01:46. > :01:50.believes the way forward is more integration, not less.

:01:50. > :01:54.Trade that is fair rent free across the Atlantic supports millions of

:01:54. > :01:58.good paying American jobs -- fair and free.

:01:58. > :02:06.We will meet the man negotiating with President Obama on an historic

:02:06. > :02:09.trade deal between America and the And standby for the fire and fury

:02:09. > :02:17.of a Prime Minister's Questions the day before the most important by-

:02:17. > :02:26.election for 30 years. We won't be missing a moment of PMQs afternoon.

:02:26. > :02:31.That is all in the next hour-and-a- half live from this Ben Ali

:02:31. > :02:36.building in the European Parliament. Joining us both for the duration is

:02:36. > :02:39.one temporary exile from the Westminster village, David Davis, a

:02:39. > :02:43.former Foreign Office Europe Minister who famously whipped the

:02:43. > :02:49.Maastricht treaty through the House of Commons, to the chagrin of some

:02:49. > :02:54.of his colleagues on the Tory right - that is French, you know!

:02:54. > :02:58.And Glenis Wilmott of Labour, who leads her party's MEPs in the

:02:59. > :03:03.European Parliament. Bienvenue a vous deux.

:03:03. > :03:08.Let's get a bigger update on the big domestic story of the day, the

:03:08. > :03:11.whole Chris Rennard story. Vicki Young is our political

:03:11. > :03:16.correspondent. Nick Clegg has been doing his phone-in, what did he

:03:16. > :03:21.say? He must have been delighted to remember that he had half an hour

:03:21. > :03:26.of questions on the London station LBC, and Chris Rennard came up.

:03:26. > :03:30.Nick Clegg has slightly changed the story again. When he mentioned why

:03:30. > :03:35.Chris Rennard stood down in 2009 we were always told it was about ill-

:03:35. > :03:38.health, but today Nick Clegg said that have caused the allegations of

:03:38. > :03:43.inappropriate behaviour towards women were in the background. He

:03:43. > :03:48.also suggested that because he had just come in as leader, he wanted a

:03:48. > :03:53.change himself up the part of -- at the top of the party structure. But

:03:53. > :03:56.there seems to be again a change in the story which just keeps on going.

:03:57. > :04:00.After the discomfort of the phone- in, where do we go? We have heard

:04:00. > :04:05.from the women who have made the allegations, we have heard

:04:05. > :04:09.responses from Nick Clegg which has changed, what do we do now?

:04:09. > :04:12.party would like everybody to stop talking about it, they have Party

:04:12. > :04:16.investigations going on which they hope will get to the bottom of it,

:04:16. > :04:21.but the more they talk about it, the more the story changes, the

:04:21. > :04:26.more it will be covered. That could be a problem, especially with the

:04:26. > :04:29.very important by-election tomorrow. The problem they had originally was

:04:29. > :04:33.that the women involved in this did not want publicity, they thought

:04:33. > :04:38.the issue had been dealt with, Chris Rennard stood down, he had

:04:38. > :04:41.stepped from sight, but then they saw him upping his profile and I

:04:41. > :04:45.think they were worried he was trying to get back into a position

:04:45. > :04:49.of power. That is where it went wrong. But the party President Tim

:04:49. > :04:56.Farron has today said that the party led down these women and

:04:56. > :05:00.things need to be dealt with in the party structure and organisation.

:05:00. > :05:04.Tim Farron was the one who famously said that the party screwed up.

:05:04. > :05:07.By that, I think he meant Nick Clegg!

:05:07. > :05:13.David Davis, this has gone from being a sex scandal that does not

:05:13. > :05:20.seem to involve any sex, thank you, Lib Dems, for that, into a crisis

:05:20. > :05:25.of Mr Clegg's leadership. Will it impact the Eastleigh by-election?

:05:25. > :05:29.Hard to know, but I suspect not, in truth. People making by-election

:05:29. > :05:33.decisions tend to make them on local issues. But it certainly

:05:34. > :05:39.can't help their position or make the Liberal story on the door step

:05:39. > :05:43.even easier. -- any easier. In a by-election called because the

:05:43. > :05:48.sitting candidate is going to jail, fought in the middle of a

:05:48. > :05:53.leadership crisis for the Lib Dems, with you only a few thousand votes

:05:53. > :05:57.behind, if they -- if you can't win this, you can't win anywhere?

:05:57. > :06:06.That's true. It ought to be in our favour, but Lib Dems are

:06:06. > :06:10.notoriously difficult to remove. You have 39 or 40 councillors, they

:06:10. > :06:14.control the council entirely in the area. That is their army on the

:06:14. > :06:20.ground. I have had to do something like this in my own seat, it took

:06:20. > :06:27.10 years to basically eradicate my Lib Dem opposition. You say and

:06:27. > :06:30.eradicate, should we go there?! But you have said that if you can't win

:06:30. > :06:34.in Eastleigh you can't win anywhere. It would seem to me that if on the

:06:34. > :06:39.early hours of Friday morning we discover the Lib Dems have held on,

:06:39. > :06:44.despite all we have been talking about, we have gone from a crisis

:06:44. > :06:49.for Mr Clegg to a crisis for Mr Cameron. I am not sure about that.

:06:49. > :06:53.It has been discounted with the expectation that they will win. But

:06:53. > :06:58.the UKIP/Tory relationship, what that will be, that is much more

:06:58. > :07:04.likely to win back Tory MPs. UKIP does well and the Lib Dems

:07:04. > :07:09.hold onto the seat, and you come second or, maybe even, a terrible

:07:09. > :07:13.suggestion, third, I suggest there is another crisis for Cameron.

:07:13. > :07:19.think if we came third it would be a crisis, that is the case. A bit

:07:19. > :07:23.is a close second with UKIP on our tail, it would be pretty

:07:23. > :07:27.uncomfortable -- if it is a close second. It will not dislodge David

:07:27. > :07:31.Cameron, he will be there until the next election, but it will make

:07:31. > :07:37.things more uncomfortable. Glenis Wilmott, One nation Labour clearly

:07:37. > :07:41.does not include Eastleigh? It was always going to be an uphill battle

:07:41. > :07:45.in Eastleigh, but I think it says more about what is happening in the

:07:45. > :07:47.Conservatives, the Lib Dems and the coalition in general. People

:07:47. > :07:51.obviously don't have these in either party. It will be

:07:51. > :07:57.interesting to see what happens tomorrow. -- people don't have

:07:57. > :08:01.faith in either party. The if you are right and voters do not have

:08:01. > :08:05.faith in either coalition party, that means Eastleigh is precisely

:08:05. > :08:12.the kind of seat that oppositions should be winning. And you have

:08:12. > :08:18.said you would win seats outside your heartland, Eastleigh is not a

:08:18. > :08:27.Porsche, seven-seat, working-class, a former railway workers. -- is not

:08:27. > :08:32.a Porsche seven-seat. If you come forth, it is not good for Labour.

:08:32. > :08:38.A joke it did well in Italy, why can't they do well for Labour?

:08:38. > :08:42.don't think it is quite the same as in Italy! Why are people turning

:08:42. > :08:46.away from this Conservative-led government? Let's look at why

:08:46. > :08:50.Labour can't do well in a constituency like Eastleigh in the

:08:50. > :08:56.midst of an unpopular coalition government with living standards

:08:56. > :09:04.being squeezed higher than in any time since the 1920s. Why do you do,

:09:04. > :09:09.as the polls suggest, so badly? Let's see what happens tomorrow.

:09:09. > :09:14.The story here is that UKIP have taken so many boats from the Tories,

:09:14. > :09:17.which is a real crisis for David Cameron -- so many votes. That is

:09:17. > :09:22.the issue that David Cameron has tried to deal with when he has

:09:22. > :09:26.spoken about a referendum, it has not worked. If the viewers would

:09:26. > :09:34.like to see a full list of beastly candidates, and there are many of

:09:34. > :09:38.them, you can see them on the BBC website -- a full list of the

:09:38. > :09:42.Eastleigh candidates. The indecisive Italian election

:09:42. > :09:46.result has led to fears that political gridlock in the third

:09:46. > :09:51.largest eurozone economy could rekindle the European debt crisis.

:09:51. > :09:55.57% of Italians voted for and to austerity parties, and with the

:09:55. > :09:59.result an effective stalemate, shares and Italian banks fell 7% in

:09:59. > :10:04.value on Tuesday. The eurozone may have been out of the news recently

:10:04. > :10:10.but the economic picture remains bleak. Its economy shrank by 0.6%

:10:10. > :10:14.in the final quarter of 2012. Italy has barely grown for a decade. The

:10:14. > :10:19.European Commission has forecast a further 0.3% contraction across the

:10:19. > :10:26.whole of the EU in 2013. Continued uncertainty in its elite makes any

:10:26. > :10:29.wider recovery less likely. -- continued uncertainty in Italy. The

:10:29. > :10:38.commission says the average unemployment rate will reach 27% in

:10:38. > :10:42.Greece, 28.9% in Spain and 17.3% in Portugal -- 26.9% in Spain. This

:10:42. > :10:50.comes at a time when credit ratings agency Moody's has downgraded

:10:50. > :10:53.Britain's rating from 8882 A one. I am joined by Jane Foley, senior

:10:53. > :10:58.strategist at Rabobank. People would argue that losing the AAA

:10:58. > :11:02.credit rating is a blow for George Osborne, the markets may well have

:11:02. > :11:08.acted it in. But what is the long- term impact of losing the AAA from

:11:09. > :11:14.the UK? Relative to, say, five years ago, there is a new normal in

:11:14. > :11:19.the markets. The UK was not the first to lose AAA, the US lost

:11:19. > :11:25.theirs around 18 months ago and France lost theirs last year. So we

:11:25. > :11:28.have adjusted to what is a worse standard for economies. The other

:11:28. > :11:31.factor is that credit rating companies are only really

:11:31. > :11:36.reflecting the bad news that the markets already know about. There

:11:36. > :11:42.is not too much shock value year, but that is one difference in the

:11:42. > :11:46.UK, there is still a prospect that all three major credit ratings

:11:46. > :11:50.companies could potentially downgrade the UK by the end of, say,

:11:50. > :11:55.this quartet. The march Budget will be key in determining whether that

:11:55. > :11:59.happens. George Osborne could breathe a sigh of relief because of

:11:59. > :12:03.the stalemate in the Italian elections, it has somewhat

:12:03. > :12:09.overshadowed what has happened since Britain lost its AAA. Now the

:12:09. > :12:11.markets will be more spooked by what is happening in Italy.

:12:11. > :12:16.eurozone crisis, foreign international investment point of

:12:16. > :12:19.view, is much bigger than the UK credit rating outlook. Most people

:12:19. > :12:24.had anticipated that would happen anyway. These elections are

:12:24. > :12:28.potentially really very significant. Most people, from an economist

:12:28. > :12:32.point of view, most eurozone politicians, see the need for its

:12:32. > :12:42.elite to carry on with structural reform -- the need for Italy to

:12:42. > :12:46.carry on. But Italy has a very strong history of short-lived, weak

:12:46. > :12:51.coalition governments, that has been since the Second World War.

:12:51. > :12:55.There is a lot of voter apathy so many Italians do not take the

:12:55. > :12:59.elections that seriously, so consequently we have a stalemate

:12:59. > :13:02.position meaning that more structural reform looks really

:13:02. > :13:05.difficult. That is a problem for the eurozone and it serves as a

:13:05. > :13:13.reminder that the crisis in the eurozone is very much up and

:13:13. > :13:18.running still. Thank you, Jane Foley.

:13:18. > :13:23.Here in Brussels we are joined by the European commissioner for trade,

:13:23. > :13:29.Karel de Gucht. Welcome to the programme. The bail out for its

:13:29. > :13:34.elite agreed by the Commission and the ECB and so on was contingent on

:13:34. > :13:39.a number of austerity measures. -- the bail out for its elite. Well

:13:39. > :13:45.that bail out continue now that Italy has voted against austerity

:13:45. > :13:52.measures? I see no other option. It is a deliberate choice of the

:13:52. > :14:02.European Union that we continue to support its elite in its -- to

:14:02. > :14:07.support its elite to get back to normal economic growth. I would not

:14:07. > :14:12.call it a bail out. It was not a bail out. Italy has not been bailed

:14:12. > :14:19.out, we have been taking measures, the Italians have done so, Mario

:14:19. > :14:27.Monti has done so, so that the interest rates went down. In terms

:14:28. > :14:36.of the budget deficits for Italy this year, 2013, it will be a

:14:36. > :14:39.little bit above 2%. So we have quite a good result. We know that

:14:39. > :14:45.Italy could not get away with a huge number of bombs it needs to

:14:45. > :14:55.put into the market if the ECB was not standing behind it. -- the

:14:55. > :15:01.number of bombss. If they abandon the programme of Mario Monti, will

:15:01. > :15:05.the ECB continue to support existing measures? These questions

:15:05. > :15:11.are very interesting for journalists. This is not a

:15:11. > :15:15.hypothetical question. Italy has to bother 350 billion euros this year.

:15:15. > :15:21.-- has to borrow. Regardless of whether they stick with austerity

:15:21. > :15:24.or not, does the ECB continued to support that bond buying? Your

:15:24. > :15:27.question is hypothetical because Italy has not decided to abandon

:15:27. > :15:33.the austerity measures they have been taking in the past. People

:15:33. > :15:37.just voted against it. Yes, but first of all you need a government

:15:37. > :15:42.in the country which will change those decisions, and apart from the

:15:42. > :15:47.fact that it will not be easy to find the Government, I don't think

:15:47. > :15:52.you'll find a government that makes a way with those measures. In

:15:52. > :16:02.politics, the day before elections on the day after elections, the

:16:02. > :16:07.

:16:07. > :16:11.difference in between is much more If you continue with what I call

:16:11. > :16:15.the bail out, you want to choose a different word, it means the

:16:15. > :16:18.conditions you impose on bail outs don't matter and the Greece and the

:16:18. > :16:23.Portuguese and the Irish will be saying why are we doing it, as

:16:23. > :16:27.well? But that's why I say that they will continue those measures

:16:27. > :16:34.and you say 57% has been voting against Europe, that's not true.

:16:34. > :16:39.I said voting against austerity. But even that is not true. I happen

:16:39. > :16:47.to know Italy rather well and they have voted with their feet and they

:16:47. > :16:52.are simply fed up with Italian politics and then you could argue,

:16:52. > :16:56.but in the end, Berlusconi got quite a good result, yes, because

:16:56. > :17:02.people say look we don't like him, we don't trust him but at least he

:17:02. > :17:06.doesn't make us problems, you know. Then you have somebody like Monti,

:17:06. > :17:10.predecessor of mine who has been courageous in in taking these

:17:10. > :17:14.measures and if you demonstrate that kind of courage in politics

:17:14. > :17:18.you have to calculate it might well be that you are losing the next

:17:18. > :17:21.elections and that's what's happening with Mr Monti but doesn't

:17:21. > :17:25.say anything about whether his measures were right, his measures

:17:25. > :17:29.were right and you will see that in the future. Not according to the

:17:29. > :17:32.Italian people, I understand they may not matter in Brussels. Let me

:17:32. > :17:39.ask this, do you you accept those European Commissioners, your

:17:39. > :17:42.colleagues and others here who said the eurozone crisis was effectively

:17:42. > :17:47.over at the end of last year was wrong? I don't think what we have

:17:47. > :17:53.been saying is wrong. We were able to stop the cycle of the euro

:17:53. > :17:59.crisis because of the ECB saying clearly, look, we are going to do

:17:59. > :18:03.everything necessary to keep the eurozone together. That has not

:18:03. > :18:10.changed, you know. It is still in crisis, isn't it? You should

:18:10. > :18:15.realise, Sir, that the economic monetary union is monetary project

:18:15. > :18:20.but before all it's a political project and that will stay like

:18:20. > :18:28.that. It's not going to change because of an election in Italy and

:18:28. > :18:35.and then - are you then still a Democrat in all this? When you see

:18:35. > :18:38.the figures, the outcome of the Italian election, of course you

:18:38. > :18:42.have to respect that, but on the other hand, you should not be

:18:42. > :18:46.pleased with that and not look upon this as a demonstration of what you

:18:46. > :18:53.would call a good democratic practice, you know. That all of a

:18:53. > :18:56.sudden a quarter of the population is voting for somebody like Beppe

:18:56. > :19:01.Grillo, who seems to be a very good comic, tells something about the

:19:01. > :19:05.mood in that country and tells something about difficulties

:19:05. > :19:10.democracy is in and the difficulties democracy is in tells

:19:10. > :19:16.something about the courage you need at this present time to take

:19:16. > :19:20.tough decisions like Mario Monti has been taking. The European Union

:19:20. > :19:24.is beginning, is already under way with negotiations for a free trade

:19:24. > :19:28.deal with the United States, which is a big step for both the European

:19:28. > :19:33.Union and for the United States. What's the timetable on that and

:19:33. > :19:37.how confident are you that you will get a free trade deal?

:19:37. > :19:40.timetable, I think we should do it in a short period of time, that's

:19:40. > :19:45.also what the Americans have been saying, that it should happen on

:19:45. > :19:49.one tank of gas but the gas price went down considerably in the US.

:19:49. > :19:53.The American tanks are pretty big! That's what I mean. We should do it

:19:53. > :19:58.now, because there's no reason that you would have a better chance if

:19:58. > :20:03.you take more years and more time to do it. What's your timetable?

:20:03. > :20:08.am not going to nail myself down on timetable. I think ideally we

:20:08. > :20:13.should do it within this serve, in term of this college but of course

:20:13. > :20:17.- then you don't have much time, but don't nail me down on a

:20:17. > :20:20.timetable. Nail me down on a result and the result should be that it's

:20:20. > :20:24.really a big and deep and comprehensive trade deal that's

:20:24. > :20:27.giving a lot of oxygen to both our economies and that re-establishes

:20:27. > :20:31.our leading role in the world economy, that's what we are aiming

:20:31. > :20:34.at, you know. This will be a trade deal that will include the French

:20:34. > :20:38.agricultural sector? Of course and also the British one. Yeah,

:20:38. > :20:42.although you know the problems of the French one. We have already

:20:42. > :20:47.seen what the French agricultural Minister has said. They've said

:20:47. > :20:51.they're open to a deal but vigilant on agricultural matters. The French

:20:51. > :20:54.Minister for agriculture is not negotiating in the European

:20:54. > :20:59.Commission. We will take into account... They still have to

:21:00. > :21:03.approve it. All kind of considerations. You don't have a

:21:03. > :21:06.problem only with European agriculture, there's also very huge

:21:06. > :21:09.problem with the American agriculture. I understand that, but

:21:09. > :21:14.the American Agriculture Minister has said that everything in their

:21:14. > :21:19.sector is up for negotiation, as we have not yet heard that from the

:21:19. > :21:24.French. Let me ask this, if Britain was to leave the European Union and

:21:24. > :21:29.Mr Cameron is offering a referendum on that if he is re-elected in 2015.

:21:29. > :21:32.He is promising a referendum which will be in or out. If Britain voted

:21:33. > :21:40.to leave, would the European Union be prepared to negotiate a free

:21:40. > :21:47.trade arrangement with Britain? First of all, this is a statement

:21:47. > :21:51.about a period after the next legs. Secondly -- after the next election.

:21:51. > :21:55.Secondly, I haven't heard Mr Cameron saying he want to leave the

:21:55. > :22:00.union, the last two pages of his speech, he is... I didn't say that,

:22:00. > :22:04.I said he is offering a referendum and if the people were to vote to

:22:04. > :22:07.leave, would it be possible for Britain to negotiate a free trade

:22:07. > :22:13.arrangement with the European Union on the same basis as you would like

:22:13. > :22:16.to negotiate one with the United States? Europe is not a free lunch.

:22:16. > :22:20.Britain is part of the European Union. It's a very important member

:22:20. > :22:26.state. By the way, they have been playing a very important role, for

:22:26. > :22:30.example, in establishing internal markets, also in the enlargement to

:22:30. > :22:33.the eastern countries, so we want them to stay in, that's what we are

:22:33. > :22:37.going to work on and I am not going to pronounce myself on something

:22:37. > :22:42.that I think will never happen for a number of reasons. It will never

:22:42. > :22:46.happen, David Davis? That's a misjudgment. Depending on how the

:22:46. > :22:50.European authorities respond to attempts at renegotiating our

:22:50. > :22:56.membership, if there's a blank response I think there's a high

:22:56. > :23:01.chance that the British people will vote to leave. Commissioner?

:23:01. > :23:10.understood that you would have a referendum after a treaty change at

:23:10. > :23:16.conditions. Now you have said that we started talking about - also

:23:16. > :23:19.have been working that for 30 years, first in European Parliament,

:23:19. > :23:23.national Government and now in European Commission. I don't see

:23:23. > :23:30.any treaty change in the foreseeable future. Even though

:23:31. > :23:34.there are demands for much deeper fiscal union within the eurozone?

:23:34. > :23:37.There's difference between treaty negotiations, treaty change

:23:37. > :23:43.negotiations and treaty changes, that's not exactly the same, you

:23:43. > :23:47.know. It will be extremely difficult because we have to do

:23:47. > :23:51.that by unanimity and when you start a process there will not only

:23:51. > :23:54.be demands by Great Britain on the table but demands by almost all of

:23:54. > :23:58.the member states and that's why I personally - that's my personal

:23:58. > :24:05.opinion. I cannot see any treaty change in the foreseeable future.

:24:05. > :24:09.Probably if you have any time at any time a referendum in Great

:24:09. > :24:13.Britain, that's the Sovereign decision of Great Britain but I

:24:13. > :24:17.don't think it will be about treaty change. Commissioner, the way the

:24:17. > :24:20.Prime Minister has phrased this is we will have a renegotiation with

:24:20. > :24:24.the European Union about our our relationship which would require

:24:24. > :24:30.treaty change. Very fundamental parts would require treaty change.

:24:30. > :24:34.If that doesn't happen, then his stated aim of arguing to stay in

:24:34. > :24:37.will be completely undermined. If there's no change in our

:24:37. > :24:43.relationship with the Union, the odds of the British people voting

:24:43. > :24:46.to leave would be quite high. you are a democratic country. You

:24:46. > :24:50.are democratic people. If you vote to leave the European Union, that's

:24:50. > :24:55.your Sovereign decision. What I am arguing is that you have many more

:24:55. > :25:01.reasons to stay in than to get out. I believe that in the end people

:25:01. > :25:05.are rationale, you know. someone like yourself, who's a

:25:05. > :25:08.committed European and in any referendum would vote yes to keep

:25:08. > :25:13.Britain in, isn't there a problem that you have with the British

:25:13. > :25:18.people in that if you were to say to the British people Britain could

:25:18. > :25:22.have a free trade arrangement similar to what is being offered to

:25:22. > :25:25.the United States, most British people may say, I would rather have

:25:26. > :25:28.that, actually? It's difficult at the moment, because we haven't had

:25:28. > :25:31.a proper debate about why it's in Britain's interests to be part of

:25:31. > :25:35.Europe. I think the discussion on the referendum, whether I agree or

:25:35. > :25:38.not, is actually bringing that discussion to the fore. That's a

:25:39. > :25:41.good thing. I think once we get people from British businesses, as

:25:41. > :25:45.we have had, coming forward and saying why it's in British

:25:45. > :25:48.interests for us to have strong engagement in Europe, you see the

:25:48. > :25:55.whole term of the debate change and that's happened and that will

:25:55. > :25:58.continue to happen. I think when we have the debate proper... You would

:25:58. > :26:03.win the argument? We had the US saying how important it was, as

:26:03. > :26:07.well. I know we are not governed by the US but it's interesting how

:26:07. > :26:12.people's views change when people like that start coming and making

:26:12. > :26:14.the case. Final word, Commissioner. The Commission have personal

:26:14. > :26:18.congratulations because we are starting with negotiations with US

:26:19. > :26:23.and good reason for that, it will benefit very much to the UK, very,

:26:23. > :26:26.very much. Britain is a big supporter of a tree trade area with

:26:26. > :26:30.America -- free trade area with America. Commissioner, thank you

:26:30. > :26:34.for being with us. The EU may have won the Nobel Peace

:26:34. > :26:36.Prize recently - not a bad little trophy, that one - but there is one

:26:36. > :26:41.glorious gong, revered across the continent, that our European

:26:41. > :26:44.masters are yet to get their grubby hands on. Yes, that's right, the

:26:44. > :26:50.Daily Politics taza, tasse, kuppi, kopp or mug to you and me - and

:26:51. > :27:00.here's your chance to win it. We'll remind you how to enter in a minute,

:27:01. > :27:09.

:27:09. > :27:19.but let's see if you can remember The Prime Minister is on his way as

:27:19. > :27:34.

:27:34. > :27:44.we speak. Not long to wait for his There is a certain preshuplness in

:27:44. > :28:14.

:28:15. > :28:19.To be in with a chance of winning that wonderful Daily Politics mug

:28:19. > :28:29.send your answer to our special e- mail address.

:28:29. > :28:33.You can see the full terms and conditions on our website.

:28:33. > :28:37.It's coming up to 1.00pm here in Brussels - and it is nearly midday

:28:37. > :28:40.back in London. Just take a look at Big Ben - and that can mean only

:28:40. > :28:42.one thing - yes, Prime Minister's Questions is on its way. And that's

:28:42. > :28:48.not all, our political correspondent Iain Watson is here

:28:48. > :28:52.with us. The day before the by- election, loss of the credit rating,

:28:52. > :28:56.what's is Mr Miliband's tactic? is going to go on the economy,

:28:56. > :29:04.almost exclusively the economy, he is not going to get into the

:29:04. > :29:08.private grief of the Liberal Democrats. He wasn't doing well on

:29:08. > :29:14.the economy on Monday. They're aware of the risks. The first risk

:29:14. > :29:19.is AAA is a battery rating, so not a credit rating. Does break through

:29:19. > :29:22.to the wider public? The Moody's report on the downgrade there is

:29:22. > :29:24.ammunition there for the Government. For example, if you are cutting too

:29:24. > :29:27.far and too fast as they would suggest, they're saying there might

:29:27. > :29:31.be a further downgrade. They're also saying the economy is still

:29:32. > :29:35.quite competitive. So, there is some ammunition. He knows on its

:29:35. > :29:39.own this isn't going to be the silver bullet that kills off

:29:39. > :29:45.Conservative economic crediblity but he is going to portray it as a

:29:46. > :29:49.symptom of a wider economic malaise. I think he will try and get in

:29:49. > :29:54.these gas prices and profits, as well. That's the squeeze on living

:29:54. > :29:58.standards and people are hurting. Absolutely. The wider Labour

:29:58. > :30:03.strategists are saying they don't want this debate about the economy,

:30:03. > :30:06.they're not entirely winning. They want to move on to living standards

:30:06. > :30:11.and they know by the time of the next election living standards will

:30:11. > :30:21.certainly not be rising so they think that's better territory to

:30:21. > :30:26.

:30:26. > :30:33.occupy. Thank you. Let's go to the Enact the 1984, when the Brighton

:30:33. > :30:35.bomb went off, I felt a surge of excitement at the nearness of

:30:36. > :30:39.Margaret Thatcher's demise, and yet a disappointment that such a chance

:30:40. > :30:44.had been missed. Those are the words of the Labour candidate in

:30:44. > :30:52.Eastleigh by-election. They are a complete disgrace and I hope the

:30:52. > :30:59.leader of the Labour Party will get up and condemn them right now.

:30:59. > :31:06.Mr Speaker, three years ago the Prime Minister had this to say, the

:31:06. > :31:12.first priority of any government has got to be keeping UK plc's

:31:12. > :31:17.credit rating, that has got to come first. It is the only responsible

:31:17. > :31:21.thing to do. Can the Prime Minister tell us, how was that going?

:31:21. > :31:26.First of all, isn't it amazing that the leader of the opposition will

:31:26. > :31:30.not condemn someone who apparently speaks up for terrorists? It isn't

:31:30. > :31:35.it absolutely disgraceful? He will have a second chance when he gets

:31:35. > :31:39.up again. But the decision of the ratings agency is a reminder of the

:31:39. > :31:44.debt and deficit problem that this country faces, and frankly it is a

:31:44. > :31:47.warning to anyone who thinks we can walk away from it. It is absolutely

:31:47. > :31:51.vital that we continue with the work of this government, that has

:31:51. > :31:56.cut the deficit by a quarter, has a million extra private sector jobs

:31:56. > :31:59.and interest rates at record low levels. I know it is still his

:31:59. > :32:05.policy to address excessive borrowing by borrowing more.

:32:05. > :32:10.I was asking about the country's credit rating, about the country's

:32:10. > :32:15.credit rating. This is what he used to say, that it was a mark of trust

:32:15. > :32:19.in our economy, that it was right up front and centre in our new

:32:19. > :32:24.economic model. And his manifesto published for the general election

:32:24. > :32:31.said this, safeguarding Britain's credit rating was the very first of

:32:31. > :32:35.his, and I quote, bench marks for Britain against which the British

:32:35. > :32:40.people can judge the economic success or failure of of the next

:32:40. > :32:44.government. So does the Prime Minister accept that by the first

:32:44. > :32:50.Test he set himself, he has failed? If there is a problem of excessive

:32:50. > :32:56.borrowing, why is it his policy to borrow moult? That is the question

:32:56. > :32:59.he simply has to answer. -- why is it his policy to borrow more? The

:32:59. > :33:03.credit ratings agency Moody's says that Moody's could also downgrade

:33:03. > :33:07.the UK government debt rating further in the event of reduced

:33:08. > :33:12.political commitment to fiscal consolidation. On this side of the

:33:12. > :33:17.house, we know that is the vital work we have to do. Will he finally

:33:18. > :33:21.admits that he is in favour of more borrowing? Admit it. You always

:33:21. > :33:28.know when he starts asking me questions that you can't answer

:33:28. > :33:31.questions about his own record. -- that he can't answer question. A

:33:31. > :33:38.part-time Chancellor said it would be a humiliation for Britain to

:33:38. > :33:44.lose its AAA credit rating -- the part-time Chancellor. I know the

:33:44. > :33:50.Prime Minister is not big on humility, but is manifested it

:33:50. > :33:55.promise he would be accountable and open. -- his manifesto did promise.

:33:55. > :34:02.Yes or no, has he failed the first Economic test that he set out in

:34:02. > :34:07.this manifesto? I'm not arguing for one moment that

:34:07. > :34:11.the rating agency doesn't matter, that is his argument. His argument

:34:11. > :34:15.is the rating agency does not matter, his answer to debt is to

:34:15. > :34:20.borrow more and not take responsibility for the mess they

:34:20. > :34:23.left. This Government has cut the deficit by a quarter, has a million

:34:23. > :34:28.extra private sector jobs and lower interest rates which are vital for

:34:28. > :34:33.the future of the economy. If he wants to see those economies which

:34:33. > :34:37.maintain their AAA rating, they are countries like Canada and Germany,

:34:38. > :34:42.who fix the roof when the sun was shining. Why doesn't he admits that

:34:42. > :34:51.his answer to extra borrowing is to borrow more? Have another go, admit

:34:51. > :34:55.it. Anytime you want to swap places, I will gladly answer the questions!

:34:55. > :35:02.And he talks about borrowing, I don't know when the last time he

:35:02. > :35:06.checked was, the deficit is rising, not falling this year. And he is

:35:07. > :35:12.borrowing �212 billion more than he planned because of his failure to

:35:12. > :35:16.grow the economy. Let's turn to the reasons for the downgrade. Can we

:35:16. > :35:21.take it from his answers so far that he really believes that this

:35:21. > :35:26.loss of the country's AAA status, which he set as the test, has

:35:26. > :35:30.nothing to do with him? I'm the one saying his credit

:35:30. > :35:34.rating does matter, and it demonstrates we have to go further

:35:34. > :35:38.and faster are reducing the deficit. But the very fact he won't answer

:35:38. > :35:41.the question about wanting to borrow more, he will never sit on

:35:41. > :35:46.this side of a house but he won't answer the questions about what the

:35:46. > :35:50.country needs to do. If you want to look at what is happening in the

:35:50. > :35:56.economy, isn't it interesting that he doesn't mention the other

:35:56. > :36:00.economic news from last week, 154,000 extra people in work, more

:36:00. > :36:03.people in employment than any time in our history, youth unemployment

:36:03. > :36:08.down since the election, unemployment down since the

:36:08. > :36:11.election, that is what is happening in our economy, but he can't

:36:12. > :36:17.recognise it. When will he admit that we should never listen to

:36:17. > :36:20.someone who sold the Gold, who bossed the banks, who racked up the

:36:20. > :36:24.deficit and can't say sorry for any of it?

:36:24. > :36:29.I think we can take it from that answer that he can't accept the

:36:29. > :36:34.simple fact that he has failed on the first Test he set himself and

:36:34. > :36:38.it is his fault, it has happened on his watch. And borrowing is rising

:36:38. > :36:43.under him. Even after all the pain of the tax rises, all the spending

:36:43. > :36:48.cuts, borrowing is rising, because the part-time Chancellor's plan is

:36:49. > :36:52.failing. The truth is that they are the last people left who think

:36:52. > :36:57.their plan is working and the failure is nothing to do with them.

:36:57. > :37:02.We have 1 million young people... The Education Secretary calls out

:37:03. > :37:09.that is not true, maybe he believes that, but behind the scenes he is

:37:09. > :37:13.briefing against the Chancellor! Maybe they should swap places! We

:37:13. > :37:17.have 1 million young people out of work, the deficit is rising, not

:37:18. > :37:22.falling, the economy is flatlining. What further evidence does he need

:37:22. > :37:27.that his plan is not working? examine the points he has made, he

:37:28. > :37:32.says the deficit is up, it is down by a quarter since the election. He

:37:32. > :37:36.said we don't have support for our plan, the CBI, the biggest business

:37:36. > :37:40.association in the country, says we have the right plan for growth. He

:37:40. > :37:44.complains about unemployment, it is down on the election and a record

:37:44. > :37:48.number are in work. Those are the facts. Now let us examine his

:37:49. > :37:52.policy, the fact that the New Statesman, the in-house magazine of

:37:52. > :37:56.the Labour Party, says this, his critique of the Government's

:37:56. > :38:00.strategy will never win back public trust, his proposals for the

:38:00. > :38:05.economy will never convince, his credibility problem will only

:38:05. > :38:10.become magnified as the general election progresses. That is the

:38:10. > :38:20.New Statesman! With the greatest of respect to the New Statesman, he is

:38:20. > :38:31.

:38:32. > :38:36.All we have heard today... Order, order, order! You are excitable

:38:36. > :38:43.fellow! It is not very statesmanlike, calm yourself! Mr Ed

:38:43. > :38:47.Miliband. All we have heard today is a Prime Minister who refuses to

:38:47. > :38:52.accept that he has failed on the central test he set himself, who

:38:52. > :38:57.has failed to meet the first Test he set for himself. It is not just

:38:57. > :39:02.our credit rating downgraded, we have a downgraded government, a

:39:02. > :39:06.downgraded chance land are downgraded Prime Minister. --

:39:06. > :39:10.downgraded Chancellor and a downgraded Prime Minister. If the

:39:10. > :39:20.New Statesman is scraping the barrel, it was the only newspaper

:39:20. > :39:21.

:39:21. > :39:25.which endorsed his leadership! I have to say... LAUGHTER AND

:39:25. > :39:29.SHOUTING. In this Oscar week, perhaps the

:39:29. > :39:33.best we can say is that Daniel Day- Lewis was utterly convincing as

:39:33. > :39:39.Abraham Lincoln, and the right honourable gentleman is utterly

:39:40. > :39:45.convincing as Gordon Brown. More borrowing, more spending, more debt.

:39:46. > :39:49.Andrew Jones! In 10 years running Harrogate

:39:49. > :39:54.Borough Council, the Conservatives have cleared to the �19.6 million

:39:55. > :39:59.of debt left by the Liberal Democrats and have enabled a

:39:59. > :40:03.council tax freeze. Does the Prime Minister show that this shows the -

:40:03. > :40:07.- does the Prime Minister agree that this show us the wisdom to

:40:07. > :40:11.tackling debt and anything else is the road to ruin? It is worth

:40:11. > :40:14.recognising that when it comes to finding efficiencies and value for

:40:14. > :40:18.money, local government has an excellent record and we should

:40:18. > :40:23.really say that in this place, they have a good record of paying down

:40:23. > :40:30.debt, dealing with deficit and being refashioned. That reduces

:40:30. > :40:36.your debt interest charges. -- and being efficient.

:40:36. > :40:42.Next month a big event alongside the Budget will be the champions

:40:42. > :40:45.Wales playing England at the Millennium Stadium. HEAR, HEAR!

:40:45. > :40:49.Does the Prime Minister have the same confidence in England winning

:40:49. > :40:54.the Triple Crown as his Chancellor had in retaining the AAA credit

:40:54. > :41:01.rating? And as team manager, does he intend to change his economic

:41:01. > :41:04.team to avoid further humiliation and a triple dip recession? There

:41:04. > :41:09.is a difficult record with prime ministers endorsing various rugby

:41:09. > :41:12.or football teams, so I won't plan to do that, but I am very proud of

:41:12. > :41:16.the fact that on St David's Day the Welsh flag will be flying above

:41:17. > :41:26.Downing Street, as it should be, and when it comes to the rugby, may

:41:27. > :41:28.

:41:28. > :41:33.the best team win. Has My right honourable friend

:41:33. > :41:36.noticed that, in common with the United States and Japan, we lost

:41:36. > :41:45.our to play staters, that the cost of our international borrowing has

:41:45. > :41:48.actually fallen? -- lost our AAA status. I don't deny for one second

:41:48. > :41:53.the importance of the ratings agencies, but the most important

:41:53. > :41:58.test of credibility which you face day-in, day-out in the market, is

:41:58. > :42:02.the rate of interest at which you borrow, and our rate of interest is

:42:02. > :42:06.still at record lows. It has gone down since the elections where it

:42:06. > :42:12.has gone up in many other countries. If we listen to the party opposite,

:42:12. > :42:15.it would go up again. The Prime Minister will be aware of

:42:15. > :42:21.an increased need for food banks in constituencies like mine brought

:42:21. > :42:25.about by his Government's failed policies. Will he sign a my

:42:25. > :42:31.petition calling for action so that no family in the UK goes hungry due

:42:31. > :42:35.to his policies? I was certainly look at his petition. First of all,

:42:36. > :42:40.the use of food banks went up tenfold under the last Labour

:42:40. > :42:44.government. But a very important change the maid, asked for by the

:42:44. > :42:48.Trussel Trust, which does so much to promote the work of food banks,

:42:48. > :42:52.was to allow them to be advertised in JobCentres. The last government

:42:52. > :42:58.didn't do that because they were worried about the PR. We put people

:42:58. > :43:02.ahead of public relations. This week, the generation that

:43:02. > :43:07.fought in the Arctic convoy and Bomber Command, who died in the

:43:07. > :43:11.Second World War, have finally been recognised. Does my right

:43:11. > :43:18.honourable friend agree with me that it is right that we remember

:43:18. > :43:21.the 3000 sailors and the 55,000 their lives for the freedom of this

:43:21. > :43:24.country? It is right to raise this issue and I am sure there will be

:43:24. > :43:28.support right across the House of Commons for those who do parts in

:43:28. > :43:33.the Arctic convoys and all those who served in Bomber Command. It is

:43:33. > :43:37.not enough to have the excellent memorial to those who served in

:43:37. > :43:42.Bomber Command in Green Park, it is right that we have the medal for

:43:42. > :43:46.Arctic convoy and the class four Bomber Command. It is very

:43:46. > :43:50.important that we hand these out as quickly as possible, because people

:43:50. > :43:54.who served all those years ago, tragically, we are losing more and

:43:54. > :44:00.more of them and they deserve their Acknowledgments, I am proud that we

:44:00. > :44:04.will get them under this Government. Mr and Mrs Goodwin live in the

:44:04. > :44:08.Caerphilly Borough, they are both registered blind and relied heavily

:44:09. > :44:13.on guide dogs, family and neighbours. Life is not easy for

:44:13. > :44:18.them. But on the 1st April, things will become even more difficult,

:44:18. > :44:21.because they will have to pay the Government bedroom tax on their

:44:21. > :44:27.home for 26 years. What justification can there be for

:44:27. > :44:32.this? First of all, I will look at any individual case, the Department

:44:32. > :44:36.of Work and Pensions will look at any individual case. But can I make

:44:36. > :44:41.this point, this is not a tax. Eight taxes when someone earns

:44:41. > :44:47.money, it is their money and the Government takes some of it away. -

:44:47. > :44:52.- a tax is. The party opposite have to engage with the fact that

:44:52. > :44:58.housing benefit accounts for �23 billion of government spending, a

:44:58. > :45:01.50% increase over last decade. We have to address the fact that we

:45:01. > :45:06.have 250,000 families in overcrowded accommodation and 1.8

:45:06. > :45:09.million people waiting for a Council axe. That is why it is not

:45:09. > :45:14.surprising that the honourable gentleman on the front bench is

:45:14. > :45:18.shouting, shameful, let him listen to what Labour's Housing Minister

:45:18. > :45:23.said under the last government. He said, we have reiterated time and

:45:23. > :45:25.again the need to ensure that houses that are too large for

:45:25. > :45:29.people's current needs are allocated accordingly, that is what

:45:29. > :45:39.they said in government but now when opposition all we get is rank

:45:39. > :45:43.

:45:43. > :45:48.Businesses in Yorkshire have full order books and the head of the CBI

:45:48. > :45:55.has said the Yorkshire economy is turning a corner. Would he ignore

:45:55. > :45:58.the poor advice from the party opposite? The British economy has

:45:58. > :46:05.been through difficult times, not least because we are recovering

:46:05. > :46:08.from a massive boom and bust, a massive banking bust and the

:46:08. > :46:13.deepest recession since the 1930s. In terms of employment, in terms of

:46:13. > :46:15.new business creation, you can see an economy that's rebalancing and

:46:16. > :46:22.it's that rebalancing and that business growth that we need to

:46:22. > :46:26.encourage. The Prime Minister has stood idly by while hard-pressed

:46:26. > :46:32.families across the country have faced soaring energy bills, now

:46:32. > :46:35.over �1400 a year. Last October, the Prime Minister promised to take

:46:35. > :46:38.afrbgs. -- action. The country wants to know what is he going to

:46:38. > :46:43.do now to keep his promise to those families who are struggling to heat

:46:43. > :46:47.their homes? We are legislating to make sure that energy companies put

:46:47. > :46:55.people on to the lowest tariffs. When that Bill comes in front of

:46:55. > :46:57.the House of Commons, I hope she will vote for it. Will the Prime

:46:57. > :47:02.Minister withdraw the National Health Service procurement patient

:47:02. > :47:05.choice and competition regulations that seem to contradict assurances

:47:05. > :47:13.given in the other place that this coalition Government will not

:47:13. > :47:16.privatise our NHS? I would urge my honourable friend to look very

:47:16. > :47:20.closely at these regulations because I think what he will find

:47:20. > :47:24.is they are absolutely in line with the principles the last Government

:47:24. > :47:28.put in place and actually, the effect of withdrawing the

:47:28. > :47:33.regulations would actually mean that you have more competition in

:47:33. > :47:36.the NHS, rather than managed competition, managed by monitor. I

:47:36. > :47:44.think the effect of what he wants could be the exact opposite of what

:47:44. > :47:48.he seeks. The Energy Secretary, the Deputy

:47:48. > :47:54.Prime Minister, the committee on climate change, the chair of the

:47:54. > :47:56.energy and climate change Select Committee and a group of over 35

:47:56. > :48:01.businesses NGOs and faith groups are among those who back the

:48:01. > :48:05.inclusion of a target to decarbonise the power sector by

:48:05. > :48:08.2030 in the Energy Bill. Can the Prime Minister explain why his

:48:08. > :48:13.Government have failed to include such a target in the Bill? We don't

:48:13. > :48:20.believe it makes sense to consider setting a target range for 2030 in

:48:20. > :48:23.advance of setting the 5th carbon budget which covers the period. It

:48:24. > :48:30.will be taking the power in the Energy Bill but setting it in

:48:30. > :48:34.advance wouldn't make sense. 2008, Labour commissioned three

:48:34. > :48:38.reports into the state of the NHS to celebrate its 60th birthday

:48:38. > :48:43.party. We now know those reports were damming and raised issues such

:48:43. > :48:47.as a dangerous target culture that was raised five years later. Those

:48:47. > :48:51.reports were suppressed by the Labour Government. Had they not

:48:51. > :48:56.been suppressed thousands of lives could possibly have been saved.

:48:56. > :49:02.Will the Prime Minister join me in calling for an investigation as to

:49:02. > :49:05.who exactly was responsible for suppressing those reports? I know

:49:05. > :49:10.what my honourable friend has said and I will look carefully at the

:49:10. > :49:13.issue she raises. The whole point about the Frances Report is we

:49:13. > :49:18.should use this opportunity to say yes, of course we support the NHS

:49:18. > :49:21.and its founding principles, but not everything in the NHS is right.

:49:21. > :49:24.Where there is bad practice and where there are things going wrong,

:49:24. > :49:27.we need to shine a very bright light at that and make sure not

:49:28. > :49:34.only that we deal with it, but we also hold people to account for it,

:49:34. > :49:40.as well. Further to the honourable member's question on the new

:49:40. > :49:44.regulations laid down on 13th February, the Government gave

:49:44. > :49:47.assurances that GP Commissioners would not be forced to put health

:49:47. > :49:54.service at competitive tendering. The regulations go completely

:49:54. > :49:57.against this. What is the Prime Minister's excuse for this? The GP

:49:57. > :50:02.Commissioners are not forced to put services out to competitive tender.

:50:02. > :50:06.It's GP Commissioners and the point is it is going to be doctors making

:50:06. > :50:11.the decisions about whether they want to expand choice and diversity

:50:11. > :50:13.in the NHS. But I would say to the honourable lady, what is she

:50:13. > :50:18.worried about, what's the Labour Party worried about? Isn't it the

:50:18. > :50:25.case that there are lots of voluntary bodies, charities, the

:50:25. > :50:29.hospice movement, organisations like Mind, like Whizz Kids in Tower

:50:29. > :50:34.Hamlets that provide an amazing service for wheurpb with --

:50:34. > :50:40.children with wheelchairs. Let us have diversity, let us have choice,

:50:40. > :50:45.make sure we are on the side of patients. Two-and-a-half years ago,

:50:45. > :50:48.a nine-year-old from Glamorgan became the 9th person to die in a

:50:48. > :50:53.river incident on a rafting exercise on a river. There appeared

:50:53. > :50:57.to be blatant disregard to common sense health and safety standards.

:50:57. > :51:00.Her parents have campaigned tirelessly for a criminal

:51:00. > :51:03.investigation, improved standards and even funded witnesses to travel

:51:03. > :51:07.to the Turkish courts but their efforts have been frustrated for

:51:07. > :51:12.what appears to be bureaucratic reasons. Will the Prime Minister

:51:12. > :51:17.work with the Turkish authorities to gain justice and help warn

:51:17. > :51:23.people of the risks of white water rafting in Turkey? He is right to

:51:23. > :51:28.raise this tragic case of a nine- year-old constituent of his who

:51:28. > :51:31.died in 2010 in Turkey. I want to send my sincere condolences to the

:51:31. > :51:34.family in these terrible circumstances. I know he's been

:51:35. > :51:37.speaking to the Minister for Europe Europe regarding this. Our Embassy

:51:37. > :51:41.in Turkey is monitoring the case and can approach the Turkish

:51:41. > :51:45.authorities and ask them to keep the family fully informed of any

:51:45. > :51:48.progress and I am sure the Foreign Office will have listened carefully

:51:48. > :51:52.what what what he said today, standing up for this family's

:51:52. > :51:56.interests. I have a vulnerable constituent, near pension age,

:51:56. > :51:59.who's lived in the same house his whole life. His parents have now

:52:00. > :52:03.died. He is willing to be rehoused but cannot find an alternative. He

:52:03. > :52:09.now faces homelessness because he simply can't afford the

:52:09. > :52:13.Government's bedroom tax. Can the Prime Minister explain why he has

:52:13. > :52:19.prioritised a tax cut for millionaires whilst devastating the

:52:19. > :52:24.lives of vulnerable people? point Wye make is there are 250,000

:52:24. > :52:29.families who live in overcrowded accommodation. There are 386,000

:52:29. > :52:32.people who live in underoccupied homes. There are 1.8 million people

:52:32. > :52:37.who would love to have a council house who couldn't get one. Of

:52:37. > :52:40.course we need to build more social homes and we are doing exactly that.

:52:40. > :52:45.But in the meantime, we should do everything to make sure those homes

:52:45. > :52:53.are used in the most efficient and fair way, that's what these changes

:52:53. > :52:58.will help to achieve. That's why they deserve our support. We were

:52:58. > :53:05.all hugely inspired by the wonderful Paralympic Games in

:53:05. > :53:11.London last year. Not only a triumph for sport, but a triumph

:53:11. > :53:17.for perceptions of disability. Will the Prime Minister welcome the

:53:17. > :53:20.generation-inspired report which is going to be presented to Downing

:53:20. > :53:25.Street today, as a great opportunity to use the legacy of

:53:25. > :53:29.this to improve the lives of young disabled people? I will certainly

:53:29. > :53:33.welcome the report my honourable friend mentioned. I thought the

:53:33. > :53:38.Games were an absolute triumph for Britain, the way they were

:53:38. > :53:41.put on and the way the auditorium and stadium were full for almost

:53:41. > :53:46.every single event. It was a great testament to the generosity of

:53:46. > :53:49.people of this country and their enthusiasm for Paralympic sports.

:53:49. > :53:53.The important thing is the change in perception about what disabled

:53:53. > :53:58.people are capable of and that's a real gift and something we should

:53:58. > :54:03.encourage. The Prime Minister supports an exemption to the

:54:03. > :54:08.bedroom tax for families of prisoners, but not for people with

:54:08. > :54:14.cancer, people with disabilities, foster parents, or armed forces

:54:14. > :54:18.families. Why? As the honourable lady knows there is a �50 million

:54:18. > :54:21.found directly support people as part of this measure. We have

:54:21. > :54:27.addressed very specifically the point about armed forces' families

:54:27. > :54:30.where people leaving the home will be more than compensated for any

:54:30. > :54:37.costs under occupancy rules. I come back to the bigger picture, which

:54:37. > :54:41.is that housing benefit is up 50% in real terms, it now accounts for

:54:41. > :54:45.�23 billion of public spending. I have to say to the party opposite,

:54:45. > :54:51.if you come here week after week and you say no to the benefit cap,

:54:51. > :54:55.no to capping housing benefit, no to restriking -- restricting growth

:54:55. > :55:04.of benefits, people will simply not believe you have any plans to deal

:55:04. > :55:08.with our deficit whatsoever and you know what, they'd be right.

:55:08. > :55:14.Reeducation forms as pursued by this Government have been emgraced

:55:14. > :55:19.by -- embraced by schools in Bedfordshire and by staff in one

:55:19. > :55:23.school in pursuit of an academy. This week there has been a blip. A

:55:23. > :55:27.school which had been offered free school status 14 months ago has

:55:27. > :55:32.found as part of the Barnfields Trust, has found last week that's

:55:32. > :55:38.been removed without knowing why. I wonder if the Prime Minister could

:55:38. > :55:44.use his offices to implore the Department of Education to let me

:55:44. > :55:47.snow stphp the reason -- to let me know know as soon as possible the

:55:47. > :55:51.reason. I would join her in strongly supporting the free

:55:51. > :55:55.schools movement. It's a remarkable advance that within just two-and-a-

:55:55. > :56:01.half years we now have 101 free schools that are open, we have many

:56:01. > :56:04.more in the pipeline. I know that my right honourable friend, the

:56:04. > :56:07.Education Secretary, was listening very closely about the specific

:56:07. > :56:10.proposal. It's obviously important we vet proposals to make sure

:56:10. > :56:13.they're strong proposals for education, that they have parental

:56:13. > :56:17.support, they'll raise standards in the local authority but I strongly

:56:17. > :56:23.support the free schools movement and I am sure my right honourable

:56:23. > :56:26.friend will be in touch with her. My own local authority have done

:56:26. > :56:31.pioneering work over years on improving public health. They've

:56:31. > :56:41.recently asked adults to refrain from smoking in children's play

:56:41. > :56:45.areas. Does the Prime Minister agree with me one of his own health

:56:45. > :56:49.Ministers - that we should go a step further and introduce a ban on

:56:50. > :56:54.smoking where children are present in vehicles? I think we should look

:56:54. > :56:58.carefully at what he and others have said. We are looking across

:56:58. > :57:03.the piece at all the issues, about whether we should follow the

:57:03. > :57:07.Australians with a ban on packaging, what more we can do on restricting

:57:07. > :57:10.smoking in public places. -- there has been a real health advance from

:57:10. > :57:17.some measures taken. We have to look at each oupb and work out

:57:17. > :57:27.whether there is a real public benefit. He makes a good point.

:57:27. > :57:28.

:57:28. > :57:32.22 years since the landmark Medical Research Council report made a

:57:32. > :57:37.direct link between - countries have fortified their basic food

:57:37. > :57:40.stuffs but this policy is mired in bureaucracy between the Food

:57:40. > :57:44.Standards Agency, the Department of Health and others. Will the Prime

:57:44. > :57:53.Minister do everything he can and give reassurance to the House that

:57:54. > :57:58.he will unblock this logjam to prevent the entirely preventable

:57:58. > :58:03.conditions of spina bifida? It's true that levels of - conditions

:58:03. > :58:07.like spina bifida have come down and it's true that folic acid has

:58:07. > :58:11.an important role to play. In terms of the specific points and the

:58:11. > :58:17.bureaucratic problem he identifies I will look at that and perhaps get

:58:17. > :58:20.the Department of Health to write to him about it. With respect, I

:58:20. > :58:26.make no apology for returning to an issue which my colleagues have

:58:26. > :58:31.raised. A letter from my constituent said this, I am

:58:31. > :58:36.disabled, wheelchair dependent, suffer from brittle bones, require

:58:36. > :58:43.day and night assistance from social services, and therefore, I

:58:43. > :58:47.need a spare room on health grounds. I feel suicidal about this bedroom

:58:47. > :58:53.tax. Would the Prime Minister, consulting with the Secretary of

:58:53. > :59:00.State for Work and Pensions, agree to put the needs of disabled people

:59:00. > :59:07.first and revisit what's turning out for hundreds of thousands of

:59:07. > :59:12.disabled people and their families, to be a disastrous policy? This

:59:12. > :59:16.Government always puts disabled people first. That's why we have

:59:16. > :59:23.protected disabled benefits, specifically on the issue that he

:59:23. > :59:27.raises, there is the �50 million fund to support people affected by

:59:27. > :59:30.the underoccupiesancy measure. Disabled adult - they don't want to

:59:30. > :59:34.hear the answers. This directly answers the point. Disabled adults

:59:34. > :59:37.will have access to discretionary housing payment scheme and it will

:59:37. > :59:44.remain for local authorities like his own, to assess the individual

:59:44. > :59:48.circumstances. It is worth making the point again, a �23 billion

:59:48. > :59:52.budget, 50% increase over the last decade, we have to do something

:59:52. > :00:00.about the growth in the housing benefit bill and all we hear is

:00:00. > :00:05.irresponsibility from the party opposite. Who would have thought

:00:05. > :00:11.when some of us voted for just a common market all those years ago,

:00:11. > :00:16.that the EU would now be interfering potentially in what

:00:16. > :00:21.benefits we should be paying to Romanians and Bulgarians before

:00:21. > :00:26.they've made any contribution to our society? Is it any wonder

:00:26. > :00:30.people feel disillusioned and powerless? Isn't the good news this,

:00:30. > :00:35.who is more likely to vote to give people a genuine choice in a

:00:36. > :00:38.referendum, a Liberal or a Conservative MP for Eastleigh?

:00:38. > :00:41.delighted my honourable friend managed to slip that point in at

:00:41. > :00:45.the end. I would urge any honourable friends who aren't there

:00:45. > :00:50.already to make their way to Eastleigh this afternoon and

:00:50. > :00:54.support Maria Hutchings in the campaign. The point that he makes

:00:55. > :00:59.is very important, which is we need to look through every aspect of how

:00:59. > :01:04.we welcome people to our country and make sure while we must be fair,

:01:04. > :01:08.we must not be a soft touch. I am making sure we look at our health

:01:08. > :01:12.service, we look at housing, at benefits, we look at legal aid, at

:01:12. > :01:15.all of the things and make sure we have proper and tough controls on

:01:15. > :01:19.people who want to come and live here.

:01:19. > :01:24.The Treasury was required to approve the settlement made with a

:01:24. > :01:28.dismissed former chief executive of my local hospital Trust in February

:01:28. > :01:34.last year. If he believes in openness in the NHS, why has his

:01:34. > :01:37.Government allowed this size of this pay-off to be kept secret?

:01:37. > :01:41.will look closely at this issue that he raises. I know there have

:01:41. > :01:45.been particular issues around foundation Trusts in the area which

:01:45. > :01:51.he represents. I will make sure that the Health Secretary writes to

:01:51. > :01:56.him about this issue. Recently large numbers of my constituents

:01:56. > :02:00.have taken a great interest in political campaigning in the

:02:00. > :02:05.neighbouring County. My belief is that it's always best if local

:02:05. > :02:11.people have a strong independent voice, particularly if they're in

:02:11. > :02:15.favour of controlling immigration, making welfare fairer, and an in-

:02:15. > :02:20.out referendum. Does the Prime Minister agree with my advice that

:02:20. > :02:26.the people of Eastleigh will be well advised to vote for Maria

:02:26. > :02:31.Hutchings tomorrow? I want to thank my honourable friend for his hard

:02:31. > :02:41.work and for the ingenious way he managed to get that question in

:02:41. > :02:46.

:02:46. > :02:52.If you have any luck in getting the honourable member for Rhondda to

:02:52. > :02:54.shut up, do let us know how it's done! The Prime Minister Prime

:02:54. > :03:00.Minister shouldn't bother phoning me, I will phone him in those

:03:00. > :03:05.circumstances. Thank you. Thank you very much for that, Mr

:03:05. > :03:11.Speaker. Perhaps we could end Prime Minister's questions on a similar

:03:11. > :03:16.note to that which we began it with, recognising the appalling views of

:03:16. > :03:20.the Labour candidate in Eastleigh. He said this about the Falklands

:03:20. > :03:25.war, one of the proudest moments of this country's recent history, I

:03:25. > :03:28.settled, he said, on the position of wanting Great Britain to lose a

:03:28. > :03:32.war for the good of Great Britain. This candidate endorsed by the

:03:32. > :03:36.leader of the Labour Party, a shocking lack of patriotism and

:03:36. > :03:40.national pride. Mr Speaker, the Prime Minister has run away from

:03:40. > :03:44.the question as to whether he will personally benefit from the

:03:44. > :03:50.millionaires tax cut. It's a simple question. When the top rate of tax

:03:50. > :03:54.is cut from 50p to 45, will he personally benefit? The top rate of

:03:55. > :03:58.tax under this Government will be higher than any year under his

:03:58. > :04:06.Government. That is the change that we are bringing about. When they

:04:06. > :04:16.introduced the 50p they lost �7 billion in tax revenue. They're not

:04:16. > :04:28.

:04:28. > :04:36.only socialists, they're Iain Watson got it right, although

:04:36. > :04:40.it was not that difficult! They went on the economy, we will talk

:04:40. > :04:44.about that in a minute, it was the argument about the AAA rating, the

:04:44. > :04:48.deficit, it was the sense that we have heard a lot of this argument

:04:48. > :04:52.before and we probably will again in the future. It really only came

:04:52. > :04:56.to light when the Prime Minister quoted the New Statesman magazine,

:04:56. > :05:05.and the Leader of the Opposition attack did, which seemed strange.

:05:05. > :05:14.It is a fine centre-left magazine we might talk about that in a

:05:14. > :05:18.moment. What were the viewers saying? Jimmy from Nottingham said

:05:18. > :05:23.that when David Cameron stonewalls the questions by asking more which

:05:23. > :05:29.aren't answered by Ed Miliband, that is the question. The

:05:29. > :05:32.politicians are just taking a turn to punch a wall. Another viewer

:05:32. > :05:37.said that Ed scored an own goal with his New Statesman jibe, if he

:05:37. > :05:40.can't land one blow on the Prime Minister today, you never will. Tom

:05:40. > :05:45.from Rotherham says that neither Ed Miliband nor David Cameron have

:05:45. > :05:48.grasped the fact that the credit ratings have no more substance than

:05:48. > :05:52.a considered opinion. Diane from Cornwall said clearly the loss of

:05:53. > :05:57.the AAA rating, though largely insignificant economically, is

:05:57. > :06:01.dynamite politically, which Ed Miliband exposed eloquently. And

:06:01. > :06:05.this from Marjorie, petty squabbling in the House of Commons

:06:05. > :06:09.while Rome burns. I'm depressed about Britain's future. The level

:06:09. > :06:16.of political debate is so squalid and I feel sorry for the Deputy

:06:16. > :06:20.Prime Minister, he looks ill. On that note, let's turn to Iain

:06:20. > :06:26.Watson. Give us some more of your penetrating prescience. Two things

:06:26. > :06:31.struck me, the first was, as you alluded to, Ed Miliband got mugged.

:06:31. > :06:35.His strategy was quite clear, let's go on the economy then say the

:06:35. > :06:39.credit rating as part of a wider malaise surrounding the Government.

:06:39. > :06:43.And interest rate -- interestingly trying to get onto the issue of

:06:43. > :06:48.trust in the Prime Minister, waving around the Conservative manifesto

:06:48. > :06:54.which promise to protect the credit rating. That was fine. Then

:06:54. > :06:59.suddenly he almost walked into this trap. He said that you are scraping

:06:59. > :07:02.the bottom of the barrel by quoting the New Statesman, Ed Miliband says

:07:02. > :07:07.to David Cameron. Them the punchline, David Cameron says, this

:07:07. > :07:12.was the magazine that supported you. In terms of the theatre, Ed

:07:12. > :07:18.Miliband would not have got a victory, but in terms of wider

:07:18. > :07:22.arguments, the Conservatives not sticking to their own promises.

:07:22. > :07:26.Very briefly, as one of the e-mail suggested, Nick Clegg had not

:07:26. > :07:32.looked well, but I was surprised at how restrained backbenchers were on

:07:32. > :07:39.both sides. They mentioned Eastleigh but they did not spiral

:07:39. > :07:45.them into the Liberal Democrats' current troubles. Is there not some

:07:45. > :07:49.substance in the claimed that both Ed Miliband and Ed Balls, despite

:07:49. > :07:54.having an open goal on the economy, are having difficulty in getting

:07:54. > :07:59.the ball in the back of the net? think the AAA rating is not the

:08:00. > :08:04.thing, this was Osborne's test, but for me I think you need to talk to

:08:04. > :08:09.families on the street, as I do all the time. For them, wages are

:08:09. > :08:16.falling, prices are rising, how do they cope? Nobody in the coalition

:08:16. > :08:22.seems worried. These are issues that quite absolutely resonate in a

:08:22. > :08:26.way that, it was even said earlier, AAA might be a form of battery to

:08:26. > :08:30.most people. Whether you can put food on the table or pay the Energy

:08:30. > :08:34.Bill Matters. It is more relevant. And Osborne said it was so

:08:34. > :08:38.important, when Labour said it was not, what is important is getting

:08:38. > :08:43.growth back into the economy, because it is not happening. They

:08:43. > :08:47.said about the deficit coming down, it is not. It is going up. Debt is

:08:47. > :08:51.going up, borrowing is coming up. Their strategy has not worked.

:08:51. > :08:58.Let's look at what is happening to people trying to feed their

:08:58. > :09:02.families every day, that is really important. You've just done a

:09:02. > :09:06.better job than Ed Miliband it. There is a tradition and a House of

:09:06. > :09:11.Commons, I said, the open goal has always missed. The expectation is

:09:11. > :09:18.too high, it is too obvious, you almost pointing out which corner of

:09:18. > :09:20.the let the ball is going into. I think Ed Miliband would have been

:09:20. > :09:25.much better going on cost of living, it would have been much stronger

:09:25. > :09:34.and less expected than the credit ratings argument. If we are trying

:09:34. > :09:37.to do better than Miliband, let me have a go. David Davis, inflation

:09:37. > :09:42.is 50% higher than target, real living standards have been squeezed

:09:42. > :09:48.as never before and for longer than any time in 70 years, death a debt

:09:48. > :09:52.reduction has stalled, that is a polite way of putting it -- deficit

:09:52. > :09:57.reduction. There is no growth in the economy and your credit agency

:09:57. > :10:02.rating has gone. What is going right? My view on this is that it

:10:02. > :10:05.is very simple, we ought to have a Tory growth strategy. Let's not kid

:10:05. > :10:09.ourselves, this started with an inheritance which was very hard to

:10:09. > :10:15.deal with, namely the enormous deficit, the overspending over the

:10:15. > :10:18.good times. That is a clear cause. You are now borrowing more than

:10:18. > :10:22.Alastair Darling plan to, and your party said he was borrowing too

:10:22. > :10:26.much. This solution requires an austerity programme which is

:10:26. > :10:31.tougher than the one we have. We have had a lot of rhetoric about

:10:31. > :10:39.austerity, we need a bit more reality. More cuts, I'm afraid, or

:10:39. > :10:49.the same cuts faster. And the second half, the simple truth is if

:10:49. > :10:49.

:10:49. > :10:53.every 1% less on growth loses you on the deficit every year after.

:10:53. > :10:58.Myself and John Redwood have said for years, there has been a need

:10:58. > :11:03.for a growth strategy from day one, meaning lower taxes. It is the sort

:11:03. > :11:07.of thing the Germans did in 2003 when they cut taxes in the middle

:11:07. > :11:11.of a deficit problem unsolved the deficit. In the Times this morning,

:11:11. > :11:16.John Redwood had an alternative plan to the Government. You have

:11:16. > :11:23.admitted to me that not a lot has gone right with it. If there is no

:11:23. > :11:26.change in the Budget, and there is no sign that there will be, for how

:11:26. > :11:31.long will your backbench colleagues put up with current economic

:11:31. > :11:36.strategy? They will, but they will be critical. It is interesting to

:11:36. > :11:40.see what happens in the Budget. He has a narrow slot and he might well

:11:40. > :11:48.start to think that some tax reductions are necessary in order

:11:48. > :11:53.to get the growth under way. They must be getting unhappy? Of course

:11:53. > :11:58.some of them are run happy. You don't see it on this, you see it on

:11:58. > :12:01.the rather less watch debates on the House of Commons when people

:12:01. > :12:07.are on their feet, but it is a real issue not just in this country but

:12:07. > :12:12.virtually every Western country. They are failing to resolve this

:12:12. > :12:22.problem. The Americans are, most Europeans are, obviously it's any

:12:22. > :12:23.

:12:23. > :12:26.is. It requires a much more robust, much bolder policy on taxation.

:12:26. > :12:30.said that you were sure, despite the criticism, that Mr Cameron

:12:30. > :12:35.would remain as Prime Minister until the end of the parliament.

:12:35. > :12:40.Are you as Shearer by George Osborne remaining Chancellor?

:12:40. > :12:45.are two halves of the same coin. are you as sure about George

:12:45. > :12:50.Osborne. We were meeting people last night

:12:50. > :12:54.associated with the parliament, we have a big audience in Brussels, it

:12:54. > :13:00.was very encouraging to hear that. Not caught up in the ratings,

:13:00. > :13:04.either! Should the European Parliament not consider a kind of

:13:04. > :13:14.Prime Minister's Questions to raise its profile? If it is like that

:13:14. > :13:19.

:13:19. > :13:23.I was trying to think of something diplomatic. I don't want to be in a

:13:23. > :13:28.bear pit like that, what does that achieve? I am not sure what we

:13:28. > :13:34.achieved by that. It keeps you in a job, yes, but does it inform the

:13:34. > :13:38.debate. Do you not like PMQs? OK for a little bit of jousting,

:13:38. > :13:43.but I don't think it moves the debate on. That is the way our

:13:43. > :13:47.Parliament works, this one works differently, it is more about

:13:47. > :13:51.consensus. That is why you see a lot more women. This is the way

:13:51. > :13:56.women prefer to work. That is not the way most women like to work.

:13:56. > :14:00.You should have asked Margaret Thatcher that question! You think

:14:00. > :14:05.if we had more women and the British Parliament, and they are

:14:05. > :14:10.still terribly under-represented, we would see less of what you call

:14:10. > :14:17.the bear-pit? I would hope so. And I think it puts a lot of women

:14:17. > :14:22.going into national politics, absolutely. Final thought? I think

:14:23. > :14:27.the final thought would be... We managed to talk about a European

:14:27. > :14:32.issue at the end, Romanian and Bulgarian immigration, it will be

:14:32. > :14:36.interesting to see where that goes. David Cameron mentioned faster cuts,

:14:36. > :14:40.I was wondering if that was faster than Labour, and an attempt to

:14:40. > :14:47.appease people like David Davis. Thank you very much.

:14:47. > :14:53.The Budget was coming up in a few weeks.

:14:53. > :14:58.Deduce a pizza before? That is your imaginary friend. -- did you say

:14:58. > :14:59.Peter? Back to the issue of Europe and

:14:59. > :15:03.with the Conservatives continuing to dangle a possibility of an in-

:15:03. > :15:07.out referendum after the next election, we should remember that

:15:07. > :15:13.many European Parliament MEPs believe that Europe's next -- real

:15:13. > :15:23.future lies in further integration. This is Sophie in 't Veld, a Dutch

:15:23. > :15:33.

:15:33. > :15:38.liberal, with her take on which way When European integration started

:15:38. > :15:43.in the 50s right after two devastating world wars that tore

:15:43. > :15:47.this continent apart, the purpose was very much to integrate nation-

:15:47. > :15:53.states and make sure they would never make war on each other again.

:15:53. > :15:58.Today, the challenges are a very different nature. The challenges

:15:58. > :16:01.are a globalised economy, the challenges our energy, the

:16:01. > :16:05.challenges are the competition for raw materials in the world. And

:16:05. > :16:10.this is something that Europe needs to consider. If we want to preserve

:16:10. > :16:14.our way of life, if we want to preserve our standard of living,

:16:14. > :16:20.our quality of life, then we need to do it as a single consonant and

:16:20. > :16:24.speak with one voice, that is why Europe needs to integrate further.

:16:24. > :16:30.For decades, Europe has been shaped by diplomats who would come

:16:30. > :16:35.together, diplomats from different countries negotiating and having an

:16:35. > :16:38.exchange of national interests. But now Europe needs to become a fully-

:16:38. > :16:48.fledged political union where citizens actually give a mandate to

:16:48. > :16:55.

:16:55. > :16:59.If we are to become this democratic political Union of citizens then we

:17:00. > :17:04.need to develop into a community of citizens based not only a shared

:17:04. > :17:08.interest but also shared values. The world today is going through

:17:08. > :17:11.nothing short of a revolution comparable to the Industrial

:17:12. > :17:16.Revolution. If the world is different, Europe needs to change

:17:16. > :17:20.as well. We need to do it together, that is the only way that Europe

:17:20. > :17:30.can preserve our quality of life, our way of life, in a changing

:17:30. > :17:33.

:17:33. > :17:35.And Sophie joins us now, alongside the UKIP MEP, Roger Helmer. You are

:17:35. > :17:39.obviously in favour of further integration, do you want all EU

:17:39. > :17:44.member states to join the single currency? Well, I don't think it's

:17:44. > :17:50.up to me to tell member states what to do, but I think ultimately, it

:17:50. > :17:54.would benefit us all if we have a single continent with a single,

:17:54. > :17:58.strong currency that also provides protection against external shocks,

:17:58. > :18:02.but obviously it is for, in this case, the British people to decide

:18:02. > :18:06.whether or not they want to join. It's an interesting view, bearing

:18:06. > :18:10.in mind the euro is in such a crisis and many in Britain say it's

:18:10. > :18:14.a relief we are not part of the euro. How do you think it would

:18:14. > :18:18.benefit stphus. The euro is not in a crisis. The euro has proven to be

:18:18. > :18:22.remarkably stable and resill kwrept. We have a crisis of a different

:18:22. > :18:27.nature, an economic crisis, a political crisis. It turned out we

:18:27. > :18:31.didn't have the political, the governance instruments to reply to

:18:31. > :18:37.respond to the economic turbulence coming at us a. But the euro is

:18:37. > :18:42.very stable. I don't think we have a euro crisis. I think we are too

:18:42. > :18:45.focused on internal matters. We are fairly obsessed with our belly

:18:45. > :18:49.buttons and seem to forget the euro is not only an exchange instrument

:18:49. > :18:54.between European countries, it's also a global currency, a reserve

:18:54. > :18:59.currency. What do you say to that. I don't think Sophie is living in

:18:59. > :19:02.the real world. We have had the euro crisis running like some

:19:02. > :19:06.perverse soap opera for the last three years or so. We have large

:19:07. > :19:09.parts of southern Europe in utter crisis. We lost the Bulgarian Prime

:19:09. > :19:15.Minister recently, we all know about Greece. We have seen what's

:19:15. > :19:18.happened in the Italian elections, which are mainly motivated by

:19:18. > :19:22.unhappiness with austerity imposed from Brussels. The thing is a

:19:22. > :19:26.crisis, no argument about it. The British people know that. The

:19:26. > :19:32.British people would absolutely not contemplate joining the euro.

:19:32. > :19:35.Haven't the Italians stuck two fingers up to austerity, austerity

:19:35. > :19:39.imposed by Brussels? They may not be saying no to the euro but

:19:40. > :19:43.they've said in a sense, no more, thank you very much. I fully

:19:43. > :19:47.understand but you have to distinguish what is the cause and

:19:47. > :19:50.what is the consequence. I think any country, including my own

:19:50. > :19:55.country, we could not escape austerity even if we were outside

:19:55. > :20:01.the eurozone. It's very simple maths. You cannot systematically

:20:01. > :20:07.spend more than you earn. At some point you have to cut back or you

:20:07. > :20:11.have to earn more, one way or the other. You have a 35% gap in

:20:11. > :20:17.competitive... Let me finish, please. There are several ways out

:20:17. > :20:21.of the debt crisis and economic crisis. Is further integration and

:20:21. > :20:25.closer fiscal union one? If we have a shared currency, which we have,

:20:25. > :20:29.then we also need to have the governance instruments to go with

:20:29. > :20:33.it. Or we should choose not to have the currency. One or the other.

:20:33. > :20:37.are halfway to a solution. You would need to make the euro work,

:20:37. > :20:42.you would need fiscal integration, that would mean Germany sending

:20:42. > :20:47.billions of euros to Greece and Italy and Spain, not on the odd ad

:20:47. > :20:51.hoc bail out, but every year. The The German voters won't stand for

:20:51. > :20:55.it. That solution will not and cannot work. The only solution,

:20:55. > :21:00.actually, is to break up the euro, the question is when, how, and what

:21:00. > :21:04.pattern we get afterwards. Further integration, is that what Labour

:21:04. > :21:07.MEPs would like to see actually Britain encouraging more

:21:08. > :21:11.integration with Britain part of it? Absolutely not. That's a

:21:11. > :21:14.Liberal point of view. Our view is that we want strong member states,

:21:14. > :21:18.working together on those areas where it's obvious that it's

:21:18. > :21:22.helpful, like the environment, security. All of those, a single

:21:22. > :21:26.market. There's lots of areas we should work together. We are not

:21:26. > :21:30.federalists, we don't believe in that model. In order for there to

:21:30. > :21:33.be prosperity again in Europe that's what has to happen,

:21:34. > :21:37.otherwise this will continue. are two issues. One is what do you

:21:37. > :21:41.with the eurozone countries that have obviously got to make changes

:21:41. > :21:44.about how they manage their economies. I think it's a different

:21:44. > :21:48.issue about Europe altogether. not a referendum, why is Labour

:21:48. > :21:53.standing on the fence in terms of offering the British people a

:21:53. > :21:58.referendum saying not now, it will create uncertainty but we are not

:21:58. > :22:01.ruling it out, which also creates uncertainty? It Does create create

:22:01. > :22:08.uncertainty to say in X number of years we will have a referendum.

:22:08. > :22:11.British businesses will tell you that. I had a meeting with an

:22:11. > :22:14.ambassador, it caused uncertainty for American companies. It's not

:22:14. > :22:19.the right time. We have more things to do, getting the economy working.

:22:19. > :22:25.Will a Conservative Prime Minister take us out of the EU? Depends what

:22:25. > :22:29.the referendum says. What he won't do is take us no the euro. When it

:22:29. > :22:32.was first founded we didn't join and opposed it for two reasons. One

:22:32. > :22:35.was because it would amplify the shocks, the problems, the economic

:22:35. > :22:39.problems that we had. Secondly, it would take away democratic

:22:39. > :22:45.accountability from the nation states. You have seen that in Spain,

:22:45. > :22:48.in Greece, in Italy, today, in Spain, in Portugal. We don't want

:22:48. > :22:54.it. What do you make of the British position? I don't know what the

:22:54. > :23:01.British position is, frankly. There are many different positions in

:23:01. > :23:06.Britain. I think there is one very positive outcome of all this and -

:23:06. > :23:11.of the whole crisis situation, never before have we debated so

:23:11. > :23:15.much about the purposes, the merits or not of European integration and

:23:15. > :23:21.how we want Europe to integrate. When European integration started

:23:21. > :23:25.in the 50s, Europe was about 20% of the world population of then 2.5

:23:25. > :23:29.billion. Now the population is 7 billion and we are about 7%. We are

:23:29. > :23:33.shrinking and ageing. If we want to preserve the position of Europe in

:23:33. > :23:35.the world, we need to do it together. But we need to do it in a

:23:35. > :23:39.democratic way. We have to stop there. Do you think Britain will

:23:39. > :23:43.still be in the EU after the next election? I very much hope so.

:23:43. > :23:49.Tkoeu think that we belong -- I do think that we belong together.

:23:49. > :23:54.I bring us back to the Eastleigh by-election. Reports cominging out

:23:54. > :23:57.there is a head of steam behind UKIP, what say you? I can endorse

:23:57. > :24:01.that, I was there at the weekend. I am not going to make predictions,

:24:01. > :24:06.it's a mug's game. People may well be surprised by the outcome and I

:24:06. > :24:09.think we are we are doing very well, having said I won't make a predicts,

:24:09. > :24:13.one I would make is I think we are going to get a record share of the

:24:13. > :24:17.vote for UKIP in a by-election. number of your colleagues, senior

:24:17. > :24:23.UKIP people, were telling us in private, that they thought you

:24:23. > :24:27.would win Eastleigh. If we do, I shall drink a great deal of

:24:27. > :24:31.champagne. I got that bit! Do you think you will win? We are in with

:24:31. > :24:34.a chance. We know that, but do you think you will win? I am not

:24:34. > :24:37.venturing... A strong word in private, why don't you say it in

:24:37. > :24:42.public? If I believe we were going to win I would say we are going to

:24:42. > :24:47.win. You know what it's like in politics, you make a prediction and

:24:47. > :24:50.everybody holds you to it. I don't know whether we are going to win. I

:24:50. > :24:53.hope we will. I have worked to that objective. We are in with a good

:24:53. > :24:57.chance. People won't vote Labour, they know Labour's not going

:24:57. > :25:02.anywhere. If they want to give the coalition a knock... We don't need

:25:02. > :25:12.to go around the whole course! You sound like the football manager who

:25:12. > :25:15.said I don't make predictions and I never will! Profound.

:25:15. > :25:17.Now, the 754 MEPs who come here each week represent the second

:25:17. > :25:21.largest democratic electorate in the world, after India. In order to

:25:21. > :25:23.house all those MEPs you need a pretty big building. We sent Adam

:25:23. > :25:27.on a little tour. Welcome to the European Parliament,

:25:27. > :25:30.half a million square metres. The most exciting bit is where

:25:30. > :25:35.parliament meets when it's not at its other seat in the French city

:25:35. > :25:39.of Strasbourg. Sadly, we will not be seeing it today, because it's

:25:39. > :25:45.closed for the foreseeable future after enormous cracks appeared in

:25:45. > :25:52.the ceiling. Come with me on a search for alternative interesting

:25:52. > :25:58.things in this findishly complicated building.

:25:59. > :26:05.-- fiendishly. Every MEP gets their own peupblgial hole where -- pigeon

:26:05. > :26:10.hole where papers are delivered. The only thing there's more of is

:26:10. > :26:18.art. The walls of this place are covered in it.

:26:18. > :26:21.The biggest piece is this one, by a Belgian sculptor. It's a sort of

:26:21. > :26:26.hymn to European togetherness in stainless steel and runs through

:26:26. > :26:29.the middle of the building. Then there is the fact there is

:26:29. > :26:34.weird stuff just dotted around all over the place. Like this grand

:26:34. > :26:44.piano donated by the people of Estonia to mark their country's

:26:44. > :26:49.90th anniversary. Now, how does the Estonian national anthem go?

:26:49. > :26:53.No. No, I have no idea what that sign means.

:26:53. > :26:59.Running the various parliament buildings costs about a 10th of 1%

:26:59. > :27:04.of the total EU budget. Around 190 million euros a year. It's also a

:27:04. > :27:07.very open place. They'll let you film pretty much everywhere,

:27:07. > :27:13.annoyingly, the only thing off limits are the bars and restaurants.

:27:13. > :27:17.I can tell that you one of them is the Mickey Mouse bar. The chairs in

:27:17. > :27:22.it are reminiscent of a certain Disney character. Sadly, they've

:27:22. > :27:30.got rid of most of them now and these are museum pieces.

:27:30. > :27:37.Talking of museums, there's one here called The Parliamentarian.

:27:37. > :27:42.It's amazingly hi-tech. You can't come to a tourist

:27:42. > :27:51.attraction without going to a gift shop. Giant chocolate euro, Andrew?

:27:51. > :28:00.Jo, how about teabags in the shape of world leaders? A euro-shaped

:28:00. > :28:04.money box. And a giant euro clock. He is good with the presents! Just

:28:04. > :28:10.before we go, it's time to put you out of your misery and give you the

:28:10. > :28:20.answer to Guess The Year. It was 2007. The winner is Sue Renyard

:28:20. > :28:23.

:28:23. > :28:26.from Fareham in Hampshire. Well done, Sue. That's it for today.

:28:26. > :28:30.Thanks to our guests - especially David Davis and Glenis Willmott for

:28:30. > :28:33.being our guests of the day. The news is starting over on BBC One

:28:33. > :28:38.now. We'll be back in Westminster again tomorrow with all the big