Conference Special Daily Politics


Conference Special

Andrew Neil is joined by former cabinet minister Lord Fowler to discuss all the latest from the Conservative party conference. Including live coverage of George Osborne's speech.


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Transcript


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Morning, folks. Welcome to yet another week of conference specials.

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The Tories are in Manchester this year for their annual party shindig.

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That's the queue for the hottest ticket in town, the Chancellor's

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speech to conference. Maybe they are all sitting down already! He's

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speech to conference. Maybe they are expected to take to the stage in

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about 20 minutes' time, with a tough message for the long term unemployed

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and a few sweeteners for the hardworking. Everybody loves a hard

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worker! With all the economic indicators

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worker! suggesting the economy's on the up,

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he might even put a smile on his face. But don't hold your breath.

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We'll be carrying George Osborne's speech live and uninterrupted.

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His boss is looking happy, down to his shirt sleeves. He's got a tall

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order ahead of him if wants an outright majority at the next

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election. We'll be asking, does he stand a chance?

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He looks like a nice chap but is this man the Conservatives'

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deadliest enemy ever? We'll be talking pacts with UKIP.

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And it seems David Cameron doesn't like our Adam's balls.

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Who has got more balls, you or Mrs Thatcher?

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All that in the next hour, and with us for the duration is the former

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Conservative Party chairman, Norman Fowler. -- in the next hour and a

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half. Welcome. This conference season has been notable for the

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number of new policies which have been announced. The Liberal

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Democrats and Labour both set out new ideas which they hope will form

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part of their campaigns for the next election, and the Conservatives are

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no different. They're trying to woo voters who want to get on in the

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game of life. David Cameron wants to encourage marriage, and has made

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good on his promise to recognise it in the tax system. Married and

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civilly partnered couples will be able to share some of their unused

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personal income tax allowance, potentially worth up to £200 a year.

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The PM also says he wants to help potentially worth up to £200 a year.

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people buy their own home. So phase two of the Government's Help to Buy

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scheme will come into effect this week, three months ahead of

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schedule, offering government loans of up to 20% of a home's value to

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help people raise a deposit. But for people who are still jobless after

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two years on the existing work programme, the government's new help

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to work will mean a tougher regime as a condition for staying on

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benefits. -- be Government's new Help to Work. One option will be

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community work placements, like cleaning up litter. This morning the

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Chancellor, George Osborne, said that the long term unemployed should

:03:13.:03:16.

be taking up the jobs which are being created. And that is why we

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are saying, look, you will not be able to do nothing in return for

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your benefit any more. You will have to either turn up at the Jobcentre

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everyday or you will have to undertake community work, or you

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will have to get help for some underlying problem you might have

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like a drug addiction or illiteracy. We will not leave behind any more a

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generation on long-term unemployment, we will do everything

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we can to help them into work. Norman Fowler, compassionate

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conservatism, and is now the US style tough love? It is a variation

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of the old American workfare scheme, which has been around for some time.

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I think it is sensible, as far as younger people are concerned. Young

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people who refuse all offers to go back to work. We have more problems

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people who refuse all offers to go with older people, and particularly

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when it comes to some things that have been mentioned like drug use.

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The idea that you will have a sudden policy that will take them off drugs

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does not work, we all know that. As a general policy, I think it is a

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good idea. It sounds like it has a few holes in it? Any policy of that

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kind has a few questions, obviously. One of the questions is about who,

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indeed, it covers. In the vast majority of cases, I think it will

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work well. These people have been unemployed for a long time,

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obviously there will be a number of shysters in there as well, but a lot

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just have not been able to get work, they are the most vulnerable in some

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of the poorest in society. Will we really say, if you don't do what we

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want, we will take your benefits away and threw them on to the

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streets? You will have to have tough sanctions of one kind. You put one

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group, the other group are the ones working on the black economy. When I

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was doing the employment job, there were lots of people working on the

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black economy and claiming unemployment benefit at the same

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time. I think you have to look at that. I don't think you will be able

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to wave a magic wand and everything will go, it does not matter who is

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in power, but doing it this way is a very sensible step to having a

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policy as far as long-term unemployment is concerned. You don't

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want people in their 20s to remain unemployed for the rest of their

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life, basically. George Osborne will be taking to

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stage in about 15 minutes' time. We're joined now by the Treasury

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Minister, David Gauke. Treasury Secretary, the previous big flagship

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scheme of this coalition, welfare to work, has not worked, so why will

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this? The work programme has been effective. Something like 72 per

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cent of those who have been on it have come off benefits at one point

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or other. We are except that there are those who, having gone through

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the work programme, are still unemployed and we need something in

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place to ensure that we have something to address that. I think

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it is perfectly reasonable in those circumstances to identify one in

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three routes whereby people make themselves available to work. On the

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welfare to work scheme, in the first year, according to the Department

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running it, the scheme was so bad that it was worse than doing things.

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People who weren't part of the scheme got more jobs than those who

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work part. In the years two 13, you failed to hit your minimum targets.

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-- two and three. Why will this work better? That is not a fair

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representation. The work programme is focused on those most difficult

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to get back to work. Evidence is emerging that more people are

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working as a consequence of the programme, so I don't accept that.

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But nonetheless, at the end of a two year work programme there is an

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issue that there will still be people unemployed, and it is right

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that we put in place something that is fair to the general taxpayer who

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are funding the benefits, after all, but which is also a route through

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which the long-term unemployed put something back into society and get

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habits of working. And where more intensive help is necessary, that

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help should be provided. And if they don't take that help, you will take

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benefits away from some of the poorest and most vulnerable in

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society? Yes, because it isn't right that people who receive benefits do

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nothing in response. I think it is per fairly reasonable to say that

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you can only receive jobseeker's allowance if you do something, and

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either that is attending Jobcentres, demonstrating that you are looking

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for work, or community work for 30 hours a week plus ten hours a week

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looking for work, or we provide mandatory support to deal with

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issues such as drug or alcohol dependency or a literacy or

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whatever. And if they end up on the streets, that will be a price worth

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paying for your policy? We are saying that you can continue to

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receive support, but with conditions. I don't think it is in

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reasonable when tax payers' money is being spent supporting people who

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reasonable when tax payers' money is have been unemployed for three years

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or more, to say that we can get the -- give them the support but we

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expect something in return. Wages have failed to keep pace with prices

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since you have been in coalition. Labour would help freeze energy

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prices to help cope with the cost of living, what would you do? We are

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taking lots of measures to help in terms of increasing the personal

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allowance, taking people out of income tax, freezing council tax,

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freezing fuel duty, there is a long list of things. But living standards

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are still being squeezed, what else list of things. But living standards

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would you do? You can't divorce a discussion about living standards,

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and I accept that these are difficult times for many people,

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from the state of the economy. We have got to have a strong economy,

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get economic growth, deal with the long-term issues that we are faced

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with, such as high levels of borrowing, and we need to bring that

:10:08.:10:13.

down and start addressing debt. All of these are important. There is an

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idea that you can sin has separate the issue of living standards from

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where the economy is and making the right issue for the economy -- you

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can somehow separate. It is wrong. Labour have lost the big economic

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argument and they want to move onto something else. Living standards

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matter, but it is as the consequence of a strong economy that we get

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these rises in living standards. Labour will freeze gas and

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electricity prices, you have cut the tax on beer, so that is OK? As far

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as Labour's policy on freezing electricity prices, you know as well

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side to the flaws in that policy. We have two look at some of the

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long-term pressures, to look at the causes. We can debate for a very

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long time the flaws in Labour's policy, but we have increased the

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personal allowance and that has made a very big difference. £700 cash

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difference to millions of taxpayers, that is real help. The

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Prime Minister promised that he would legislate to put everybody on

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the lowest tariff. What happened to that? It has not happened. We are

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doing that. You are not. We are legislating in order to ensure that

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happens. That we get the lowest tariff provided to consumers. That

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is genuine. I have looked at the legislation, it does not promise and

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does not force the energy companies to put everybody on the lowest

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tariff, which is what the Prime Minister promised. We are ensuring

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that everybody is put on the lowest tariff. That is the approach we are

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taking, that is on top of a whole range of measures. Energy prices,

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Labour are committed to a decarbonisation target by 2013, that

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will put £125 on energy bills. It is not helping to address energy costs

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in the long-term. So you will cut green levies? Lou Mark Roe we are

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not committed to the decarbonisation target, it would act to electricity

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prices. We will hear from Ed Miliband that they will freeze

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energy prices, it is not coherent. When, by law, will everybody be on

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the lowest tariff? I can't give you a date for that. That is the policy

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we are approaching. Why not? Our a date for that. That is the policy

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bills are about to go up this autumn. British Gas is threatening

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huge rises. The only direct solution is to put us on the lowest tariff. I

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don't think the legislation does that, by the way, but I would like a

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date from you as to when that will happen, because people will suffer

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this winter. I will not give you a date here and now. I will check the

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position on that. The reality is that if we are going to get

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position on that. The reality is long-term energy prices down, not

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just for 20 months but 20 years, we need to ensure there is proper

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competition, we need to ensure... Why haven't you done that? We are

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always looking at what we can do. Let me ask you this, if you are

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trying to improve competition, why is it that base energy prices for

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gas and electricity before you add the green levies and taxes, why are

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they in Britain among the highest base prices in Europe? If you have a

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competitive energy market? If you base prices in Europe? If you have a

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look at energy prices as a whole, the UK is pretty well mid-table. We

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look at energy prices as a whole, don't have particularly high... That

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is after tax. Before tax, our base energy prices are the highest. If

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you look at the overall position, the UK doesn't have the highest.

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They are higher than we would like and we want to make sure we get

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competition and we don't impose a decarbonisation target that will

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make things worse. A freeze, as we heard last week, if anything, is

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likely to result in energy companies jacking up prices rather than

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reducing them. It is not a sustainable approach and the

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government is doing a lot for living standards but we cannot divorce it

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from the big economic argument, how do we get growth and deal with the

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deficit? There is a problem here for the Conservatives, Norman. You can

:15:19.:15:22.

have your view on the economics of freezing energy prices, but it is

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good politics, whichever way you look at it. The Conservatives, from

:15:27.:15:31.

that performance, have nothing specific to counter it, other than a

:15:31.:15:37.

general "the economy is recovering and living standards will rise when

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it does" . Yes, but Ed Miliband has opened an opportunity for the

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Conservative Party here, because he has gone back to the 1970s - price

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control, price regulation, all of that. You and I remember that sort

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of thing and the apparatus that went with it. That has put clear blue

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water between the two parties. It gives an enormous opportunity to the

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Tory party. But in the 1970s, you had Roy Hattersley running a price

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commission, trying to control the price of sugar and tea and all the

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rest. Even he admits that that was nonsense. That is not what Labour

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are proposing. They are saying the energy market does not work. The

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energy minister said so as well. So let's have a 20 month freeze on

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energy prices while we get the market to work. And there there will

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be a 20 month freeze on some other price. But the energy market is a

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cartel. But it is a complete contrast in the way the two parties

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would look at the position. I accept that there has been a response from

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the government to Ed Miliband, but if you go forward a few months, you

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will find that that is not how the public feel about it. They don't

:17:05.:17:16.

want to go back to price controls. They have seen energy prices rise in

:17:16.:17:24.

real terms by 40% since 2007. And of course, we are not in control of

:17:24.:17:29.

that and neither are the energy companies, but they say that when

:17:29.:17:32.

the wholesale price of gas goes up, their bills go up. When the price

:17:32.:17:37.

comes down, their bills don't go down, so it is a popular thing to

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say there something wrong with the market if prices are that sticky.

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Let's freeze them for a brief period and sort out the market. It is

:17:46.:17:57.

immediate and popular, but does the government start intervening in the

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market? I am not saying the market is working perfectly, but there are

:18:01.:18:09.

different ways of tackling that. Which the coalition is not doing.

:18:09.:18:12.

The minister could tell is nothing they are doing to improve the energy

:18:12.:18:17.

market. But you gave him a very tough interview. He was a treasure

:18:17.:18:23.

in minister. Are the Treasury across everything? You can't expect to be

:18:23.:18:34.

an expert on everything. He is running the country. My point is

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that there is a big contrast in the way the two parties are looking at

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it, whether you go with a market approach or government intervention.

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You are still very lively. Time for our daily quiz. The question is,

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which Tory cabinet Minister has spent time at a £2500 fat farm in

:19:00.:19:09.

Austria? Was it George Osborne, Eric Pickles, Patrick McLoughlin or

:19:09.:19:14.

Michael Gove? At the end of the show, Norman will give us the

:19:14.:19:25.

correct answer. Will I? So, what is the mood like in beautiful

:19:25.:19:29.

Manchester? Who better to tell us than two of Fleet Street's finest?

:19:29.:19:32.

Sadly, they were not available. Instead with, we have the

:19:33.:19:38.

Spectator's James Forsyth and Rachel Sylvester from the Times. Rachel,

:19:38.:19:48.

are they talking a lot about the possibility of a constituency by

:19:48.:19:52.

constituency electoral pact with UKIP? Nigel Farage is here today, so

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UKIP are dominating the whole thing. I don't think the Tories have worked

:19:58.:20:01.

out how to deal with him and the way in which local MPs will want to make

:20:01.:20:06.

deals with UKIP. We interviewed George Osborne last week, and he

:20:06.:20:11.

said the Tories had to win an overall majority. But he would not

:20:11.:20:16.

go into what would happen if an individual MP made a deal. He would

:20:16.:20:20.

not say whether or not they would be sacked. They are trying to work out

:20:21.:20:27.

what is realistic. It is a rum do, James, if a leader of a minor party

:20:27.:20:32.

can come to the giant Tory party and dominate events even though he is

:20:32.:20:37.

not allowed in the conference? UKIP is only part of the problem the

:20:37.:20:42.

Tories have to deal with, but if you go to a fringe, it is what the

:20:42.:20:47.

activists want to talk about. The reason for that is, you have seen

:20:47.:20:52.

Tory activists going over to UKIP. They all know someone who now votes

:20:52.:20:58.

UKIP. That is why it is creating a problem. I think to be's

:20:58.:21:05.

intervention by Nigel Farage is actually a weakness. He is admitting

:21:05.:21:10.

that the best UKIP can hope for is to come top in the European

:21:10.:21:14.

elections. He is saying, if we come top in the European elections, I

:21:14.:21:23.

will pull the dogs off after that. It is creating a strangely retro

:21:23.:21:26.

atmosphere here. It is all marriage, tax allowances. There is Maggie beer

:21:26.:21:37.

for sale. The Tories are almost caught in the headlights of UKIP,

:21:37.:21:40.

and the danger is that they are alienating more centrist voters who

:21:40.:21:44.

would otherwise be attracted to them, those who were originally

:21:44.:21:47.

attracted to the more compassionate conservatism that David Cameron

:21:47.:21:53.

offered. James, you are about to become a dad, you will need one of

:21:53.:22:02.

those iron baby T-shirts. I think you will see the Tories trying to

:22:02.:22:06.

mix up these messages designed to appeal to UKIP voters, whether on

:22:06.:22:11.

the European Commission of human rights, combined with more centrist

:22:11.:22:14.

messages on health and education. The big challenge for Tories is what

:22:15.:22:18.

to do about the cost of living. George Osborne is trying to say it

:22:18.:22:21.

is really about the economy and that you can't trust Labour with the cost

:22:22.:22:26.

of living. But if you talk to the Tories here from the most marginal

:22:26.:22:31.

seats, they will say this energy price freeze announcement has cut

:22:31.:22:35.

through, and they need a better response to that. Rachel, at least

:22:35.:22:45.

Labour has come up with something specific and easily understood. If

:22:45.:22:50.

you vote for Labour, your energy prices will not rise for 20 months.

:22:50.:22:55.

You go have a debate about before or after that, but the 20 months, they

:22:55.:22:59.

are frozen. Is it enough for the Conservatives to talk in general

:22:59.:23:05.

terms by saying with an economic recovery, you're living standards

:23:05.:23:10.

will recover? It is a bit vague. I don't think it is enough. It is all

:23:10.:23:14.

very well going on about a global raise, but if people are hobbling to

:23:14.:23:18.

the corner shop to get a pint of milk, they don't care about a global

:23:18.:23:22.

raise will stop there sometimes a lack of urgency in the way they talk

:23:22.:23:27.

about the cost of living issues. They need to understand that people

:23:27.:23:31.

asked ugly. They say they understand, but they have not

:23:31.:23:35.

demonstrated that people are struggling in their policies. These

:23:35.:23:40.

speeches are leaked so far in advance that we already know what is

:23:40.:23:44.

in them, but has he got something up his sleeve? Mr Miliband had the

:23:44.:23:49.

energy freeze up his sleeve for the last minute. Do we get is a prize to

:23:49.:23:56.

keep is interested? He will want to emphasise the welfare issue. The

:23:56.:24:02.

Tories can't do fairness through tax cuts, so they will try and do it

:24:02.:24:07.

through rebalancing the system and ending be something for nothing

:24:07.:24:10.

culture. George Osborne is taken with how popular the benefits cap

:24:10.:24:14.

has been, and he is looking for a repeat of that success. Rachel, what

:24:14.:24:19.

is the overall mood that? The Conservatives have had a good

:24:20.:24:21.

summer, partly because Labour had a Conservatives have had a good

:24:21.:24:25.

bad summer. The economy is recovering on a broad range of

:24:25.:24:29.

indicators, but they still face this index all mountain to climb for an

:24:30.:24:31.

indicators, but they still face this overall majority. So are they

:24:31.:24:37.

confident, depressed? Do they think it could be another hung parliament?

:24:37.:24:42.

They seem a bit thrown in. They were thrown by the Ed Miliband

:24:43.:24:44.

announcement on price freezes. They thrown by the Ed Miliband

:24:44.:24:49.

are convinced that it is wrong, but they don't seem to know how to deal

:24:49.:24:52.

with it tactically. They are thrown by the UKIP threat, and the feeling

:24:52.:25:02.

is slightly dis- combo dilated. -- this combo plate. That is a good

:25:02.:25:07.

American word. The Tory party is not sure to celebrate the fact that

:25:07.:25:11.

there is now clear red water between them and Labour or whether the

:25:11.:25:17.

centre ground has shifted so that they need to be careful about how to

:25:17.:25:23.

respond to Ed Miliband. The announcement on price freezes is

:25:23.:25:29.

clearly politically popular. Cameron is also trying to reassure his party

:25:29.:25:32.

that he really does want image are the. He will have to get the message

:25:32.:25:39.

across that he is not just banking on another coalition with Nick Clegg

:25:39.:25:44.

and will really try to win. So they are talking about things they know

:25:44.:25:48.

the Lib Dems will not agree on, like the human rights act. It is also

:25:48.:25:50.

about, whose side are you on? David the human rights act. It is also

:25:50.:25:56.

Cameron was worried that the Tories would be seen as being on the side

:25:56.:25:58.

Cameron was worried that the Tories of the big energy companies rather

:25:58.:25:59.

than the consumer. It is about of the big energy companies rather

:25:59.:26:05.

showing that you are on the side of the hard-working families, misspelt,

:26:05.:26:14.

as my colleague noted. But can they demonstrate that with their

:26:14.:26:19.

speeches, that they are on the side of ordinary people, rather than the

:26:19.:26:25.

wealthy elite? Or big business, the energy companies and the banks and

:26:25.:26:30.

the wealthy donors who support the Tory party? James, should we read

:26:30.:26:36.

anything into the fact that it is George Osborne making the

:26:36.:26:41.

announcement, not Iain Duncan Smith, the welfare secretary? George

:26:41.:26:47.

Osborne is a man with political ambitions and he knows this will be

:26:47.:26:51.

popular with the country. He is dammed if he is going to let someone

:26:51.:26:58.

else have it. And MP said to me this morning, by George, George's stock

:26:58.:27:03.

is rising. Perhaps people wrote him off a year ago, but now he is

:27:04.:27:08.

gaining popularity in the party. If he can be the man who takes the

:27:08.:27:12.

credit for a recovery, he will be back in the running for the

:27:12.:27:16.

leadership. But the Tory leadership is a marathon, not a sprint. With

:27:16.:27:20.

the omnishambles Budget, George Osborne over. He has now dusted

:27:20.:27:24.

himself down and he will be a contender when Cameron decides to

:27:24.:27:29.

go. But that depends on the Tories winning the next election. Osborne

:27:29.:27:33.

and Cameron's fortunes are so in extra doubly linked that if the

:27:33.:27:36.

Tories lose the election in 2015, that is the end for George Osborne.

:27:36.:27:41.

But if the Tories win that overall majority, there will not be a

:27:41.:27:45.

leadership contest, according to Mrs Cameron, because she says she wants

:27:45.:27:46.

leadership contest, according to Mrs her husband to stay in power until

:27:46.:27:51.

2020, and she is a powerful woman. I don't think any prime minister who

:27:51.:27:57.

has just won his first overall majority would want to stand down

:27:57.:28:01.

straight. Cameron would want to keep going. But is he the prime minister

:28:01.:28:08.

who finally manages to leave the stage with the crowd wanting more?

:28:08.:28:13.

If he does win a second term, the European referendum will be an

:28:13.:28:21.

obvious sticking point. If he wins that, he will be able to say, I have

:28:21.:28:23.

settled the historic question of that, he will be able to say, I have

:28:24.:28:28.

Britain's relationship with Europe. That might be the time for him to

:28:28.:28:33.

retire. I would not read too much into the 2020 comment. But he would

:28:33.:28:38.

also have to resign if he gets an overall majority, he goes to

:28:38.:28:43.

Europe, the renegotiations are not successful, he has a referendum in

:28:43.:28:46.

which little changes with our relationship with Brussels, and he

:28:46.:28:51.

loses the referendum? Then he is toast, is neat? The referendum

:28:51.:28:55.

pledge may come back to bite on. It may keep the right-wingers happy for

:28:55.:29:02.

now, but in the end, he will have to be in the yes camp and say that he

:29:02.:29:08.

has got adequate reforms from Europe. And a lot of his party will

:29:08.:29:13.

want to be in the no camp. So it could end up dividing the Tory party

:29:13.:29:18.

in an attempt to bring unity in the short term. You have got to think,

:29:18.:29:27.

how much back does Brussels -- how much back from Brussels does David

:29:27.:29:30.

Cameron needs to get to stay in the EU? That is an awful lot, and it

:29:30.:29:35.

might be more than is on offer. James, is it possible that some

:29:35.:29:41.

individual Tory MPs on the very Eurosceptic wing will try to do a

:29:41.:29:48.

constituency deal with UKIP? I think you will see a handful of them do a

:29:48.:29:54.

deal with UKIP. You will see a lot more of them make a play to UKIP

:29:54.:29:59.

voters, saying, I will be campaigning for Britain to leave in

:29:59.:30:04.

the referendum, so vote for me. It will be like 1997, when you saw Tory

:30:04.:30:09.

MPs who had a particular referendum party problem, including David

:30:09.:30:16.

Cameron. And the Conservative Party HQ turned a blind eye. And will UKIP

:30:16.:30:21.

have enough candidates to stand people in every seat? They will have

:30:21.:30:24.

to choose the constituencies where they have a hope of doing reasonably

:30:25.:30:46.

well. You would have thought they might back off from some

:30:46.:30:48.

constituencies where there are very tough, Eurosceptic Tory MPs. I know

:30:48.:30:51.

you want to see the Chancellor in action. Karren Brady is still

:30:51.:30:53.

talking. But is why the Chancellor is ten minutes late on his allotted

:30:53.:30:56.

time to speak. If you could ask the wind-up, we would be grateful. Other

:30:56.:31:04.

than the leader's speech, the Chancellor's speech is usually the

:31:04.:31:12.

biggest? Like you, I am intrigued that it is the Chancellor making

:31:12.:31:13.

biggest? Like you, I am intrigued this big announcement about

:31:13.:31:19.

welfare. You would have been mightily annoyed if you're

:31:19.:31:22.

Chancellor had taken that away from you? I think I might have been. I

:31:22.:31:27.

think Nigel Lawson and I would have had yet another of our periodic

:31:27.:31:34.

disagreements. I'm intrigued by that. I was also intrigued by what

:31:34.:31:39.

everyone is saying about UKIP. Frankly, we have been around this

:31:39.:31:47.

course before with the Liberals, the Referendum Party and a bit with the

:31:47.:31:52.

1997 election, which was not spectacularly successful, when

:31:52.:31:55.

people said we will divide in the party. I think as far as UKIP is

:31:55.:32:03.

concerned, it makes no sense for us to go into any kind of alliance

:32:03.:32:06.

locally, nationally or anywhere else, because it gives

:32:06.:32:10.

respectability to UKIP. We are talking about the right-wing of the

:32:11.:32:15.

Conservative Party, that any alliance with UKIP brings into play

:32:15.:32:21.

the centre and the left of the Conservative Party. They will not

:32:21.:32:25.

want that, people like me don't want that. If you were still party

:32:25.:32:30.

chairman and you learned that a right-wing, Eurosceptic Tory MP was

:32:30.:32:34.

doing an electoral pact with UKIP, what would you do? Bring him in, say

:32:35.:32:40.

it is an accept the book and if he continued, you would have to get rid

:32:41.:32:45.

of him, it is that straightforward -- bring him in, say it is not

:32:45.:32:51.

acceptable. Here is George Osborne at last.

:32:51.:33:02.

Thank you, Karren Brady, that was a brilliant introduction. You're

:33:02.:33:09.

hired! At every party conference, since the

:33:09.:33:14.

election, as we have gathered, the At every party conference, since the

:33:15.:33:19.

question for us, the question for me, the question for our country,

:33:19.:33:26.

has, is economic plan working? They are not asking that question now.

:33:26.:33:33.

The deficit down by a surge, exports doubled to China, taxpayers' money

:33:33.:33:40.

back from the banks, not going in. 1.4 million new jobs created by

:33:40.:33:45.

businesses, 1000 new jobs announced in this city today. Our plan is

:33:45.:33:57.

working. We held our nerve in the face of

:33:57.:34:02.

huge pressure. Now Britain is turning a corner. And that is down

:34:02.:34:10.

to the resolve and the sacrifice of the people of this country. And, for

:34:10.:34:16.

that, we owe the British people a huge, heartfelt thank you. Thanks to

:34:16.:34:26.

you, Britain is on the right track. So now families working hard to get

:34:26.:34:31.

on, anxious about the future, are asking these questions start can we

:34:31.:34:36.

make the recovery last? Will I feel it in my pocket? My approach has

:34:36.:34:41.

always been to be straight with people. So let me answer these

:34:41.:34:46.

questions directly. Yes, we can make the recovery a lasting one. But it

:34:46.:34:52.

won't happen by it self. We have to deal with our debts and see through

:34:52.:34:58.

our plan. Yes, if the recovery is sustained, then families. To feel

:34:58.:35:02.

better off. Because what matters most for living standards are jobs

:35:02.:35:07.

and lower mortgage rates and lower taxes. Family finances will not be

:35:07.:35:16.

transformed overnight, because Britain was made much poorer by the

:35:16.:35:21.

crash. That is what happens when you get a catastrophic failure of

:35:21.:35:25.

economic policy of the kind we saw under Labour, when no one prepares

:35:25.:35:28.

economic policy of the kind we saw in the boom for the bust, when the

:35:28.:35:32.

banks get bailed out and when government budget spiral out of

:35:32.:35:34.

control. We will never let that government budget spiral out of

:35:34.:35:37.

happen to our country again. APPLAUSE

:35:37.:35:47.

I share non-offer personal as I saw from the Leader of the Opposition

:35:47.:35:54.

last week. For him, the global free market equates to a race to the

:35:54.:36:00.

bottom, with the games being shared among a small and smaller group. --

:36:00.:36:08.

the gain being shared. That is the argument that Karl Marx made in Das

:36:08.:36:19.

L. It is what socialist beliefs, but socialism brings this about and it

:36:19.:36:22.

is the historic work of this party to put it right. Because attempts

:36:22.:36:30.

is the historic work of this party crisis and confiscate wealth crush

:36:30.:36:35.

endeavour and blight aspiration. And the people who suffer are not the

:36:36.:36:40.

rich but the hundreds and thousands put out of work, the millions made

:36:40.:36:46.

poorer, the generation whose lives are blighted. It is working people

:36:46.:36:50.

who pay the price when the economy is ruined. That is what Labour did

:36:50.:36:56.

to the workers, and the British people will never let them forget

:36:56.:37:02.

it. And so, by contrast, I'm an optimist

:37:02.:37:09.

about the world. I'm a believer in freedom and free markets. I see the

:37:09.:37:17.

global economy growing. I see hundreds of people in places like

:37:17.:37:20.

India and China leaving grinding poverty to join it. That is

:37:20.:37:26.

something to celebrate. It doesn't have to be a threat to this country.

:37:26.:37:32.

It is a huge opportunity. But we have to understand that the Wealth

:37:32.:37:35.

of nations depends on some basic truths. Jobs are only created when

:37:35.:37:43.

people build businesses that are successful and can expand. Exports

:37:43.:37:45.

only happen if those businesses are making things that others in the

:37:45.:37:49.

only happen if those businesses are world wants to buy. Investment only

:37:49.:37:54.

flows if your country is a more attractive place to do business than

:37:54.:37:55.

flows if your country is a more other countries. And the wealth this

:37:55.:37:59.

creates could be spread widely across the nation, but only when

:37:59.:38:04.

every child gets a good education, when each adult has the incentive to

:38:04.:38:08.

every child gets a good education, work and every family gets to keep

:38:08.:38:13.

more of what they earn. And to achieve all these things, you need

:38:13.:38:19.

to get the fundamentals right. The economic stability, sound public

:38:19.:38:23.

finances, says banks, excellent schools and colleges, competitive

:38:24.:38:29.

taxes, amazing science, welfare that works. There is no short cuts to any

:38:29.:38:34.

of these things, just the hard graft of putting right what went so badly

:38:34.:38:38.

wrong and forging a new attitude in this country that says, we are not

:38:38.:38:43.

afraid of the future, because we intend to shape it.

:38:43.:38:55.

So there is no feeling at this conference of a task completed or a

:38:55.:39:03.

victory one. We know it is not over. Until we fix the addiction to debts

:39:03.:39:07.

that got this country into this mess in the first place, it is not over.

:39:07.:39:12.

Until we can help hard-working people to own a home, save and start

:39:12.:39:17.

a business. Until we have helped the long-term unemployed, it is not

:39:17.:39:19.

over. Until there is real faith that long-term unemployed, it is not

:39:19.:39:23.

our children's lives will be better than our own, it is not over. The

:39:23.:39:28.

battle to turn Britain around is not even close to being over, and we

:39:28.:39:31.

will finish what we have started. APPLAUSE

:39:31.:39:43.

What I offer is a serious plan for a grown-up country. An economic plan

:39:43.:39:50.

What I offer is a serious plan for a for hard-working people that will

:39:50.:39:55.

create jobs, keep mortgage rates low, let people keep more of their

:39:55.:40:00.

income, tax-free. It is the only route to better living standards.

:40:00.:40:06.

Without a credible economic plan, you don't have a living standards

:40:06.:40:11.

plan. We understand that there can be no recovery for all if there is

:40:11.:40:18.

no recovery at all. In Italy, the deadlock in Washington this week,

:40:18.:40:23.

these are stark reminders that the debt crisis is not over. And yet the

:40:23.:40:31.

last fortnight has shown there is no serious plan coming from any other

:40:31.:40:39.

party. The liberal Democrats were jostling for position. I have to

:40:39.:40:43.

tell you today, and click has informed us of his intention to form

:40:43.:40:48.

a new coalition. For the first time, he is intending to create a

:40:48.:40:52.

full working relationship with Vince Cable.

:40:52.:40:52.

LAUGHTER Mind you, at their conference, Vince

:40:52.:41:04.

Cable did something that was undeniably Tory. If I had been

:41:04.:41:07.

there, I wouldn't have turned about the Lib Dem economic debate either!

:41:07.:41:12.

At least they had an economic debate. Labour's economic

:41:12.:41:17.

At least they had an economic announcements amounted to declaring

:41:17.:41:22.

war on enterprise, tax rise on business and an apprenticeship

:41:22.:41:24.

policy that turned out to be illegal. And then there was the

:41:24.:41:30.

energy announcement that completely unravelled. Now, any politician

:41:30.:41:35.

would love to tell you that they can wave a magic wand and freeze your

:41:35.:41:40.

energy bill, everyone wants cheaper energy. That is why we are

:41:40.:41:43.

legislating to put everyone on the cheapest tariff. But I will tell you

:41:44.:41:48.

what happens when you draw up policy on the back of a fag packet -

:41:48.:41:54.

companies will just jack up their prices before, so in the short-term,

:41:54.:41:57.

prices go up, and companies would prices before, so in the short-term,

:41:57.:41:59.

not invest this country and build the power station we need so, in the

:41:59.:42:06.

long term, prices go up. That is Labour 's offer - get hammered with

:42:06.:42:11.

high prices now, high prices later, higher prices for all. Don't worry,

:42:11.:42:17.

there will be a phoney freeze on prices in between. How should I put

:42:17.:42:19.

it? Britain can do better than that. Perhaps with all this talk of

:42:19.:42:32.

blackouts, we have been a bit unfair on Ed Miliband's leadership. We used

:42:33.:42:36.

blackouts, we have been a bit unfair to think light is on, but nobody's

:42:36.:42:41.

home. Turns out we were only half right.

:42:41.:42:46.

LAUGHTER .

:42:46.:42:50.

Now, I remember when we were in opposition. We made commitments and

:42:50.:42:53.

unworkable promises to abolish things like student fees. We felt

:42:53.:42:59.

good at conferences like this. And then we lost elections. In David

:42:59.:43:03.

Cameron got us to face the truth about the way we had come to be

:43:03.:43:08.

seen. He forced us to be credible, to reach out to all parts of

:43:08.:43:13.

society. Last week, Labour didn't do that. They retreated. Ed Miliband

:43:13.:43:22.

said he could make all of our problems disappear and send a cheque

:43:22.:43:23.

said he could make all of our in the post. It is not based on

:43:23.:43:25.

truth. More borrowing and more debt in the post. It is not based on

:43:25.:43:32.

remains their economic policy. But they no longer dare talk to the

:43:33.:43:37.

British people about it. Instead, they would much rather talk about

:43:37.:43:41.

the cost of living, as if the cost of living was somehow detached from

:43:41.:43:47.

the performance of the economy. You ask the citizens of Greece what

:43:47.:43:50.

happens to living standards when the economy fails. He asks on with a

:43:50.:43:52.

happens to living standards when the mortgage what happens to their

:43:52.:43:54.

happens to living standards when the living standards when mortgage rates

:43:54.:43:59.

go up -- you ask someone with a mortgage. Just a 1 cent rise means

:43:59.:44:05.

an extra £1000 on the average bill. You ask the citizens of this country

:44:05.:44:09.

what would be disastrous for living standards and they would say higher

:44:09.:44:14.

borrowing, higher welfare costs, higher taxes. These are not the

:44:14.:44:17.

solution is to lower living standards, they are the cause of

:44:17.:44:19.

them. This country is paying a very, very

:44:19.:44:33.

high price for that lesson. If you want to know the consequences of an

:44:33.:44:39.

Ed Miliband premiership, just look at a plan of the man who knows him

:44:39.:44:49.

best, his brother. David Miliband - one, leave Parliament, two, leave

:44:49.:44:55.

politics, three, leave the country, four dedicate your life to

:44:55.:45:05.

international rescue. David and Ed Miliband, the greatest

:45:05.:45:10.

sibling rivalry since the Bible. Kane and not very able. Now, our own

:45:10.:45:18.

sibling rivalry since the Bible. rescue mission for the British

:45:18.:45:19.

economy is far from complete. People rescue mission for the British

:45:19.:45:25.

know the difference between a quick fix from and a credible economic

:45:25.:45:30.

argument. Here is our serious plan for a grown-up country. First, sound

:45:30.:45:36.

money. The bedrock of any sustained recovery and improved living

:45:36.:45:41.

standards is economic stability. That is what the hard work and the

:45:41.:45:45.

sacrifice of the last three years has been about. In that time, they

:45:45.:45:51.

brought the deficit down by a third, and the British public know that

:45:51.:45:55.

whoever is elected will face some very hard choices. Let me tell you

:45:55.:46:02.

about the principles I bring to that task. Our country's problem is not

:46:02.:46:07.

that it taxes too little, it is that its government spends too much.

:46:07.:46:21.

While no responsible Chancellor ever rules out tax changes, I think it

:46:21.:46:25.

can be done by reducing spending and capping welfare, not by raising

:46:25.:46:31.

taxes. Surely the lesson of the last arcade is that it is not enough to

:46:31.:46:35.

clean up the mess after it has happened will stop you have got to

:46:35.:46:39.

take action before it happens. It should be obvious to anyone that in

:46:39.:46:44.

the years running up to the crash, this country should have been

:46:44.:46:47.

running a budget surplus. That is what we mean when we say they did

:46:47.:46:52.

not fix the roof when the sun was shining. Let us never make that same

:46:52.:47:02.

mistake again. Never again should anyone doing my job be so foolish

:47:02.:47:07.

are so deluded, as to believe they have abolished the age-old cycle of

:47:07.:47:14.

boom and bust. When we have dealt with Labour's deficit, we will have

:47:14.:47:20.

a surplus in good times as insurance against difficult times ahead. And

:47:20.:47:31.

provided that the recovery is sustained, our goal is to achieve

:47:31.:47:36.

that surplus in the next Parliament. That will bear down on our debts,

:47:36.:47:41.

prepare us for the next rainy day. It will require discipline and

:47:41.:47:44.

spending control, because if we want to protect the things we care about,

:47:44.:47:48.

like generous tensions and decent health care, and buying the best

:47:48.:47:54.

equipment for the brave men and women who fight in our armed forces,

:47:54.:47:58.

all of us have to confront the costs of modern government and cap working

:47:58.:48:05.

age welfare bills. And only if we properly controlled public

:48:05.:48:07.

expenditure will we be able to keep lowering taxes are hard-working

:48:07.:48:13.

people in a way that lasts. I have never been for tax cuts that are

:48:13.:48:19.

borrowed. I want low taxes that are paid for. We will also go on

:48:19.:48:24.

investing in the essential infrastructure of our country, the

:48:24.:48:29.

roads and railways and science and communications that are the backbone

:48:29.:48:39.

of the future economy. So we should commit, alongside to running a

:48:39.:48:41.

surplus and capping welfare, to grow our capital spending at least in

:48:41.:48:44.

line with our national income. These principles will form the foundation

:48:44.:48:45.

line with our national income. These of our public finance policy. I will

:48:46.:48:52.

set out the details next year. For those who ask, is this necessary? ,

:48:52.:48:58.

I say, what is the alternative? To run a deficit for ever? To leave our

:48:58.:49:04.

children with our debts? To leave Britain perilously exposed the next

:49:04.:49:09.

time the storm comes? This crisis took us to the brink. If we don't

:49:09.:49:14.

reduce our debts, the next could push us over. Let's learn from the

:49:14.:49:18.

mistakes that got him phew into this mess. Let us about, never again.

:49:18.:49:24.

This time, we will run a surplus and fix the roof when the sun shines.

:49:24.:49:39.

First, our plan secures sound public finances. Second, it supports the

:49:40.:49:44.

aspirations of hard-working people and let them keep more of the money

:49:44.:49:51.

they earn. We are increasing to £10,000 the amount you can earn

:49:51.:49:54.

before you pay a penny of income tax. That is a real achievement,

:49:55.:50:00.

delivered in budget after budget by tax. That is a real achievement,

:50:00.:50:03.

a Conservative Chancellor of the Exchequer. The Liberal Democrats

:50:03.:50:13.

like to point out that during the election, David Cameron said he

:50:13.:50:15.

like to point out that during the would love to increase the tax

:50:15.:50:19.

allowance, but warned that it was not easy to afford. He did say that,

:50:19.:50:25.

and he was right. The difficult thing is not increasing the tax free

:50:26.:50:29.

allowance, the difficult thing is paying for it, but we have done it.

:50:29.:50:35.

The result, and income tax cuts for 25 million people, equivalent to a

:50:36.:50:39.

rise of almost 10% in the national minimum wage. Real money in

:50:39.:50:44.

people's pockets. For we are the party of hard-working people. To

:50:44.:50:50.

anyone who questions that, I say, go to the workplaces of Britain, like

:50:50.:50:55.

the huge Morrisons in Sittingbourne. Meet the forklift truck drivers

:50:55.:51:01.

there. Go to the war button factory. Meet the people who work

:51:01.:51:07.

all hours. Hard-working people, better off because of Conservative

:51:07.:51:12.

tax cuts. These are the people we stand alongside. And because we are

:51:12.:51:25.

getting the public finances back under control, we have been able to

:51:25.:51:30.

help in other ways, too. Freezing council tax, cutting beer duty,

:51:30.:51:35.

tax-free childcare. Thanks to our prime minister, now a £1000 married

:51:35.:51:41.

couple's allowance, two, a conservative is made and more than

:51:41.:51:51.

delivered. -- a Conservative promise made and delivered. We have cut fuel

:51:51.:51:57.

duty, abolished Labour's fuel escalator. I can tell you today that

:51:57.:52:01.

provided we can find the savings to pay for it, I want to freeze fuel

:52:01.:52:05.

duty for the rest of this Parliament. Conservatives don't just

:52:06.:52:09.

talk about being on the side of hard-working people, we show it be

:52:09.:52:13.

in day out in the policies we deliver.

:52:13.:52:25.

Now, people aspire to keep more of their income tax-free. And many

:52:25.:52:30.

aspire to run their own business and work for themselves. My parents

:52:30.:52:38.

planned carefully, took a risk, set up a small manufacturing company

:52:38.:52:39.

planned carefully, took a risk, set more than 40 years ago. The company

:52:39.:52:47.

grew, they employed more people. In the life of the family business, the

:52:47.:52:52.

orders won, the exports, these were the backdrop of my childhood. I am

:52:52.:52:57.

hugely proud of what my parents achieved, and I am proud that they

:52:57.:53:11.

are in this hall today. And you should know this about me. I will

:53:11.:53:16.

always be on the side of those who use their savings, take a risk, put

:53:16.:53:21.

everything on the line to set up their own company. Labour increased

:53:21.:53:26.

small business tax, I have cut it. Labour were extending business rates

:53:27.:53:31.

to the smallest firms, I have exempted them. Now our new

:53:31.:53:34.

employment allowance will take a third of all businesses out of

:53:34.:53:38.

paying national insurance altogether. We Conservatives are

:53:38.:53:42.

nothing if we are not the party of small business, and that is the way

:53:42.:53:55.

it is going to stay. And we are the party of homeownership, to. I am the

:53:55.:54:02.

first person to say we must be vigilant in avoiding the mistakes of

:54:02.:54:06.

the past. That is why I gave to the Bank of England the powers to stop

:54:06.:54:09.

dangerous housing bubbles emerging. Bank of England the powers to stop

:54:09.:54:13.

But too many people asked ill being denied the dream of owning their own

:54:13.:54:18.

home -- they are still being denied. So instead of starting the next

:54:18.:54:25.

phase of home buying next year, we are starting it next week. There are

:54:25.:54:28.

some people, many living in the richest parts of London, who say we

:54:29.:54:32.

shouldn't be doing these things. I have this to say. Take your

:54:32.:54:39.

arguments down the road to where house prices have fallen for the

:54:39.:54:43.

last five years. Take your arguments to Bury or Morecambe, where young

:54:43.:54:47.

working couples are still living at home with their parents. Take your

:54:47.:54:48.

working couples are still living at arguments to our great towns and

:54:49.:54:52.

cities where there are families who have saved for years, earning decent

:54:52.:54:57.

salaries, who can afford mortgage repayments, but can't possibly

:54:57.:55:02.

afford it deposit being asked by the banks these days. Take your

:55:02.:55:05.

arguments to those families and say this policy is not right, you

:55:05.:55:10.

shouldn't be allowed to buy your own home. I will tell you what they will

:55:10.:55:12.

shouldn't be allowed to buy your own say back. It is all right for you,

:55:12.:55:16.

you have got your own home. We have been saving for years, what about

:55:16.:55:20.

us? I know whose side this party is on. We are the party of love -- the

:55:20.:55:40.

party of aspiration, and now the party of the Cameron's help to buy.

:55:40.:55:45.

We are the party of homeownership, and we are going to let the country

:55:45.:55:47.

We are the party of homeownership, know it. We will also make sure no

:55:47.:55:58.

one is left behind as our economy recovers. Our goal is nothing short

:55:58.:56:05.

of a recovery for all. That is the third part of our economic plan.

:56:05.:56:10.

Lectures from the left on fairness, frankly, stick in the throat. Under

:56:10.:56:14.

their government, the richest paid frankly, stick in the throat. Under

:56:14.:56:17.

lower tax rates than their cleaners on tax avoidance boomed, inequality

:56:17.:56:23.

increased, youth unemployment doubled, the gap between the north

:56:23.:56:26.

and south grew and the number of households where no one worked

:56:26.:56:30.

reached record levels. Fair? That was the fairest government of all.

:56:30.:56:38.

-- the un-fairest government of all. Contrast that with what we have

:56:38.:56:48.

done. When I say we, I mean we Conservatives. I sit at that cabinet

:56:48.:56:55.

table, and I know who has really put forward the policies that are

:56:55.:56:58.

delivering a fairer society. The pupil premium to support the most

:56:58.:57:00.

disadvantaged children, that was Michael Gove's idea, front and

:57:00.:57:06.

centre of the last Conservative manifesto. Our commitment on

:57:06.:57:10.

international aid, delivered by Andrew Mitchell and Justin

:57:10.:57:13.

Greening. Action on domestic violence, that is Theresa May. The

:57:13.:57:17.

International campaign to get raped recognised as a war crime, led by

:57:17.:57:22.

William Hague. New care standards for the elderly - Jeremy Hunt. The

:57:22.:57:25.

anti-avoidance measures in budget after budget, they are the

:57:25.:57:29.

painstaking work of our Conservative Treasury team, David Gauke and his

:57:29.:57:36.

colleagues. Rights for gay people, the biggest rise in the state

:57:36.:57:40.

pension, all delivered by Conservatives in government. And the

:57:40.:57:43.

overhaul of our entire welfare system, making sure work always

:57:43.:57:47.

pays, that is Iain Duncan Smith's life mission. These are all

:57:47.:58:05.

achievements of a modern, reformed Conservative Party that we have

:58:05.:58:10.

worked so hard together to create. But as we change our party and

:58:10.:58:15.

govern our country, there is more to do. I am part of a generation of

:58:15.:58:21.

Conservatives that came after the great struggles of the 1980s. That

:58:21.:58:26.

government rescued the country from eight tales bling -- a tailspin into

:58:26.:58:33.

decline. It renewed the foundations of cities like Manchester, but we

:58:33.:58:34.

decline. It renewed the foundations should not pretend we got every

:58:34.:58:39.

thing right. Old problems were solved, but new problems emerged. In

:58:39.:58:43.

some parts of the country, workless nurse took hold and we did not do

:58:43.:58:49.

enough to stop that -- workless nests. As a local member of

:58:49.:58:51.

Parliament, I know some parts of the north of England, we still have to

:58:51.:58:57.

work hard to overcome long memories of people who thought we did not

:58:57.:58:59.

work hard to overcome long memories care. Labour made the problem of

:58:59.:59:04.

welfare dependency worse. By the time they left office, 5 million

:59:04.:59:09.

people were on out of work benefits. What a waste of life and talent, a

:59:09.:59:13.

generation of people recycled through the job centre, collecting

:59:13.:59:19.

their dole cheques year in year out. No one seemed to notice. And opened

:59:19.:59:22.

or immigration policy meant those No one seemed to notice. And opened

:59:22.:59:26.

running the country did not care, because there was always an

:59:26.:59:28.

uncontrolled supplier of low skilled labour from abroad. Well, never

:59:28.:59:34.

again. We have capped benefits and our work programme is getting people

:59:34.:59:37.

into jobs. We have cut immigration by a third. What about the long-term

:59:37.:59:45.

unemployed? Let us pledge here that we will not abandon them, as

:59:45.:59:50.

previous governments did. Today, I can tell you about a new approach we

:59:50.:59:55.

are calling helped to work. The first time, all long-term unemployed

:59:55.:59:59.

people who are capable of work will be required to do something in

:59:59.:00:02.

return for their benefits and to help them find work. They will do

:00:02.:00:08.

useful work, putting something back into their community, making meals

:00:08.:00:12.

for the elderly, clearing up litter, working for a local charity. Others

:00:12.:00:13.

for the elderly, clearing up litter, will be made to attend a job centre

:00:13.:00:18.

every working day. For those with underlying problems like drug

:00:18.:00:22.

addiction and illiteracy, there will be an intensive regime of support.

:00:22.:00:24.

addiction and illiteracy, there will No one will be it gnawed or left

:00:24.:00:30.

without help. But no one will get something for nothing. Help to work,

:00:30.:00:37.

and return, work for the dole. A fair welfare system is fair to those

:00:37.:00:40.

who need it and fair to those who pay for it, too.

:00:40.:00:53.

? la economic plan, sound finance, backing aspiration, no one left

:00:53.:01:03.

behind, invested in the future -- our economic plan is. I am

:01:03.:01:11.

drivelling to China, and when you visit metropolises like there's it

:01:11.:01:14.

is hard not to be in awe of the scale of what is happening there,

:01:14.:01:21.

the ambition and the drive. -- I am travelling to China. Some people say

:01:21.:01:25.

that China is the sweatshop of the world and we should not compete, but

:01:25.:01:30.

China is also now a huge market for our exports and a home of

:01:30.:01:37.

innovation. This is a huge challenge for our country. If we get it right,

:01:37.:01:40.

it is the key to our future prosperity. This is what the debate

:01:40.:01:45.

about living standards is really all about. I don't want to see other

:01:45.:01:50.

nations pushing the frontiers of science and invention and commerce

:01:50.:01:51.

and explain to my children, that science and invention and commerce

:01:51.:01:55.

used to be our country. I don't want to look back and say that I was part

:01:55.:02:01.

of a generation that gave up and that we are poorer as a result. I

:02:01.:02:04.

of a generation that gave up and don't have to be. The other day I

:02:04.:02:07.

went to meet the people building a car that will travel at 1000 miles

:02:07.:02:13.

an hour and break the land speed record. It is not being built in

:02:13.:02:18.

Boston by some huge American defence company, it is not being built in

:02:19.:02:23.

Beijing by the Chinese government. It is called the Bloodhound, built

:02:23.:02:28.

in Bristol by British engineers, British apprentices and British

:02:28.:02:34.

companies. That is why I say we are in charge of our own destiny. In

:02:34.:02:42.

this great Railway Hall, can you imagine the Nation of Islam barred

:02:42.:02:44.

in being able imagine the Nation of Islam barred

:02:44.:05:17.

in being able We are at our best when we are optimists. We are at our

:05:17.:05:25.

best when we have faith that our country's better days lie not behind

:05:25.:05:28.

us, but ahead. We have fought hard battles these last three years, held

:05:28.:05:35.

our nerve when all around, people urged us to give in. And I want

:05:35.:05:39.

people to look back at these years and say yes, these were years of

:05:39.:05:45.

difficult cuts and sacrifice, but this was also the time when I bought

:05:45.:05:49.

my first home, set up my business, when our country invested in the

:05:49.:05:53.

things that matter for our future. These were the years when we laid

:05:53.:05:57.

the sound economic foundations on which better living standards are

:05:57.:06:01.

built, the sound foundations without which better living standards cannot

:06:01.:06:05.

be built. This is the time for a serious plan for a grown-up

:06:06.:06:10.

country. We are turning Britain around and we say to the people of

:06:10.:06:14.

this nation, we rescued the economy together, we will recover together,

:06:14.:06:19.

and together, we will share in the rewards, for the Sun has started to

:06:19.:06:22.

rise above the hill and the future looks brighter than it did just a

:06:22.:06:26.

few dark years ago. Thank you very much. STUDIO: George Osborne

:06:26.:06:44.

finishes his annual address to the Tory party faithful. He spoke for

:06:44.:06:46.

finishes his annual address to the just over 35 minutes is. He offered

:06:46.:06:51.

a serious plan for a grown-up country. He reminded not just the

:06:51.:06:57.

Labour Party, but the Liberal Democrats that the debt crisis was

:06:57.:07:03.

not over. He slipped in a little attack on Vince Cable, and I guess

:07:03.:07:07.

that is because Mr Cable attacked the Tories a couple of weeks ago.

:07:07.:07:17.

Interestingly, he promised that in the good years of a Conservative

:07:17.:07:20.

government they would run a surplus rather than a smaller deficit. We

:07:20.:07:23.

will look at how that might work. At rather than a smaller deficit. We

:07:23.:07:27.

the moment they predict deficits for as far as the eye will see, but he

:07:27.:07:33.

said they will build the roof when the sun shone. He said he would

:07:33.:07:40.

freeze Friel -- fuel duty for the rest of Parliament. I imagine that

:07:40.:07:47.

will be good for the heavy transport industry. He unveiled his plan for

:07:47.:07:51.

workfare for the long-term unemployed, which has already been

:07:51.:07:55.

heavily trailed. He did not use the phrase workfare, but behind closed

:07:55.:07:57.

heavily trailed. He did not use the doors or in the corridors of

:07:57.:08:02.

Manchester, that is what ministers are referring to it as. And he had a

:08:03.:08:07.

plug for High Speed 2. He gave no sign that, despite the lack of

:08:07.:08:12.

enthusiasm from Labour and a lot of resistance on his own side, he still

:08:12.:08:17.

called the high-speed train from London to Birmingham and then

:08:17.:08:21.

further north a great work of engineering. Interestingly, he

:08:21.:08:24.

didn't get a round of applause for that. Listening to that has been my

:08:24.:08:30.

guest, Norman Fowler. What did you that. Listening to that has been my

:08:31.:08:37.

make of it? The problem with all these speeches as they have been in

:08:37.:08:41.

the paper for at least 24 hours beforehand. In our day, we did not

:08:42.:08:48.

do it that way. So the response from the audience was that much greater.

:08:48.:08:54.

If, for example, the workfare proposals had come out of a clear

:08:54.:08:58.

blue sky, I think the audience would have been cheering. Why do they do

:08:58.:09:04.

that? Search me, is the answer. They so often get it wrong, the people

:09:04.:09:09.

who spin in advance. They get not particularly good headlines to begin

:09:09.:09:13.

with, then when the announcement comes it is yesterday's news. What

:09:13.:09:18.

do you make of the statement that he will run surpluses in the good

:09:18.:09:24.

years? I think it is sensible. I think it was a good speech. He has

:09:24.:09:28.

the great advantage of being a better speaker than most

:09:28.:09:34.

chancellors. He needs a new joke writer. It is difficult in those

:09:34.:09:39.

circumstances, in quite a serious speech about the economy, to bring

:09:39.:09:43.

out the great Morecambe and Weiss jokes. It is not that easy to do. I

:09:43.:09:50.

was not raising the bar anywhere near Morecambe and Wise, just to be

:09:50.:09:56.

better. He said we have to stick up the task, that must be the message.

:09:56.:10:00.

We are 15 months away from the election, how the party will be

:10:00.:10:05.

judged as how they are in 15 months time, have we made progress and

:10:05.:10:12.

would labour, frankly, ruin it? That will be the test. You think it was a

:10:12.:10:15.

great delivery? You seemed quite hesitant. FI was being

:10:15.:10:21.

supercritical, I would say he should have given more time at times, when

:10:21.:10:27.

he got to the punch line, he should have delayed it a little. -- if I

:10:27.:10:33.

was being supercritical. I think he is a fairly good speaker. The effect

:10:33.:10:40.

of what people were saying... The affection of people for him as a

:10:40.:10:48.

person has greatly increased. If David Cameron fell under a bus, you

:10:48.:10:51.

would actually see him now as a successor. Really? Yellow. I think

:10:51.:10:58.

so. I think he has become a much stronger and much easier to admire

:10:58.:11:02.

character than he ever was before. Well, listening to Mr Osborne in our

:11:02.:11:05.

Glasgow studio, is Labour's Treasury spokesperson, Cathy Jamieson.

:11:05.:11:15.

Welcome. I guess whoever wins the next election, Labour or the

:11:15.:11:18.

Conservatives or even a hung parliament, the long-term unemployed

:11:18.:11:25.

are in for it? They will have to get out and do something? I think the

:11:25.:11:29.

are in for it? They will have to get announcement today from George

:11:29.:11:33.

Osborne was far less vicious than what Labour has already said. George

:11:33.:11:36.

Osborne is talking about people having to turn up at the Jobcentres

:11:37.:11:42.

or being forced to go out and prepare meals for the elderly etc,

:11:42.:11:47.

we want to see people getting back into jobs. We have made it very

:11:47.:11:51.

clear that we would have a jobs guarantee, people would have to take

:11:51.:11:55.

jobs, if young people are out of work for a year or more, the

:11:55.:12:00.

long-term unemployed for two years, they would be minimum wage jobs but

:12:01.:12:04.

they would get help and support with the jobs search and some of the

:12:04.:12:09.

issues around literacy and so on. It is not that different, really? I

:12:09.:12:15.

think ours is far more ambitious than George Osborne has announced.

:12:15.:12:19.

It was quite astonishing to hear him talking about getting the economy

:12:19.:12:23.

back into surplus. In 2010 he promised he would have dealt with

:12:23.:12:25.

back into surplus. In 2010 he the deficit by 2015, he seems to be

:12:25.:12:30.

pushing that back into the next Parliament. I don't think his speech

:12:30.:12:34.

today offered any hope for hard working people across the UK. You

:12:34.:12:39.

are going to force the long-term unemployed to take a job, to provide

:12:39.:12:42.

the job, it will be guaranteed for them. This doll is born is going to

:12:42.:12:47.

force them to take a variety of things, but doing nothing is not an

:12:47.:12:53.

option -- Mr Osborne is going to force them. What sanctions would you

:12:53.:12:57.

have on the long-term unemployed if they refuse your force? The issue we

:12:57.:13:02.

have put forward is that it would be compulsory. These would be jobs that

:13:02.:13:08.

would be available for a period of six months, people would be obliged

:13:08.:13:13.

to take them. What is the sanction if they don't? Similar sanctions in

:13:13.:13:22.

terms of the benefits system. You would take away some of their

:13:22.:13:28.

welfare? The differences we are actually offering jobs and people

:13:28.:13:31.

are expected to take them because they would be proper jobs and

:13:31.:13:35.

supported. What we have heard from George Osborne today is not anywhere

:13:35.:13:39.

near as ambitious as what we have said we would do. What you both have

:13:39.:13:47.

in common, correct me if I am wrong, is that if the long-term unemployed

:13:47.:13:52.

don't do what you want, they will lose at least some of their welfare

:13:52.:13:58.

payments, correct? The majority of people who have been out of work for

:13:58.:14:02.

a lengthy period of time are desperate to get back into work. The

:14:02.:14:07.

answer is that yes, there would be sanctions.

:14:07.:14:13.

The sanctions would be withdrawal of welfare? Yes, but we would be

:14:13.:14:17.

offering real jobs for a proper welfare? Yes, but we would be

:14:17.:14:21.

wage, it is not just forcing people to do unpaid work for their

:14:21.:14:25.

benefits, it isn't highly different and we think it is reasonable to

:14:25.:14:30.

expect people to take that. -- it is highly different. I wanted to know

:14:31.:14:36.

what the sanctions would be. If Labour gets into power and growth

:14:36.:14:41.

returns to the economy and the economy is doing well, the way it

:14:41.:14:46.

was in the middle of the last decade, would a Labour government

:14:46.:14:53.

run surpluses? I think we would have to look at what is going to happen.

:14:53.:14:57.

We don't know what the state of the can you will be. If it is going

:14:57.:15:04.

well, would you run surpluses? In an ideal world, we want to see the

:15:04.:15:08.

economy returning to that position. But this appears to be unfunded

:15:08.:15:13.

promises. The announcement today on fuel duty fees, which seems to have

:15:13.:15:17.

been shoehorned in at the last minute because it does not appear to

:15:17.:15:21.

be funded, he can't see how he will pay for that and he will tell us

:15:21.:15:26.

that some point. That does not fit with a responsible approach to the

:15:26.:15:30.

economy. We are not making promises that we cannot guarantee we would

:15:30.:15:33.

deliver, but we want to see growth continue. Everybody wants to see

:15:33.:15:41.

that, but let me clarify. If the economy grows under labour for a

:15:41.:15:46.

large number of years, as it did after 1997, under a Labour

:15:46.:15:51.

government, would you run surpluses if growth continued? In an ideal

:15:51.:15:56.

world, we would want to do that. Let's see what the position is,

:15:56.:15:59.

world, we would want to do that. because we have no idea about the

:15:59.:16:02.

state of the economy. I am not because we have no idea about the

:16:02.:16:05.

asking you to run surpluses on year one, if you get four or five years,

:16:05.:16:12.

would you run a surplus rather than a deficit? We want to be sure that

:16:12.:16:15.

we can play some infrastructure. We did not hear much from George

:16:15.:16:22.

Osborne about getting the investment for the jobs. He tries to talk a

:16:22.:16:28.

good game, but today 's speech delivered far less than even I

:16:28.:16:34.

expected. And I am sure that your expectations were not high!

:16:34.:16:42.

Sorry, we have to move on. You know that we don't deal with history

:16:42.:16:47.

much. But the Labour Party conference last week might as well

:16:47.:16:51.

have been the War of the roses as far as we are concerned!

:16:51.:16:56.

Tories in Manchester yesterday held a tribute to former Prime Minister,

:16:56.:16:59.

Margaret Thatcher, who passed away. But can David Cameron match up to

:16:59.:17:06.

her? Adam has been finding out. You can't move for tributes to the Iron

:17:06.:17:10.

Lady, there is even a gift shop dedicated to her.

:17:10.:17:14.

But who will Conservative Party members vote as the better leader,

:17:14.:17:19.

Margaret Thatcher or David Cameron? What has she got? Guts and

:17:19.:17:28.

determination. Could David Cameron do anything to swing your vote? No.

:17:28.:17:36.

He messed it up on the gay vote for me. Will he have more of a legacy

:17:36.:17:49.

than the Iron Lady? Probably not. With the Tories ever see the like of

:17:49.:17:56.

her again? I hope so. Is there a potential Iron Lady in the Tory

:17:56.:18:01.

ranks at the moment? I don't think so. Cameron is much more democratic

:18:01.:18:08.

than Thatcher was. I would like to have two balls again, please. I

:18:08.:18:13.

can't say no to Mrs Thatcher, but I have to say yes to David Cameron.

:18:13.:18:17.

Most people my age don't know much about Thatcher. I am a fan. I have

:18:17.:18:22.

seen every thing she has done on TV. Every clip she has done, I have seen

:18:22.:18:30.

on YouTube. How do you think Mrs Thatcher would react if I thrust

:18:30.:18:35.

these balls in her face? She would say, you naughty boy! The hall was

:18:35.:18:44.

packed, there were people standing around the edges and there was an

:18:44.:18:47.

excitement about politics. Today, that has gone. What is Cameron's

:18:47.:18:58.

miners' strike? UKIP. In my opinion, someone has paid someone to put

:18:58.:19:03.

balls in the Cameron box. Quite soon, the Thatcher one will be

:19:03.:19:06.

overflowing. Then they will have to transfer some over to the Cameron

:19:06.:19:12.

box. I see a bit of Margaret Thatcher fashion tribute going on

:19:12.:19:17.

here. I looked like a granny, is that what you mean? No. Just one

:19:17.:19:25.

more. I have noticed that there is a lot of Maggie memorabilia at this

:19:25.:19:28.

conference. You were not taken by the Iron Lady ironing board cover?

:19:28.:19:34.

Hello! No. Who is a stronger leader, Thatcher or Cameron? Both. It is an

:19:34.:19:45.

Hello! No. Who is a stronger leader, either/or question, and as a

:19:45.:19:49.

history, lots of people like someone else. I will go for Margaret

:19:49.:19:54.

Thatcher, because she had balls. Who has got more balls, Thatcher or

:19:54.:20:01.

Cameron? If David Cameron was here voting, he would vote for the person

:20:01.:20:05.

I am going to vote for? Lady Thatcher, of course. Prime minister,

:20:05.:20:10.

who has got more balls, you or Mrs Thatcher? Now, the prime minister

:20:10.:20:15.

must have seen it as he swept through. The result of the mood box

:20:15.:20:20.

is that Margaret Thatcher is more popular than he is.

:20:20.:20:26.

We are now joined by the Conservative chairman, Grant

:20:26.:20:33.

Shapps, from Manchester. Mr Osborne says that in the good years, he is

:20:33.:20:38.

now going to run a surplus. But since you are projecting deficits as

:20:38.:20:43.

far as the eye can see, it will be a long while before you get near a

:20:43.:20:49.

surplus, isn't it? Well, it takes as long as it does determine the

:20:49.:20:52.

economy ran from what we now know was the deepest recession this

:20:52.:20:56.

country experiences the war. Twice as deep as that in America. That

:20:56.:21:03.

shows how bad it was under the previous government. We are making

:21:03.:21:05.

progress. We have cut a third off previous government. We are making

:21:05.:21:09.

the deficit. He made clear that we are going to finish the job and then

:21:09.:21:11.

make sure that when times are good, are going to finish the job and then

:21:11.:21:15.

we are running a surplus so that this country can afford it when

:21:15.:21:20.

there is another rainy day. So not before 2020? I don't know how long

:21:20.:21:25.

there is another rainy day. So not it will take mobot you have already

:21:25.:21:28.

seen the deficit reduced by a third. I hope we will have made more

:21:28.:21:29.

seen the deficit reduced by a third. progress by the time we get to the

:21:29.:21:35.

election in 2015. What was significant about today was that

:21:35.:21:37.

George Osborne said that never again, will we have the same mistake

:21:37.:21:42.

that Labour made of failing to fix the roof when the sun was shining.

:21:42.:21:46.

Can we get a few corrections to what has been said? The prime minister

:21:46.:21:53.

said yesterday on the BBC that 95% mortgages, which was what people

:21:53.:21:56.

would get and your Help to Buy scheme, he said they were

:21:56.:22:00.

commonplace. Can we get it on the record that that is not true? I can

:22:00.:22:06.

tell you that mortgages went up to not just 100% of the value of the

:22:06.:22:12.

property, but it went beyond. But they were not common. Actually, you

:22:12.:22:19.

could often get a mortgage for 90%, sometimes 95%. Those mortgage rates

:22:19.:22:25.

ran for decades without causing any difficulties. When it's beyond that

:22:25.:22:32.

to 100% of the property, and you could borrow money not just to buy

:22:32.:22:36.

your house but in addition, that was when it went wrong. We have

:22:36.:22:39.

prevented that from happening by giving the bank of England more

:22:39.:22:44.

power to stop it. The prime minister says people can't afford the

:22:44.:22:47.

deposit, so you are going to help them with that because they can't

:22:47.:22:53.

afford to service the mortgage. He is saying that they can afford to

:22:53.:22:58.

pay for the mortgage interest rate at a time when interest rates are at

:22:58.:23:02.

historic lows. They might not be able to continue to pay when

:23:02.:23:07.

interest rates rise, and they will be servicing 95 cent of the value of

:23:07.:23:16.

their home. At the moment, the market is oriented around 80 to 85%

:23:16.:23:23.

loan to value. But you will allow them to go up to 95%. But that means

:23:23.:23:29.

you need the most enormous deposit. It does not mean everyone will get

:23:29.:23:33.

95%. The government will back people who want to get on the housing

:23:34.:23:38.

ladder who are at the moment prevented because they don't have

:23:38.:23:40.

ladder who are at the moment upto £60,000 as a deposit. You and

:23:40.:23:47.

me, Andrew, and many watching this programme, we were able to get loan

:23:47.:23:53.

to values of 95%. That has not been available to this generation, which

:23:53.:23:58.

means that 35-year-olds, 37-year-olds are living at home with

:23:58.:24:01.

mum and dad. We think people in this generation should get the same

:24:01.:24:05.

opportunities as people in our generation. The only way you can

:24:05.:24:10.

stop house prices going up with this government subsidy is if you build a

:24:11.:24:16.

lot more, so why are housing starts under your coalition so poor? We

:24:16.:24:20.

have had some of the toughest times this country has ever known. As you

:24:20.:24:28.

know. Housing starts are now up. Not by much. In your first year, housing

:24:28.:24:35.

starts were 109,000. In your second year, they were 110,000. In your

:24:36.:24:44.

third year, they were 102,000. They are now running at a rate of

:24:44.:24:49.

110,000, the same as when you came in. There has been no improvement.

:24:49.:24:58.

But there will now be. When I was housing minister, there were lots of

:24:58.:25:01.

factors which dictated building homes. Planning permission is one.

:25:01.:25:07.

The second is the finance for people building the homes, and the third,

:25:07.:25:10.

which was not dealt with until this pop lit -- policy, is making sure

:25:10.:25:15.

people can get mortgages for those homes. The mortgage market was stuck

:25:15.:25:19.

at only giving mortgages at a loan to value of 80%, and people were

:25:20.:25:25.

having to get huge deposits together. That is why it was

:25:25.:25:28.

impossible to provide housing at the speed that we needed it. The

:25:28.:25:34.

pipeline suggests that there are now more starts that did not come

:25:34.:25:41.

through in the figures you mention. On UKIP, if a Conservative

:25:41.:25:45.

backbencher Eurosceptic decides to do a deal with UKIP at the next

:25:45.:25:51.

election so that UKIP doesn't run against them, as party chairman,

:25:51.:25:56.

what will you do? Our policy is of against them, as party chairman,

:25:56.:26:02.

course to have a referendum on a reformed Europe in the next

:26:02.:26:07.

Parliament by 2017. So all of our candidates will stand on the basis

:26:07.:26:10.

that the Conservatives will give you a referendum. Secondly, we will run

:26:10.:26:17.

candidates in all 650 constituencies, as we always do.

:26:17.:26:20.

Thirdly, they will only ever be on the ballot paper as Conservative

:26:20.:26:28.

candidates. What other parties do is their business. But if a sitting

:26:28.:26:36.

Tory MP or an aspiring Tory MP does a deal to be a joint candidate with

:26:36.:26:42.

UKIP, you will take them off the Tory approved list? Every person who

:26:42.:26:52.

stands for this election in this country for a party has to be signed

:26:52.:26:57.

off by that party to legally be the candidate. There will only be people

:26:57.:27:02.

on the ballot paper described as Conservative candidates. But you

:27:02.:27:05.

will disown any of your candidates who try to run with UKIP? Or I am

:27:05.:27:11.

saying is that whether other parties stand is their business. We will

:27:11.:27:17.

only run Conservative candidates. But if your MP is run as joint

:27:17.:27:22.

candidates with UKIP, what will you do? How can they be joint if it just

:27:22.:27:27.

says Conservative on the ballot paper? Whether other parties stand

:27:27.:27:31.

is their business. They can only stand as Conservatives, signed off

:27:31.:27:37.

by Conservatives. If Peter Bone does a deal with UKIP and runs as a joint

:27:37.:27:41.

candidates, will he still be the Tory candidate? I don't understand

:27:41.:27:46.

what you mean by joint candidate. You can only be the Conservative

:27:46.:27:50.

candidate. Whether UKIP stand or not is their business. If people want to

:27:50.:27:58.

have a referendum over Europe, I can't see any point in UKIP

:27:58.:28:02.

standing. We are the people who will offer the referendum and David

:28:02.:28:06.

Hamman is the only prime minister who will deliver on that. -- David

:28:06.:28:15.

Cameron. Who is the Tory minister who lost all this weight at the

:28:15.:28:18.

Cameron. Who is the Tory minister Austrian fat farm? Is that must be

:28:18.:28:22.

Eric Pickles. No, it was Michael Gove. Maybe Mr pickles should have

:28:22.:28:28.

been there, but Michael Gove lost two stone. That is it for today.

:28:28.:28:33.

Thanks to all my guests. The one O'Clock News is starting on BBC

:28:33.:28:38.

One. I will be here at noon tomorrow, our usual time, with more

:28:38.:28:43.

from the Conservative conference from Manchester. James Landale will

:28:43.:28:47.

be on BBC Two tonight with today at conference after Newsnight. Hope you

:28:47.:28:54.

can join him and me tomorrow. Till then, bye-bye. Thanks for watching.

:28:54.:29:00.

Andrew Neil is joined by former cabinet minister Lord Fowler to discuss all the latest from the Conservative party conference in Manchester. Including live coverage of chancellor George Osborne's speech.


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