02/12/2013 Daily Politics


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Afternoon, folks. Welcome to the Daily Politics. Has the government


stolen Labour's thunder over energy? A number of leading energy companies


have promised to reduce recent increases to domestic fuel bills


after the government announced cuts to the green levies they face.


Ministers say they believe ?50 can be taken off the average annual


bill. David Cameron's in Beijing, stepping up our ties with China. But


is he marching too much to the Chinese tune? It's only three days


till the Autumn statement. What Christmas goodies will George


Osborne have up his sleeve? And it's only 521 days till the General


Election! Could the end of coalition government get messy?


All that in the next hour. With us for the whole programme today is the


former Home Office and Foreign Office Minister, Liberal Democrat


MP, Jeremy Browne. Welcome to the programme. Good afternoon. Now,


first this morning, let's talk about China because that's where the Prime


Minister is. Writing in a newspaper ahead of his visit, Mr Cameron had


this message. " There is no country in the Western world more open to


Chinese investment, more able to meet the demands of Chinese


consumers, or more willing to make the case for economic openess in the


G8, the G20 and the European Union. ". Pretty clear. And this is what he


had to say to the BBC's Nick Robinson earlier today. We have a


strong relationship between Britain and China including human rights


dialogue. We are one of the few countries to have that relationship


with China but very much top of the list only in China is making sure we


secure those British jobs at home and British investment to help


achieve our economic growth. Is he selling our souls of the Chinese? I


agree with every new said. The biggest fact of life in the world


today is the rise of China, the rise of Asia more generally, I think it


will completely dominate everything that we do in government terms for


the next 50 years in this country. I read an article, I think it is in


the Guardian, Simon Jenkins, a few weeks ago, one of the worst I have


ever read. What it said was David Cameron shouldn't waste of time


going to China, he should be concentrating entirely on domestic


policy but China is increasingly domestic policy because if we are


concerned about the future of our economy, our education system, our


deficit, all of these are tied up with the rise of Asia. With all due


respect, that wasn't quite the question I asked, because many


people apart from Simon Jenkins would agree that that is where the


investment comes from. But should we be selling our soul in the sense


that many critics say he's giving in he has capitulated on human rights


after the to-do over posing with the Dalai llama which seemed to cause a


big problem. It's more concentrated than that. I don't think we should


be selling our soul, is the short answer, but I do think there was a


danger with some of these jamborees that we take loads of business


people on a plane and a few government ministers. Cronies?


Important business people but we feel we have ticked the box and done


it the whole point of the racial job I think with China and other Asian


countries is about weaving them into everything we do in terms of how we


think about international politics, the future of the economy. But we


should at the same time, have the self-respect to stand up for our own


values, I don't think anybody in the world should tell the elected Prime


Minister this country who he can or cannot meet. I'm not saying we


should cave in Folsom we should have confidence in our own values. And we


shouldn't see the relationship with countries like China as just a


transactional relationship that we do a bit, and then they do a bit


back. We have to think much more in the integrated way, the way we would


with the French and the Germans and the Americans, about how to interact


with Asian countries on a daily basis, not every three years. Human


rights isn't going to be raised in a meaningful way on this trip.


Universal values have been set aside for the greater good. I think the


Prime Minister was right to meet the Dalai Lama. I think... It did result


in a problem. I don't think the primaries should be dictated to by


foreign governments but we have to see the relationship in the round.


And we have to be aware that China is already the second biggest


economy in the world and will overtake the Americans. It isn't


wise or, in my view, polite to spend the whole time lecturing them and


expecting them to listen to us. It doesn't work either. Also, we have


to be courteous to the countries we deal with and respectful of them


whilst, at the same time course having self-respect for ourselves.


It's perfectly possible to have a rounded relationship which puts


human rights on the list of concerns but, at the same time, we have an


economic and political situation into related. You have dealt with


the Chinese for them what are they like? You have a famous picture we


have shown. Any opportunity, not just to see you of course, but the


pandas. It was amazing. I loved meeting that panda. What did he say


about human rights? He loved his carrot, and he's got it all over his


belly. You look more pleased than he does. It was a very funny situation


to find myself in. What are the Chinese like? They are. . Pretty


hot-headed. In flexible. In their thinking for them when they come to


negotiating, and discussing the issues with other countries, but I


think the trap we fall into sometimes is thinking that the


Chinese are not thinking deeply about the future of world affairs. I


think they are very interested in what they can learn from us, from


other leading countries like the Germans, and we shouldn't be so


arrogant as to assume we can't learn anything from them either. Let's


leave it there. And the Panda. Now it's time for our daily quiz. Not


completely unrelated. The question for today is what culinary delight


was David Cameron served on his current trip to China? Was it: A)


Roasted duck heads. B) Bamboo fungus. C) Chicken feet.


D) Sweet and sour sea horse. They all sound and look delicious, don't


they? At the end of the show Jeremy will give us the correct answer. He


has and we have them all. The Chancellor is due to deliver his


Autumn Statement on Thursday, updating us on the state of the


nation's finances and setting out his tax and spending plans for the


future. -- he has, we have them all. Speaking to the BBC yesterday,


George Osborne said the UK economy was on the right track and denied


that his policies were creating a housing bubble. His opposite number,


Ed Balls, however, warned against over-confidence in the recovery.


Here's a bit of what they both had to say. The economic planners


working and recovery is underway. In the Autumn statement, I will say the


job is not yet done. We have got to make sure we go on taking the


difficult decisions to secure that recovery. And we also want a


responsible recovery. We want to learn from the mistakes of the past


and don't see a re-emergence of some of those problems in the financial


system which brought this country to its knees. On housing, specifically,


what are the Bank of England and I say is this not a housing bubble at


the moment, that we want to make sure one doesn't develop and that's


why it wasn't just the Bank of England, at myself and the bank


governor working together. One of these schemes, which has been


underpinning mortgage lending in financial markets, we are now going


to focus on small business lending because they are not only the


lifeblood of the economy. I think you see as working together, the


Bank of England, the Treasury, to make sure we do not repeat the


mistakes of the past and monitor the economy, swap housing booms before


they emerge, and let's be clear, as of today, the Bank of England agreed


this not a housing boom. It's good that finally we are seeing some


growth but from a very low base, for families in our country, it's not a


recovery because living standards are falling month by month. If


George boasts about a recovery, which may be there for people in the


city, but for most people is not there at all, I fear it will make


you look even more out of touch. George Osborne and Ed Balls. With us


now is the former Labour Chairman of the Treasury Select Committee, John


McFall. And the former Defence Secretary, the Conservative MP, Liam


Fox. Welcome to both of you. It's going to be a big week. The economy


will take centre stage, as it has done over the last few years.


Actually, now, it's all looking pretty good. In fact, some


economists say the UK is projected to be public the fastest-growing


economy in the developed world. It's not surprising that George Osborne


says is looking good, but is this the right type of recovery? In his


October 2011 budget, he said he did not want a debt fuelled economy. He


did not want city bonuses, and he did not want other excesses. Now, if


you look at the economy just now, Mark Carney said three quarters of


the growth next year will come from increasing consumer spending and


debt. So we actually have a debt fuelled recovery and that isn't good


for the longer term. We will talk about the type of recovery in a


moment. Cynics would save you talked about growth, Ed Balls talked about


nothing else but getting growth back into the economy when it's back, and


the projections are it's going to increase faster than the forecast


said and, from that growth, there will be an economic recovery. What


are you complaining about? Actually, the economy fell so much that the


normal experience when the economy recovers its growth has increased


quite a bit, but what type of growth are we having? It's a joyless


growth, unemployment now was still higher than when the government came


in and because of his policies, it took off 1.5% of GDP every year so,


in many ways, it was three years of waste. We don't know whether it was


the Chancellor's policies, it could've been longer if Labour had


been in arguably but that's not the issue of the type of recovery. Just


before you get to your point of view, it is to to say, actually, it


is consumer spending, what people are worried about is a housing


bubble, we will return to exactly the sort of conditions that resulted


and exacerbated the result of a financial crash. I don't think we


necessarily well but we should be guarded about that danger. We should


try to make sure that we don't. Just to pick up on John's point for the


unemployment levels are lower than when the government came into


office. Youth unemployment? The government was rolling almost ?450


million every day. It was completely disastrous and we had to restore


some sanity to the government. That was as a result of a financial


crash, to be fair. What we're doing now, slowly but surely, is getting


the economic situation and the government finances back on their


feet but there's a long way to go, so no one must think the job has


been done. Are those finances being fixed question mark the deficit is


still extremely high. If you take the figures George Osborne used


himself in 2010 and 11, he is postponing all the austerity he


really couldn't do for them the finances are not fixed, they are


better and the deficit is lower, but it still extremely high. I don't


want to see the Chancellor and the government as a whole talking about


the whole situation as if it has been sorted. We are out of the woods


and every thing is fine and dandy. We are growing, but as a


prerequisite for sustained recovery in this country and thought at the


public finances, but we are still warrant a colossal amount of money


and have a lot of hard decisions in front of us. Actually, Liam Fox, you


will talk about austerity more in the autumn statement. It's going to


go on for years and years and years and, despite this growth, there's


nothing for people to look forward to for the there's a lot for people


to look forward to, 1 million public sector jobs created. It's nonsense,


clearly the public finances are improving. But we still are spending


a lot more money than we are aiming at a country. Until we get back into


balance, we will have to continue to tighten our belts, continue downward


pressure on public expenditure, and on the deficit. How much further


would you shrink public spending and the size of the state? It is an


arbitrary debate, but if you think of when we were at the early 2000s,


it was a reasonably sustained position. Labour increased public


spending. Up to 52% of GDP. This government is still running off a


lot of money over the parliament. Of course, and I think it still


borrowing a lot. We are still ring too much money. We would like to


sing deficit come down faster. -- borrowing too much money. But we are


making progress. We're talking about the elimination of the deficit in


this country within five years, which is infinitely better than the


performances in, double countries in Europe. And there would have to be


tax rises as one of spending cuts. There. As the economy grows, what do


you do with the extra money? Put it into deficit reduction, some of it


into increased spending? I would like to see us continuing downward


pressure on the deficit, the most important thing. And then tax cuts


because ultimately, interest rates are going to rise, and if we want to


protect people from an increase in mortgage rates, we have to see the


tax pressure come down. Can we afford tax cuts in the foreseeable


future at any stage? Well, we can, but my greatest majority -- priority


would be reducing the deficit. If you look at marriage tax cuts and


meals for schoolchildren, that is a dealer the two coalition parties are


done. ?1.5 billion. Is that really affordable at a time when austerity


is going to rain, the finances aren't fixed, and the Lib Dems are


throwing out these little gambits to the public before the finance


meetings? I think both parties of government are doing that and have


to look at how they continue to bear down on the deficit. Some targeted


tax cuts are possible. We have cut income tax for people on low and


middle incomes by raising the threshold to ?10,000, and that is an


important tax cut that benefits 25 million people in work, but what the


Government cannot do is, as I say, let it head down, is the end money


as if we are out of the woods. Let's talk about the cost of living


crisis, Liam Fox, and I will come to you in response to this, John


McFall, but the Tories have been playing catch-up, they have had to


move onto Labour territory, who have dominated the agenda on the cost of


living crisis. I, Ed Miliband's speech at the Labour Party


conference got considerable political momentum. -- I think. The


question is, what do you do when you find people are finding it difficult


to make ends meet because, for various reasons, prices have risen


faster than wages in recent years? My answer would be to not take so


much money out of earnings in the first place. Government should not


be taking so much of people's income. Government needs to control


spending so it is not pushing hard working people into more hardship by


taxing them. In terms of the cost of living, they are doing, to some


extent, the Tories, responding in what they would claim is a more


effective way than Labour's suggestion. In general, they are and


string what has been raised by Ed Miliband. To adapt Mrs Thatcher's


phrase, you turn if you want to. I am first in the queue for U-turn


every time on payday loans, energy, so this government are not leading,


they are following. We need leadership year flood is, and what


we will get is another bout of PR from George Osborne. -- we need


leadership here. Debt and deficit reduction at two completely separate


things. Courtesy of Fraser Nelson, he says that in the 13 years of


Labour government, it added ?319 billion, any five years of this


Government it will add ?465 billion, so let's get real when we talk about


debt and deficit reduction. John is that the government have added a


colossal amount of money to the overall national debt, but the


reason for that is we inherited such a massive deficit. I do not member


Labour saying they wanted to cut the deficit faster than that. Come on,


it is not... You are saying Labour as saying they would borrow more.


Yeah, they want to borrow more. Labour gave you growth in 2010. You


do not know if that would have continued. Is it true that Labour


would spend more, use any savings from the deficit to spend? Alistair


Darling said at the Labour target in 2010, and George Osborne and company


said, look, we are going to square the debt by 2015, and they have not


got anywhere near it. He would have halved the deficit by 2015. There is


not a single hard-headed decision that has been made in the House of


Commons in the last three years to get more efficient, low spending


that Labour has not opposed. But give them credit for one thing, Ed


Miliband has set the pace with his speech and his idea on energy


prices. The difficulty the Government has, when Ed Miliband


comes up with an idea like that, even an economic league illiterate


idea, is that the Government seems to be unsure about whether to


ridicule it or match it. The worst is to do both, and the Government


has got to, if you like, get a sense of its direction and priorities, and


not be driven to respond to every bad idea of Ed Miliband's, because


that is the danger Gordon Brown got into, and every time George Osborne


as Shadow Chancellor came up with an idea, Gordon Brown seemed to think


his main priority was to cancel it out. That will be politics for you!


You can be too tactical if you are not careful. One of the things


people will be worried about is that good news in a broader sense, Labour


want to focus on cost of living, Government want to focus on the


bigger economic picture, but what if the economy is overstimulated, the


pressure to put up interest rates will be overwhelming, wanted?


Interest rates will rise. Not before the next election. It looks like it


is a bit off here and in the United States, but they are historically


low, way below normal, and the question is, when they do start to


rise, what can the Government best do to minimise that and protect


people? First of all, it is getting control of borrowing, making the


pressure for rising interest rates less, but making sure that the tax


burden is falling so that people are not being hit twice. What do you


think about the married couple's tax break and free school meals? It is a


good idea, but I would have postponed it until later. I think we


need to make sure the deficit is tackled. Something we have not


mentioned, the deficit means we have debt interest to repay, and next


year that debt interest is bigger than the education budget. That is


not acceptable, spending more money servicing debt than on education.


George Osborne said he would avoid that. We are bringing it down,


Labour would put it back up. Our interest is ?1 billion per week,


just interest alone. I am glad I do not have to paid! You do, that is


the point! John McFall, the problem for Labour is that the people do not


trust you, whatever you say or do in terms of finger wagging, they do not


trust you to run the economy. Well, that is the challenge for labour,


and Labour lost the argument at the beginning of 2010 when we allowed a


false statement to be made that the UK was like Greece and elsewhere,


and the issue now in terms of interest rates, Lee made the point,


globally we have a savings glut. There are not enough investments to


match the savings that are there, and this is an opportunity for the


Chancellor to make sure we have an investment strategy, because


business investment is lower this year than it was last year. What


would you like to see? One thing. I want to see the deficit pressure


continued outwards. I agree with that. I will add to it that I also


think we should do more and continue to do more people on low and middle


incomes. We have got used to coalition government in this country


now, the deals, the squabbles and the patching things up, but time


flies when you are having fun, and it will all be over in two years or


less, which has got people thinking about what the end will be like. To


find out if parting really will be such sweet sorrow, Adam has been


looking at some countries where coalition make-ups and break-ups are


part of everyday life. # Time to say goodbye...


This beautiful friendship will come to an end in just 521 days' time,


when the next general election is held and the coalition will be


unwound. Some of Whitehall's finest minds are


wondering what that will be like here at a think tank, the Institute


of the and, along with some international commentators, who have


seen plenty of endings, happy and unhappy. -- the Institute for


government. First of all, Germany, which has had 18 coalitions since


1949. For the time being, the most important lesson is for the junior


partner, because in the last election, the Liberals, not the Lib


Dems in Germany, the Liberals, they paid a very high price for being in


the coalition, because they did not stick to their philosophies, and


their voters said, you sold everything that you promised to us


just to stay in power. They took a terrible defeat in the September


elections. Philosophies, and their voters said, you sold everything


that you promised to us just to stay in power. They took a terrible


defeat in the September elections. In Ireland, several coalitions have


collapsed, and the lesson from there is all about party discipline. In


Ireland, several coalitions have collapsed, and the lesson from there


is all about party discipline. Backbenchers backbenchers they get


very worried they get very worried about their seats, individually and


collectively. You need to instil confidence in the backbenchers that


the best thing to do is stay in government, deliver on the programme


for government, that is hugely important. Although we are unlikely


to follow Sweden, where four parties and their coalitions are thinking


about the next one. We have managed to create pre-election pacts, a


common manifesto, four parties creating a common manifesto before


the elections, and we won into 2006 and were re-elected in 2010.


So no matter what language your coalition is in, the message seems


to be, weirdly, the most important thing about breaking up is sticking


together or as long as possible. We are joined now for the rest of


the programme by energy Mr Michael Fallon and, from the Institute of


Government, by Peter Riddle. Is there a theme to coalitions ending,


or nothing at all? Oh, there are themes, and that film which you


showed, based on the meeting we had last week, they all say, if you


break of a coalition early, if you are the junior partner, you get


punished, invariably. Both sides? More likely the junior partner, the


one who was breaking up. But there is a common pattern as an election


approaches, politicians will revert to electoral type. You need a system


which is flexible enough to accommodate them working together on


the immediate problems of government, but also recognising


they are competing as parties, not standing as a coalition but


competing as parties for their plans beyond. It is a mixture of


recognising the party system, but also having a system which allows


them to govern together on immediate problems, and in a sense they are


advocating breaking the coalition up. Wrong, anyone who does that will


get punished, that is the invariable message. You are not wanted was


advocating coalition, but do you agree that in Germany the Liberals,


they were wiped out, weren't they, because people thought they had sold


out to the bigger partner? Well, there may be a number of reasons why


they were wiped out, and we have to be mindful of that. I agree with


what Peter said, and the one thing I take exception to a bit was the


introduction about the squabbling and bickering in the coalition. Has


that not happened? It has, but to no greater degree than as happened in


single party governments. If you remember Gordon Brown and Cabinet


ministers resigning and calling on him to go, if you think about how


Margaret Thatcher was deposed, John Major, all parties, as they get near


a general election, whether in government on their own or with


another party, inevitably they look more to the future, but we are paid


to govern on a day-to-day basis in the interests of the country, and


that is what we need to get on with. But tribal loyalty will win out. The


coalition will not be on the ballot paper, and it is right the Liberal


Democrats and the Conservatives put forward their ideas for 2015-20, but


that does not stop us getting on with trying to run the country


sensibly in 2014. But will you sacrifice seats for, as you would


put it, the coalition? I hope not, we will have to have a vote and find


out! My hope is that people will believe that it is perfectly


possible to have an enlightened, generous spirited Liberal party that


believes in us having sane economic management, and that the combination


can be attracted to another people for us to do well at general


election, we will find out. Do recognise that description, Michael


Fallon? On a personal level, I think coalition works extremely well,


dealing with the deficit, sticking to one economic policy, and that is


why we have a lower interest rates, and I do not think there is


squabbling and Pickering. What about backbenchers? Perhaps, you see that


occasionally, but even with our own, just as much as the Liberal


Democrats with theirs. In the heart of government, I have very cordial


relations with Vince Cable and with Ed Davey, both Liberal Democrats. We


get on very well. What will happen between now and the election, as you


are defending seats yourselves and putting forward a manifesto that


will look, I presume, very different to Jeremy and his colleagues? The


evidence from Peter, and he will speak for himself, is that we will


have to keep focusing on big things, we will have to keep going and


deficit reduction, making sure the economic recovery is sustainable and


well-balanced, pushing on with our reforms to education and welfare,


but I suspect, as we get nearer to the election, both parties will be


looking to the future, and you are going to get more positioning and a


clear indication of what a straightforward majority


Conservative government would do. We all get the impression everybody is


looking now to try and position themselves in terms of the Lib Dems


and the Conservatives, but not much will get done. What gets done it


tends to be new things. A lot of legislation in this parliament is


now being implemented. Health, universal credit, a lot of the new


legislation, always the final year of Parliament is when there isn't


much bigger legislation. Things will happen but there won't be massive


new initiatives. The focus will shift. The interesting point Michael


made if it's in both the Tories and the Lib Dem interest to contain the


argument. Don't squabble too much over the current, and therefore get


the tone right and the balance between that and the electorate. You


don't care if they lose its combo Lib Dems? We will be fighting them


in the election. Why do you care about keeping it sweet and unified


until then? You have got more to gain and they have got everything to


lose. We all have a common interest. They didn't vote overall


for a winner last time. We came together in the national interest at


a difficult stage of the European economy, and we have stuck to that,


and we do have to focus on what has to be done in the next year and a


half, as well as lookahead. What about another coalition with the


Tories? It's not a game. We have to make sure we have in place an


economy where people can have a realistic prospect of finding jobs,


not losing their House. But you have also got to win your seat. You have


got to hope, if you do the right thing, and make wise decisions...


But some of your colleagues may not see that. Another coalition with the


Tories. You have obviously enjoyed it? It was bought for the Lib Dems


to being coalition again after the next general election. That it is


possible. I think it either Conservatives or Labour were to get


more than half the seats, neither of them would have an appetite for a


coalition with the Lib Dems, although, if the Conservatives were


to win with a majority of four, or Labour, with a tiny majority, people


will look back fondly at this period of stable government compared to


being fitted on a daily basis by government with a small majority.


You have to be careful what you wish for. There's a lot to be said for


stable coalition. You have obviously enjoyed the coalition and maybe


would preferred... Some bits more than others! You have been a victim


of coalition shenanigans. There was a lot of surprise when you didn't


keep your job. I don't know if I'm a victim of shenanigans. They felt


they had to shuffle the deck. I'm a victim of more senior people in


government being able to decide who serves in government and who


doesn't. But I am completely committed to this government. I


think it is, by far and away, the best prospect Britain has full


dealing with its long-term problems and I think we're a good fist of it.


What is interesting about the coalition, as well as dealing with


the deficit and recovery, we have done some pretty radical things. We


are making big changes in welfare, in schools,


are making big changes in welfare, are making big changes in welfare,


in schools, that, honestly, you are better with


a majority government which is more you can get on and do the things you


want to do. We would you can get on and do the things you


human rights, for example, getting rid


human rights, for example, getting back fondly on Nick Clegg. I don't


human rights, for example, getting agree with that. I believe don't


Herbert says you sent letters to yourself and answer


Herbert says you sent letters to part of this which cut across, how


you deal with industries affected part of this which cut across, how


example, which is why the Prime Minister asked we to


example, which is why the Prime next time, the key thing is the


politicians and the next time, the key thing is the


different. We could have a minority-owned. Who knows?


different. We could have a prepared for any kind of outcome. It


would be great prepared for any kind of outcome. It


what's happening this week. As we've heard,


what's happening this week. As we've diplomatic to-do after meeting the


Dalai Lama play. On Tuesday, Ed Miliband will


be claiming play. On Tuesday, Ed Miliband will


for attention by play. On Tuesday, Ed Miliband will


Clegg will be in the ring with play. On Tuesday, Ed Miliband will


it. And finally, Friday sees play. On Tuesday, Ed Miliband will


David Cameron has sold his soul for play. On Tuesday, Ed Miliband will


statesman and a in China. As Ms leaders will be


statesman and a in China. As Ms and the fact of the matter is, there


are some and the fact of the matter is, there


Washing human rights to one side. Promoting Britain as the


with. Other people say it's sour grapes from the French and the


with. Other people say it's sour it's worth it? Some people say he is


selling Britain's sold it's worth it? Some people say he is


father-in-law and people like that. It's proving a distraction for him.


On the other hand, out of the millions of businesses in the UK,


not many have people related to the Prime Minister, so is having to fend


off those criticisms. Maybe it's distracting from the message about


helping British business overall. The allegations of cronyism have


been in the papers. Whether or not that the tracks from the trip, this


would also say some things that Western governments can't tell a


Chinese what to do because they will freeze the right and you won't get


what you want? Boris Johnson said it well on his recent China, when he


said you can't go into meetings and say, how is this freedom stuff


going, chaps? Western leaders know they will be put in the deep freeze.


They are reluctant to tread into sensitive water. China needs


European countries almost as much as we need them. They need our


services. Their economy is heavy in manufacturing to services and the UK


provides good accountancy, legal services. They need us. Foreign


leaders have a duty to raise human rights issues when they are there.


The Autumn statement, the UK economy motoring ahead. It's more


austerities, isn't it? That is the message George Osborne yesterday was


trying to deliver and he will stress that again on Thursday that things


are turning the corner. He has got a delicate balance to adopt here will


stop he is trying to say the economy is doing better but also he hasn't


got much room for manoeuvre. We are expecting growth figures to be


upgraded by the biggest increase for three years. So that's great.


Hurray. We are expecting some giveaways. Perhaps on petrol duty,


perhaps a cat. Help for small businesses in the high Street --


cut. Some Tories, Liam Fox MP, are pushing hard for tax cuts, permanent


austerity, George Osborne yesterday said to have lie ahead. But of


course, they have another 18 months to go before the general election,


so he'll want to save up some sweeteners for later on. It's a


difficult balancing act, I think. The worry now, which we have been


discussing if that there are fears of a housing bubble and actually,


this growth is not sustainable, particularly if it's based on a


housing bubble and another credit room. That's one of George


Osborne's concerns, the recovery will look a bit like the kind of


recoveries with hard in the past based on inflated housing prices,


consumer credit and the rest of it. That's what he's trying to pull


together the visit of the Prime Minister to China to show it will be


a broader-based recovery, the exporter manufacturing going, to


make sure we're not just dependent on a housing bubble. OK, both of


you, thank you very much. Ever since Ed Miliband announced at his party


conference that a Labour Government would implement a price freeze on


energy bills, the Coalition has looked a little as though it's been


running to keep up. Better news on the economy has apparently not led


to better poll ratings, with the political debate focused on what


Labour call a cost of living crisis. Over the last week we've been


hearing clues about what the Government plans to do to keep bills


down, and this morning we got the full details. Policies announced


today will enable companies to reduce bills by an average of about


?50. The energy company obligation or ECO scheme, which pays for home


insulation, will be implemented more slowly. That should lead to a saving


of ?30 to ?35 for customers. The Warm Home Discount, which provides a


rebate for vulnerable households, will from now on be funded from


general taxation, rather than added to bills. Meaning a further saving


of ?12. And the electricity distribution network companies have


agreed to cut their charges for a further one-off saving of ?5. It


looks as though the Lib Dems have won some concessions to make sure


the changes don't lead to higher carbon emissions. People who buy a


new home could get up to ?1,000 from the Government to spend on


energy-saving measures. And ?90 million of public money will be


spent over three years to improve the energy efficiency of schools and


hospitals. This morning the major energy companies have confirmed that


they will pass on the savings to customers although most people's


bills will still rise overall. Labour is launching its own Green


Paper on energy today to consult on how their policy of freezing bills


could be implemented. Ed Miliband says the changes to energy levies


announced today are just smoke and mirrors. And Labour's Julie Elliott,


who is a shadow energy minister, joins us now. Welcome to the


programme. Michael Fallon, just to recap, today's announcement will


mean those go up by less than they otherwise would but they are still


going to rise overall, aren't they? It depends what happens to wholesale


gas prices. Labour said you could freeze prices without explaining how


you can free costs. No government can freeze international costs of


gas or indeed of oil. We can deal with our own taxes, the levy is put


on top of the bill, and we are to be not immediately. The government has


already announced today that don't pass this through, so the bills now


will be around ?50 lower than they would otherwise have been. Right,


they have shot your fox, haven't they? Not at all, all they're doing


is passing some costs of fuel bills onto general taxation and, to save


energy prices are coming down, a British Gas customer who today's


prices would have gone up by ?130, their bills are still ?80 more than


they would have been lasted, so they haven't solved the problem, the


energy market, between the companies, it's simply not working.


These measures do nothing to address that. How do you control wholesale


gas and oil prices? You can't. You can make it transparent. The freeze


is a mechanism while we sort out the market in this country. You can't


control the price of gas from the Middle East on the price of gas from


Russia Makkah Orange and it has the importing. But you can make the


market in Britain work, which it isn't at the moment. Because we


inherited the big six companies from you. There were originally 14. By


the time you finish in government, there's only six. We are going to


annual competition. More competition. Making switching more


easy, but in poorer households onto the cheapest possible tariffs,


introducing... You are putting everyone on the same tariff, aren't


you? There will be fewer of them. The most honourable people will get


onto the lowest tariff, so we are tackling the problems of


competition. Which we have inherited. We are also providing


immediate help now full we don't have to wait for some mythical


freeze in three year's time. It's not mythical. It has helped


straightaway. You have welcomed the government taking action. They are


doing something, and you have got to welcome anything that can be done


but with three pathways that years into the government, energy prices


have gone up hugely in the last three years and they have only acted


when we have taken a decisive policy decision to do something in the


general election. What are you going to do, you win the election, the


frieze art enacted, the companies put prices up beforehand, wait until


the freeze is over and do the same again? Well, if they collude, Ofgem


have the power to act on that, and they should, because... What is to


stop them putting up prices when the freeze ends? You cannot control


energy prices, which is why what you have been saying about our energy


frieze is misleading. We are planning to freeze them for 20


months while we make the market work properly, while we make it open and


transparent so that if companies own production and sale in the retail


market, the cost to sell to each other is open, transparent and


clear, so people know they are not paying above and beyond the odds,


which at the moment they do not know. Is that not the way to go,


breaking up the six companies? What you are doing is a short-term


response to the fact that, politically, this has dominated the


agenda, but isn't Labour right to say you have got to do something to


reform the market properly? Responding to the increase is a


short-term response to the fact that, politically, this has


dominated the agenda, but isn't Labour right to say you have got to


do something to reform the market properly? Responding to the


increases of like fuel duty, council tax. The new competition review will


do that, it will look at the cost and the structure of these


companies, and it will see whether or not there is cross subsidy


between the two things, the generation and retail supply. We


will look very hard at that, and we will know the answer by the spring.


The Warm Home Discount will be paid for out of general taxation, you are


going to be accused of robbing Peter to pay Paul. It is going to be much


better focused. Too many of these levies are regressive, which means


that the benefit goes to middle-class or wealthier households


and is paid for by ordinary rate taxpayers. What we are going to do


is target the levy is far better, so that the Energy Company Obligation,


ECO, the biggest of them, gets to the house all to need it most, that


is extremely important. Are they regressive, the Greek levy did not


do what they were supposed to? I think Ed Miliband's initial proposal


is completely economic leak illiterate, but I think that the


Government's response has been in glorious, and I don't want the


Government to lose its nerve. It promised to be the greenest


government in history, and I think there is a danger of thinking that,


if we give people a discount of less than ?1 per week, they will be


tremendously grateful and the argument will have gone. Go. The


Government should focus on cost of living, the fact that we have lifted


people out of tax. -- gone full circle. If you earn ?15,000 per


year, this Government as cut your tax bill by ?700 per year, and that


is dealing with the cost of living, not 50p here or there as a response


to Ed Miliband's tactical manoeuvres. You are not going to be


the greenest government ever, George Osborne made it clear that Britain


cannot afford it, David Cameron has called it green crap, it has gone.


We are the greenest government ever, we have more offshore wind than any


country on earth, we are inundated with applications for onshore


turbines, solar energy, 15% of our electricity comes from renewables


and we said at the green investment bank. We are pursuing the green


agenda, but it has to be affordable, cost-effective. We are


not abandoning our green commitments, but we are making sure


the burden does not fall unfairly on some households and certainly does


not fall unfairly on our businesses compare to others in Europe. I agree


it needs to be cost-effective and we need rational policy-making. What I


said, if you earn ?16,000 per year, by April of next year this


government will have cut your tax bill by ?700, a real cost of living


bonus. I think the Government is in danger of losing the focus on its


real achievements, what is doing to help people on low and middle


incomes by being true and by Ed Miliband's economic leak illiterate


ideas and energy prices. If the Government is drawn into that, it


will lose the argument. The savings come from changes which are mostly


social programmes. So we are all still paying big subsidies for low


carbon energy. Because there was no plan to replace the coal-fired and


oil fired stations, we have to invest in all sorts of new power


stations and that includes renewables. That has to be paid for,


and the reforms we are announcing today do not undermine the


renewables obligation of the new contracts for difference, we are


still going to get investment made which we should have had years ago.


If you are struggling to pay your bill, do you care whether or not


some of it is going to pay for new green renewable energy? You just


want lower bills, don't you? I think it is not fair to say that people do


not want a greener energy mix. Do they care? What's this has actually


done, extending ECO for another two years is the same amount of money,


it could mean that in some terms it is a cut to make homes


energy-efficient because you are spreading the money over twice the


period of time. Also, what really needs to happen with ECO, we would


have got rid of it, because it needs to be targeted at people who cannot


afford to pay their bills. At the moment, 60% of people who get ECO


can afford to do the changes themselves. It is not targeted at


poor people. It is going to be better targeted, there are going to


be more households in deprived areas that will be eligible for it. It is


being spread over two years rather than four, that is good, some


companies have not been able to discharge their obligations under it


in the first two years, so it will be spread further out. It will be


better targeted at the most vulnerable, and I'm sorry to hear


that Labour would scrap it, I did not realise that. It is a good


thing, insulating homes? I want the Government to be environmentally


ambitious, it could have a better record on reducing demand for


energy, new-build houses with solar panelling, all of those types of


areas. The point I am making on the big political tussle is that, yes,


Labour left this garment with an economic catastrophe, and Labour


have seized the initiative with their economically illiterate


policies, the Government has been badly wrong-footed, given we have


created over 1 million private sector jobs... I have to give you a


chance to respond to that. This Government is sending all the wrong


signals to business, so investment in renewables has fallen through the


floor, a direct result of the actions of this government. I will


leave it there, thank you very much. You will all remember scenes like


these from not so long ago. The British Government has so far given


?50 million in emergency aid to the Philippines after the devastation


wrought by Typhoon Haiyan. But it seems that our counterparts have not


been as generous, let's have a quick look at this clip now.


What they need now is more water, but today it rained and rained and


rained. In most places, when the rain comes down, people go inside.


Here, foremost, is no inside. And so they huddle under whatever cover


they can find, although some seem blissfully unaware of the misery all


around them. Of course, those were tragic


pictures that we saw over a period of days and weeks, the consequences


of that dreadful incident, and there has been plenty of talk about the


money that has been sent. Talking about emergency aid to the


Philippines, it seems that our counterparts have not been as


generous, and the Sun report it has raised more money than the French


government and that the furniture chain IKEA has donated more money


than China and Russia. With me to discuss this is Emily Ashton from


the Sun, I use a prized by that, Jeremy Browne? Not at all. -- are


you surprised. British people are extremely generous, and in Taunton


two Rotary clubs were raising money, and it was not just loose change, it


was ?10 notes. There is also a slightly bigger point to go around


to David Cameron's trip again, which is that although China has


potentials of world leadership, when it comes to the crunch, even in


Asia, in the Philippines, it is the West End countries like Britain and


the Americans that are stepping up to the plate and helping the


Filipinos, whether it is the government or the British people. We


are still playing a major role in the world, and countries like China


have an onus on them to start thinking in global terms beyond


their own borders in terms of how they can help people in desperate


circumstances. Emily, you must be feeling good. Absolutely, we


launched this last month, and hopefully people have seen it. We


launched the campaign last month, when we saw the devastation, and


there was an amazing response, ?550,000 has been raised by the


campaign, it will can text in ?1, and that is what thousands and


thousands of people have done. You can also donate online, and we are


asking bosses to donate ?1 for everyone of their employees. That


has raised about ?550,000, more than the French government! Which seems


to amazing, is there something particular about the British psyche


that makes as generous? I think we are a bighearted nation, a generous


nation, and the UK Government have donated ?50 million, the most out of


any government. Is that something you are proud of? We are proud of


our record on overseas aid, this is not a political point. The public


has been generous, the government has signed up to the 0.7% target,


and we are one of the leading nations not just in the amount of


aid, but in the quality of aid we give and the speed of our response.


Given that ?33 million was raised by the British public, does it raise


questions about how we manage foreign aid? Should it continue to


be ringfenced? I think it is important to ring fence it as we


head towards the target, and I do not think it is right to take out on


the poorest areas of the world, whether Africa or these disaster


areas like the Philippines, our own domestic economic problems. They are


not their concern. But we talk about countries like India. And we are


stepping down the aid to India, that is happening already, so we can


better focus on the poorest areas of the world, which is still Africa. Do


you think the British public, generous though they have been, do


they really sign up to this ringfencing of foreign aid as a


percentage of GDP? I think people make the distinction between areas


of real crisis, where people simply do not have the basics of water and


food to survive, that is a very different thing to some of the other


things. I agree with Michael that we should stick to this evil .7%, it is


something we should be very proud of. -- this 0.7%. What about being


the nasty country over immigration? I strongly disagree with that! We


are an extremely generous hearted country, and every time we have one


of these major international disasters, this appeal, people


collecting money in the street, the British public give very generously,


but we are doing it for the right reasons, because we see these people


on television, and we feel extremely sympathetic for them. But I make the


wider political point, do not think the Government and the main people


in the Philippines will not notice. They will notice and they will


appreciate that when it came to the crunch, countries like China held


back and Britain stepped forward. In terms of our status in the world,


people say that Britain does not matter any more. I think it is not


just what the government does, it is that people right around the world


can see that the British people are international in their outlook and


extremely charitable and sympathetic. Thank you very much,


Emily. The answer to the quiz, I hope you remember this, what


culinary delight was David Cameron served in China? Roasted decades,


bamboo fungus, chicken feed or sweet-and-sour sea horse? They all


sounds delicious! Have you eaten all of them? The only thing I do not


really like is rice pudding, so I would... Not for breakfast may be!


Which one to Mac may be the fungus. That was a guest! From all of us,




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