:00:41. > :00:44.Good morning and welcome to the Daily Politics.
:00:45. > :00:47.Billions wasted ordering the wrong type of planes, boats and armoured
:00:48. > :00:52.vehicles - now the Ministry of defence loses millions on a failed
:00:53. > :00:55.privatisation. The Prime Minister says he wants go
:00:56. > :01:00.further on welfare reform - which party is going to look tougher on
:01:01. > :01:05.benefits at the next election? Is a tax on flying putting the
:01:06. > :01:09.brakes on the UK economy? The boss of Virgin Atlantic thinks so. He'll
:01:10. > :01:12.be getting on his Soapbox. And what are politicians trying to
:01:13. > :01:16.tell us with their Christmas cards this year? Well it looks like
:01:17. > :01:24.there's no apology from Godfrey "bongo-bongo" Bloom.
:01:25. > :01:34.All that coming up in the next 90 minutes of uninterrupted public
:01:35. > :01:38.service broadcasting. It is the penultimate PMQs of the year. And
:01:39. > :01:41.with us for the duration, two politicians who once held the
:01:42. > :01:47.venerable office of Shadow Chief Secretary to the Treasury, but their
:01:48. > :01:50.maths wasn't good enough. So these days Phillip Hammond is Defence
:01:51. > :01:54.Secretary and Rachel Reeves is Shadow Work Pensions Secretary.
:01:55. > :01:57.Welcome to both of you. First this morning - the boss of
:01:58. > :02:01.Domino's Pizza, Lance Batchelor, has been complaining that he can't get
:02:02. > :02:04.Brits to fill jobs in his takeaways and relies heavily on migrant
:02:05. > :02:07.labour, particularly in the South East of England. Yesterday though
:02:08. > :02:15.the immigration minister told Mr Batchelor that he should just pay
:02:16. > :02:22.his staff more. Mr Batchelor was talking about
:02:23. > :02:25.hiring people in his particular pizza chain. If you have jobs
:02:26. > :02:31.available and cannot fill them, perhaps you should reflect on the
:02:32. > :02:34.salary package. So perhaps he should pay his staff are little more than
:02:35. > :02:42.he might find it easier to recruit them. So that is your message to
:02:43. > :02:46.him? It is a market, we should not import relatively unskilled labour
:02:47. > :02:50.from outside the European Union so he can keep his wages low. He runs a
:02:51. > :02:55.profitable business and should pay what the market demands. Is lands
:02:56. > :03:01.Batchelor right, if he cannot get the stuff to fill the jobs, should
:03:02. > :03:06.you relax the immigration laws for non-EU workers to come into this
:03:07. > :03:11.country and fill those jobs? No, there is no appetite in this country
:03:12. > :03:15.for large-scale, unskilled immigration. And there is an
:03:16. > :03:20.appetite for reforming the way our benefit system works to give people
:03:21. > :03:24.incentive to work. At the same time reforming our education system, as
:03:25. > :03:30.we are doing, to upscale the population. That has to be the
:03:31. > :03:34.future. The future of Britain has to be as a high skilled, high wage
:03:35. > :03:42.economy, not a low skill, low-wage economy. So you think you should pay
:03:43. > :03:45.them more? We have got to do our bit, which is reforming the benefit
:03:46. > :03:50.system to make sure people have an incentive to work and it pays for
:03:51. > :03:58.people to work. At the moment, it doesn't? That is why we are coming
:03:59. > :04:02.onto this and engaged in a major reform of the benefit system to make
:04:03. > :04:07.sure work pays. The solution cannot be importing large numbers of
:04:08. > :04:09.unskilled workers into Britain. Except if people like Lance
:04:10. > :04:15.Batchelor cannot fill those jobs because he claims Brits will not do
:04:16. > :04:20.that sort of work, aren't the restrictions just too strict? Ie he
:04:21. > :04:28.a different story from my constituents and we have a million
:04:29. > :04:34.people out of work. People at my constituency in Leeds applied to
:04:35. > :04:39.20, 30 jobs a week and don't even get a reply. We know there are
:04:40. > :04:44.people desperate for work and labour said they would introduce a
:04:45. > :04:49.compulsory job guarantee so no young people would be out of a job for
:04:50. > :04:54.more than a year. But it is a job they have to take, so there would be
:04:55. > :04:57.no option after a year just to be claiming benefits, the young person
:04:58. > :05:04.would have to be in a job. The Home Secretary once new measures to limit
:05:05. > :05:15.movement within the EU over concerns of numbers who may arrive from
:05:16. > :05:18.Bulgaria, do you agree with her? There is no appetite in this country
:05:19. > :05:26.for a wave of low skilled workers coming in. We don't know if there
:05:27. > :05:30.will be a wave. We don't, but we know when a lot of the other access
:05:31. > :05:37.and countries joined the government decided not to impose any
:05:38. > :05:43.transitional... But it is happening in January and we are in December,
:05:44. > :05:50.you cannot do anything. You cannot be ready for January? It sends an
:05:51. > :05:53.important signal. I did a broadcast with double Guerin ambassador a
:05:54. > :05:58.couple of weeks ago and we are sending a message which is reaching
:05:59. > :06:03.people who might be tempted to come here for the wrong reasons. But we
:06:04. > :06:08.have to look with our European neighbours have the freedom of
:06:09. > :06:12.movement works. It was never intended to provide for mass
:06:13. > :06:18.movement of people from low GDP areas of the EU. We have got to find
:06:19. > :06:25.a smoother way of managing the movement. Do you accept you cannot
:06:26. > :06:30.do anything that will be in place in January that will restrict the
:06:31. > :06:33.movements of Hungarians? There are some admin measures which will be in
:06:34. > :06:41.place in January, other measures will come into force later in the
:06:42. > :06:47.year, secondary legislation. We are doing it now. You are not doing what
:06:48. > :06:55.needs to be done. In January, they will have access to the labour
:06:56. > :07:00.market. Yvette Cooper, made a speech at the beginning of the year who
:07:01. > :07:05.said there should be these restrictions and at the 11th hour,
:07:06. > :07:09.David Cameron has said the same, but it is too late now. We extended the
:07:10. > :07:19.transitional arrangements that were put in place... Your government
:07:20. > :07:24.didn't even put in any transitional arrangements when Poland joined the
:07:25. > :07:27.European Union, we had a flood. But you are not learning from any of
:07:28. > :07:33.these mistakes and these people can come into the country from January
:07:34. > :07:37.and claim benefits. The signal we are sending will deter people who
:07:38. > :07:42.think they can come here and claim benefits.
:07:43. > :07:46.We've all done it - you order something in the wrong size or wrong
:07:47. > :07:49.colour or buy tickets for the wrong date - frustrating and expensive.
:07:50. > :07:52.And it's a feeling defence secretaries like Philip here will be
:07:53. > :07:56.familiar with. This ship, a Queen Elizabeth Class carrier, was ordered
:07:57. > :07:59.with the wrong kind of equipment to land our planes on. That cost a cool
:08:00. > :08:02.?74 million. These Nimrod MR4A reconnaissance planes ordered back
:08:03. > :08:11.in 1993 were scrapped in 2010 but only after ?4 billion has already
:08:12. > :08:14.been spent on them. These are recent mistakes made by the Ministry of
:08:15. > :08:18.Defence so after a review the government thought it might be a
:08:19. > :08:22.good idea to change the way it buys military equipment. They decided to
:08:23. > :08:25.sub-contract procurement to the private sector, but only one company
:08:26. > :08:28.bid for the work and yesterday the Defence Secretary announced that
:08:29. > :08:36.plan had been scrapped too, at the cost of ?7 million. Before we talk
:08:37. > :08:43.to him let's speak to Dr John Louth of the Royal United Services
:08:44. > :08:49.Institute. Why are we so bad at this? It is a
:08:50. > :08:56.difficult thing to do, to acquire defence equipment at the right time
:08:57. > :09:00.and that the right cost. These are complicated projects and ideas have
:09:01. > :09:03.been improving, but there is still enough scope for things to go
:09:04. > :09:08.wrong. His privatisation the solution? It is worth looking at,
:09:09. > :09:13.there is strong evidence to suggest these programmes run best when there
:09:14. > :09:21.is a strong public and private mix of competencies and personnel. So in
:09:22. > :09:25.a sense the department was smart in looking at what the private sector
:09:26. > :09:31.could continue to do for it. Whether it was smart to look at a government
:09:32. > :09:35.owned contract operated solution is more contest of all. There was a
:09:36. > :09:39.number of voices earlier in the year suggesting there may not really
:09:40. > :09:45.appetite within the private sector for this sort of complicated
:09:46. > :09:50.solution. So did the government make the right decision to scrap it? They
:09:51. > :09:57.made a timely decision but it brings new questions, the public sector
:09:58. > :10:00.trading entity that was announced yesterday is a new concept. We have
:10:01. > :10:06.not been discussing this over the past year or so when the Chief of
:10:07. > :10:09.defence material taught to the defence select committee earlier in
:10:10. > :10:14.the year. We did not discuss this concept. There is a lot of hanging
:10:15. > :10:17.questions from the announcement yesterday as well.
:10:18. > :10:26.Thank you very much. Philip Hammond, this could be an episode of
:10:27. > :10:32.Yes Minister, couldn't it? You could not even procure somebody
:10:33. > :10:36.to do your procurement for you? I know that is what is written down
:10:37. > :10:42.there, but MoD procurement is getting better. The MoD is dealing
:10:43. > :10:49.with some of the most complex procurement details in the world. We
:10:50. > :10:55.had one had and you cannot run a competition with one. That was one
:10:56. > :11:01.of the world's leading project management companies, but it was not
:11:02. > :11:09.sensible to proceed. How much had you spend on the process? Just under
:11:10. > :11:16.?7.4 million. So another 7.4 million down the drain when you are cutting
:11:17. > :11:21.the Navy and the army. The procurement arm of the MoD spends 15
:11:22. > :11:28.billion pounds a year and we have to make it work better. I will not
:11:29. > :11:32.apologise for investing ?7 million in exploring a sensible proposition.
:11:33. > :11:39.Why should you apologise, it is our money, not yours. Proposition which
:11:40. > :11:42.the shadow defence spokesman, Jim Murphy, said we should explore and
:11:43. > :11:48.test these two propositions are running a competition. That is what
:11:49. > :11:53.we have done. I have stopped the competition and with one bidder we
:11:54. > :11:57.cannot proceed and we are putting in place an alternative arrangements
:11:58. > :12:05.which will capture the best of this private sector arrangement. Why did
:12:06. > :12:10.no one else come to the party? The business and its information systems
:12:11. > :12:15.and the information it has is not sufficiently mature for a business
:12:16. > :12:22.to be able to contract, willing to contract on and at risk basis. We
:12:23. > :12:27.said we would only pay them out of savings they generated. The concern
:12:28. > :12:30.of some potential bidders was that it wasn't possible, with the
:12:31. > :12:35.management information available to identify the remuneration they will
:12:36. > :12:41.need. You were warned not to do this. The RU as I said they think
:12:42. > :12:47.there was some responsibility the government should not farm out. It
:12:48. > :12:52.was not accepted as the best way forward. Failures in acquisition can
:12:53. > :13:01.lead to loss of life. It is a matter of debate. It is an objection of
:13:02. > :13:04.principle. They said you can only do this activity in the public sector.
:13:05. > :13:13.I don't accept that. I said yesterday we should build the public
:13:14. > :13:16.sector capability, but we should not rule out allowing the private sector
:13:17. > :13:26.to challenge again in the future. In order to protect the taxpayers...
:13:27. > :13:35.You tried to do it, only one company came. You employ 16,500 people to
:13:36. > :13:41.source and by defence equipment. Their track record is appalling. Has
:13:42. > :13:47.anybody ever been fired? It is 9500 people involved. The rest are in
:13:48. > :13:56.defence Logistics, the warehousing operation. You have 4.2 billion
:13:57. > :14:02.worth of non-explosive suppliers that you don't need and have not
:14:03. > :14:07.been moved for two years. We have a large stock of redundant equipment.
:14:08. > :14:13.Some of it is going back into the 1970s. As these people squander our
:14:14. > :14:19.hard earned money and our Armed Forces are being cut to the bone,
:14:20. > :14:24.has anybody been fired? People are being hired and fired all of the
:14:25. > :14:29.time. What about for incompetence? We have to change the culture in the
:14:30. > :14:35.organisation, introduced the support staff they need. What isn't helpful
:14:36. > :14:40.is people in Westminster slinging mud all the time. There is a lot of
:14:41. > :14:44.hard-working, dedicated people there, many of them doing a good
:14:45. > :14:52.job. I have been round this story five times. I remember it happened
:14:53. > :14:57.under Wilson. I remember the problems under Margaret thatcher. I
:14:58. > :15:04.remember the problems under the last Labour government as well. Now we
:15:05. > :15:09.are in a situation of the 16 largest programmes your department is meant
:15:10. > :15:13.to be responsible for, costs have risen by half a billion and the
:15:14. > :15:21.cumulated timescale has slipped by 11.5 years. You are useless at this?
:15:22. > :15:25.There will be a review report from the National audit office in
:15:26. > :15:28.January, and I think it will show an improvement in the period since we
:15:29. > :15:34.announced the balancing of the defence budget in May 2012. We are
:15:35. > :15:41.getting better at this. The defence select committee in March this year
:15:42. > :15:44.said your ministry shows a worrying lack of financial expertise and
:15:45. > :15:58.therefore you spend a fortune on consultants and accountants. We do
:15:59. > :16:04.spend a lot of money, but one of the reasons to make the change is to pay
:16:05. > :16:10.market rates for what is a market facing organisation. They interact
:16:11. > :16:18.with some of the most powerful economies. I announced a package of
:16:19. > :16:23.freedoms that will allow us to start to recruit people with technical
:16:24. > :16:31.skills and commercial skills and pay them the market rate, to lead the
:16:32. > :16:39.organisation to success. And it was just as bad under the Labour Party.
:16:40. > :16:47.Arise of ?3.3 billion in 2010. The programme, the Jets, increased by
:16:48. > :16:54.2.7 billion. The new aircraft carriers, risen by 767 million. You
:16:55. > :17:01.are both useless. In Parliament yesterday we have the statement
:17:02. > :17:06.about defence. Iain Duncan Smith also had to admit that money had
:17:07. > :17:10.been written off on universal credit and 90 million has been written
:17:11. > :17:20.off... And how much was written off under your 13 years? I was not in
:17:21. > :17:28.Government previously. You are a Labour MP. I was not in Government
:17:29. > :17:34.then. I assume you supported it. You wash your hands of those 13 years? I
:17:35. > :17:38.will not take responsibility for things when I was not there.
:17:39. > :17:47.Yesterday in Parliament, we had the welfare secretary and ?100 million
:17:48. > :17:56.in use of -- universal credit. Philip Hammond will not even
:17:57. > :18:02.apologise. It was a sensible investment of money. If we are going
:18:03. > :18:07.to do things better, we have two explore options and you cannot do
:18:08. > :18:13.that for nothing. You have been warned by the select committee and
:18:14. > :18:23.others that you weren't not going to be able to deliver this. We are
:18:24. > :18:28.going to move on. Bringing down the benefit bill and making work pay
:18:29. > :18:33.sound easy, but this Government found out it is complicated. On
:18:34. > :18:39.Monday, Iain Duncan Smith hacked to admit he had missed his deadline for
:18:40. > :18:42.implementing universal credit. David Cameron said that a future
:18:43. > :18:46.Conservative Government would still want to go further on welfare.
:18:47. > :18:53.Labour wants to talk tough on the issue. It costs 1 billion of
:18:54. > :18:58.taxpayers money a year but who will be tougher about handing it out?
:18:59. > :19:04.Last week the Government announced there will be a limit on welfare
:19:05. > :19:08.spending, on top of a ?26,000 benefits limit so that nobody
:19:09. > :19:17.claiming out of work and Fitz will be able to receive more than the
:19:18. > :19:23.average person in work. And then the penalty, the bedroom tax, those in
:19:24. > :19:30.the public sector who have spare runs. It seems that Ed Miliband
:19:31. > :19:33.wants to look hard, too. His new shadow secretary has promised that
:19:34. > :19:40.Labour would he tougher than the Conservatives. There is there jobs
:19:41. > :19:50.guarantee scheme and if you forego a job, you forego benefits. Is it
:19:51. > :19:55.right that Ed Miliband has asked the shadow cabinet to stop using the
:19:56. > :20:02.word welfare? I used it a moment ago, if that was true, I would be in
:20:03. > :20:07.trouble! The financial Times reported that he had banned it in
:20:08. > :20:20.favour of Social Security. You can use either word. We have a welfare
:20:21. > :20:26.state, social Security system. An independent woman. The problem is,
:20:27. > :20:33.people do not believe you on welfare. They look at how much you
:20:34. > :20:40.increased and how half-hearted you are about welfare reform. There are
:20:41. > :20:44.a couple of important priorities that I have set out, such as every
:20:45. > :20:49.young person out of work for a year will be guaranteed a job, which they
:20:50. > :20:55.will have to take, otherwise they forego benefits. We would withdraw
:20:56. > :21:00.their benefits if they did not accept the jobs offered. And if you
:21:01. > :21:04.are over 25, and you have been out of work for two years, the
:21:05. > :21:10.compulsory jobs guarantee would guarantee a job, but you would have
:21:11. > :21:14.to take it or forego benefits. We have a work programme beginning to
:21:15. > :21:20.deliver in the way that the previous versions did not. Getting people
:21:21. > :21:26.back into work is the objective of any system. I am not afraid to use
:21:27. > :21:30.the term welfare. That has to be the principal, getting people ready for
:21:31. > :21:37.work and getting them into work. 900,000 have an out of work for more
:21:38. > :21:41.than a year. The work programme is not delivering. The compulsory jobs
:21:42. > :21:46.guarantee would say you cannot be out of work for more than a year. We
:21:47. > :21:53.said we would reinstate the bank bonus tax to bring in money and
:21:54. > :21:58.restrict tensions tax relief. Those things would finance the compulsory
:21:59. > :22:02.jobs guarantee. Is this the same banks bonus tax that has been
:22:03. > :22:07.pledged not just to the youth jobs guarantee, but more capital
:22:08. > :22:12.spending, reversing child benefit, tax credits, more money for regional
:22:13. > :22:18.growth, turning empty shop is over to the community and building new
:22:19. > :22:23.homes and free childcare? No, it will be used to the compulsory jobs
:22:24. > :22:31.guarantee. How will you pay for the other things? The VAT cut, we will
:22:32. > :22:39.not reverse. Childcare will be funded by the bank levy. What about
:22:40. > :22:45.child benefit? Ed Miliband said we could not reverse it. Tax credit
:22:46. > :22:50.savings? We will not be able to reverse all of the changes. We have
:22:51. > :22:59.said we would guarantee a young person a job after being out of work
:23:00. > :23:06.for a year. The banks bonus went up and we think we should tax them at
:23:07. > :23:18.50% and get people back to work. On childcare, we said that we would
:23:19. > :23:20.expand the offer from 15 up to 25 hours for working families by
:23:21. > :23:29.increasing the bank levy. That will pay for it? We think it is right to
:23:30. > :23:35.tax bankers. You will have the bank levy and the banks bonus tax. Even
:23:36. > :23:48.though it never takes inasmuch as the Chancellor says? We would have
:23:49. > :23:56.both the tax and the levy. They are still nothing. Compared to your
:23:57. > :24:03.years. I know you do not take responsibility. We still see
:24:04. > :24:08.multi-million pounds bonuses. We should use it to get young people
:24:09. > :24:12.back to work. The time to be a banker in this country to get large
:24:13. > :24:17.bonuses was when you were in power. They still get large bonuses and we
:24:18. > :24:23.should tax them and use it to get people into jobs. You are committed
:24:24. > :24:31.to the overall benefit cap? Ed Miliband made a speech about that.
:24:32. > :24:36.We would cap Social Security, or welfare spending, but we would do
:24:37. > :24:40.that in ways different from this Government. By guaranteeing people
:24:41. > :24:50.jobs and building houses. Would you include state pensions? We would. As
:24:51. > :24:55.part of the cap? We would. When we were in Government we introduced
:24:56. > :24:59.automatic enrolment so that more people are saving for retirement. It
:25:00. > :25:05.does not mean we would reduce state pensions. But pensions spending, and
:25:06. > :25:11.I know you will take out the fuel allowances for the better off, but
:25:12. > :25:26.the state pension is part of your -- part of your welfare cap and not the
:25:27. > :25:34.welfare cap. We have committed, like the Government have. We said we
:25:35. > :25:37.would reduce the cost of jobseeker's allowance by guaranteeing young
:25:38. > :25:42.people jobs paid for by the bank bonus tax. We said we would build
:25:43. > :25:47.homes, rather than paying out all this money on housing benefit,
:25:48. > :25:52.building social housing. That was to be paid for by the bank taxes coming
:25:53. > :25:58.you told me to take it out. We have committed to build 200 thousand
:25:59. > :26:06.homes a year. We have Sir Michael Lyons doing a review. The living
:26:07. > :26:10.wage is an important policy for bringing down Social Security
:26:11. > :26:14.spending. We have 5 million people who cannot afford to live on the
:26:15. > :26:20.wages they earn and as a result they rely on tax credits and housing
:26:21. > :26:24.benefit. Are you going to pay the living wage in every public sector
:26:25. > :26:30.job? That was the commitment in the last manifesto. The Government would
:26:31. > :26:34.be a living wage employer. The moment Labour comes to power, the
:26:35. > :26:44.public sector will get the living wage? We have someone looking at
:26:45. > :26:50.this. We have 18 Labour local authorities paying the living age,
:26:51. > :26:55.including two contractors. We want to learn from that. If we can have
:26:56. > :27:01.more people being paid a living wage. You are not telling me what
:27:02. > :27:08.you would do. What has cost ?41 million in wasted IT and more
:27:09. > :27:14.expected to be written off? You are creating from Iain Duncan Smith's
:27:15. > :27:19.answer to Rachel Reeves' question. ?40 million has been written off in
:27:20. > :27:26.this IT project. To put it in context, the last Government wrote
:27:27. > :27:34.off ?13 billion on the NHS computer project. The answer is you did write
:27:35. > :27:41.it off. We have Prime Minister's Questions. He was sitting next to a
:27:42. > :27:46.Scandinavian blonde woman at a funeral, she took out her
:27:47. > :27:53.smartphone. Asked him if he wanted to be in a selfie. He and Barack
:27:54. > :28:00.Obama could not resist. It happened at the memorial service yesterday.
:28:01. > :28:12.Michelle Obama is not looking pleased. We are not into such trends
:28:13. > :28:15.here. Smile for the camera. If you are looking for something glamorous
:28:16. > :28:21.to be pictured next to, look no further. The Daily Politics mug. We
:28:22. > :28:34.will remind you how to enter in a minute. Can you remember when this
:28:35. > :28:42.happened? Never mind. You will not be able to win the Daily Politics
:28:43. > :28:50.mug very easily! We will show it later. And now it is coming up to
:28:51. > :28:58.midday. We can take a look at Big Ben. The sun is shining now. There
:28:59. > :29:07.was fog this morning. City airport was in a bad way, also Heathrow. By
:29:08. > :29:13.9:30am, sunshine and look at Big Ben now. It is a glorious sight. I hope
:29:14. > :29:25.it will be OK, I have two fly out this afternoon. I am going to
:29:26. > :29:29.Berlin. Prime Minister's Questions is on its way. If you would like to
:29:30. > :29:37.comment on proceedings you can send us an e-mail. You can also send your
:29:38. > :29:48.thoughts on Twitter. We might read some out. James is also here.
:29:49. > :29:56.Welcome. The penultimate PMQs of the year. What will it be about,
:29:57. > :30:03.somebody tells me the cost of living will feature? This is the first
:30:04. > :30:09.Prime Minister's Questions he has taken part in since the autumn
:30:10. > :30:14.statement. He could go on about the arguments about how you measure the
:30:15. > :30:22.cost of living, which is confusing. Universal credit, there has been a
:30:23. > :30:27.lot about that. Also the pay for MPs being announced tomorrow. He has
:30:28. > :30:35.already made an overjoyed to party leaders saying maybe there is a
:30:36. > :30:43.cross party deal that can be done -- overture. Is anybody saying they
:30:44. > :30:49.should not take the pay rise? Not exactly. Labour are saying this is
:30:50. > :30:53.wrong at the time of public pay restrictions. The other parties that
:30:54. > :31:18.there is no formal proposal, we should wait and see. We can go over.
:31:19. > :31:26.I am sure the Prime Minister is concerned there has been a 42%
:31:27. > :31:30.increase in long-term unemployment amongst young women in this country
:31:31. > :31:38.under his watch. Can he confirmed the reason why he does not support
:31:39. > :31:41.the campaign like his colleague from South Dorset who is at least
:31:42. > :31:44.providing jobs for the girls. What we have seen under this government
:31:45. > :31:50.is a rapid reduction in unemployment over recent months. A million more
:31:51. > :31:56.people in work than when I became Prime Minister. There is a lot more
:31:57. > :32:00.work to be done in terms of getting the long-term unemployed back into
:32:01. > :32:05.work but the work programme is performing twice as successfully and
:32:06. > :32:12.she should get behind those programmes rather than make the
:32:13. > :32:17.point she does. Last Tuesday, Joshua, aged 17 in my constituency
:32:18. > :32:23.died due to a knife attack. Whilst we have seen a reduction of serious
:32:24. > :32:28.youth violence by 19%, what more can be done to read the streets of
:32:29. > :32:33.Enfield and elsewhere in this country from the carnage of knife
:32:34. > :32:37.attacks? He makes a very good point, speaking on behalf of of his
:32:38. > :32:42.constituents. We have toughened the law and that has made a difference.
:32:43. > :32:46.The most important thing is to get rid of this dreadful culture of
:32:47. > :32:51.people carrying knives and educating young people on the dangers of
:32:52. > :32:58.carrying knives because so often those who carry knives end up being
:32:59. > :33:07.stopped with them themselves. Mr Ed Miliband. Does the Prime Minister
:33:08. > :33:13.agree that given the crisis ordinary families are facing in their living
:33:14. > :33:18.standards MPs should not be given a pay rise many times above inflation
:33:19. > :33:22.in 2015? I do agree with him. It would be wrong for MPs to get a big
:33:23. > :33:27.pay rise. All the party leaders agree on that and we have made this
:33:28. > :33:34.point. It should be clear that this is not a final recommendation.
:33:35. > :33:41.First, the idea of an 11% pay rise in one year at a time of pay
:33:42. > :33:44.restraint is unacceptable. Also, unless this is rethought, I don't
:33:45. > :33:49.think anyone will want to rule anything out. No one wants to go
:33:50. > :33:52.back to MPs voting on their own page but we need a process and outcome
:33:53. > :34:00.that will build public confidence. And this should be accompanied with
:34:01. > :34:07.a cut in the cost of politics. Mr Speaker, I am glad he agrees on this
:34:08. > :34:12.issue. Does he also agree with me that we should not let this hang
:34:13. > :34:19.around as an issue until after the general election, hanging over trust
:34:20. > :34:23.in politics. Can I urge him to work with me to find a way I make
:34:24. > :34:32.cross-party basis to stop this package happening? My door is always
:34:33. > :34:37.open to the right honourable gentleman and I am happy to discuss
:34:38. > :34:42.this or any other issue. This is not a final recommendation and if the
:34:43. > :34:44.three party leaders and others in this house can unite behind the
:34:45. > :34:51.position to say this would not a right, then I think that is the
:34:52. > :34:55.strongest message we can give. I agree with the Prime Minister, but I
:34:56. > :35:00.hope he agrees with me that waiting and seeing will not work, and we do
:35:01. > :35:06.have to get together to deal with this now. The reason why this is not
:35:07. > :35:10.the right time for this pay rise is because people are going through the
:35:11. > :35:15.biggest cost of living crisis in a generation. Last Thursday, the
:35:16. > :35:23.Chancellor claimed living standards were rising. That is not the case,
:35:24. > :35:28.is it? Let me add a point on the issue of MP's pay. This government
:35:29. > :35:32.has shown respect for the fact of the difficulties people face because
:35:33. > :35:35.we cut Minister's pay by 5% and froze it for the whole of
:35:36. > :35:40.Parliament. That is not something the party opposite did. If he wants
:35:41. > :35:49.to get onto the economy, and after last week's exchange I cannot wait
:35:50. > :36:02.to get onto the economy. We discovered a new duo, Red Ed and
:36:03. > :36:08.Redder Ed. The Institute of fiscal studies but this clearly. They said,
:36:09. > :36:15.we have had a big recession, the biggest in 100 years. It would be
:36:16. > :36:18.astonishing if household earnings have not fawning and earnings had
:36:19. > :36:25.not fallen, but that is the legacy of what they left us. His entire
:36:26. > :36:31.approach seems to be this, we made the most almighty mess, why are you
:36:32. > :36:37.taking so long to clear it up? We are clearing it up. He has been the
:36:38. > :36:50.Prime Minister for three and a half years. Now, but I think we are
:36:51. > :36:52.making progress because last Thursday the Chancellor said that
:36:53. > :36:57.living standards were rising. Now, his own office of budget
:36:58. > :37:02.responsibility said that whichever way you look at it, average
:37:03. > :37:08.earnings, wages, salaries, levels have been falling. Order, order. You
:37:09. > :37:21.are yelling at cross the chamber, be quiet. Quiet! Calm yourself, take up
:37:22. > :37:25.yoga. Mr Ed Miliband. They went on, it is inconceivable to suggest
:37:26. > :37:30.otherwise. But that is what the Chancellor did last Thursday. Why
:37:31. > :37:35.won't he admitted, there is a cost of living crisis in this country. It
:37:36. > :37:43.comes to something when you being heckled from your own site, Mr
:37:44. > :37:49.Speaker. I don't know how you are going to keep us in order. I will
:37:50. > :37:55.tell him what has been happening, the deficit is down, a million more
:37:56. > :37:59.people in work, 400,000 more business operating in Britain and we
:38:00. > :38:05.have one of the fastest rates of growth than any Western economy. But
:38:06. > :38:10.the truth about the cost of living is this, if you don't have a
:38:11. > :38:15.long-term, economic plan to get the economic -- economy moving, you
:38:16. > :38:19.don't have a plan to deal with living standards. We have a plan to
:38:20. > :38:24.keep interest rates low, get people back to work, cut taxes. He does not
:38:25. > :38:30.have a plan apart from more borrowing, more spending, more
:38:31. > :38:35.taxes, all of the things that got us into this mess in the first place.
:38:36. > :38:42.Utterly complacent and out of touch with the country. That is this Prime
:38:43. > :38:45.Minister all over. He does understand that some people are
:38:46. > :38:55.really struggling, because today we learned of his plan to cut the top
:38:56. > :39:02.rate of tax further from 45p to 40p. Can he explain why is he
:39:03. > :39:08.contemplating a further tax cuts for millionaires who have received
:39:09. > :39:13.hundreds and thousands of pounds of tax cut when ordinary families are
:39:14. > :39:18.squeezed. The top rate of tax under this government is higher than any
:39:19. > :39:21.time he was in the cabinets, in the government or working in the
:39:22. > :39:26.Treasury trying to wreck the economy in the first place. Let's compare
:39:27. > :39:32.records, they doubled council tax, we have frozen it. They put up
:39:33. > :39:39.petrol tax 12 times, we frozen it. They put up the basic rate of
:39:40. > :39:44.pension by 75p, we put it up by ?15 a week. The British public know if
:39:45. > :39:49.you want to sort out the cost of living, you need more jobs, more
:39:50. > :40:01.growth and a long-term economic plan. We have got one, he hasn't. I
:40:02. > :40:11.will tell him what happened. Members can calm down. As long as it takes,
:40:12. > :40:16.it will go on so they can shout and scream in the most juvenile manner,
:40:17. > :40:20.but we will keep going. Under the last Labour government, real
:40:21. > :40:28.earnings went up ?3600, living standards up. Under him, they are
:40:29. > :40:34.down ?1600. We have always known how out of touch he is, but he has taken
:40:35. > :40:38.it to a new level. They are in denial about the cost of living
:40:39. > :40:43.crisis and they are not satisfied with one millionaire's tax cuts,
:40:44. > :40:49.they think it is time for another. Once again he has proved he stands
:40:50. > :40:53.up for the wrong people. At the end of six questions we are back to
:40:54. > :40:57.denial and the record of the last Labour government. I know I have had
:40:58. > :41:02.a long flight, but I could not have done better if I had written the
:41:03. > :41:07.script myself. The last Labour government gave us the biggest
:41:08. > :41:13.banking bust anywhere in the world. They created a giant mess that this
:41:14. > :41:16.government is clearing up. That is the truth. Since the Autumn
:41:17. > :41:21.Statement, why can't he mention business optimism is up,
:41:22. > :41:36.manufacturing is up, job vacancies is up and pretty soon we can add two
:41:37. > :41:44.to that list. Unemployment in my constituency is 21% lower than it
:41:45. > :41:48.was. We have had 90% increase in apprenticeship start-ups,
:41:49. > :41:54.manufacturing output is up and business activity is at 832 high in
:41:55. > :41:58.the West Midlands. With the Prime Minister agree that due to the hard
:41:59. > :42:02.work of my constituents and people across the country, the
:42:03. > :42:06.government's long-term economic plan is working and delivering benefits
:42:07. > :42:15.to every region of the United Kingdom? He is right, the West
:42:16. > :42:21.Midlands, which during the boom years, the number of people in the
:42:22. > :42:26.private sector went down, we are now seeing better news. Employment is up
:42:27. > :42:31.25,000 since the election, private sector employment is up 14,000 this
:42:32. > :42:34.year, the youth claimant count is falling in the West Midlands and
:42:35. > :42:39.they know how much time and effort he puts into the apprenticeship fair
:42:40. > :42:43.he held this year. It shows the long-term plan we have is the right
:42:44. > :42:47.plan and it is beginning to work. What does the Prime Minister have
:42:48. > :42:53.two say to women working full-time who have seen their disposable
:42:54. > :42:57.incomes fall by almost ?2500 since his government came to office? The
:42:58. > :43:03.first thing to say is to welcome there are more women in work than at
:43:04. > :43:08.any time in our history. The second thing to say is because we are
:43:09. > :43:15.lifting the first ?10,000 people earn out of income tax, they will be
:43:16. > :43:20.off by ?705 next year. That is progress. If he is saying, does it
:43:21. > :43:26.take time to recover from the mess left by his party? Yes it does. We
:43:27. > :43:32.are going to do it. Dementia is the disease most feared over 50s in this
:43:33. > :43:38.country. The government is doubling investment into dementia research,
:43:39. > :43:45.and the Prime Minister is hosting the G8 summit on dementia. Will he
:43:46. > :43:49.live this government's sites to double investment in dementia
:43:50. > :43:54.research? I am grateful to what he said and he his right, this is a
:43:55. > :43:58.real challenge, not just facing this country where there are 670,000
:43:59. > :44:03.people suffering, but they challenge facing the whole world. That is why
:44:04. > :44:09.we are having the G8 conference today in London so we can share
:44:10. > :44:13.intelligence and expertise, we can share information and learn lessons
:44:14. > :44:18.from each other. This government is planning to double research into
:44:19. > :44:23.dementia I2015 and double it again there after. Given the
:44:24. > :44:30.implementation of universal credit has become a shambles, have found
:44:31. > :44:36.the public have confidence in it? It is absolutely right we introduced
:44:37. > :44:41.this benefit system in a very slow and deliberate way. Frankly, I
:44:42. > :44:48.remember, as a constituency MP, sitting in my surgery when the tax
:44:49. > :44:53.credit system came in having case after case with people 's household
:44:54. > :44:57.finances wrecked by the last Labour government. I will not let that
:44:58. > :45:03.happen again. As I introduced this benefit, let's remember there are
:45:04. > :45:12.480,000 fewer people on an out of work benefits and it is this
:45:13. > :45:18.government making work pay. Does he agree the best ways to raise living
:45:19. > :45:24.standards is not to abandon this plan for the economy, as the party
:45:25. > :45:28.opposite? He is right, the biggest hit to living standards is if we let
:45:29. > :45:33.spending and borrowing get out of control and interest rates went up.
:45:34. > :45:37.That is what we want to avoid. We got the deficit down and must
:45:38. > :45:42.continue with difficult spending additions -- decisions, which has
:45:43. > :45:47.enabled us to cut the taxes of people living and working in
:45:48. > :45:50.Basildon. Next J, people for instance on minimum wage working
:45:51. > :45:54.full time will see their income tax bill come down by two thirds, real
:45:55. > :46:03.action on the side of people who work hard. Is the Prime Minister
:46:04. > :46:08.aware that the FTSE 100 directors now get ?86,000 a week on average
:46:09. > :46:14.while at the other end, 5 million workers get less than the living
:46:15. > :46:18.wage, and three quarters of a million people who cannot get a job
:46:19. > :46:24.and gets sanction gets nothing at all and are left to starve? Is there
:46:25. > :46:30.no end to the brutality and nasty nurse of Tory Britain? -- nasty
:46:31. > :46:37.nurse. I was saying to the right honourable gentleman that a 40p tax
:46:38. > :46:49.rate when it is now 45p, with a bonus bonanza in the city, he has a
:46:50. > :46:59.lot of Ras neck. -- brass neck. New figures show that the second largest
:47:00. > :47:04.pub company, Punch taverns, in their pubs, overcharged the consumer on
:47:05. > :47:13.beer alone by ?4.3 billion over ten years. There is clear market
:47:14. > :47:17.manipulation. Will he commit to deal with this crony capitalism and
:47:18. > :47:24.listen to the Federation of Small Businesses and back the select
:47:25. > :47:28.committee solution? I know of his interest not just in the air, but in
:47:29. > :47:36.pubs and in how pub landlords are treated -- not just in beer. I am a
:47:37. > :47:40.believer in a healthy pub industry, they are often at the heart of the
:47:41. > :47:46.community and I will look carefully at the report. During the Autumn
:47:47. > :47:50.statement the Chancellor said people should expect to spend one third of
:47:51. > :47:57.adult life in retirement, considering that life expectancy in
:47:58. > :48:03.some parts is 75, what does he think would be a fairer time and age in a
:48:04. > :48:09.Welsh context? The point is the Chancellor made was this should be
:48:10. > :48:12.assessed independently. It is right to set an expectation rather than
:48:13. > :48:20.having ministers announce what retirement ages should be. If the
:48:21. > :48:24.point he is making is we need to tackle health inequality better and
:48:25. > :48:37.ring-fence budgets for public health as the government has brought in, I
:48:38. > :48:44.would agree. Mr Speaker, bomber command veteran Stan Franks recently
:48:45. > :48:52.passed away at the age of 88. As a teenager he flew 31 missions, a
:48:53. > :48:57.staggering achievement. Will he congratulate the efforts of the
:48:58. > :49:00.Association and the newspaper in ensuring the funds meant his passing
:49:01. > :49:09.was marked appropriately. I would praise those in Thurrock, who raised
:49:10. > :49:14.the money. He is believed to have been the youngest ever meant to
:49:15. > :49:20.complete these missions, before he was 20 years old. It is a reminder
:49:21. > :49:24.how much previous generations put in to make sure we could live in
:49:25. > :49:30.freedom. It is one of the greatest privileges to welcome veterans of
:49:31. > :49:34.bomber command to visit Downing Street and making sure they have the
:49:35. > :49:45.class on the medal they value so much. -- clasp. We should never
:49:46. > :49:49.forget those rave cruising bomber command. So many are coming to the
:49:50. > :50:06.end of their lives, and so many did so much for their country. Can I
:50:07. > :50:12.thank the Prime Minister for saving my marriage? Carolyn was about to
:50:13. > :50:17.sign the divorce papers when she heard the reports that if we stayed
:50:18. > :50:23.together we would be in line for a sweet tax break. But if as the Prime
:50:24. > :50:28.Minister says, marriage must be underpinned by the tax system, why
:50:29. > :50:38.is it that since the tax allowance for married people was abolished,
:50:39. > :50:44.the divorce rate has gone down? I am delighted that happiness is
:50:45. > :50:47.maintained. It was only when I started talking about the married
:50:48. > :50:56.couples allowance the leader of the opposition the knot. The tax system
:50:57. > :51:02.moves in mysterious ways. In the light of the call by the leader of
:51:03. > :51:06.the opposition for urgent act should in response to the proposal for an
:51:07. > :51:12.increase in MPs pay, would he immediately table the boundary
:51:13. > :51:17.commission report that would simultaneously pay for any increase
:51:18. > :51:21.and increase the workload of MPs to do so. It would surely be
:51:22. > :51:24.hypocritical either for the leader of the opposition or for the leader
:51:25. > :51:33.of the Liberal Democrats to oppose... My right honourable friend
:51:34. > :51:40.is tempting me. The point I tried to make is I think cutting the cost of
:51:41. > :51:48.politics has a role to play alongside this argument. Members
:51:49. > :51:53.must not shout at the Prime Minister. It is discourteous to
:51:54. > :51:57.gesticulate at the man. It is no good shouting from the party
:51:58. > :52:05.opposite, they have the opportunity to reform the House of Lords and
:52:06. > :52:10.they stopped it. The Prime Minister says that the G8 and his attendance
:52:11. > :52:14.at the investment conference advertised his commitment to
:52:15. > :52:23.Northern Ireland. But his Whitehall is busy removing jobs from Northern
:52:24. > :52:34.Ireland. In the DVLA and now in the HM RC. How does removing jobs
:52:35. > :52:40.contribute to balancing the economy in Northern Ireland and that
:52:41. > :52:46.region? I quite understand why he makes the points he does. I
:52:47. > :52:52.understand there will be a meeting to talk about the HM RC issues. As
:52:53. > :52:57.he knows in terms of the DVLA, the Department of Transport are
:52:58. > :53:00.considering consultation. -- the results of consultation. Employment
:53:01. > :53:06.has risen in Northern Ireland since the election. The long-term answer
:53:07. > :53:12.for the economy in Northern Ireland is a private-sector revival. The
:53:13. > :53:15.public sector is large and we need more small and medium-sized
:53:16. > :53:25.enterprises and more investment and more jobs to come, which is what the
:53:26. > :53:28.conference was about. My constituent, Jack Sherry, who
:53:29. > :53:35.completed the National citizens service, visited to let me know how
:53:36. > :53:45.much the programme had given him personal con buttons -- confidence.
:53:46. > :53:54.What plans does he have for enabling as many young people as possible to
:53:55. > :53:58.take part in this programme. I think this is a transforming programme
:53:59. > :54:02.with 66,000 young people going through it already. It forms what
:54:03. > :54:08.part of what Prince Charles wants to see in terms of a decade where we
:54:09. > :54:16.encourage volunteering and try to get to 50% of young people who take
:54:17. > :54:20.part in that. I am having a similar experience to my honourable friend,
:54:21. > :54:28.of people talking about what this has done for young people and their
:54:29. > :54:34.confidence. While the Prime Minister is coming over family friendly, can
:54:35. > :54:37.he confirm if maternity and paternity pay will be included in
:54:38. > :54:44.the benefits cap announced in the autumn statement? As the Chancellor
:54:45. > :54:48.announced, what is out of the benefit cap is the basic state
:54:49. > :54:53.pension. On all of welfare spending we have to make sure we distribute
:54:54. > :55:05.properly between the different sorts of welfare. 330 new jobs were
:55:06. > :55:11.created in my constituency in the past three months and I expect many
:55:12. > :55:17.more to be created, particularly as housing and construction projects
:55:18. > :55:21.accelerate. Would he agree that it is important to young people do not
:55:22. > :55:26.get left behind and that abolishing the jobs tax on young people under
:55:27. > :55:32.21 shows that the government is serious about tackling youth
:55:33. > :55:38.unemployment? I am grateful for what he says. As the economy recovers, it
:55:39. > :55:43.is vital that it is a recovery for everyone, for North and South and
:55:44. > :55:47.for young and old. There is always the danger that young people not in
:55:48. > :55:52.the workforce are locked out. That is why the change announced, about
:55:53. > :55:57.abolishing the jobs tax on young people, to make it cheaper for
:55:58. > :56:03.employers to take them on, can have an impact in making sure they
:56:04. > :56:09.participate in the economy. Given that the Work and Pensions Secretary
:56:10. > :56:13.was left alone when he made the statement on universal credit, does
:56:14. > :56:20.the Prime Minister still have confidence in him and the universal
:56:21. > :56:24.benefits changes? I think the Work and Pensions Secretary has probably
:56:25. > :56:28.done more than anyone else in British politics to transform the
:56:29. > :56:34.debate about welfare. That is happening because of his dedication.
:56:35. > :56:39.We see fewer people out of work and the number of jobless households at
:56:40. > :56:43.the lowest since records began. He is introducing a system that
:56:44. > :56:46.includes the benefits cap that Labour voted against and the
:56:47. > :56:54.household benefit cap they voted against which is making work pay. We
:56:55. > :56:57.should be proud. Does the Prime Minister agree that in the long
:56:58. > :57:05.term, the best plan to improve living standards of my hard-working
:57:06. > :57:10.constituents is to continue to cut their income tax, which can only be
:57:11. > :57:13.achieved by a growing economy, the government cutting spending, so the
:57:14. > :57:21.country lives within its means and does not have to borrow to pay
:57:22. > :57:25.bills? I think my honourable friend makes an important point, which is
:57:26. > :57:29.this, you can talk about how you want to help people with living
:57:30. > :57:35.standards and to keep the tax bill... It is extraordinary, the
:57:36. > :57:40.shadow chancellor, he is at it again, he is heckling again. We
:57:41. > :57:50.learn something last week, he can dish it out, but he cannot take it.
:57:51. > :57:55.I tell you what is going down, his career is going down, that is what
:57:56. > :58:00.is going down. If you want to get taxes down, you have to make
:58:01. > :58:04.difficult decisions about spending. That is what we have done and that
:58:05. > :58:10.is why we were able to cut taxes, whereas they would have to put them
:58:11. > :58:16.up. In towns across the United Kingdom, there are parents in
:58:17. > :58:25.despair because they cannot afford a decent Christmas. Why is that? What
:58:26. > :58:29.is happening is we are recovering from the most difficult recession we
:58:30. > :58:34.have had in living memory. It takes time will stop we see 1 million more
:58:35. > :58:42.people in work, which is a positive development. We seek more businesses
:58:43. > :58:45.operating, we see a growth rate which is the second highest of any
:58:46. > :58:52.major Western economy. The job is not done yet, that is why we need a
:58:53. > :58:56.long-term economic plan which is what we are dedicated to
:58:57. > :59:00.delivering. We would get nowhere if the first thing we did was to
:59:01. > :59:04.increase spending and borrowing and taxes, all of the things that got
:59:05. > :59:14.this country into a mess in the first place. British Aerospace have
:59:15. > :59:20.1000 apprentices at any one time. 221 in the Ribble Valley. What can
:59:21. > :59:30.he do to in courage of the firms to follow the example and take on more
:59:31. > :59:32.apprentices, particularly in engineering and science, which would
:59:33. > :59:40.encourage more youngsters to study the subject? I have seen what BEA
:59:41. > :59:45.Systems do in terms of apprenticeships. It is impressive.
:59:46. > :59:49.We have to take action and make sure young people study science and
:59:50. > :59:54.maths, and that is happening will stop we have to make sure that
:59:55. > :59:57.setting up apprenticeships is simpler and less expensive. We need
:59:58. > :00:03.a culture where companies want to get involved in the programme. We
:00:04. > :00:08.need more investment to our shores. That is why it is good news that one
:00:09. > :00:12.of the giants of the pharmaceutical industry has announced another 200
:00:13. > :00:16.million invested in our country because life sizes is also an area
:00:17. > :00:25.where Britain can win in the global race. When the house debated Syria,
:00:26. > :00:31.in August, the estimated dead in the conflict was 100,000. Three months
:00:32. > :00:36.later, the estimate is over 120,000. We cannot allow this to be a
:00:37. > :00:41.conflict in a far-away land we do not know anything about. Is it time
:00:42. > :00:45.for the government and the house to urge greater action by the
:00:46. > :00:50.international community and show that we do care about the suffering
:00:51. > :00:55.of the Syrian people? I agree with the honourable lady who has a long
:00:56. > :00:59.record of speaking out and believing as I do that Britain should be
:01:00. > :01:03.engaged in all the work to try to bring those involved in this
:01:04. > :01:09.dreadful war to the negotiating table in terms of the Geneva to
:01:10. > :01:13.process. We must continue with the work we do on humanitarian aid to
:01:14. > :01:18.help those who are suffering will stop we should also continue to work
:01:19. > :01:25.with all that those in Syria who want a free and democratic future.
:01:26. > :01:28.We must not allow the argument to develop that the only opposition in
:01:29. > :01:35.Syria is extremist and that will be the case if we stop working with
:01:36. > :01:42.those who care about democracy. In Rochford and Southend, employment is
:01:43. > :01:46.up, small business numbers are up, largely due to the impact of the
:01:47. > :01:52.expanding Southend airport. I know he is probably sick of airports, but
:01:53. > :01:55.would he consider in the New Year coming to Southend airport to
:01:56. > :02:00.celebrate the success and if he wants, to bring the family and I
:02:01. > :02:07.promised to buy them and ice cream on the seafront. Who could resist an
:02:08. > :02:12.Essex style celebration in the New Year? I would find out more about
:02:13. > :02:21.what it involves before I commit! We should not underestimate the is of
:02:22. > :02:25.airports in driving regional growth. Despite the savage cuts, next year
:02:26. > :02:30.Liverpool will host the International Festival of business.
:02:31. > :02:33.Why will the Prime Minister not commit to attending? Will he ensure
:02:34. > :02:39.the same level of support that Boris would enjoy, is afforded to the
:02:40. > :02:45.Mayor of Liverpool will stop and would he say that beside a short
:02:46. > :02:52.sleep over in London, the Beatles would always be made in Liverpool.
:02:53. > :02:57.Having happily visited the Beatles museum and enjoyed being there, I
:02:58. > :03:01.can confirm what he says. In terms of the Mayor of Liverpool, I have
:03:02. > :03:06.never had any problem working with him and have shared a platform to
:03:07. > :03:15.advertise the regions of that city, and I will continue to, operate with
:03:16. > :03:20.him. Abolishing roaming charges is a victory for British consumers we
:03:21. > :03:23.might get from remaining inside the European Union. As he discussed
:03:24. > :03:30.international mobile phone usage with any other heads of government
:03:31. > :03:36.in the last day or so? You could say, in a roundabout way. Perhaps in
:03:37. > :03:41.my defence you should remember the television cameras are always on but
:03:42. > :03:48.in my defence I would say Nelson Mandela played an extraordinary role
:03:49. > :03:49.in bringing people together. I thought it was only polite to say
:03:50. > :04:08.yes! Prime Minister referring at the end
:04:09. > :04:17.there to the "selfie" with him, Barack Obama and the Prime Minister
:04:18. > :04:24.of Denmark. So the second to last PMQs of 2013 kicked off with MP's
:04:25. > :04:32.plate with Ed Miliband asking the Prime Minister create an all-party
:04:33. > :04:42.group to Aske why this 11% rise cannot be done. Ed Miliband moved on
:04:43. > :04:51.to say MPs should get a pay rise at a time when households have been
:04:52. > :04:57.under strain and stress. Then PMQs went into some well rehearsed
:04:58. > :05:05.arguments over the cost of living. The Prime Minister talking about the
:05:06. > :05:09.economy, talk about two trains passing in the night.
:05:10. > :05:15.That might continue for about the next 18 months.
:05:16. > :05:22.That was all picked up by viewers. " such hypocrisy with David Cameron
:05:23. > :05:29.and Ed Miliband agreeing with each other over the recommended 11% pay
:05:30. > :05:34.rise. We all know most MPs believe they are worth even more". " when
:05:35. > :05:37.David Cameron talks about cutting the cost of politics, doesn't he
:05:38. > :05:45.mean he wants to make it the reserve of a privileged elite who can enter
:05:46. > :05:53.parliament as a hobby"? Helen says, Ed Miliband is on thin ice talking
:05:54. > :06:05.about the cost of limit -- cost of living. Ian Jordan said week after
:06:06. > :06:11.week Ed Miliband goes on the cost of living issue and week after week,
:06:12. > :06:21.David Cameron fails to address the issue.
:06:22. > :06:25.Let's start with MP's pay. Do we know what the government or the
:06:26. > :06:29.Prime Minister wants to do with this report? I think he has dropped a
:06:30. > :06:34.large hint as to what he wants to do. I was surprised by the vehemence
:06:35. > :06:40.with which he agreed with Ed Miliband. He said a pay rise of 11%
:06:41. > :06:43.was unacceptable and said no one wants to rule anything out and his
:06:44. > :06:50.door was always open to talk to other party leaders about this. And
:06:51. > :06:55.also, he said it was unacceptable to have an 11% pay rise in any one
:06:56. > :07:03.year. There is the nuclear option, and then you could say I PSA should
:07:04. > :07:09.have no responsibility for pay, just everything else. Or you could delay
:07:10. > :07:14.this particular pay rise. Or you could stagger it, spread it over a
:07:15. > :07:22.Parliament or two, so it is less stark, you remove the blunt headline
:07:23. > :07:27.of an 11% pay rise. I think the Prime Minister has indicated there
:07:28. > :07:33.is a plan. There is clearly an idea. But they don't have to move
:07:34. > :07:41.that fast on it. This pay rise is not going to happen until 2015. So
:07:42. > :07:46.after the next election? And even then the increase will not be given
:07:47. > :07:50.until a review has happened. So all MPs are elected at the next election
:07:51. > :07:57.will get the old pay until some months later. If the review says
:07:58. > :07:59.11%, that is find on some of it will be back page. I don't think the
:08:00. > :08:04.government will move fast on this but the Prime Minister has indicated
:08:05. > :08:10.there will be some action. Philip Hammond, is there any measure
:08:11. > :08:18.normally accepted by the ISS or the OBR, all reputable economists or the
:08:19. > :08:24.ONS which says living standards have risen since you came to power?
:08:25. > :08:30.Living standards are starting to rise again after what has been a
:08:31. > :08:34.very difficult period with a huge reduction in our national income. I
:08:35. > :08:39.think everybody in this country understands that if our national
:08:40. > :08:45.income contracts by 7.5%, that has an impact on living standards. Let
:08:46. > :08:48.me come back to my question, is there any measure up to date which
:08:49. > :08:54.shows living standards have risen under this government? I haven't got
:08:55. > :08:59.a specific measure. That is because there aren't any. We are seeing a
:09:00. > :09:04.recovery in the economy, people benefiting from the measures we have
:09:05. > :09:08.taken to increase the tax-free personal allowance, freeze council
:09:09. > :09:12.tax, freeze fuel duties, so pressures on living standards
:09:13. > :09:16.whether government does have some direct ability are being managed.
:09:17. > :09:22.And as the economy starts to grow again, we will see living standards
:09:23. > :09:26.beginning to recover. Continuing to recover? So what measure are you
:09:27. > :09:32.using to justify the claim living standards are rising? As our
:09:33. > :09:38.national income rises again, living standards will rise. We know from
:09:39. > :09:43.the OBR that they are predicting the economy from 2012 up to 2018 will
:09:44. > :09:50.grow by 15%, but wages will only grow by 7% over that period, so it
:09:51. > :09:58.does not follow a growing economy benefits those who depend on wages.
:09:59. > :10:03.Wages growing by 7% in real terms represents a recovery in living
:10:04. > :10:10.standards. It is between 2012 and 2018! Prices will rise more than 7%.
:10:11. > :10:17.Those figures you have just quoted... It is the share of GDP,
:10:18. > :10:22.half of it goes to wages. But wages will not rise by 7% in real terms
:10:23. > :10:29.between now and 2018, you accept that? The economy has taken an
:10:30. > :10:32.enormous hit and common-sense tells you people 's living standards
:10:33. > :10:39.suffer. As the economy recovers, living standards will recover. You
:10:40. > :10:47.cannot magic higher living standards. I was trying to get
:10:48. > :10:50.clarity. The reason Philip Hammond cannot give you any numbers living
:10:51. > :10:57.standards are increasing is because there are no such numbers. Anyone
:10:58. > :11:01.who has looked at the numbers shows that under all of the different
:11:02. > :11:07.measures, living standards are falling and continuing to fall. It
:11:08. > :11:11.is welcome the economy is growing, but who is benefiting? Ordinary
:11:12. > :11:17.workers and families are not. During the course of this Parliament, the
:11:18. > :11:28.average worker is ?1600 worse off than they were. Let's take that
:11:29. > :11:32.figure, it is comparing... It is a TUC -based figure. It is taking the
:11:33. > :11:38.rise in wages and chem pairing with the rise in prices and wages have
:11:39. > :11:43.not kept pace with prizes. But that is not a measure of living standards
:11:44. > :11:49.because it does not include the ?700 on average tax cut people have got.
:11:50. > :11:55.When you take all that into account, it is obviously not as high as 1600
:11:56. > :12:05.animal, but do we know what it is? It may be higher than 1600, because
:12:06. > :12:12.the Institute for Fiscal Studies show if you look at tax benefits
:12:13. > :12:22.alone, the average family is ?1800 worse off. There is cuts to tax
:12:23. > :12:25.credit, and the reduction in child care, you give with the personal
:12:26. > :12:31.allowance but take much more with the other. So what do you say to
:12:32. > :12:37.that Philip Hammond? That even when you take tax cuts and everything
:12:38. > :12:44.else you have done to mitigate the living standard squeeze, it is still
:12:45. > :12:49.bad? This is a futile argument. We understand what the challenge is. As
:12:50. > :12:53.the economy recovers we need living standards to recover and we need to
:12:54. > :12:56.repair the public finances. We cannot take the brakes off at this
:12:57. > :13:03.stage. The government is doing what it can in areas where it has a
:13:04. > :13:10.direct ability including tax threshold, holding down rail fares,
:13:11. > :13:14.which was a new announcement in the Autumn Statement. They are still
:13:15. > :13:22.going up higher than inflation. No they are not. It was going to be
:13:23. > :13:27.twice as high as inflation, now it is just a little bit above. Rachel,
:13:28. > :13:32.people out there know the only way living standards will recover
:13:33. > :13:37.sustainably is to have a prolonged and sustainable, economic recovery
:13:38. > :13:43.with a plan to deliver that over the long term. That is what we are not
:13:44. > :13:46.hearing from Labour. Even with a growing economy you need to make
:13:47. > :13:53.sure it is more than just ordinary families that benefit. That is why
:13:54. > :13:55.we would freeze energy prices, reintroduce the mansion tax to
:13:56. > :14:01.ensure it is ordinarily families who benefit and not just the privileged
:14:02. > :14:07.few at the top. James, the thing to watch next year, because in a sense
:14:08. > :14:12.they are like to ship is passing in the night, the government want to
:14:13. > :14:15.talk about the eco-thing, and Labour wants to talk about the cost of
:14:16. > :14:25.living because of the figures Rachel lives. However you look at it, there
:14:26. > :14:30.is a squeeze and have to spend more money on food and energy. Next year,
:14:31. > :14:33.average earnings are expected to overtake prices as inflation comes
:14:34. > :14:40.down, but this argument will develop as the year goes on? Completely. It
:14:41. > :14:45.is all about shaping the question that is in the minds of voters when
:14:46. > :14:51.they go to the polls in 2015. It is straightforward and political. If
:14:52. > :14:55.you think the mindset of politics and the electorate is quite often
:14:56. > :14:59.set some way ahead of a general election, so by the time you get to
:15:00. > :15:04.a general election and the matter how much the parties campaign, the
:15:05. > :15:09.basic question is there. Is it the economy or the cost of living? The
:15:10. > :15:19.interesting question is, is not the particular measure for the cost of
:15:20. > :15:25.living, it is for statisticians, it will be a sense of how the prices
:15:26. > :15:29.managed to did little earnings and do people feel it? Do they feel it
:15:30. > :15:34.in time for the election for the Conservatives to claim it or are
:15:35. > :15:40.they citing statistics? That will keep us busy next year.
:15:41. > :15:45.Before we move on, I am sorry, I am very, very sorry we could not run
:15:46. > :15:51.our competition because a gremlin got into the works. If we can get
:15:52. > :15:57.our video player working in time, we will run it tomorrow.
:15:58. > :16:14.If you have already watched it online, and entered it today, who
:16:15. > :16:17.would have thought that? ! It will catch on eventually, Andrew people
:16:18. > :16:26.have been using the Internet? They have.
:16:27. > :16:35.It is one of our oldest dates. I am impressed you have seen it. I
:16:36. > :16:39.know what it is. Now, when you last went on holiday or a business trip
:16:40. > :16:44.did you study the breakdown for the price of your flight? Over recent
:16:45. > :16:46.years, the percentage we pay in taxes has steadily increased. A good
:16:47. > :16:50.thing environmental campaigners say, as it deters people from unnecessary
:16:51. > :16:53.travel. But not so, claim the airlines and airports, who say the
:16:54. > :16:56.tax is stifling the economy and preventing business growth. Here's
:16:57. > :17:08.Craig Kreeger, the CEO of Virgin Atlantic, with his soapbox. The UK
:17:09. > :17:11.has a vibrant and significant airline sector, vital for long-term
:17:12. > :17:19.growth and the country's place in the world economy. It makes the UK
:17:20. > :17:23.competitive destination for new markets and gives British businesses
:17:24. > :17:28.the connections they need to successfully export but right now
:17:29. > :17:31.the UK aviation sector operates in an environment without the right
:17:32. > :17:37.infrastructure and tax environment for people to choose the UK. The UK
:17:38. > :17:42.government currently taxes every customer taking off from the UK, the
:17:43. > :17:49.airline passenger duty. It is included in the price of the ticket.
:17:50. > :17:54.It began as a small tax for environmental reasons and it has
:17:55. > :17:59.grown to a massive disincentive for business and travel to and from the
:18:00. > :18:03.UK at a time when all of us want to see the UK economy in a sustained
:18:04. > :18:09.recovery. When it was introduced, the duty was ?5 for European flights
:18:10. > :18:16.and ?10 for anywhere else. It now ranges from ?13 to ?188, depending
:18:17. > :18:20.on where you are flying to and the cabin you fly in. From April, a
:18:21. > :18:28.family of four going to the Caribbean, will pay ?340. We have
:18:29. > :18:31.the highest air passenger tax in the world, taking almost 3 billion every
:18:32. > :18:36.year from travellers, including 5 billion from businesses -- 500
:18:37. > :18:47.million. The duty is not a tax on airlines
:18:48. > :18:52.and it is not just a tax on passengers. It is a tax on
:18:53. > :18:58.business, tourism, trade and exports. We know people feel
:18:59. > :19:07.strongly about this. 200 towers and passengers signed a petition seeking
:19:08. > :19:12.its review. -- 200,000. Other countries around the world have
:19:13. > :19:17.started to scrap this unfair tax. Germany is the latest to consider
:19:18. > :19:22.doing so. In this country we seem to take aviation and its value in
:19:23. > :19:26.driving growth for granted in a way no other government in the world
:19:27. > :19:32.does. To be internationally competitive, it is time to
:19:33. > :19:41.reconsider this approach. Craig Kreeger joins us. People say
:19:42. > :19:47.motorists pay 20% VAT on fuel, cars and repairs, but aviation pay zero
:19:48. > :19:53.VAT on the same, why should passengers not be taxed? The issue
:19:54. > :19:59.is the overall taxation of the industry and travel. Unlike other
:20:00. > :20:02.businesses, airlines provide connectivity and enable business and
:20:03. > :20:10.tourism, which is great for the economy. The world economic Forum
:20:11. > :20:14.ranked the UK at the bottom of 139 countries in terms of taxation paid
:20:15. > :20:21.by passengers flying. We believe that impact... That aviation can
:20:22. > :20:28.provide a key role and we are missing an opportunity. Businesses
:20:29. > :20:35.and tourism, for British people who want to travel, it is expensive. And
:20:36. > :20:40.the value of inbound tourism, it is also hindered by this. Were you
:20:41. > :20:46.disappointed nothing was said in the autumn statement? Of course. We
:20:47. > :20:54.would have liked to see it reduced or abolished. We have worked with
:20:55. > :20:59.PricewaterhouseCoopers who put a study showing the economic impact of
:21:00. > :21:07.abolishing the tax on GDP. And that it would be net positive to the
:21:08. > :21:14.economy within a year. What tax would you increase to compensate? We
:21:15. > :21:20.are not in a position to decrease the tax take will stop we have a
:21:21. > :21:25.deficit and debt to pay off. Somebody coming in and pleading for
:21:26. > :21:31.one sector to have lower taxes, it is incumbent upon them to say where
:21:32. > :21:34.they would increase taxes. I would say freezing or reducing it to make
:21:35. > :21:41.it more competitive would be economic. Where would you increase
:21:42. > :21:46.taxes to make up the difference? The answer is by virtue of the growth in
:21:47. > :21:52.GDP there would be more collective economic impact for the country.
:21:53. > :21:59.This is a famous argument, cut the taxes and growth will regenerate
:22:00. > :22:05.revenue for the Exchequer. You cannot do that in the short-term.
:22:06. > :22:09.There is a hit you have two tape. Over the long term, you can measure
:22:10. > :22:17.the impact, but in the short term we not in a position will stop I think
:22:18. > :22:20.it would still be positive. That is what George Osborne said about
:22:21. > :22:29.corporation. Reduce it and businesses will spend more. When you
:22:30. > :22:34.talk about corporate taxes and investment, there is a direct
:22:35. > :22:44.impact. The broader suggestion that reducing taxes that it will make
:22:45. > :22:49.itself up, there is a lag in that. I think Philip should be consistent.
:22:50. > :22:56.The evidence is clear with corporation tax, the eager the base
:22:57. > :23:01.you have, it is widening the base. The office for budget responsibility
:23:02. > :23:11.said it would reduce corporation tax revenue, that it costs the Exchequer
:23:12. > :23:15.money. The issue of businesses is, I think, the suggestion is that
:23:16. > :23:22.businesses would save ?600 million by reducing air passenger duty. They
:23:23. > :23:27.will save six year and pounds by the proposed changes we have made to
:23:28. > :23:37.corporation tax. -- six billion pounds. You have to think about how
:23:38. > :23:41.you deliver the incentives. Other countries who have reached a
:23:42. > :23:44.different conclusion are also going through an economic downturn and
:23:45. > :23:49.they have drawn the opposite conclusion about the way in which
:23:50. > :23:51.taxation on transportation and aviation in particular can suppress
:23:52. > :23:58.the way in which businesses recover. Whether it is Germany
:23:59. > :24:02.freezing their duty, at half the rate of the UK, or eliminating it,
:24:03. > :24:11.like Ireland, or the Netherlands, we have seen other countries make
:24:12. > :24:14.another conclusion and benefit. Next week we have the interim report
:24:15. > :24:21.looking at what should happen to airports. What should happen? I am
:24:22. > :24:26.thrilled we have a process that has a level of independence and a
:24:27. > :24:30.capability for everyone to participate and I have spent some
:24:31. > :24:39.time on that process and I am optimistic we can break the logjam.
:24:40. > :24:51.Let me give you background. One harbour is really critical, to me. I
:24:52. > :24:58.think he throw is logical -- hub. We need to create one that is world
:24:59. > :25:04.class in this country. Thanks. Christmas is on the way. We have
:25:05. > :25:09.been arguing on who gets the chocolate from the advent calendar
:25:10. > :25:16.in the office. The politicians have sent out Christmas cards. Not for
:25:17. > :25:20.them a boring nativity scene, or anything to do with religious
:25:21. > :25:51.significance, not even a robin. Look at this.
:25:52. > :26:22.And here the Mail's Andrew Pierce has delivered himself to the studio.
:26:23. > :26:24.Yours is in the post, Andrew. I am reaching out to the Labour Party,
:26:25. > :26:32.also. reaching out to the Labour Party,
:26:33. > :26:45.This is our Christmas card. And Rachel's. A robin from a primary
:26:46. > :26:54.school. That is for you. I want you to sign this card. I did not bring
:26:55. > :26:58.mine with me, but it is in the post. Has it gone through the procurement
:26:59. > :27:06.process? You pay ?1 and it comes out at ?10! These politicians, their
:27:07. > :27:13.cards, they put their faces on them and sometimes their family. It is
:27:14. > :27:17.nothing to do with Christmas stop it is about David Cameron trying to
:27:18. > :27:25.show he is all rain, and Ed Miliband trying to appear human. -- David
:27:26. > :27:30.Cameron trying to show he is ordinary. They tell us the family is
:27:31. > :27:38.out of bounds, but they exploit them. Gordon Brown did in a way,
:27:39. > :27:46.because he got his children to design his card. Nick Clegg got the
:27:47. > :27:49.children in the picture. Gordon Brown had a competition where
:27:50. > :27:53.schoolchildren designed the card and he picked the winner. And he said to
:27:54. > :28:02.be won when he was Chancellor, but that stopped when he became Prime
:28:03. > :28:07.Minister. Solipsistic, that is the word of the day for these Christmas
:28:08. > :28:12.cards. They are self regarding. They are not putting on a picture of
:28:13. > :28:21.Father Christmas, the Nativity, it is them and their family. They do
:28:22. > :28:27.not do nativity scenes. We do not do God. Have you got God on your card?
:28:28. > :28:38.Anything religious? I have soldiers on my guard. He is not the
:28:39. > :28:41.Archbishop of Canterbury! I have a selection of cards, some of them
:28:42. > :28:49.have Father Christmas. Yours is religious. It is only fitting.
:28:50. > :28:55.Thanks to our guests. One o'clock News is starting on BBC One. I will
:28:56. > :28:59.be here tomorrow doing the programme as usual, on my own, she is going to
:29:00. > :29:02.Berlin. Goodbye.