11/12/2013 Daily Politics


11/12/2013

Andrew Neil and Jo Coburn with live coverage of Prime Minister's Questions. With MPs Philip Hammond and Rachel Reeves, and a look at politicians' Christmas cards.


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Transcript


LineFromTo

Good morning and welcome to the Daily Politics.

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Billions wasted ordering the wrong type of planes, boats and armoured

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vehicles - now the Ministry of defence loses millions on a failed

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privatisation. The Prime Minister says he wants go

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further on welfare reform - which party is going to look tougher on

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benefits at the next election? Is a tax on flying putting the

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brakes on the UK economy? The boss of Virgin Atlantic thinks so. He'll

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be getting on his Soapbox. And what are politicians trying to

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tell us with their Christmas cards this year? Well it looks like

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there's no apology from Godfrey "bongo-bongo" Bloom.

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All that coming up in the next 90 minutes of uninterrupted public

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service broadcasting. It is the penultimate PMQs of the year. And

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with us for the duration, two politicians who once held the

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venerable office of Shadow Chief Secretary to the Treasury, but their

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maths wasn't good enough. So these days Phillip Hammond is Defence

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Secretary and Rachel Reeves is Shadow Work Pensions Secretary.

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Welcome to both of you. First this morning - the boss of

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Domino's Pizza, Lance Batchelor, has been complaining that he can't get

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Brits to fill jobs in his takeaways and relies heavily on migrant

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labour, particularly in the South East of England. Yesterday though

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the immigration minister told Mr Batchelor that he should just pay

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his staff more. Mr Batchelor was talking about

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hiring people in his particular pizza chain. If you have jobs

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available and cannot fill them, perhaps you should reflect on the

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salary package. So perhaps he should pay his staff are little more than

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he might find it easier to recruit them. So that is your message to

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him? It is a market, we should not import relatively unskilled labour

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from outside the European Union so he can keep his wages low. He runs a

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profitable business and should pay what the market demands. Is lands

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Batchelor right, if he cannot get the stuff to fill the jobs, should

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you relax the immigration laws for non-EU workers to come into this

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country and fill those jobs? No, there is no appetite in this country

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for large-scale, unskilled immigration. And there is an

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appetite for reforming the way our benefit system works to give people

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incentive to work. At the same time reforming our education system, as

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we are doing, to upscale the population. That has to be the

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future. The future of Britain has to be as a high skilled, high wage

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economy, not a low skill, low-wage economy. So you think you should pay

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them more? We have got to do our bit, which is reforming the benefit

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system to make sure people have an incentive to work and it pays for

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people to work. At the moment, it doesn't? That is why we are coming

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onto this and engaged in a major reform of the benefit system to make

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sure work pays. The solution cannot be importing large numbers of

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unskilled workers into Britain. Except if people like Lance

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Batchelor cannot fill those jobs because he claims Brits will not do

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that sort of work, aren't the restrictions just too strict? Ie he

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a different story from my constituents and we have a million

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people out of work. People at my constituency in Leeds applied to

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20, 30 jobs a week and don't even get a reply. We know there are

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people desperate for work and labour said they would introduce a

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compulsory job guarantee so no young people would be out of a job for

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more than a year. But it is a job they have to take, so there would be

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no option after a year just to be claiming benefits, the young person

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would have to be in a job. The Home Secretary once new measures to limit

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movement within the EU over concerns of numbers who may arrive from

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Bulgaria, do you agree with her? There is no appetite in this country

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for a wave of low skilled workers coming in. We don't know if there

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will be a wave. We don't, but we know when a lot of the other access

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and countries joined the government decided not to impose any

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transitional... But it is happening in January and we are in December,

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you cannot do anything. You cannot be ready for January? It sends an

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important signal. I did a broadcast with double Guerin ambassador a

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couple of weeks ago and we are sending a message which is reaching

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people who might be tempted to come here for the wrong reasons. But we

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have to look with our European neighbours have the freedom of

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movement works. It was never intended to provide for mass

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movement of people from low GDP areas of the EU. We have got to find

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a smoother way of managing the movement. Do you accept you cannot

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do anything that will be in place in January that will restrict the

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movements of Hungarians? There are some admin measures which will be in

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place in January, other measures will come into force later in the

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year, secondary legislation. We are doing it now. You are not doing what

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needs to be done. In January, they will have access to the labour

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market. Yvette Cooper, made a speech at the beginning of the year who

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said there should be these restrictions and at the 11th hour,

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David Cameron has said the same, but it is too late now. We extended the

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transitional arrangements that were put in place... Your government

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didn't even put in any transitional arrangements when Poland joined the

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European Union, we had a flood. But you are not learning from any of

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these mistakes and these people can come into the country from January

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and claim benefits. The signal we are sending will deter people who

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think they can come here and claim benefits.

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We've all done it - you order something in the wrong size or wrong

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colour or buy tickets for the wrong date - frustrating and expensive.

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And it's a feeling defence secretaries like Philip here will be

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familiar with. This ship, a Queen Elizabeth Class carrier, was ordered

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with the wrong kind of equipment to land our planes on. That cost a cool

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?74 million. These Nimrod MR4A reconnaissance planes ordered back

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in 1993 were scrapped in 2010 but only after ?4 billion has already

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been spent on them. These are recent mistakes made by the Ministry of

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Defence so after a review the government thought it might be a

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good idea to change the way it buys military equipment. They decided to

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sub-contract procurement to the private sector, but only one company

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bid for the work and yesterday the Defence Secretary announced that

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plan had been scrapped too, at the cost of ?7 million. Before we talk

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to him let's speak to Dr John Louth of the Royal United Services

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Institute. Why are we so bad at this? It is a

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difficult thing to do, to acquire defence equipment at the right time

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and that the right cost. These are complicated projects and ideas have

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been improving, but there is still enough scope for things to go

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wrong. His privatisation the solution? It is worth looking at,

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there is strong evidence to suggest these programmes run best when there

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is a strong public and private mix of competencies and personnel. So in

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a sense the department was smart in looking at what the private sector

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could continue to do for it. Whether it was smart to look at a government

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owned contract operated solution is more contest of all. There was a

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number of voices earlier in the year suggesting there may not really

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appetite within the private sector for this sort of complicated

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solution. So did the government make the right decision to scrap it? They

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made a timely decision but it brings new questions, the public sector

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trading entity that was announced yesterday is a new concept. We have

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not been discussing this over the past year or so when the Chief of

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defence material taught to the defence select committee earlier in

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the year. We did not discuss this concept. There is a lot of hanging

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questions from the announcement yesterday as well.

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Thank you very much. Philip Hammond, this could be an episode of

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Yes Minister, couldn't it? You could not even procure somebody

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to do your procurement for you? I know that is what is written down

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there, but MoD procurement is getting better. The MoD is dealing

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with some of the most complex procurement details in the world. We

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had one had and you cannot run a competition with one. That was one

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of the world's leading project management companies, but it was not

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sensible to proceed. How much had you spend on the process? Just under

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?7.4 million. So another 7.4 million down the drain when you are cutting

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the Navy and the army. The procurement arm of the MoD spends 15

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billion pounds a year and we have to make it work better. I will not

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apologise for investing ?7 million in exploring a sensible proposition.

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Why should you apologise, it is our money, not yours. Proposition which

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the shadow defence spokesman, Jim Murphy, said we should explore and

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test these two propositions are running a competition. That is what

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we have done. I have stopped the competition and with one bidder we

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cannot proceed and we are putting in place an alternative arrangements

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which will capture the best of this private sector arrangement. Why did

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no one else come to the party? The business and its information systems

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and the information it has is not sufficiently mature for a business

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to be able to contract, willing to contract on and at risk basis. We

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said we would only pay them out of savings they generated. The concern

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of some potential bidders was that it wasn't possible, with the

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management information available to identify the remuneration they will

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need. You were warned not to do this. The RU as I said they think

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there was some responsibility the government should not farm out. It

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was not accepted as the best way forward. Failures in acquisition can

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lead to loss of life. It is a matter of debate. It is an objection of

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principle. They said you can only do this activity in the public sector.

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I don't accept that. I said yesterday we should build the public

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sector capability, but we should not rule out allowing the private sector

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to challenge again in the future. In order to protect the taxpayers...

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You tried to do it, only one company came. You employ 16,500 people to

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source and by defence equipment. Their track record is appalling. Has

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anybody ever been fired? It is 9500 people involved. The rest are in

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defence Logistics, the warehousing operation. You have 4.2 billion

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worth of non-explosive suppliers that you don't need and have not

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been moved for two years. We have a large stock of redundant equipment.

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Some of it is going back into the 1970s. As these people squander our

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hard earned money and our Armed Forces are being cut to the bone,

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has anybody been fired? People are being hired and fired all of the

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time. What about for incompetence? We have to change the culture in the

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organisation, introduced the support staff they need. What isn't helpful

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is people in Westminster slinging mud all the time. There is a lot of

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hard-working, dedicated people there, many of them doing a good

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job. I have been round this story five times. I remember it happened

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under Wilson. I remember the problems under Margaret thatcher. I

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remember the problems under the last Labour government as well. Now we

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are in a situation of the 16 largest programmes your department is meant

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to be responsible for, costs have risen by half a billion and the

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cumulated timescale has slipped by 11.5 years. You are useless at this?

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There will be a review report from the National audit office in

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January, and I think it will show an improvement in the period since we

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announced the balancing of the defence budget in May 2012. We are

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getting better at this. The defence select committee in March this year

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said your ministry shows a worrying lack of financial expertise and

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therefore you spend a fortune on consultants and accountants. We do

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spend a lot of money, but one of the reasons to make the change is to pay

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market rates for what is a market facing organisation. They interact

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with some of the most powerful economies. I announced a package of

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freedoms that will allow us to start to recruit people with technical

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skills and commercial skills and pay them the market rate, to lead the

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organisation to success. And it was just as bad under the Labour Party.

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Arise of ?3.3 billion in 2010. The programme, the Jets, increased by

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2.7 billion. The new aircraft carriers, risen by 767 million. You

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are both useless. In Parliament yesterday we have the statement

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about defence. Iain Duncan Smith also had to admit that money had

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been written off on universal credit and 90 million has been written

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off... And how much was written off under your 13 years? I was not in

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Government previously. You are a Labour MP. I was not in Government

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then. I assume you supported it. You wash your hands of those 13 years? I

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will not take responsibility for things when I was not there.

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Yesterday in Parliament, we had the welfare secretary and ?100 million

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in use of -- universal credit. Philip Hammond will not even

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apologise. It was a sensible investment of money. If we are going

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to do things better, we have two explore options and you cannot do

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that for nothing. You have been warned by the select committee and

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others that you weren't not going to be able to deliver this. We are

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going to move on. Bringing down the benefit bill and making work pay

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sound easy, but this Government found out it is complicated. On

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Monday, Iain Duncan Smith hacked to admit he had missed his deadline for

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implementing universal credit. David Cameron said that a future

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Conservative Government would still want to go further on welfare.

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Labour wants to talk tough on the issue. It costs 1 billion of

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taxpayers money a year but who will be tougher about handing it out?

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Last week the Government announced there will be a limit on welfare

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spending, on top of a ?26,000 benefits limit so that nobody

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claiming out of work and Fitz will be able to receive more than the

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average person in work. And then the penalty, the bedroom tax, those in

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the public sector who have spare runs. It seems that Ed Miliband

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wants to look hard, too. His new shadow secretary has promised that

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Labour would he tougher than the Conservatives. There is there jobs

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guarantee scheme and if you forego a job, you forego benefits. Is it

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right that Ed Miliband has asked the shadow cabinet to stop using the

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word welfare? I used it a moment ago, if that was true, I would be in

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trouble! The financial Times reported that he had banned it in

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favour of Social Security. You can use either word. We have a welfare

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state, social Security system. An independent woman. The problem is,

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people do not believe you on welfare. They look at how much you

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increased and how half-hearted you are about welfare reform. There are

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a couple of important priorities that I have set out, such as every

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young person out of work for a year will be guaranteed a job, which they

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will have to take, otherwise they forego benefits. We would withdraw

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their benefits if they did not accept the jobs offered. And if you

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are over 25, and you have been out of work for two years, the

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compulsory jobs guarantee would guarantee a job, but you would have

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to take it or forego benefits. We have a work programme beginning to

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deliver in the way that the previous versions did not. Getting people

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back into work is the objective of any system. I am not afraid to use

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the term welfare. That has to be the principal, getting people ready for

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work and getting them into work. 900,000 have an out of work for more

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than a year. The work programme is not delivering. The compulsory jobs

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guarantee would say you cannot be out of work for more than a year. We

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said we would reinstate the bank bonus tax to bring in money and

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restrict tensions tax relief. Those things would finance the compulsory

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jobs guarantee. Is this the same banks bonus tax that has been

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pledged not just to the youth jobs guarantee, but more capital

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spending, reversing child benefit, tax credits, more money for regional

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growth, turning empty shop is over to the community and building new

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homes and free childcare? No, it will be used to the compulsory jobs

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guarantee. How will you pay for the other things? The VAT cut, we will

:22:24.:22:31.

not reverse. Childcare will be funded by the bank levy. What about

:22:32.:22:39.

child benefit? Ed Miliband said we could not reverse it. Tax credit

:22:40.:22:45.

savings? We will not be able to reverse all of the changes. We have

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said we would guarantee a young person a job after being out of work

:22:51.:22:59.

for a year. The banks bonus went up and we think we should tax them at

:23:00.:23:06.

50% and get people back to work. On childcare, we said that we would

:23:07.:23:18.

expand the offer from 15 up to 25 hours for working families by

:23:19.:23:20.

increasing the bank levy. That will pay for it? We think it is right to

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tax bankers. You will have the bank levy and the banks bonus tax. Even

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though it never takes inasmuch as the Chancellor says? We would have

:23:36.:23:48.

both the tax and the levy. They are still nothing. Compared to your

:23:49.:23:56.

years. I know you do not take responsibility. We still see

:23:57.:24:03.

multi-million pounds bonuses. We should use it to get young people

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back to work. The time to be a banker in this country to get large

:24:09.:24:12.

bonuses was when you were in power. They still get large bonuses and we

:24:13.:24:17.

should tax them and use it to get people into jobs. You are committed

:24:18.:24:23.

to the overall benefit cap? Ed Miliband made a speech about that.

:24:24.:24:31.

We would cap Social Security, or welfare spending, but we would do

:24:32.:24:36.

that in ways different from this Government. By guaranteeing people

:24:37.:24:40.

jobs and building houses. Would you include state pensions? We would. As

:24:41.:24:50.

part of the cap? We would. When we were in Government we introduced

:24:51.:24:55.

automatic enrolment so that more people are saving for retirement. It

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does not mean we would reduce state pensions. But pensions spending, and

:25:00.:25:05.

I know you will take out the fuel allowances for the better off, but

:25:06.:25:11.

the state pension is part of your -- part of your welfare cap and not the

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welfare cap. We have committed, like the Government have. We said we

:25:27.:25:34.

would reduce the cost of jobseeker's allowance by guaranteeing young

:25:35.:25:37.

people jobs paid for by the bank bonus tax. We said we would build

:25:38.:25:42.

homes, rather than paying out all this money on housing benefit,

:25:43.:25:47.

building social housing. That was to be paid for by the bank taxes coming

:25:48.:25:52.

you told me to take it out. We have committed to build 200 thousand

:25:53.:25:58.

homes a year. We have Sir Michael Lyons doing a review. The living

:25:59.:26:06.

wage is an important policy for bringing down Social Security

:26:07.:26:10.

spending. We have 5 million people who cannot afford to live on the

:26:11.:26:14.

wages they earn and as a result they rely on tax credits and housing

:26:15.:26:20.

benefit. Are you going to pay the living wage in every public sector

:26:21.:26:24.

job? That was the commitment in the last manifesto. The Government would

:26:25.:26:30.

be a living wage employer. The moment Labour comes to power, the

:26:31.:26:34.

public sector will get the living wage? We have someone looking at

:26:35.:26:44.

this. We have 18 Labour local authorities paying the living age,

:26:45.:26:50.

including two contractors. We want to learn from that. If we can have

:26:51.:26:55.

more people being paid a living wage. You are not telling me what

:26:56.:27:01.

you would do. What has cost ?41 million in wasted IT and more

:27:02.:27:08.

expected to be written off? You are creating from Iain Duncan Smith's

:27:09.:27:14.

answer to Rachel Reeves' question. ?40 million has been written off in

:27:15.:27:19.

this IT project. To put it in context, the last Government wrote

:27:20.:27:26.

off ?13 billion on the NHS computer project. The answer is you did write

:27:27.:27:34.

it off. We have Prime Minister's Questions. He was sitting next to a

:27:35.:27:41.

Scandinavian blonde woman at a funeral, she took out her

:27:42.:27:46.

smartphone. Asked him if he wanted to be in a selfie. He and Barack

:27:47.:27:53.

Obama could not resist. It happened at the memorial service yesterday.

:27:54.:28:00.

Michelle Obama is not looking pleased. We are not into such trends

:28:01.:28:12.

here. Smile for the camera. If you are looking for something glamorous

:28:13.:28:15.

to be pictured next to, look no further. The Daily Politics mug. We

:28:16.:28:21.

will remind you how to enter in a minute. Can you remember when this

:28:22.:28:34.

happened? Never mind. You will not be able to win the Daily Politics

:28:35.:28:42.

mug very easily! We will show it later. And now it is coming up to

:28:43.:28:50.

midday. We can take a look at Big Ben. The sun is shining now. There

:28:51.:28:58.

was fog this morning. City airport was in a bad way, also Heathrow. By

:28:59.:29:07.

9:30am, sunshine and look at Big Ben now. It is a glorious sight. I hope

:29:08.:29:13.

it will be OK, I have two fly out this afternoon. I am going to

:29:14.:29:25.

Berlin. Prime Minister's Questions is on its way. If you would like to

:29:26.:29:29.

comment on proceedings you can send us an e-mail. You can also send your

:29:30.:29:37.

thoughts on Twitter. We might read some out. James is also here.

:29:38.:29:48.

Welcome. The penultimate PMQs of the year. What will it be about,

:29:49.:29:56.

somebody tells me the cost of living will feature? This is the first

:29:57.:30:03.

Prime Minister's Questions he has taken part in since the autumn

:30:04.:30:09.

statement. He could go on about the arguments about how you measure the

:30:10.:30:14.

cost of living, which is confusing. Universal credit, there has been a

:30:15.:30:22.

lot about that. Also the pay for MPs being announced tomorrow. He has

:30:23.:30:27.

already made an overjoyed to party leaders saying maybe there is a

:30:28.:30:35.

cross party deal that can be done -- overture. Is anybody saying they

:30:36.:30:43.

should not take the pay rise? Not exactly. Labour are saying this is

:30:44.:30:49.

wrong at the time of public pay restrictions. The other parties that

:30:50.:30:53.

there is no formal proposal, we should wait and see. We can go over.

:30:54.:31:18.

I am sure the Prime Minister is concerned there has been a 42%

:31:19.:31:26.

increase in long-term unemployment amongst young women in this country

:31:27.:31:30.

under his watch. Can he confirmed the reason why he does not support

:31:31.:31:38.

the campaign like his colleague from South Dorset who is at least

:31:39.:31:41.

providing jobs for the girls. What we have seen under this government

:31:42.:31:44.

is a rapid reduction in unemployment over recent months. A million more

:31:45.:31:50.

people in work than when I became Prime Minister. There is a lot more

:31:51.:31:56.

work to be done in terms of getting the long-term unemployed back into

:31:57.:32:00.

work but the work programme is performing twice as successfully and

:32:01.:32:05.

she should get behind those programmes rather than make the

:32:06.:32:12.

point she does. Last Tuesday, Joshua, aged 17 in my constituency

:32:13.:32:17.

died due to a knife attack. Whilst we have seen a reduction of serious

:32:18.:32:23.

youth violence by 19%, what more can be done to read the streets of

:32:24.:32:28.

Enfield and elsewhere in this country from the carnage of knife

:32:29.:32:33.

attacks? He makes a very good point, speaking on behalf of of his

:32:34.:32:37.

constituents. We have toughened the law and that has made a difference.

:32:38.:32:42.

The most important thing is to get rid of this dreadful culture of

:32:43.:32:46.

people carrying knives and educating young people on the dangers of

:32:47.:32:51.

carrying knives because so often those who carry knives end up being

:32:52.:32:58.

stopped with them themselves. Mr Ed Miliband. Does the Prime Minister

:32:59.:33:07.

agree that given the crisis ordinary families are facing in their living

:33:08.:33:13.

standards MPs should not be given a pay rise many times above inflation

:33:14.:33:18.

in 2015? I do agree with him. It would be wrong for MPs to get a big

:33:19.:33:22.

pay rise. All the party leaders agree on that and we have made this

:33:23.:33:27.

point. It should be clear that this is not a final recommendation.

:33:28.:33:34.

First, the idea of an 11% pay rise in one year at a time of pay

:33:35.:33:41.

restraint is unacceptable. Also, unless this is rethought, I don't

:33:42.:33:44.

think anyone will want to rule anything out. No one wants to go

:33:45.:33:49.

back to MPs voting on their own page but we need a process and outcome

:33:50.:33:52.

that will build public confidence. And this should be accompanied with

:33:53.:34:00.

a cut in the cost of politics. Mr Speaker, I am glad he agrees on this

:34:01.:34:07.

issue. Does he also agree with me that we should not let this hang

:34:08.:34:12.

around as an issue until after the general election, hanging over trust

:34:13.:34:19.

in politics. Can I urge him to work with me to find a way I make

:34:20.:34:23.

cross-party basis to stop this package happening? My door is always

:34:24.:34:32.

open to the right honourable gentleman and I am happy to discuss

:34:33.:34:37.

this or any other issue. This is not a final recommendation and if the

:34:38.:34:42.

three party leaders and others in this house can unite behind the

:34:43.:34:44.

position to say this would not a right, then I think that is the

:34:45.:34:51.

strongest message we can give. I agree with the Prime Minister, but I

:34:52.:34:55.

hope he agrees with me that waiting and seeing will not work, and we do

:34:56.:35:00.

have to get together to deal with this now. The reason why this is not

:35:01.:35:06.

the right time for this pay rise is because people are going through the

:35:07.:35:10.

biggest cost of living crisis in a generation. Last Thursday, the

:35:11.:35:15.

Chancellor claimed living standards were rising. That is not the case,

:35:16.:35:23.

is it? Let me add a point on the issue of MP's pay. This government

:35:24.:35:28.

has shown respect for the fact of the difficulties people face because

:35:29.:35:32.

we cut Minister's pay by 5% and froze it for the whole of

:35:33.:35:35.

Parliament. That is not something the party opposite did. If he wants

:35:36.:35:40.

to get onto the economy, and after last week's exchange I cannot wait

:35:41.:35:49.

to get onto the economy. We discovered a new duo, Red Ed and

:35:50.:36:02.

Redder Ed. The Institute of fiscal studies but this clearly. They said,

:36:03.:36:08.

we have had a big recession, the biggest in 100 years. It would be

:36:09.:36:15.

astonishing if household earnings have not fawning and earnings had

:36:16.:36:18.

not fallen, but that is the legacy of what they left us. His entire

:36:19.:36:25.

approach seems to be this, we made the most almighty mess, why are you

:36:26.:36:31.

taking so long to clear it up? We are clearing it up. He has been the

:36:32.:36:37.

Prime Minister for three and a half years. Now, but I think we are

:36:38.:36:50.

making progress because last Thursday the Chancellor said that

:36:51.:36:52.

living standards were rising. Now, his own office of budget

:36:53.:36:57.

responsibility said that whichever way you look at it, average

:36:58.:37:02.

earnings, wages, salaries, levels have been falling. Order, order. You

:37:03.:37:08.

are yelling at cross the chamber, be quiet. Quiet! Calm yourself, take up

:37:09.:37:21.

yoga. Mr Ed Miliband. They went on, it is inconceivable to suggest

:37:22.:37:25.

otherwise. But that is what the Chancellor did last Thursday. Why

:37:26.:37:30.

won't he admitted, there is a cost of living crisis in this country. It

:37:31.:37:35.

comes to something when you being heckled from your own site, Mr

:37:36.:37:43.

Speaker. I don't know how you are going to keep us in order. I will

:37:44.:37:49.

tell him what has been happening, the deficit is down, a million more

:37:50.:37:55.

people in work, 400,000 more business operating in Britain and we

:37:56.:37:59.

have one of the fastest rates of growth than any Western economy. But

:38:00.:38:05.

the truth about the cost of living is this, if you don't have a

:38:06.:38:10.

long-term, economic plan to get the economic -- economy moving, you

:38:11.:38:15.

don't have a plan to deal with living standards. We have a plan to

:38:16.:38:19.

keep interest rates low, get people back to work, cut taxes. He does not

:38:20.:38:24.

have a plan apart from more borrowing, more spending, more

:38:25.:38:30.

taxes, all of the things that got us into this mess in the first place.

:38:31.:38:35.

Utterly complacent and out of touch with the country. That is this Prime

:38:36.:38:42.

Minister all over. He does understand that some people are

:38:43.:38:45.

really struggling, because today we learned of his plan to cut the top

:38:46.:38:55.

rate of tax further from 45p to 40p. Can he explain why is he

:38:56.:39:02.

contemplating a further tax cuts for millionaires who have received

:39:03.:39:08.

hundreds and thousands of pounds of tax cut when ordinary families are

:39:09.:39:13.

squeezed. The top rate of tax under this government is higher than any

:39:14.:39:18.

time he was in the cabinets, in the government or working in the

:39:19.:39:21.

Treasury trying to wreck the economy in the first place. Let's compare

:39:22.:39:26.

records, they doubled council tax, we have frozen it. They put up

:39:27.:39:32.

petrol tax 12 times, we frozen it. They put up the basic rate of

:39:33.:39:39.

pension by 75p, we put it up by ?15 a week. The British public know if

:39:40.:39:44.

you want to sort out the cost of living, you need more jobs, more

:39:45.:39:49.

growth and a long-term economic plan. We have got one, he hasn't. I

:39:50.:40:01.

will tell him what happened. Members can calm down. As long as it takes,

:40:02.:40:11.

it will go on so they can shout and scream in the most juvenile manner,

:40:12.:40:16.

but we will keep going. Under the last Labour government, real

:40:17.:40:20.

earnings went up ?3600, living standards up. Under him, they are

:40:21.:40:28.

down ?1600. We have always known how out of touch he is, but he has taken

:40:29.:40:34.

it to a new level. They are in denial about the cost of living

:40:35.:40:38.

crisis and they are not satisfied with one millionaire's tax cuts,

:40:39.:40:43.

they think it is time for another. Once again he has proved he stands

:40:44.:40:49.

up for the wrong people. At the end of six questions we are back to

:40:50.:40:53.

denial and the record of the last Labour government. I know I have had

:40:54.:40:57.

a long flight, but I could not have done better if I had written the

:40:58.:41:02.

script myself. The last Labour government gave us the biggest

:41:03.:41:07.

banking bust anywhere in the world. They created a giant mess that this

:41:08.:41:13.

government is clearing up. That is the truth. Since the Autumn

:41:14.:41:16.

Statement, why can't he mention business optimism is up,

:41:17.:41:21.

manufacturing is up, job vacancies is up and pretty soon we can add two

:41:22.:41:36.

to that list. Unemployment in my constituency is 21% lower than it

:41:37.:41:44.

was. We have had 90% increase in apprenticeship start-ups,

:41:45.:41:48.

manufacturing output is up and business activity is at 832 high in

:41:49.:41:54.

the West Midlands. With the Prime Minister agree that due to the hard

:41:55.:41:58.

work of my constituents and people across the country, the

:41:59.:42:02.

government's long-term economic plan is working and delivering benefits

:42:03.:42:06.

to every region of the United Kingdom? He is right, the West

:42:07.:42:15.

Midlands, which during the boom years, the number of people in the

:42:16.:42:21.

private sector went down, we are now seeing better news. Employment is up

:42:22.:42:26.

25,000 since the election, private sector employment is up 14,000 this

:42:27.:42:31.

year, the youth claimant count is falling in the West Midlands and

:42:32.:42:34.

they know how much time and effort he puts into the apprenticeship fair

:42:35.:42:39.

he held this year. It shows the long-term plan we have is the right

:42:40.:42:43.

plan and it is beginning to work. What does the Prime Minister have

:42:44.:42:47.

two say to women working full-time who have seen their disposable

:42:48.:42:53.

incomes fall by almost ?2500 since his government came to office? The

:42:54.:42:57.

first thing to say is to welcome there are more women in work than at

:42:58.:43:03.

any time in our history. The second thing to say is because we are

:43:04.:43:08.

lifting the first ?10,000 people earn out of income tax, they will be

:43:09.:43:15.

off by ?705 next year. That is progress. If he is saying, does it

:43:16.:43:20.

take time to recover from the mess left by his party? Yes it does. We

:43:21.:43:26.

are going to do it. Dementia is the disease most feared over 50s in this

:43:27.:43:32.

country. The government is doubling investment into dementia research,

:43:33.:43:38.

and the Prime Minister is hosting the G8 summit on dementia. Will he

:43:39.:43:45.

live this government's sites to double investment in dementia

:43:46.:43:49.

research? I am grateful to what he said and he his right, this is a

:43:50.:43:54.

real challenge, not just facing this country where there are 670,000

:43:55.:43:58.

people suffering, but they challenge facing the whole world. That is why

:43:59.:44:03.

we are having the G8 conference today in London so we can share

:44:04.:44:09.

intelligence and expertise, we can share information and learn lessons

:44:10.:44:13.

from each other. This government is planning to double research into

:44:14.:44:18.

dementia I2015 and double it again there after. Given the

:44:19.:44:23.

implementation of universal credit has become a shambles, have found

:44:24.:44:30.

the public have confidence in it? It is absolutely right we introduced

:44:31.:44:36.

this benefit system in a very slow and deliberate way. Frankly, I

:44:37.:44:41.

remember, as a constituency MP, sitting in my surgery when the tax

:44:42.:44:48.

credit system came in having case after case with people 's household

:44:49.:44:53.

finances wrecked by the last Labour government. I will not let that

:44:54.:44:57.

happen again. As I introduced this benefit, let's remember there are

:44:58.:45:03.

480,000 fewer people on an out of work benefits and it is this

:45:04.:45:12.

government making work pay. Does he agree the best ways to raise living

:45:13.:45:18.

standards is not to abandon this plan for the economy, as the party

:45:19.:45:24.

opposite? He is right, the biggest hit to living standards is if we let

:45:25.:45:28.

spending and borrowing get out of control and interest rates went up.

:45:29.:45:33.

That is what we want to avoid. We got the deficit down and must

:45:34.:45:37.

continue with difficult spending additions -- decisions, which has

:45:38.:45:42.

enabled us to cut the taxes of people living and working in

:45:43.:45:47.

Basildon. Next J, people for instance on minimum wage working

:45:48.:45:50.

full time will see their income tax bill come down by two thirds, real

:45:51.:45:54.

action on the side of people who work hard. Is the Prime Minister

:45:55.:46:03.

aware that the FTSE 100 directors now get ?86,000 a week on average

:46:04.:46:08.

while at the other end, 5 million workers get less than the living

:46:09.:46:14.

wage, and three quarters of a million people who cannot get a job

:46:15.:46:18.

and gets sanction gets nothing at all and are left to starve? Is there

:46:19.:46:24.

no end to the brutality and nasty nurse of Tory Britain? -- nasty

:46:25.:46:30.

nurse. I was saying to the right honourable gentleman that a 40p tax

:46:31.:46:37.

rate when it is now 45p, with a bonus bonanza in the city, he has a

:46:38.:46:49.

lot of Ras neck. -- brass neck. New figures show that the second largest

:46:50.:46:59.

pub company, Punch taverns, in their pubs, overcharged the consumer on

:47:00.:47:04.

beer alone by ?4.3 billion over ten years. There is clear market

:47:05.:47:13.

manipulation. Will he commit to deal with this crony capitalism and

:47:14.:47:17.

listen to the Federation of Small Businesses and back the select

:47:18.:47:24.

committee solution? I know of his interest not just in the air, but in

:47:25.:47:28.

pubs and in how pub landlords are treated -- not just in beer. I am a

:47:29.:47:36.

believer in a healthy pub industry, they are often at the heart of the

:47:37.:47:40.

community and I will look carefully at the report. During the Autumn

:47:41.:47:46.

statement the Chancellor said people should expect to spend one third of

:47:47.:47:50.

adult life in retirement, considering that life expectancy in

:47:51.:47:57.

some parts is 75, what does he think would be a fairer time and age in a

:47:58.:48:03.

Welsh context? The point is the Chancellor made was this should be

:48:04.:48:09.

assessed independently. It is right to set an expectation rather than

:48:10.:48:12.

having ministers announce what retirement ages should be. If the

:48:13.:48:20.

point he is making is we need to tackle health inequality better and

:48:21.:48:24.

ring-fence budgets for public health as the government has brought in, I

:48:25.:48:37.

would agree. Mr Speaker, bomber command veteran Stan Franks recently

:48:38.:48:44.

passed away at the age of 88. As a teenager he flew 31 missions, a

:48:45.:48:52.

staggering achievement. Will he congratulate the efforts of the

:48:53.:48:57.

Association and the newspaper in ensuring the funds meant his passing

:48:58.:49:00.

was marked appropriately. I would praise those in Thurrock, who raised

:49:01.:49:09.

the money. He is believed to have been the youngest ever meant to

:49:10.:49:14.

complete these missions, before he was 20 years old. It is a reminder

:49:15.:49:20.

how much previous generations put in to make sure we could live in

:49:21.:49:24.

freedom. It is one of the greatest privileges to welcome veterans of

:49:25.:49:30.

bomber command to visit Downing Street and making sure they have the

:49:31.:49:34.

class on the medal they value so much. -- clasp. We should never

:49:35.:49:45.

forget those rave cruising bomber command. So many are coming to the

:49:46.:49:49.

end of their lives, and so many did so much for their country. Can I

:49:50.:50:06.

thank the Prime Minister for saving my marriage? Carolyn was about to

:50:07.:50:12.

sign the divorce papers when she heard the reports that if we stayed

:50:13.:50:17.

together we would be in line for a sweet tax break. But if as the Prime

:50:18.:50:23.

Minister says, marriage must be underpinned by the tax system, why

:50:24.:50:28.

is it that since the tax allowance for married people was abolished,

:50:29.:50:38.

the divorce rate has gone down? I am delighted that happiness is

:50:39.:50:44.

maintained. It was only when I started talking about the married

:50:45.:50:47.

couples allowance the leader of the opposition the knot. The tax system

:50:48.:50:56.

moves in mysterious ways. In the light of the call by the leader of

:50:57.:51:02.

the opposition for urgent act should in response to the proposal for an

:51:03.:51:06.

increase in MPs pay, would he immediately table the boundary

:51:07.:51:12.

commission report that would simultaneously pay for any increase

:51:13.:51:17.

and increase the workload of MPs to do so. It would surely be

:51:18.:51:21.

hypocritical either for the leader of the opposition or for the leader

:51:22.:51:24.

of the Liberal Democrats to oppose... My right honourable friend

:51:25.:51:33.

is tempting me. The point I tried to make is I think cutting the cost of

:51:34.:51:40.

politics has a role to play alongside this argument. Members

:51:41.:51:48.

must not shout at the Prime Minister. It is discourteous to

:51:49.:51:53.

gesticulate at the man. It is no good shouting from the party

:51:54.:51:57.

opposite, they have the opportunity to reform the House of Lords and

:51:58.:52:05.

they stopped it. The Prime Minister says that the G8 and his attendance

:52:06.:52:10.

at the investment conference advertised his commitment to

:52:11.:52:14.

Northern Ireland. But his Whitehall is busy removing jobs from Northern

:52:15.:52:23.

Ireland. In the DVLA and now in the HM RC. How does removing jobs

:52:24.:52:34.

contribute to balancing the economy in Northern Ireland and that

:52:35.:52:40.

region? I quite understand why he makes the points he does. I

:52:41.:52:46.

understand there will be a meeting to talk about the HM RC issues. As

:52:47.:52:52.

he knows in terms of the DVLA, the Department of Transport are

:52:53.:52:57.

considering consultation. -- the results of consultation. Employment

:52:58.:53:00.

has risen in Northern Ireland since the election. The long-term answer

:53:01.:53:06.

for the economy in Northern Ireland is a private-sector revival. The

:53:07.:53:12.

public sector is large and we need more small and medium-sized

:53:13.:53:15.

enterprises and more investment and more jobs to come, which is what the

:53:16.:53:25.

conference was about. My constituent, Jack Sherry, who

:53:26.:53:28.

completed the National citizens service, visited to let me know how

:53:29.:53:35.

much the programme had given him personal con buttons -- confidence.

:53:36.:53:45.

What plans does he have for enabling as many young people as possible to

:53:46.:53:54.

take part in this programme. I think this is a transforming programme

:53:55.:53:58.

with 66,000 young people going through it already. It forms what

:53:59.:54:02.

part of what Prince Charles wants to see in terms of a decade where we

:54:03.:54:08.

encourage volunteering and try to get to 50% of young people who take

:54:09.:54:16.

part in that. I am having a similar experience to my honourable friend,

:54:17.:54:20.

of people talking about what this has done for young people and their

:54:21.:54:28.

confidence. While the Prime Minister is coming over family friendly, can

:54:29.:54:34.

he confirm if maternity and paternity pay will be included in

:54:35.:54:37.

the benefits cap announced in the autumn statement? As the Chancellor

:54:38.:54:44.

announced, what is out of the benefit cap is the basic state

:54:45.:54:48.

pension. On all of welfare spending we have to make sure we distribute

:54:49.:54:53.

properly between the different sorts of welfare. 330 new jobs were

:54:54.:55:05.

created in my constituency in the past three months and I expect many

:55:06.:55:11.

more to be created, particularly as housing and construction projects

:55:12.:55:17.

accelerate. Would he agree that it is important to young people do not

:55:18.:55:21.

get left behind and that abolishing the jobs tax on young people under

:55:22.:55:26.

21 shows that the government is serious about tackling youth

:55:27.:55:32.

unemployment? I am grateful for what he says. As the economy recovers, it

:55:33.:55:38.

is vital that it is a recovery for everyone, for North and South and

:55:39.:55:43.

for young and old. There is always the danger that young people not in

:55:44.:55:47.

the workforce are locked out. That is why the change announced, about

:55:48.:55:52.

abolishing the jobs tax on young people, to make it cheaper for

:55:53.:55:57.

employers to take them on, can have an impact in making sure they

:55:58.:56:03.

participate in the economy. Given that the Work and Pensions Secretary

:56:04.:56:09.

was left alone when he made the statement on universal credit, does

:56:10.:56:13.

the Prime Minister still have confidence in him and the universal

:56:14.:56:20.

benefits changes? I think the Work and Pensions Secretary has probably

:56:21.:56:24.

done more than anyone else in British politics to transform the

:56:25.:56:28.

debate about welfare. That is happening because of his dedication.

:56:29.:56:34.

We see fewer people out of work and the number of jobless households at

:56:35.:56:39.

the lowest since records began. He is introducing a system that

:56:40.:56:43.

includes the benefits cap that Labour voted against and the

:56:44.:56:46.

household benefit cap they voted against which is making work pay. We

:56:47.:56:54.

should be proud. Does the Prime Minister agree that in the long

:56:55.:56:57.

term, the best plan to improve living standards of my hard-working

:56:58.:57:05.

constituents is to continue to cut their income tax, which can only be

:57:06.:57:10.

achieved by a growing economy, the government cutting spending, so the

:57:11.:57:13.

country lives within its means and does not have to borrow to pay

:57:14.:57:21.

bills? I think my honourable friend makes an important point, which is

:57:22.:57:25.

this, you can talk about how you want to help people with living

:57:26.:57:29.

standards and to keep the tax bill... It is extraordinary, the

:57:30.:57:35.

shadow chancellor, he is at it again, he is heckling again. We

:57:36.:57:40.

learn something last week, he can dish it out, but he cannot take it.

:57:41.:57:50.

I tell you what is going down, his career is going down, that is what

:57:51.:57:55.

is going down. If you want to get taxes down, you have to make

:57:56.:58:00.

difficult decisions about spending. That is what we have done and that

:58:01.:58:04.

is why we were able to cut taxes, whereas they would have to put them

:58:05.:58:10.

up. In towns across the United Kingdom, there are parents in

:58:11.:58:16.

despair because they cannot afford a decent Christmas. Why is that? What

:58:17.:58:25.

is happening is we are recovering from the most difficult recession we

:58:26.:58:29.

have had in living memory. It takes time will stop we see 1 million more

:58:30.:58:34.

people in work, which is a positive development. We seek more businesses

:58:35.:58:42.

operating, we see a growth rate which is the second highest of any

:58:43.:58:45.

major Western economy. The job is not done yet, that is why we need a

:58:46.:58:52.

long-term economic plan which is what we are dedicated to

:58:53.:58:56.

delivering. We would get nowhere if the first thing we did was to

:58:57.:59:00.

increase spending and borrowing and taxes, all of the things that got

:59:01.:59:04.

this country into a mess in the first place. British Aerospace have

:59:05.:59:14.

1000 apprentices at any one time. 221 in the Ribble Valley. What can

:59:15.:59:20.

he do to in courage of the firms to follow the example and take on more

:59:21.:59:30.

apprentices, particularly in engineering and science, which would

:59:31.:59:32.

encourage more youngsters to study the subject? I have seen what BEA

:59:33.:59:40.

Systems do in terms of apprenticeships. It is impressive.

:59:41.:59:45.

We have to take action and make sure young people study science and

:59:46.:59:49.

maths, and that is happening will stop we have to make sure that

:59:50.:59:54.

setting up apprenticeships is simpler and less expensive. We need

:59:55.:59:57.

a culture where companies want to get involved in the programme. We

:59:58.:00:03.

need more investment to our shores. That is why it is good news that one

:00:04.:00:08.

of the giants of the pharmaceutical industry has announced another 200

:00:09.:00:12.

million invested in our country because life sizes is also an area

:00:13.:00:16.

where Britain can win in the global race. When the house debated Syria,

:00:17.:00:25.

in August, the estimated dead in the conflict was 100,000. Three months

:00:26.:00:31.

later, the estimate is over 120,000. We cannot allow this to be a

:00:32.:00:36.

conflict in a far-away land we do not know anything about. Is it time

:00:37.:00:41.

for the government and the house to urge greater action by the

:00:42.:00:45.

international community and show that we do care about the suffering

:00:46.:00:50.

of the Syrian people? I agree with the honourable lady who has a long

:00:51.:00:55.

record of speaking out and believing as I do that Britain should be

:00:56.:00:59.

engaged in all the work to try to bring those involved in this

:01:00.:01:03.

dreadful war to the negotiating table in terms of the Geneva to

:01:04.:01:09.

process. We must continue with the work we do on humanitarian aid to

:01:10.:01:13.

help those who are suffering will stop we should also continue to work

:01:14.:01:18.

with all that those in Syria who want a free and democratic future.

:01:19.:01:25.

We must not allow the argument to develop that the only opposition in

:01:26.:01:28.

Syria is extremist and that will be the case if we stop working with

:01:29.:01:35.

those who care about democracy. In Rochford and Southend, employment is

:01:36.:01:42.

up, small business numbers are up, largely due to the impact of the

:01:43.:01:46.

expanding Southend airport. I know he is probably sick of airports, but

:01:47.:01:52.

would he consider in the New Year coming to Southend airport to

:01:53.:01:55.

celebrate the success and if he wants, to bring the family and I

:01:56.:02:00.

promised to buy them and ice cream on the seafront. Who could resist an

:02:01.:02:07.

Essex style celebration in the New Year? I would find out more about

:02:08.:02:12.

what it involves before I commit! We should not underestimate the is of

:02:13.:02:21.

airports in driving regional growth. Despite the savage cuts, next year

:02:22.:02:25.

Liverpool will host the International Festival of business.

:02:26.:02:30.

Why will the Prime Minister not commit to attending? Will he ensure

:02:31.:02:33.

the same level of support that Boris would enjoy, is afforded to the

:02:34.:02:39.

Mayor of Liverpool will stop and would he say that beside a short

:02:40.:02:45.

sleep over in London, the Beatles would always be made in Liverpool.

:02:46.:02:52.

Having happily visited the Beatles museum and enjoyed being there, I

:02:53.:02:57.

can confirm what he says. In terms of the Mayor of Liverpool, I have

:02:58.:03:01.

never had any problem working with him and have shared a platform to

:03:02.:03:06.

advertise the regions of that city, and I will continue to, operate with

:03:07.:03:15.

him. Abolishing roaming charges is a victory for British consumers we

:03:16.:03:20.

might get from remaining inside the European Union. As he discussed

:03:21.:03:23.

international mobile phone usage with any other heads of government

:03:24.:03:30.

in the last day or so? You could say, in a roundabout way. Perhaps in

:03:31.:03:36.

my defence you should remember the television cameras are always on but

:03:37.:03:41.

in my defence I would say Nelson Mandela played an extraordinary role

:03:42.:03:48.

in bringing people together. I thought it was only polite to say

:03:49.:03:49.

yes! Prime Minister referring at the end

:03:50.:04:08.

there to the "selfie" with him, Barack Obama and the Prime Minister

:04:09.:04:17.

of Denmark. So the second to last PMQs of 2013 kicked off with MP's

:04:18.:04:24.

plate with Ed Miliband asking the Prime Minister create an all-party

:04:25.:04:32.

group to Aske why this 11% rise cannot be done. Ed Miliband moved on

:04:33.:04:42.

to say MPs should get a pay rise at a time when households have been

:04:43.:04:51.

under strain and stress. Then PMQs went into some well rehearsed

:04:52.:04:57.

arguments over the cost of living. The Prime Minister talking about the

:04:58.:05:05.

economy, talk about two trains passing in the night.

:05:06.:05:09.

That might continue for about the next 18 months.

:05:10.:05:15.

That was all picked up by viewers. " such hypocrisy with David Cameron

:05:16.:05:22.

and Ed Miliband agreeing with each other over the recommended 11% pay

:05:23.:05:29.

rise. We all know most MPs believe they are worth even more". " when

:05:30.:05:34.

David Cameron talks about cutting the cost of politics, doesn't he

:05:35.:05:37.

mean he wants to make it the reserve of a privileged elite who can enter

:05:38.:05:45.

parliament as a hobby"? Helen says, Ed Miliband is on thin ice talking

:05:46.:05:53.

about the cost of limit -- cost of living. Ian Jordan said week after

:05:54.:06:05.

week Ed Miliband goes on the cost of living issue and week after week,

:06:06.:06:11.

David Cameron fails to address the issue.

:06:12.:06:21.

Let's start with MP's pay. Do we know what the government or the

:06:22.:06:25.

Prime Minister wants to do with this report? I think he has dropped a

:06:26.:06:29.

large hint as to what he wants to do. I was surprised by the vehemence

:06:30.:06:34.

with which he agreed with Ed Miliband. He said a pay rise of 11%

:06:35.:06:40.

was unacceptable and said no one wants to rule anything out and his

:06:41.:06:43.

door was always open to talk to other party leaders about this. And

:06:44.:06:50.

also, he said it was unacceptable to have an 11% pay rise in any one

:06:51.:06:55.

year. There is the nuclear option, and then you could say I PSA should

:06:56.:07:03.

have no responsibility for pay, just everything else. Or you could delay

:07:04.:07:09.

this particular pay rise. Or you could stagger it, spread it over a

:07:10.:07:14.

Parliament or two, so it is less stark, you remove the blunt headline

:07:15.:07:22.

of an 11% pay rise. I think the Prime Minister has indicated there

:07:23.:07:27.

is a plan. There is clearly an idea. But they don't have to move

:07:28.:07:33.

that fast on it. This pay rise is not going to happen until 2015. So

:07:34.:07:41.

after the next election? And even then the increase will not be given

:07:42.:07:46.

until a review has happened. So all MPs are elected at the next election

:07:47.:07:50.

will get the old pay until some months later. If the review says

:07:51.:07:57.

11%, that is find on some of it will be back page. I don't think the

:07:58.:07:59.

government will move fast on this but the Prime Minister has indicated

:08:00.:08:04.

there will be some action. Philip Hammond, is there any measure

:08:05.:08:10.

normally accepted by the ISS or the OBR, all reputable economists or the

:08:11.:08:18.

ONS which says living standards have risen since you came to power?

:08:19.:08:24.

Living standards are starting to rise again after what has been a

:08:25.:08:30.

very difficult period with a huge reduction in our national income. I

:08:31.:08:34.

think everybody in this country understands that if our national

:08:35.:08:39.

income contracts by 7.5%, that has an impact on living standards. Let

:08:40.:08:45.

me come back to my question, is there any measure up to date which

:08:46.:08:48.

shows living standards have risen under this government? I haven't got

:08:49.:08:54.

a specific measure. That is because there aren't any. We are seeing a

:08:55.:08:59.

recovery in the economy, people benefiting from the measures we have

:09:00.:09:04.

taken to increase the tax-free personal allowance, freeze council

:09:05.:09:08.

tax, freeze fuel duties, so pressures on living standards

:09:09.:09:12.

whether government does have some direct ability are being managed.

:09:13.:09:16.

And as the economy starts to grow again, we will see living standards

:09:17.:09:22.

beginning to recover. Continuing to recover? So what measure are you

:09:23.:09:26.

using to justify the claim living standards are rising? As our

:09:27.:09:32.

national income rises again, living standards will rise. We know from

:09:33.:09:38.

the OBR that they are predicting the economy from 2012 up to 2018 will

:09:39.:09:43.

grow by 15%, but wages will only grow by 7% over that period, so it

:09:44.:09:50.

does not follow a growing economy benefits those who depend on wages.

:09:51.:09:58.

Wages growing by 7% in real terms represents a recovery in living

:09:59.:10:03.

standards. It is between 2012 and 2018! Prices will rise more than 7%.

:10:04.:10:10.

Those figures you have just quoted... It is the share of GDP,

:10:11.:10:17.

half of it goes to wages. But wages will not rise by 7% in real terms

:10:18.:10:22.

between now and 2018, you accept that? The economy has taken an

:10:23.:10:29.

enormous hit and common-sense tells you people 's living standards

:10:30.:10:32.

suffer. As the economy recovers, living standards will recover. You

:10:33.:10:39.

cannot magic higher living standards. I was trying to get

:10:40.:10:47.

clarity. The reason Philip Hammond cannot give you any numbers living

:10:48.:10:50.

standards are increasing is because there are no such numbers. Anyone

:10:51.:10:57.

who has looked at the numbers shows that under all of the different

:10:58.:11:01.

measures, living standards are falling and continuing to fall. It

:11:02.:11:07.

is welcome the economy is growing, but who is benefiting? Ordinary

:11:08.:11:11.

workers and families are not. During the course of this Parliament, the

:11:12.:11:17.

average worker is ?1600 worse off than they were. Let's take that

:11:18.:11:28.

figure, it is comparing... It is a TUC -based figure. It is taking the

:11:29.:11:32.

rise in wages and chem pairing with the rise in prices and wages have

:11:33.:11:38.

not kept pace with prizes. But that is not a measure of living standards

:11:39.:11:43.

because it does not include the ?700 on average tax cut people have got.

:11:44.:11:49.

When you take all that into account, it is obviously not as high as 1600

:11:50.:11:55.

animal, but do we know what it is? It may be higher than 1600, because

:11:56.:12:05.

the Institute for Fiscal Studies show if you look at tax benefits

:12:06.:12:12.

alone, the average family is ?1800 worse off. There is cuts to tax

:12:13.:12:22.

credit, and the reduction in child care, you give with the personal

:12:23.:12:25.

allowance but take much more with the other. So what do you say to

:12:26.:12:31.

that Philip Hammond? That even when you take tax cuts and everything

:12:32.:12:37.

else you have done to mitigate the living standard squeeze, it is still

:12:38.:12:44.

bad? This is a futile argument. We understand what the challenge is. As

:12:45.:12:49.

the economy recovers we need living standards to recover and we need to

:12:50.:12:53.

repair the public finances. We cannot take the brakes off at this

:12:54.:12:56.

stage. The government is doing what it can in areas where it has a

:12:57.:13:03.

direct ability including tax threshold, holding down rail fares,

:13:04.:13:10.

which was a new announcement in the Autumn Statement. They are still

:13:11.:13:14.

going up higher than inflation. No they are not. It was going to be

:13:15.:13:22.

twice as high as inflation, now it is just a little bit above. Rachel,

:13:23.:13:27.

people out there know the only way living standards will recover

:13:28.:13:32.

sustainably is to have a prolonged and sustainable, economic recovery

:13:33.:13:37.

with a plan to deliver that over the long term. That is what we are not

:13:38.:13:43.

hearing from Labour. Even with a growing economy you need to make

:13:44.:13:46.

sure it is more than just ordinary families that benefit. That is why

:13:47.:13:53.

we would freeze energy prices, reintroduce the mansion tax to

:13:54.:13:55.

ensure it is ordinarily families who benefit and not just the privileged

:13:56.:14:01.

few at the top. James, the thing to watch next year, because in a sense

:14:02.:14:07.

they are like to ship is passing in the night, the government want to

:14:08.:14:12.

talk about the eco-thing, and Labour wants to talk about the cost of

:14:13.:14:15.

living because of the figures Rachel lives. However you look at it, there

:14:16.:14:25.

is a squeeze and have to spend more money on food and energy. Next year,

:14:26.:14:30.

average earnings are expected to overtake prices as inflation comes

:14:31.:14:33.

down, but this argument will develop as the year goes on? Completely. It

:14:34.:14:40.

is all about shaping the question that is in the minds of voters when

:14:41.:14:45.

they go to the polls in 2015. It is straightforward and political. If

:14:46.:14:51.

you think the mindset of politics and the electorate is quite often

:14:52.:14:55.

set some way ahead of a general election, so by the time you get to

:14:56.:14:59.

a general election and the matter how much the parties campaign, the

:15:00.:15:04.

basic question is there. Is it the economy or the cost of living? The

:15:05.:15:09.

interesting question is, is not the particular measure for the cost of

:15:10.:15:19.

living, it is for statisticians, it will be a sense of how the prices

:15:20.:15:25.

managed to did little earnings and do people feel it? Do they feel it

:15:26.:15:29.

in time for the election for the Conservatives to claim it or are

:15:30.:15:34.

they citing statistics? That will keep us busy next year.

:15:35.:15:40.

Before we move on, I am sorry, I am very, very sorry we could not run

:15:41.:15:45.

our competition because a gremlin got into the works. If we can get

:15:46.:15:51.

our video player working in time, we will run it tomorrow.

:15:52.:15:57.

If you have already watched it online, and entered it today, who

:15:58.:16:14.

would have thought that? ! It will catch on eventually, Andrew people

:16:15.:16:17.

have been using the Internet? They have.

:16:18.:16:26.

It is one of our oldest dates. I am impressed you have seen it. I

:16:27.:16:35.

know what it is. Now, when you last went on holiday or a business trip

:16:36.:16:39.

did you study the breakdown for the price of your flight? Over recent

:16:40.:16:44.

years, the percentage we pay in taxes has steadily increased. A good

:16:45.:16:46.

thing environmental campaigners say, as it deters people from unnecessary

:16:47.:16:50.

travel. But not so, claim the airlines and airports, who say the

:16:51.:16:53.

tax is stifling the economy and preventing business growth. Here's

:16:54.:16:56.

Craig Kreeger, the CEO of Virgin Atlantic, with his soapbox. The UK

:16:57.:17:08.

has a vibrant and significant airline sector, vital for long-term

:17:09.:17:11.

growth and the country's place in the world economy. It makes the UK

:17:12.:17:19.

competitive destination for new markets and gives British businesses

:17:20.:17:23.

the connections they need to successfully export but right now

:17:24.:17:28.

the UK aviation sector operates in an environment without the right

:17:29.:17:31.

infrastructure and tax environment for people to choose the UK. The UK

:17:32.:17:37.

government currently taxes every customer taking off from the UK, the

:17:38.:17:42.

airline passenger duty. It is included in the price of the ticket.

:17:43.:17:49.

It began as a small tax for environmental reasons and it has

:17:50.:17:54.

grown to a massive disincentive for business and travel to and from the

:17:55.:17:59.

UK at a time when all of us want to see the UK economy in a sustained

:18:00.:18:03.

recovery. When it was introduced, the duty was ?5 for European flights

:18:04.:18:09.

and ?10 for anywhere else. It now ranges from ?13 to ?188, depending

:18:10.:18:16.

on where you are flying to and the cabin you fly in. From April, a

:18:17.:18:20.

family of four going to the Caribbean, will pay ?340. We have

:18:21.:18:28.

the highest air passenger tax in the world, taking almost 3 billion every

:18:29.:18:31.

year from travellers, including 5 billion from businesses -- 500

:18:32.:18:36.

million. The duty is not a tax on airlines

:18:37.:18:47.

and it is not just a tax on passengers. It is a tax on

:18:48.:18:52.

business, tourism, trade and exports. We know people feel

:18:53.:18:58.

strongly about this. 200 towers and passengers signed a petition seeking

:18:59.:19:07.

its review. -- 200,000. Other countries around the world have

:19:08.:19:12.

started to scrap this unfair tax. Germany is the latest to consider

:19:13.:19:17.

doing so. In this country we seem to take aviation and its value in

:19:18.:19:22.

driving growth for granted in a way no other government in the world

:19:23.:19:26.

does. To be internationally competitive, it is time to

:19:27.:19:32.

reconsider this approach. Craig Kreeger joins us. People say

:19:33.:19:41.

motorists pay 20% VAT on fuel, cars and repairs, but aviation pay zero

:19:42.:19:47.

VAT on the same, why should passengers not be taxed? The issue

:19:48.:19:53.

is the overall taxation of the industry and travel. Unlike other

:19:54.:19:59.

businesses, airlines provide connectivity and enable business and

:20:00.:20:02.

tourism, which is great for the economy. The world economic Forum

:20:03.:20:10.

ranked the UK at the bottom of 139 countries in terms of taxation paid

:20:11.:20:14.

by passengers flying. We believe that impact... That aviation can

:20:15.:20:21.

provide a key role and we are missing an opportunity. Businesses

:20:22.:20:28.

and tourism, for British people who want to travel, it is expensive. And

:20:29.:20:35.

the value of inbound tourism, it is also hindered by this. Were you

:20:36.:20:40.

disappointed nothing was said in the autumn statement? Of course. We

:20:41.:20:46.

would have liked to see it reduced or abolished. We have worked with

:20:47.:20:54.

PricewaterhouseCoopers who put a study showing the economic impact of

:20:55.:20:59.

abolishing the tax on GDP. And that it would be net positive to the

:21:00.:21:07.

economy within a year. What tax would you increase to compensate? We

:21:08.:21:14.

are not in a position to decrease the tax take will stop we have a

:21:15.:21:20.

deficit and debt to pay off. Somebody coming in and pleading for

:21:21.:21:25.

one sector to have lower taxes, it is incumbent upon them to say where

:21:26.:21:31.

they would increase taxes. I would say freezing or reducing it to make

:21:32.:21:34.

it more competitive would be economic. Where would you increase

:21:35.:21:41.

taxes to make up the difference? The answer is by virtue of the growth in

:21:42.:21:46.

GDP there would be more collective economic impact for the country.

:21:47.:21:52.

This is a famous argument, cut the taxes and growth will regenerate

:21:53.:21:59.

revenue for the Exchequer. You cannot do that in the short-term.

:22:00.:22:05.

There is a hit you have two tape. Over the long term, you can measure

:22:06.:22:09.

the impact, but in the short term we not in a position will stop I think

:22:10.:22:17.

it would still be positive. That is what George Osborne said about

:22:18.:22:20.

corporation. Reduce it and businesses will spend more. When you

:22:21.:22:29.

talk about corporate taxes and investment, there is a direct

:22:30.:22:34.

impact. The broader suggestion that reducing taxes that it will make

:22:35.:22:44.

itself up, there is a lag in that. I think Philip should be consistent.

:22:45.:22:49.

The evidence is clear with corporation tax, the eager the base

:22:50.:22:56.

you have, it is widening the base. The office for budget responsibility

:22:57.:23:01.

said it would reduce corporation tax revenue, that it costs the Exchequer

:23:02.:23:11.

money. The issue of businesses is, I think, the suggestion is that

:23:12.:23:15.

businesses would save ?600 million by reducing air passenger duty. They

:23:16.:23:22.

will save six year and pounds by the proposed changes we have made to

:23:23.:23:27.

corporation tax. -- six billion pounds. You have to think about how

:23:28.:23:37.

you deliver the incentives. Other countries who have reached a

:23:38.:23:41.

different conclusion are also going through an economic downturn and

:23:42.:23:44.

they have drawn the opposite conclusion about the way in which

:23:45.:23:49.

taxation on transportation and aviation in particular can suppress

:23:50.:23:51.

the way in which businesses recover. Whether it is Germany

:23:52.:23:58.

freezing their duty, at half the rate of the UK, or eliminating it,

:23:59.:24:02.

like Ireland, or the Netherlands, we have seen other countries make

:24:03.:24:11.

another conclusion and benefit. Next week we have the interim report

:24:12.:24:14.

looking at what should happen to airports. What should happen? I am

:24:15.:24:21.

thrilled we have a process that has a level of independence and a

:24:22.:24:26.

capability for everyone to participate and I have spent some

:24:27.:24:30.

time on that process and I am optimistic we can break the logjam.

:24:31.:24:39.

Let me give you background. One harbour is really critical, to me. I

:24:40.:24:51.

think he throw is logical -- hub. We need to create one that is world

:24:52.:24:58.

class in this country. Thanks. Christmas is on the way. We have

:24:59.:25:04.

been arguing on who gets the chocolate from the advent calendar

:25:05.:25:09.

in the office. The politicians have sent out Christmas cards. Not for

:25:10.:25:16.

them a boring nativity scene, or anything to do with religious

:25:17.:25:20.

significance, not even a robin. Look at this.

:25:21.:25:51.

And here the Mail's Andrew Pierce has delivered himself to the studio.

:25:52.:26:22.

Yours is in the post, Andrew. I am reaching out to the Labour Party,

:26:23.:26:24.

also. reaching out to the Labour Party,

:26:25.:26:32.

This is our Christmas card. And Rachel's. A robin from a primary

:26:33.:26:45.

school. That is for you. I want you to sign this card. I did not bring

:26:46.:26:54.

mine with me, but it is in the post. Has it gone through the procurement

:26:55.:26:58.

process? You pay ?1 and it comes out at ?10! These politicians, their

:26:59.:27:06.

cards, they put their faces on them and sometimes their family. It is

:27:07.:27:13.

nothing to do with Christmas stop it is about David Cameron trying to

:27:14.:27:17.

show he is all rain, and Ed Miliband trying to appear human. -- David

:27:18.:27:25.

Cameron trying to show he is ordinary. They tell us the family is

:27:26.:27:30.

out of bounds, but they exploit them. Gordon Brown did in a way,

:27:31.:27:38.

because he got his children to design his card. Nick Clegg got the

:27:39.:27:46.

children in the picture. Gordon Brown had a competition where

:27:47.:27:49.

schoolchildren designed the card and he picked the winner. And he said to

:27:50.:27:53.

be won when he was Chancellor, but that stopped when he became Prime

:27:54.:28:02.

Minister. Solipsistic, that is the word of the day for these Christmas

:28:03.:28:07.

cards. They are self regarding. They are not putting on a picture of

:28:08.:28:12.

Father Christmas, the Nativity, it is them and their family. They do

:28:13.:28:21.

not do nativity scenes. We do not do God. Have you got God on your card?

:28:22.:28:27.

Anything religious? I have soldiers on my guard. He is not the

:28:28.:28:38.

Archbishop of Canterbury! I have a selection of cards, some of them

:28:39.:28:41.

have Father Christmas. Yours is religious. It is only fitting.

:28:42.:28:49.

Thanks to our guests. One o'clock News is starting on BBC One. I will

:28:50.:28:55.

be here tomorrow doing the programme as usual, on my own, she is going to

:28:56.:28:59.

Berlin. Goodbye.

:29:00.:29:02.

Andrew Neil and Jo Coburn with live coverage of Prime Minister's Questions. With MPs Philip Hammond and Rachel Reeves, and a look at politicians' Christmas cards.


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