11/12/2013 Daily Politics

Good morning and welcome to the Daily Politics.

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

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

privatisation. The Prime Minister says he wants go

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

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

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

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

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

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

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

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

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

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

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

Secretary and Rachel Reeves is Shadow Work Pensions Secretary.

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

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

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

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

the immigration minister told Mr Batchelor that he should just pay

his staff more. Mr Batchelor was talking about

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

unskilled workers into Britain. Except if people like Lance

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

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

a different story from my constituents and we have a million

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

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

people desperate for work and labour said they would introduce a

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

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

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

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

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

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

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

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

and countries joined the government decided not to impose any

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

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

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

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

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

have to look with our European neighbours have the freedom of

movement works. It was never intended to provide for mass

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

think they can come here and claim benefits.

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

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

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

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

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

?74 million. These Nimrod MR4A reconnaissance planes ordered back

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

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

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

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

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

bid for the work and yesterday the Defence Secretary announced that

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

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

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

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

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

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

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

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

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

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

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

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

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

appetite within the private sector for this sort of complicated

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

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

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

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

defence material taught to the defence select committee earlier in

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

questions from the announcement yesterday as well.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

cannot proceed and we are putting in place an alternative arrangements

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

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

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

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

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

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

management information available to identify the remuneration they will

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

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

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

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

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

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

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

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

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

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

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

defence Logistics, the warehousing operation. You have 4.2 billion

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

said your ministry shows a worrying lack of financial expertise and

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

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

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

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

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

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

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

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

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

are both useless. In Parliament yesterday we have the statement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

implementing universal credit. David Cameron said that a future

Conservative Government would still want to go further on welfare.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

restrict tensions tax relief. Those things would finance the compulsory

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

that in ways different from this Government. By guaranteeing people

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

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

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

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

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

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

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

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

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

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

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

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

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

wage is an important policy for bringing down Social Security

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Scandinavian blonde woman at a funeral, she took out her

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

work but the work programme is performing twice as successfully and

she should get behind those programmes rather than make the

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

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

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

Enfield and elsewhere in this country from the carnage of knife

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

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

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

people carrying knives and educating young people on the dangers of

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

astonishing if household earnings have not fawning and earnings had

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

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

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

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

making progress because last Thursday the Chancellor said that

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

responsibility said that whichever way you look at it, average

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Minister all over. He does understand that some people are

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

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

contemplating a further tax cuts for millionaires who have received

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

script myself. The last Labour government gave us the biggest

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

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

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

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

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

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

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

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

work of my constituents and people across the country, the

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

country. The government is doubling investment into dementia research,

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

live this government's sites to double investment in dementia

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

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

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

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

intelligence and expertise, we can share information and learn lessons

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

dementia I2015 and double it again there after. Given the

implementation of universal credit has become a shambles, have found

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

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

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

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

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

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

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

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

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

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

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

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

continue with difficult spending additions -- decisions, which has

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

listen to the Federation of Small Businesses and back the select

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

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

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

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

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

adult life in retirement, considering that life expectancy in

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

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

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

having ministers announce what retirement ages should be. If the

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

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

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

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

staggering achievement. Will he congratulate the efforts of the

Association and the newspaper in ensuring the funds meant his passing

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

increase in MPs pay, would he immediately table the boundary

commission report that would simultaneously pay for any increase

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

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

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

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

politics has a role to play alongside this argument. Members

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

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

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

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

at the investment conference advertised his commitment to

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

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

contribute to balancing the economy in Northern Ireland and that

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

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

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

considering consultation. -- the results of consultation. Employment

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

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

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

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

conference was about. My constituent, Jack Sherry, who

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

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

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

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

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

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

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

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

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

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

he confirm if maternity and paternity pay will be included in

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

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

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

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

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

more to be created, particularly as housing and construction projects

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

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

21 shows that the government is serious about tackling youth

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

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

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

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

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

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

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

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

the Prime Minister still have confidence in him and the universal

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

done more than anyone else in British politics to transform the

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

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

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

includes the benefits cap that Labour voted against and the

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

apprentices, particularly in engineering and science, which would

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

Systems do in terms of apprenticeships. It is impressive.

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

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

setting up apprenticeships is simpler and less expensive. We need

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

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

of the giants of the pharmaceutical industry has announced another 200

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

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

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

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

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

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

international community and show that we do care about the suffering

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Liverpool will host the International Festival of business.

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

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

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

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

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

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

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

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

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

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

international mobile phone usage with any other heads of government

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

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

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

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

yes! Prime Minister referring at the end

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

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

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

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

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

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

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

economy, talk about two trains passing in the night.

That might continue for about the next 18 months.

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

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

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

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

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

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

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

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

David Cameron fails to address the issue.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

think everybody in this country understands that if our national

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

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

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

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

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

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

tax, freeze fuel duties, so pressures on living standards

whether government does have some direct ability are being managed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

cannot magic higher living standards. I was trying to get

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

direct ability including tax threshold, holding down rail fares,

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

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

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

people out there know the only way living standards will recover

sustainably is to have a prolonged and sustainable, economic recovery

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

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

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

we would freeze energy prices, reintroduce the mansion tax to

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

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

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

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

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

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

average earnings are expected to overtake prices as inflation comes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

have been using the Internet? They have.

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

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

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

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

thing environmental campaigners say, as it deters people from unnecessary

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

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

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

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

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

competitive destination for new markets and gives British businesses

the connections they need to successfully export but right now

the UK aviation sector operates in an environment without the right

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

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

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

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

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

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

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

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

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

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

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

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

million. The duty is not a tax on airlines

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

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

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

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

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

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

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

does. To be internationally competitive, it is time to

reconsider this approach. Craig Kreeger joins us. People say

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

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

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

businesses, airlines provide connectivity and enable business and

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

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

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

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

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

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

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

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

PricewaterhouseCoopers who put a study showing the economic impact of

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

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

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

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

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

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

it more competitive would be economic. Where would you increase

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

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

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

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

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

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

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

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

talk about corporate taxes and investment, there is a direct

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

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

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

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

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

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

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

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

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

you deliver the incentives. Other countries who have reached a

different conclusion are also going through an economic downturn and

they have drawn the opposite conclusion about the way in which

taxation on transportation and aviation in particular can suppress

the way in which businesses recover. Whether it is Germany

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

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

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

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

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

capability for everyone to participate and I have spent some

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

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

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

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

been arguing on who gets the chocolate from the advent calendar

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

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

significance, not even a robin. Look at this.

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

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

also. reaching out to the Labour Party,

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

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

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

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

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

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

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

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

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

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

children in the picture. Gordon Brown had a competition where

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

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

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

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

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

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

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

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

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

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

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

Berlin. Goodbye.