11/12/2013 Daily Politics


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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.


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