17/03/2014 Daily Politics


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Afternoon, folks. Welcome to the Daily Politics.


The new boss of High Speed two says he wants a more ambitious scheme,


with work on the project accelerated, so the north of England


can feel the economic benefits sooner.


Labour look as if they're backing the project, but are calling for


more savings to be made to the ?50 billion scheme.


I've taken over Jo Coburg's big board today. I'm not trying to take


her job. Just explaining how the government's creating lots of them.


European Union foreign ministers are meeting today, to decide what kinds


of sanctions to impose on Russia, in the way of Crimea's overwhelming


decision to break away from Ukraine. And, is this man worth ?300,000 a


week? Ed Balls thinks so. But, do you?


All that in the next hour. And, with us for the first half of the


programme today is the Mayor of Liverpool, Joe Anderson. Welcome.


Now, first today, let's talk about Liverpool because, when Joe was last


on the programme in November, he was telling us how he was trying to


engage the public in how to cut the council's budget. Joe has to make


?156 million worth of savings, over three years. Joe launched an APP,


asking Liverpudlians where they would like the cuts made. -- an app.


So, how did it go? Yes, we have had a lot of people


interested, probably about 8000 people participating, a good return.


Only about 80 people completed it, some give up half way. It was a


useful means. When you say useful, how is it proving to be useful? 80


people completed the task. How many came up with the requisite amount of


cuts? More important was getting people


used to the fact we have to make these cuts. We did get some useful


comments about how to do things differently. But, really emotional,


not anywhere where we need. But it was useful to engage people. To get


their ideas. But as important, to let them know the challenges. They


know how hard it is to make those sorts of cuts. But does it have any


impact on your decision making, if the idea was to make those sorts of


cuts. But does it have any impact on your decision-making, if the idea


was abused to ask them for solutions? In fairness, most were


emotional, they didn't make any revealing changes. We got a lot of


credit for doing it. A lot of plaudits for making that information


available. Prioritising children's spending, but your budget is cutting


61% of its budget, so this was a central issue. People participating


took a large chunk out of adult's care. They did actually take large


chunks out of them. You didn't agree with that? We did to an extent, we


have had to take 25% out of those services, our mandatory services.


Which you have to provide. We have taken 50% out of our discretionary


services, libraries... In fairness, the vast majority of people who


participated didn't want any cuts at all. Do you think the findings say


more about perceptions as to how and where counsel spends money, and what


they want is it not spent on your wages and staff, or corporate


services? We put -- we do people a disservice, people do understand the


challenges we face. We have also explained only ?180 million out of


the ?1.2 billion we spend comes from council tax. People understand 76%


of the money we spend comes from central government grants. If they


take 51% of that away, they know our challenge is how to manage that


budget. They are not stupid. People are quite wise and understanding, if


you provide that information. Have you cut as much as you can from


staff cuts Gracnar costs, so you could use those wages to put into


other things? Last year, we took 176, ?176 million. The next three


years, it will be ?153 million. A 58% cut. We have lost 1600 jobs. We


will be reducing libraries are 50%. Leisure centres closing. Reducing


children's centres, youth services, voluntary sector services cuts,


violence, teenage pregnancy. This is a result of the government reduction


in grant given to us. What about you generating more income? We are doing


that, investing in working with the private sector. We have spent ?60


million, borrowing money, to invest, because we get cheaper rates, to


build a new convention centre, to support our exhibition Centre and


our arena. 300 jobs are being created. We are using investment to


help sustain the city. Would you do the simulator again? We would, it is


important to keep that contact with the public.


Now it's time for our daily quiz. As Joe well knows, Liverpool was the


European City of Culture in 2008, and holds the Guinness Book of


Records title for being the Capital of Pop Music. But which of these


musical acts is not from Liverpool? Atomic Kitten.


Elbow. Cast.


Gerry and the Pacemakers? A little later, Joe will hopefully


give us the correct answer! Now to the second of our Celebrity


Big Boards. I use that term loosely. Last week, Liberal Democrat MP Tim


Farron told us about his party's plans to raise the personal tax


allowance. Well, today it's the turn of Conservative Party chairman Grant


Shapps, who has this message on jobs.


Ed Miliband and the Labour Party have tried to attack the long-term


economic plan by claiming it would lead to the disappearance of a


million jobs. But it is wrong. By backing small business and reducing


taxes, this government has helped our economy to create more jobs than


before. There are now a record-breaking 30 million people


working in Britain. More women than ever in work. Recovery is helping


more regions in the UK with new jobs bringing up. The majority of these


jobs are full-time. In the last year, nine out of ten have gone to


British citizens. This is what the budget on Wednesday will be all


about, cementing in the recovery. Sticking with the long-term economic


plan, and making sure the whole country feels the benefit. 25


million hardworking people will get a tax cut next month, and the


minimum wage will rise to ?6.50 later this year.


How did I do? Brilliant performance, Grant. Come and sit down.


You say that it million people are working in Britain. How many of the


jobs being created under your time... Well done! How many of those


jobs are part-time? Can we still not hear you, back with you in a moment.


The government says it is creating jobs for the whole country, is that


true in Liverpool? That is not true, 8% of the jobs are being created in


the south. I do not buy into that. -- 80%. We have lost 1600 jobs in


the public sector. But we are creating jobs. 1200 jobs recently


announced. A lot of that is round things we are doing. The government


has negotiated with us. We wish we had more opportunity. It is not as


simple, that government is creating these jobs. There are things that


are good which the government is doing but we need more. Governments


do not create jobs. You may argue those jobs have been created because


of government policy. Specifically at the jobs which have been


created, 1600 jobs lost in the public sector. We hear from you how


that has been made up in the private sector, but not in the North West.


You asked and the jobs are full-time? The answer is three


quarters since 2010. Nine out of ten have gone to British people. It is


the case that fresh implement has been created everywhere. It is a


contrast from what was predicted. We have worked together on all sorts of


things. It is the case that Liverpool has got the city deal


undergoing a big regeneration. The fact people are in jobs means that


is security for people and their families. The opposite to what was


predicted by the Labour Party. For every public sector job loss, three


times as many private ones have been created. But is it even? In the


North West, and in London, there is a two tiered jobs scene. In the


North West, up by 20 4000, 200 and 3000 in the East. Nothing is


happening in the same way. Price Waterhouse says their busiest


officers are in the Midlands and the North where there is more activity.


There is a lot of activity up there, and you are seeing more people, a


net increase. The fact there are more people in work means your city


has the chance to regenerate. And a government prepared to work on


things like the city deal giving proper choice over how money is


spent locally. That helps people locally. Is that your experience?


Have you got the power? You say you don't have as much power as you


would like to spend the money? City deal was a Labour concept, by the


way. But, I am glad, the reality is I am glad the Conservative Party is


working with cities like Liverpool. In reality, it is a small fraction


of what is needed. 95 -- 95% of tax, car tax, VAT, and so on, what


we argued for is more than that. If you look at European cities, that is


the case. We could do so much more if we were given the opportunities


to do it. Why did you let people in Liverpool... You are all about


decentralising, supposedly, but you were let somebody who knows best how


to run his city, he would argue, let him do it? We have the city deal.


You have said that. With business rate attention, half of business


rates stay locally. We have a lot more apprenticeships, doubled the


numbers. More people in work. Of course not everything is perfect. We


are working in the right direction. The long-term economic plan is


working to give families security that they never would have had. What


about part-time workers? Lots of polls show that people want to work


more hours. It is very insecure, in fact. Again, we want to work with


the government to reduce a welfare to work programme. Discussing with


Whitehall how to do that. Zero hours contracts and part-time work is not


secure. The Prime Minister said a question


Time last week, he compared with the inn is own constituency, compared to


Liverpool. Liverpool has council tax income that equates to ?180 million


a year. West Oxfordshire Council, 135 will impound more a year in


council tax they get the mass. Just let me finish the point. It is


ignorant of senior politicians to say Liverpool get equal the same


amount as West Oxfordshire. We don't. We would have 135... Let him


answer. What Liverpool does get is a lot more money per head of


population given to it through central Government than an area like


West Oxfordshire. There's a lot of agreement between us, you might be


surprised to hear this, and with the zero hour contracts, it is


unforgivable exclude people from taking on other jobs. On one hand,


people are being told you must not get any work this week, but you


can't work anybody else. That's completely wrong and we will do that


abuse. There has not been an increase in zero our contracts from


the previous administration. Let me just return, he batted out into the


long grass. The ?135 million West Oxfordshire is better off than


Liverpool, because they have the highest level of council tax paid to


them because they have quite well off people living in higher band


properties in Liverpool. 17 times more people in band F paid council


tax than in Liverpool. We have 17 times more... You have made that


point and then we must move on. Let's be clear. The fact of the


matter is, in the areas which get the least support from Government,


public areas like West Oxfordshire, they may get ?250 support a year,


but areas like yours public in ?1000 per head. And going to leave that


there. Very briefly, before we move on, why is productivity so low? We


have seen an interesting recovery to the recession. Unemployment went as


high as it went. The question is about productivity. We've ended up


with more people in work. What has happened in that process, people


have been prepared to accept a job, maybe over time, it had some


surprising impact on productivity full for the good news is, a lot


more people are in work, but you are absolutely right, we need to make


sure long-term productivity is high to secure the future of the country.


The economic indicators are not great. How much spare capacity is


left in the economy? One thing I can say... Does it worry you you have a


bigger structural deficit? There are figures coming out today in terms of


the production of the economy, things like supplies indexes, more


positive economic news today is I think the economy is recovering. I


don't think we are there yet. That's why we want to make sure... But


trade figures were terrible, weren't they? We have cut the deficit,


created jobs, let's give the keys back to the people who crashed the


car in the first place. But that doesn't say what you're going to do.


You are here a lot more this week. I understand that. We will hear more


about it on Wednesday. Now, High Speed Two has a new boss. He's


called Sir David Higgins and he's been doing a round of media


interviews this morning. Sir David, who previously ran the Olympic


Delivery Authority, wants HS2 to go further in its first phase and he


wants the job done more quickly so that the economic benefits are felt


sooner in the North of England. Here's what he had to say a little


earlier on BBC Breakfast. The most important thing I've done is look at


the first phase, that's London to Birmingham, and extensively review


that cost and then look at scope. Really important to get scope right.


All my experience on major projects, if you do that properly, so the


decision on the High Speed One link, on Euston, doing it properly, and


then potentially getting that kick-start of going to Crewe six


years earlier, that's all a case of saving money by getting scope right


at the start. How much will be saved? Well, the contingency is ?7.4


billion in Phase one which is a lot of money. It might sound a lot of


money but you can spend that if you waste it, so time is money. We could


lose time in the legislative programme. We don't know the full


extent of when that will be finished but that could also cost money. And


with us now is the Conservative MP and former Cabinet Minister, Cheryl


Gillan. She is opposed to HS2. We're also joined by Labour's Shadow


Transport Secretary Mary Creagh. And Grant Shapps is still here. Let's


come back to you, he wants to speed up the HS2 product so the benefits


will be felt in the North of England more quickly. Is he right? I think


so. People like, who was fought vigorously and got a good deal for


her constituencies, like Cheryl Cole we need to decide is the future


bright and head of us and we don't allow our children to benefit from


it? We haven't built the railway line since the Victorian era. I


think doing it faster is a good idea. You have lost this battle,


because now we have labour sounding more positive about it than they


were. The Government is pushing this for the you're not going to get your


way. No, I think if we had a budget stimulator as they have in


Liverpool, I think people would vote against HS2. I don't think there is


universal support for this project at all. What is interesting today,


after four years, two governments and four transport secretaries, we


still haven't got the answer. David Higgins is just come in with eight


weeks of studying this project and decided that he has got the golden


answers. I think this project has been doomed from the start. I think


it has been run badly, and I think now we are touching -- clutching at


straws. The price will go up and up. We don't know that. That is your


prediction. You could start to the West Coast and east coast when they


were built. Is that Labour's fault? Ed Balls, when he said we're not


going to hand over a blank cheque, he seemed to beat rowing back from


Labour's can image to the project which led to the uncertainty which


David Higgins said will ultimately lead to higher costs. I think the


delay has been caused by this Parliament. Channel messed -- Cheryl


mentioned the four transport secretaries. They published some of


the assessment strongly, which led to a delay. What we have seen today,


it's a very positive report, a thorough report, and Sir David talks


about the environmental and emotional and financial impacts of


HS2 and it's important we remember that, but it's also important, we


have built Crossrail, a Labour Government. That took forever. East


West London, North London, a ?6 billion upgrade. ?6 million spent a


dreading. We've not had anything north of Watford. OK for them is


Labour behind it fully? No more criticising? You ask really behind


this deal? We will vote in favour of this. We will keep an eye on it to


make sure the costs are kept low, and we link it with a connectivity


in the North, looking at Liverpool, Manchester, Leeds, Hull. And looking


at how to maximise the benefits of that phase two links. How fed up


where Labour leaders in the North when they heard Ed Balls saying,


actually we have got doubts about this? I think he was right to say


there is no blank cheque. But, for me, there has to be a genuine


enthusiasm for this. Politicians of both sides, progressive politicians,


who talk about the need to rebalance the economy, let's remember that


phrase, it's not just rhetoric full we have to do something about it for


the one way to do that is by making sure cities in the north are


connected to each other and to the south. In Liverpool, we are


investing ?150 million in a super port, where we will bring in lots of


freight from the Middle East, and we need to get it out, so it's


important to connect Liverpool the east coast of the country. I agree


with that. We do that. I agree with that entirely. He came to see me a


few weeks ago, David Higgins, and said, why don't you start this in


the North? If you're going to rebalance the economy north-south,


and I'm sure Mary and Grant Wood group this if you would listen, you


should start this in the North and get connectivity across the


Pennines. You would reduce the likelihood that the economy being


sucked down into London, by this Birmingham London face. You would


wait for the Howard Davies review to see with the airport capacity is


going to be in the south, and get that connectivity that Sir David is


waiting for. Why can't you build north to south and son of South to


North? He said the city of crew should be built first and I think


that's a good idea. I do just want to say, I'm very grateful because


there was a time at the conference, Mary was a difficult position when


Ed Balls turning against it, and Joe and his Labour colleagues came down


from many different cities and made it clear this is not acceptable.


High-speed rail is required and can only be done with cross-party


agreement and I think the cross-party spirit that council


leaders showed is very important. You have got the agreement but is it


going to be passed before the next election? I think the bill continues


through. So there is delay, isn't there? We are practically in the


fifth year of this Government and that still waiting for the bill, a


proper process. Just to be clear, it would be easier... They can petition


Parliament and have their say for the committee of MPs can look at


those petitions and I think that's right that due process is followed


but I want to correct something. The Government statement has just come


out and they have just said any extension or fast building to Crewe


would be phased two. This is a risk you introduced by dropping it in


half. By dropping it in half. Only console taking on half the project


you have built a delay into this project. Let a grant answer. Just


very quickly. During the parliament we have enabling legislation. The


biggest thing is to be absolutely clear from the north side Labour is


fully behind it. We have said that. And Ed Balls no longer going to


block this project. In terms of a delay, what does that mean to you?


Let me just say, the enabling legislation was a little cover a


bill to make sure the Government had some coverage for the money was


spending. The hybrid Bill and Parliamentary process is really


important and, to get the process up to Crewe you have to have an


environmental statement and if you wanted to do it in this bill, it


would be wrong, so what the Government ought to do, if they're


going to listen to David Higgins, they should suspend the bill, look


at including Crewe or started in the north and think carefully about how


it's going to connect down. Some politics is getting played here. On


the finance issue, it's going to cost over 35 years, just roughly


over ?1 billion a year. The UK has to invest in infrastructure in


transport like other cities around the world. It's coming online in


2033. My point is, what the report says today, we have got to get on


with it, starting the North, that's what I'm interested in. That's what


Northern leaders are interested in. And that's what we hope both parties


can agree before now and the general election that they are committed to


this and it will happen. Let's say ?50 billion, if it goes beyond that,


what will you do? We are confident, we have delivered an Olympics, an


enormous project on time, Crossrail coming through on time into budget,


there's no reason, this country is very capable of delivering projects


on time, to budget, and a bit ahead of budget full we have to make


decisions. Do we think our brighter future is in the future or do we


think it's basically all over and were no longer going to build


infrastructure? In the last 15 years alone, we've had twice as many


journeys going on. Let's look at that. We need to build some


railways. The capacity problem will not go away and will only get worse


particularly if this is not built. And particularly for voters in the


south-east, he's busy concerned about, they will not understand how


the transport priority is to spend ?50 billion on something which is


going to ease some of the commuter congestion coming into Euston,


because that is, in fact, one of the least congested lines coming into


London. Commuters in the south-east, if you're going to free up the


economy and put investment into infrastructure, they should look at


the lines I come in from the south of the country. They are a major


problem for people. And we're going to be left, the Labour Party is in


pole position to play politics with this project in the run-up to the


election and then they can deliver for the North and leave us dangling


in the South. That may happen. It's worth remembering, although this is


a big investment, three times as much will be spent on rail in the


next Parliament as on High Speed two, so there's still lots of


investment. OK let's leave it there. Now we're going to find out the


answer to the quiz. Can you render which one is not from Liverpool?


Elbow. I think they are from Manchester. They are. Thank you very


much to the guests. Well done. Now, let's take a look at the coming


Westminster week. We kick off the week with a reception in Number Ten.


The PM is hosting one for Sports Relief Fundraisers. On Tuesday don't


forget to set a reminder in your diaries. It marks six months exactly


to the Scottish Referendum. Then, get ready for the fiscal event of


the year. That's right, folks, it's The Budget. Will the Chancellor be


pulling rabbits out of the hat? The Public Accounts Select Committee


holds a session on Personal Independence Payments on Thursday


And on Friday, it's day one of the Scottish Labour Party conference in


Perth. Joining me now to discuss the week


is Rafael Behr of the New Statesman. And Isabel Hardman of the Spectator.


It is a great Westminster set piece. Ultimately, George Osborne has a


dilemma, there is a much money, he needs people still do think there is


more work to be done, we can't trust the Labour Party. It is a year


before the election so he wouldn't mind people thinking things are


going well and there may be some treats for him. He has two navigate


that path. Labour, their dilemma is they don't want to look as if they


wish things were worse. If they can see the economy is picking up, then


why would you have a Labour government? The issue on raising the


40% tax rate. There is some momentum. George Osborne has


indicated it is an aspiration to be in that tax bracket. He was trying


to say people are more likely to see the case for smaller government


wants they understand a higher tax rate -- the case for a lower tax


government. He believes the low paid Nimes -- need more help. If more


people are paying in that 40p tax bracket than before? It is important


for them to support their core constituency, every party has two.


In of terms the way wealth and reward are distributed, the core


constituency isn't big enough to deliver a Conservative majority. He


has two reach out to those people whose pockets RMT. They are


sensitive to the charge that the Tories look after their rich friends


-- whose pockets are empty. So we have seen the campaign on the bingo


tax is perfect for a good front page of the Sun newspaper.


On the issue of leadership and replacing David Cameron after the


election, is there a campaign to stop Boris being his successor?


There is a very strange campaign. There is a leadership contest.


People are working themselves up into a state. Boris was gaining more


traction with Conservative MPs. George Osborne's group worked harder


so Boris panicked, sending agents to arrange meetings with them. They are


setting a bad example to backbenchers who are obsessed with


this anyway. To see people at the top becoming delirious with the idea


of a leadership contest. Some Conservative MPs without a high


profile want to get on with their job, and they are astonished. When


people are at the heart of it seemed to be abetting this process, they


are tearing their hair out. Labour love this. It means the conserved --


it means the conversation has been diverted.


Let us turn to Ukraine, is there anything realistically that can be


done by the EU before the Crimea is pulled back into Russia?


Are the sanctions that the EU is working on, are they enough to


challenge Putin, or are they a token? And are we doing it at a cost


to ourselves. Many of those sanctions, these restrictions, asset


freezing, one of those will have any impact? At some level, there will be


some bone fide catalysts in Moscow who don't like this. Russian foreign


policy has said at a strategic level, talking about annexing a


territory of another country. If you go into that kind of business in


foreign policy, you would sweat over Visa restrictions. You have taken a


catfish Western countries are more interested in the supply of energy


-- give have taken a strategy that. So far, it looks like it is coming


off. You suspect he will get to keep Crimea, and redraw the boundaries.


There will be hand ringing in the West but not much more than that.


And we're joined now for the rest of the programme by the Conservative MP


Jesse Norman. The Labour MP Catherine McKinnell. And by the


Liberal Democrat MP Nick Harvey. Welcome to you all.


Now, let's kick off with the Budget. But first, here's George Osborne on


the Andrew Marr Show yesterday. I am in no tax Conservative, I want


our working people on all of these incomes to keep more of their income


tax-free. You can only begin to do something like this if you have got


a grip on public finances, if your economy is growing, if you are


creating jobs. This is because we have been able to do these things


that we can afford this increase. Why is he doing more to help people


who have either slipped into the 40% tax bracket? It is misconceived.


Most people have done better in the past few years. It is right for the


Chancellor to focus on the area where most attention is needed, the


well-being of the least well off. Why is there a campaign from the


likes of prominent peers and backbenchers? Is it they don't


understand the message that people are better off? Or do they feel


there is a narrative going awry for the Conservatives? What is happening


is that they want future clarity to be brought to this issue as with


national insurance, personal allowance. A direction of travel as


regards thresholds or marginal tax rates. The key point is we are


broke. It is easy to think because mortgage rates have stayed no,


economic problems have been sold. We are rashly halfway through the


process. The idea we can write large cheques. All raising thresholds. It


looks as if the threshold will go up a little but not as much as


inflation. Those people are already doing incredibly well through the


personal allowance. It would be another seven years of austerity,


and probably beyond. I do not think voters are ready for this. Whoever


wins the election, the reality is there is an awful long way to go to


get the deficit under control. Even then, there is the hangover, we will


have debts to pay off from the years of deficit. Although the economy is


improving, it will be quite a challenge for the next government to


explain why austerity will have two continue. It was easy to explain


that while the economy was on the floor. As it picks up, it will be a


subtle argument as to why austerity will continue for more. Do you agree


another ?12 billion of cuts to welfare will also be necessary? No,


that is one where you could do it but not one I would choose. You


could look at taxes across the board. And hope the economy will


approve -- improve. Do you accept austerity stays, the Chancellor has


followed the right path. We have had growth returning, and the


indicators, some of them are pretty good? He is following the right


approach. We have had three years of a flat-lining economy which has set


the country back. The people paying the price that are ordinary people


who are working and are still not able to make meet. The choice --


childcare costs have gone up 30%. People are struggling with energy


bills. It sounds complacent to talk about this being something people


have to accept and live with, when this is an opportunity for George


Osborne to do something about it. To help those people. What would Labour


do at this point? We would introduce the 10p starting rate of tax, so


when people come into the tax system, it intensifies as them to


increase their income. And raising the threshold? We are not disputing


that. This is an additional measure. We have said it would be


funded with a tax on mansions. We wouldn't bring in this antiquated


marriage tax which will benefit 84% of men and only a third of actual


married couples? -- married couples. It shows the argument is not


working. More is being done to people on low incomes than any


government. The tax-exempt personal allowance will go up to ?10,000. 2.7


million people will not pay tax at all after April, 25 million will


have received a tax benefit. I can't see why that could be an


objectionable policy. And the people above that? Arguably people have


been helped at that level. People just above that are being hit by the


cost of living issues. They say they are eating into wedges which haven't


kept up. What about them? Those people are included in the 24


million. The thing is, if you hadn't had the combination of policies at


the moment, if taxation had gone up with inflation, those above the 40%


rate would be giving -- would be receiving twice the amount. It is


fairer to do it this way. If things are as bad, why is consumer spending


on its way up? Responding to that, speaking of fair, this government


brought down the 50p tax rate, giving a ?3 billion tax cut to the


highest earning people in the country. Explain my consumer


spending is up? If we have got less money and there is a cost of living


crisis. The economy is starting to recover, we are seeing those signs.


It doesn't mean ordinary people are feeling better off. Why are they


spending more money? From a clear poll this weekend showing it doesn't


matter how great times George Osmond says this, people are not better


off. And in your constituency? People are beginning to get the


benefit of a couple of years of wages going up slightly. Certainly


that. Combine that with the income tax-free threshold which has been a


tax cut for 24 million people, taking 2.7 million out of tax


altogether. All of that has given people a little bit of breathing


space. But everybody is still finding it difficult and will for


some time. Isn't the worry that what is happening is a return to a


recovery led by that consumer spending, trade figures were pretty


bad. House prices are going up in central London and outer areas, not


elsewhere. We are returning to the very conditions that led us into the


problems we had in 2008? You want a balanced recovery across all parts.


We're not getting it. Not yet because there is a lag in industrial


investment and overseas sales. The difficulty is, who would not want to


have some form of growth, and in the High Street it is a valuable


contributor to this. The difficulty is, reports that the Financial Times


think there is little spare capacity, means we could be left


with a bigger structural deficit, even if growth continues, which will


put plans to ruin. The truth of the matter, it's really


contested of theory. It is being run in the past. I don't think there's


any reason to suggest it will be wrong in the future. -- it has been


wrong in the past. Where will the Lib Dem fingerprints be on this


budget? We are keen to continue the flagship Lib Dem policy from 2010,


pushing up the threshold. We are confident we'll get up to 10,000 we


started out making our objective but by the end of Parliament, we want to


get up to 10,500. Let's leave it there. Ministers from across the


European Union are expected to agree further sanctions against Russia,


after a referendum in Crimea backed a split from Ukraine. 97% of voters


in the region where pro-Russian forces are in control are said to


have supported joining Russia. But the referendum is being condemned as


illegal by the Government in Kiev, as well as by the EU and the US.


Here's the Foreign Secretary, William Hague, speaking a little


earlier today. What to look to Russia to do is to enter into a


diplomatic process and framework that brings Russians, the Russian


leaders, into direct contact and negotiation with Ukrainian leaders.


That is what we have been pressing for over the last two weeks. It can


be provided through an international contact or co-ordination group,


supported by many other countries. We are all ready to do that. And, of


course, they need to take their own steps to de-escalate the situation


that Russia's actions, including proceeding with the referendum


yesterday, other acts of provocation, the presence on the


border of large numbers of Russian troops, they haven't done anything


to de-escalate so far. It looks as if Crimea will be reabsorbed into


Russia before the EU has time to agree on sanctions. Yes, it probably


does, and, Vladimir Putin, having gone out on a limb this far now, I


don't think any sanctions taken by the EU or anybody else is going to


change his mind. However, I think it's worth the EU and the Americans


and the international community dressing ahead with some sanctions


in order, please, to get him to stop Crimea and not encroach into


mainland Ukraine. Is that your fear, it won't stop Crimea? If you look at


the whole way he set it up on the pretext it's to defend Russian


speakers inside Ukraine, you look at the exclusion zone, and wonder


whether he will go further in? I desperately hope he won't. He


certainly made a point and served himself well doing this, but there


is a clear danger of going further, and therefore, it's worthwhile


taking some action to prevent that. Although, it looks as if it will


have little impact, these restrictions, travel bans, freezing


certain people 's assets. Would Labour go for economic sanctions?


Well, we have said this can't go unpunished, ignored. Everyone agrees


with that. Russia are a hugely fast-growing economy, but part of an


international economic community, and they sit in the G8, and Douglas


Alexander says we should push them to exclude them from that group.


That is unlikely to have much impact. Economic sanctions as well.


What economic sanctions? To make them understand the consequences.


Which ones? The Foreign Minister is today are discussing the Visa


restrictions, and travel restrictions and freezing assets. I


think those, in themselves, will have an impact economically on the


people impacted, but ultimately, I think they are discussing it today


and it's important we don't turn a blind eye. I don't think there will


be a turn a blind eye situation, not the dramatically, at William Hague


has said we will continue efforts to make a diplomatic breakthrough. What


does that mean? We're not to reverse what happened in Crimea. They're not


going to do the referendum again, are they? No, but there could


potentially be a coming together and a conference which allows a better


understanding of both sides and their positions, and it could lead


to some benefits. Let's be clear, there's not a lot of options on the


table. One option slightly underestimated, it's easy to think


travel Visa restrictions are inconvenient, but that large numbers


of senior Russian oligarchs who live in this country, who have assets,


and asset freezes, the impact of foreign exchange markets... That


would have an impact, of course. The price of the ruble dropping, but


it's recovered. It wouldn't be a result of what the EU might do. What


will it fundamentally change about what has happened critic Mark Crimea


is common to all intents and purposes, going to be part of


Russia. --? The question at this point is to arrest that situation


and see if some more lawful arrangement can be brought to the


situation of the Ukraine and, therefore, and they should be


allowed to develop. What about Ukraine's response? I've interviewed


the ambassador and a diplomat in London, and wasn't going to give


away any trade secrets, but the indication is, publicly, they will


never accept Crimea going back to Russia. Ukraine, building up its


military in the east part of the country, they say it's up to


readiness, soon, so how worried are you there may take some military


action? I believe don't think they will. I have seen the interim Prime


Minister speaking in the media about this. I think he realises the scale


of what he is tangling with. It's highly unlikely that they will do


that. I suppose you can't rule it out entirely. I don't think they


will accept in principle Crimea going to Russia, but in practice,


it's difficult to stop it. What the Russians care about their naval


bases. This is their attitude towards Syria, the only


Mediterranean base. The critical thing for them is Sevastopol, which


has governed the Russian action. They're not going to take notice of


sanctions we are talking about, but actually, they might do if the whole


international community got together to stop them going further because I


haven't fully got the same strategic interest going further that they had


in securing this naval base. Do you think there should be an acceptance


that Britain's role and influence in the world has changed and is


diminishing in terms of what it can do to affect these things? Perhaps


not helped by the vote on a motion in Syria? I think it's very


important that Britain continues to play a role, as we have been doing


in speaking up on behalf of the rule of law, the international dialogue.


That's not the question I asked. Do you think the votes, like the one


about Syria, but Labour post, do you think that diminishes people 's view


of Britain as a foreign power or not? I am answering the question


because we have a very important diplomatic role to play. And I think


we are playing that in these circumstances, and giving an


important voice to the international rule of law and the economic and


political consequences that may flow from an abuse of that. I think


Britain needs to stand shoulder to shoulder with our international


allies in order to give a very strong unified voice that says we


won't stand by and allow this to go and responded to, and allow Ukraine


to be alone in this issue. And I think we play an important role


within the G8, and within the UN Security Council, so I think, you


know, the stereo vote was a different matter, a particular


circumstance, -- Syria vote, and that was a particular conflict which


was very difficult. This is a different circumstance. And again,


one Britain plays an important tip article role at present in, and it


will continue. OK, let's leave it you. Is anyone worth ?300,000 a


week? Well, according to Shadow Chancellor Ed Balls, footballers


like Wayne Rooney might be, but the same can't be said for bankers.


Here's a bit of what he had to say on Pienaar's Politics yesterday. I


guess there's only one Wayne Rooney and he plays for Manchester United


and he could go anywhere in the world and maybe that is genuine


talent getting paid. And somebody who has a great idea like Steve Jobs


and invents an iPhone, and they get sold all around the world, in the


end we can't say we'll cut you off at some point. On the other hand,


we've got all these bankers, and here Vince is right, bankers all


getting paid... The guy from the Co-op before he stood down, ?3.5


million salary. When they get asked, why do you get paid millions of


pounds, they say because anybody else does and therefore, we have to


too. Maybe people should say let's stop this merry-go-round going round


and get back to a bit of rationality. That is Ed Balls


talking about a move. Is he worth ?3000 a week? I don't have a view on


that. He operates in a competitive market and there are many people


operating in the financial sector who don't. My only desire on this


would be that the premiership, the FA and the players, did more for


non-league and grassroots football because, actually, teams like


Hereford United, my team, are absolutely broke, and a tiny


fraction of Wayne Rooney's salary would keep them out of trouble. The


same as two other clubs across the country. Ed Balls says he's worth


it. Is he? I think in the context of the bankers bonuses, I think you can


understand why it's pretty galling for people out there who are


struggling. But why should Wayne Rooney be paid ?300,000? Bankers are


still failing to land a small and create jobs. But, you know, I think


you can compare him to international artists, musicians, they are unique


individuals that are unique to give. And I think, the market dictates


what is paid and what is worth. The market is the market and if Wayne


Rooney is worth ?300,000 a week in the mind of Ed Balls, bankers should


be allowed to earn as much as they like as well? Manchester United kill


you think is worth that. Accommodation at what they can get


in television money and six, show they want to pay him that otherwise


a continental club could sign him. As far as the bankers are concerned,


it's different, because it's not a competitive market. They are taking


everybody is money, and we haven't really got that much control over


what they're doing with it. I think footballers, by the finish, they are


a free, and the bankers are not regulated as well as they should be.


Vince Cable says he doesn't understand why anybody needs to earn


?1 million salary. Is he right? The general rule is always the same, if


someone is built something with nothing existed before in a


competitive environment, then they should be entitled to take the


benefits of what they have created, and if they have sat in a


franchise, and they are in a big bank with little challenge in the


big markets, you should ask question about that. I think, whilst Vince


Cable says that, he did vote through the tax cut for the highest earners


and the millionaires to boost their incomes, rather than pay more in tax


to bring down the deficit. I think we've taken with a pinch of salt, as


well. Our MPs are humble bunch. They don't need to blow their own


trumpets, apart from Jesse, last week at the Parliamentary variety


show. Maybe you should give up the day


job? I wouldn't say I was so great, but thank you for that. Did you


enjoy that? It's one of the most wonderful things I've ever done,


pick up a trumpet at the age of 41 and start playing it. I started very


late. It gives rise to all these mad jokes, but actually, it's a


wonderful thing and I would encourage anybody to do it. Good for


you. That's all for today. Thanks to our guests. I would back tomorrow. I




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