12/06/2014 Daily Politics

George Osborne says his tough stance on the economy is paying off.

him to crow a bit at tonight's annual Mansion House

He's also decided to get tough with the bankers.

He wants criminal sanctions for traders who attempt to rig

Teresa May says the Home Office may have to bring it

Here is a man who has a few choice words up his sleeve. We'll be asking

him what he think of his old boss. And World Cup fever's hit

the Westminster Village. LAUGHTER.

THE MOST INTELLIGENT REMARK WE'VE HAD ON THE DAILY PICKS FOR A WHILE.

With us for the whole programme today is the MEP, Godfrey Bloom.

A champion of the feminist cause and famous liberal.

He used to be a member of UKIP before Nigel Farage gave him

He wasn't re-elected to the European Parliament last month,

but has to hold his job down till the end of June.

Gives you two weeks to finish your expenses I guess.

Now first today let's start with the passport crisis.

The Home Secretary was forced to the House of Commons

this morning to answer an Urgent Question on the matter.

Theresa May has announced measures to tackle the backlog

People applying to renew passports overseas,

for travel to the UK, will be given an automatic 12-month extension to

And those applying for passports overseas for their children will

also be issued with emergency travel documents for travel to the UK.

In addition to these changes, HMPO will increase the number of

examiners and call handlers by a further 200 staff. Second HMPO is

addressing a series of process points to make sure its systems are

operating efficiently and third, where people have an urgent need to

travel, HMPO has agreed to upgrade them. That's their application will

be considered in full. It will be compo indicted in terms of its

processing, printing and delivery. They have agreed to upgrade them

free of charge. That was the Home Secretary this morning. The

Government moving on all fronts to try to hose down this passport

crisis. I mean, the Government began by saying it was almost Much Ado

About Nothing, now it is moving on all fronts, even saying it is going

to have to take over the Passport Office My secretary went down to get

my passport renewed several months ago, I needed to go to Brazil. We

need it on the hurry up. She said it was chaos. She said she didn't know

how the place works. It all comes back to the fact that I don't think

the Home Office and its subdivisions are fit for purpose and this isn't

new. It wasn't that long ago that the Passport Office had a reputation

for being one of the most efficient of the Government agencies Indeed.

It has gone backwards, hasn't it? That's extremely sad and now, of

course, it is firefighting and crisis management. Which is always

less than helpful. The significance of this, too - there are lots of

issue that is Westminster talk about that are frankly marginal to most

people's interest, certainly in the short term. This isn't. This is

really cut-throat Absolutely. This affects everybody, who is trying to

get away, especially at this time of the year. I think it adds to the

feel that people are fed up with the incompetence of this administration

much it is reflective of the whole thing over the last fou years. We

will see how it goes. -- last four years. The story, clearly has, leg.

Now time for Godfrey to get his grey matter working with a little

daily quiz. The question for today is:

What has Boris Johnson recently ordered for London?

A, some new water cannons. B, stocks.

C, a new skyscraper called The Cucumber.

Or D, a statue of David Cameron for Trafalgar Square.

At the end of the show we'll see if Godfrey can give us the correct

This must be about the easiest quiz we have done in years.

Now, it's been a very busy week for George Osborne. Some key economic

stats have been released, he's making a major set-piece speech, and

he also took in a trip to a another planet too. Here's what the

The last Government might seem like a long time ago and from a galaxy

far away, but George Osborne - as he keeps telling us - is still trying

to sort out Labour's economic legacy.

Earlier this week the chancellor paid a visit to a film set. Why? A

new Star Wars movie is going to be filmed in the UK. And that means

more jobs and more investment, says Mr Osborne.

Talking of jobs, there was new hope yesterday. The unemployment rate

fell from 6.8% to 6.6% in the last quarter, as the number of people in

A case of the economy strikes back? Not quite. Earnings growth has

slowed to 0.7% from 1.9% the previous month, leaving wages lower

But tonight the chancellor will show he's not afraid to use the force.

He's using his Mansion House speech to set out plans to crack down on

Joining me now is the Shadow Chief Secretary to the Treasury, Chris

Leslie, and the Conservative MP Jesse Norman.

Welcome to you, both. Jesse Norman y are wages still

lagging prices? -- why are wages? It is a long-term problem. It is a

matter of catch-up in the economy. I don't think they have been kept by

the continually low inflation in eurozone which has pulled down wage

costs and other things across the whole of Europe. You know, I think

it is a process of recovery. When will wage rise more quickly than

prices? Well, when the demand for labour starts to accelerate. It is

accelerating. It is accelerating at a record level. That's true. It'll

continue to accelerate as the cycle goes on and as investment starts it

take proper shape in industrial manufacturing businesses. It always

lags consumer demand. We have seen investment picking up fast now. I

would expect wages to rise as a result of that. Will they be rising

in time for the election? Well, they may well do. It's just a matter

of... You must hope they do. I think that's true. I don't think the

election is the key issue. The key issue is - what happens to the this

country? When they rise, will they rise in a stable way is a key issue.

You forget the real wages of the bottom third of the population

stopped growing in 2003. The cracking of that and beginning the

process of accelerating wages amongst the least well-off working

people in this country is the crucial long-term challenge. Of

course, Chris Leslie, the gap between the rise in wages and the

rise in prices is not a complete measurement of living standards. No,

I think it is interesting - not just interesting, it is appalling it has

been going on for such a were longed period. I think there have been only

a couple of months where wage levels have exceeded prices. One of those

was when the Chancellor gave away his #r50p tax cut. He cut it to 45p.

And there was a bonus Bonn on did a at the top of the income scale. --

Even take that into account, prices are still running higher than wages.

Yes and we saw that in your package. The Chancellor is scratching his

head much he is under the impress that people should be grateful for

the economic data fl. He doesn't understand that for most people,

they are still finding it difficult. For many, low pay, the insecurity of

work, the zero hours interests, is a real and pressing problem. You say

that. And, of course, there is no question for lots of people it has

been a tough time. They have had to tighten their belts and their pay

hasn't kept pace with the price of a lot of things they have had to buy.

Is that true overall? If there was a cost of living crisis, there would

be a number of of indicator that is would prove your point. For example,

retail sales. They would be very weak people wouldn't have money to

spend. They are up 6% year on year. The key is not to look at this in

aggregate. You have to look at what is happening, per head, per person.

If you look at the GDP statistics, the growth in the economy, the very

wealthiest at the top, especially the wealth west 1% v seen their

share of the cake increase, they are doing very well indeed. The bottom

90%, pretty much everybody else, has seen their share actually fall back.

If that was the case, why would retail sales be rising by 6%. It is

not the top 6% from retail scales. There are a few wealthy people. They

do not. It is an be absurd point, you know it. Retail sales are

everybody GB to Marks Spencer and Primark. Some is borrowed money and

people resorting to credit cards. People are resorting to credit cards

sometimes it make ends meet. Hold on, credit card debt is not

extraordinarily high. It has shown very little of a rise. Look at the

savings ratio. And negative equity is following. People have been

dipping in a their I savings. You can only do once, by the way.

Consistently the savings ratio, 3%, last year 2%, going to be this year

predicted to be 1%, by the OBR, the following here this. S a problem

that's a continuing crisis. Yet we don't have a Chancellor who even

recognises it as a problem. Are you in danger with the unemployment

figures, which nobody can really explain, but the figures are really

- they have surprised everybody, not just politicians. They have

surprised economists as well, are you in danger you may face an

interest rate rise this side of the election? Well, it is almost

impossible, the Bank of England, which is independent, might raise

interest rates towards the end of this year, that's been the kind of

guidance we have seen, so it is it plays into the market. Unemployment

has never been higher than it is now. The rise was the last on

record. Inflation has never been as high. The participation rate is

almost the same. The participation rate... That's a percentage.. That's

right. The other thing s you would expect wages come under some

pressure as the employment market grows, because more and more people

are competing with the labour market. These things go together.

The extraordinary thing s it is doing as well as it is. There are

growing questions about your cost of living narrative as more and more

facts come out. They are not being questioned by independent

commentators. Your own side are beginning to question T let's listen

to what George leak had to say on the Daily Politics? -- what George

Clarke had to say For me, thep main issue is the economy. We have to

convince people they won't go back to bad economic circumstances of the

past. I think we need a stronger narrative about what we did right

and wrong in Government. We did many things right economically and some

things wrong. We didn't do that. We haven't been prepared to admit the

mistakes we have made. He we rested a great deal on assuming the

Conservative strategy would not succeed, that plan A would not work.

It has proved to be unwise. The Conservatives have succeeded in

getting the economy on a more positive path which leaves us very

little place to be now in these circumstances. The cost of living

crisis, as Labour call it, is that really a powerful enough narrative?

The cost of living crisis? It is a real description of the position

very many people feel. The answer isn't necessarily in those very same

people's minds, that Labour will solve their cost of living crisis.

You need a story more than just about life as people experience it,

but more about how Labour would change those conditions of life. So

Plan A worked according to Mr Clarke and the cost of living crisis is not

a strong enough narrative. I think if you describe the situation people

are in today, this is undoubtedly n my view, a cost of living crisis.

are in today, this is undoubtedly n my view, But people want

are in today, this is undoubtedly n my view, a cost of living crisis. to

know what we are saying about the economy and the vision for the

economy going forward. For me, it comes down to two things - if we

have a recovery, we want it to be... We have a recovery. That is that we

want it to be sustainable. We want to make sure it is lasting and not

lob sided and we can talk about housing and interest rates in a

moment. But we also want an economy that is fair for all. It does

involve everybody and it is not just seeing rewards and growth go to

those at the very top of society. On both of those points, I think there

is a big, big political choice for people to Mick and a lot of

difference between the Conservative and the Labour Party. -- people to

make. What do you make of the current economic situation? There

are a number of points I don't necessarily accept. The cost of

living index, I believe is badly formed. I don't believe in the CPI

being an accurate portrayal of what it actually is for real people. So,

you look at, in the last ten years, you see energy price have doubled.

You have seen petrol prices have gone up, food prices have gone up.

So the things that people are dealing with, in my constituency in

Yorkshire, and places like Hull and York and Leeds and Bradford, they

are having a struggle. But he can't complain about that, it was his side

that introduced the CPI. It is even worse if you look on R pi. . It is

worse if you look at RPI. I wouldn't have moved away from RPI. You have

You have certain things not going up. White goods. Flat screens. What

else? I think the other problem you have with cost of living, Government

haven't done anything to trim public spending. They have nibbled at the

edges of deficit spending, but they are still in this situation where

they are borrowing, ?9 billion a month. They said they would get rid

of the national debt or start to bring it down. What is going to be a

gift to the Labour Party in May 2015, people will say - the Labour

Party can't imagine this problem. The long and short is that this

administration is going to the country with a national debt which

is 50% times greater so. This administration has been a disaster

on national debt. There are today 780,000 more private-sector jobs

than one year ago, a record rise, the highest, I think, in 25 years,

but only 11,000 fewer public sector jobs. What happened to the cuts? You

ask anyone in the public services and there have been significant

cuts. Why few would jobs? I think the truth of the matter is the

economy is like a supertanker. You do not turn it around instantly.

Other crises, they take between six and ten years to overcome. That

looks at the start of recovery in 2014 and hopefully going on for

several years. Debt will rise as you start to get the deficit under

control, it is down under a third. The Labour narrative is empty.

Should interest rates rise sooner than later? My fear is that they

will rise sooner. It is a judgement for the Bank of England. I have a

worry about what is happening in the housing market. We have the

Chancellor saying that he has the Help To Buy scheme but he wants

hindrance to buy. They are in a muddle. They should focus on supply.

Unless you get demand and supply in better equilibrium, you will have a

lopsided problem. Is there a housing problem outside London? If interest

rates go up you are talking about ?240 a year for the typical mortgage

customer. That could be a problem for many people.

The government have admitted there's a benefits backlog, with more than

700,000 people still waiting for assessments for employment

And that's not the only benefit which has been delayed.

In Prime Minister's Questions yesterday,

David Cameron was asked by Labour's Katy Clark about problems with

the personal independence payment - the benefit which has replaced

Less than one quarter of people who have applied for the personal

independence payment have received decisions. If we continue at this

rate it will take more than 40 years to get to the point where everyone

is assessed. rate it will take more than 40 years

to get to the point where Does the Prime Minister think this

acceptable? What will he do about it? It is important when we

introduce new benefits that we make sure it is done in a way that works

well. I would say it is important not to have an artificial deadline

of replacing one benefit with another. We are joined by the

Minister for disabled people, Mike Penning. More than 700,000 people

waiting for assessments for employment and support allowance,

many of them some of the most vulnerable people on low incomes in

the country. That is not good enough. It is not. I have been in

the job eight months. I asked for a review of the allowance, how it

performed, and who was performing. What I would say is that figure is

10% less than the last time I released figures. Last time it was

770,000. Why did you let it get to this, not you personally, but the

government? We have to look at what it replaced. DLA, you were put on

that for life. Only 7% of people who got that got a face-to-face

examination. At the moment is when I came in it was 97%. You can see

where the delays come. We are getting that down. A further 84,000

people are still on incapacity benefit. They have not been moved

people are still on incapacity benefit. They have not over to ESA.

You say 84,000... I wanted to make sure, and this is important, that

people coming on to benefit, who need the money... People on the

current benefit are on it and have not lost anything. We want to make

sure we have new people coming on. On top of this, delays with the

personal independence payment as well. To such an extent that the

National Audit Office found claimants were waiting on average

107 days, terminally ill patients, 28 days. People who are dying. We

cannot even get money to them. It is wrong. 28 days when I arrived, less

than ten days now. I promised the select committee, lobby groups,

charities and individuals, I will get it down. I've got it down to ten

days, I think we can get it down to between three days and five days.

You can guarantee for any terminally ill person, waiting for this, they

do not wait for more than ten days? They have not been waiting for more

than ten days. I said that was wrong and said I would get it down to ten

days and I have done so. Why was it not the scene? Any new benefit it is

difficult. There was a pressure, 97% of people having face-to-face

examinations, which were not necessary. It should be around 65,

35. It is making sure the decision is right. I am adamant about this.

So little getting their decision are going to appeal. In WC A, which we

have had problems, with the contracts, and we have a new

provider, that has dropped by 89%. People who really need the money are

getting it. People not getting the work is that judges in the Appeal

Court. In the WC a they were not doing the work I wanted to do on

assessments. If I had sacked them like the Labour Party Tolmie, and we

could have done that, we would have paid huge amounts of compensation.

If you sack them because they can't perform... The Labour Party wrote

the contract. They are going out and paying us compensation, not the

other way. Atos And WC a are leaving. They are doing a much

better job now. The backlog will be cleared when we have a plan in place

and we hope, and it does depend on the numbers coming through, but

certainly we aren't fearing more than is coming in. I cannot give an

exact date. I need to make sure we get the right decision. It sounds

like, among many other things, we are looking carefully at dishes and

-- at decisions. It looks like it is working better. The people Atos

replacing, do they have a contract where you can get rid of them

without costing the taxpayer money. I have not issued a contract yet.

Normally the companies run circles around you. I am determined that

lessons need to be learned from the contract issued by the previous

government. That we get better for the taxpayer. How much has it cost

the taxpayer? Dealing with the previous contract and bringing new

people in? If we had done what others said, sack them, it would

have cost tens of millions of pounds. We have a substantial

settlement that they paid us money. I feel sorry for Mike Penning, he is

between a rock and a hard place. He inherited the problem. Everybody

has. Welfare is failing across Western Europe and north America.

What happens is under Beveridge, the idea that you were putting a safety

net under people having bad luck. We have opened the doors of welfare to

too many people. We lost the original plot. We cannot deliver. I

disagree. In the old days, mutual societies would have dealt with

that. I do not want it to be about the rights and wrongs of the welfare

state. Does the government owe the people involved an apology? I have

apologised. I apologised on the floor of the House of Commons. We

need to make sure people get it and people who do not deserve it do

not. I promised those people I would do something and that is what I am

doing. Our guest has

his own way with words. He once described parts of

the world as "Bongo Bongo Land" and The last remark saw him

criticised from the most unexpected Flatmate in Brussels and leader

of UKIP, Nigel Farage, effectively threw him out

of a party he'd been a big part of. Last year,

Godfrey was the proud recipient A spokesman described him

as a wince-inducing gaffe machine. In the garden of politics, God --

Godfrey Bloom is no shrinking violet. You would think some had his

statements were fashioned in the Duke of Edinburgh School of PR. But

he often excuses offence by saying he was joking and repeatedly blamed

the usual suspects for making a fuss. The left-wing press were on

its like a Rottweilers. That is politics. Who can he mean? Clearly,

the mainstream BBC. If you have not done a hand's turn and neither have

your parents, I do not understand why you can vote on the

administration. He was elected a UKIP MEP but weeks later on his

first day in Strasbourg, with a seat on the European Parliament's women's

rights committee... No self-respecting businessman would

employ a lady of child-bearing age. That is not politically correct but

it is a fact of life. He said that women did not "clean behind the

fridge enough". It made an effective Christmas card with his wife.

Holding bongos is his allusion to his views on foreign aid. How we can

be giving ?1 billion a month when we are in debt to Bongo Bongo Land...

It is this off-the-cuff style that scuppered him with his own. In the

midst of the biggest Conference the UKIP in years, on the back of the

joke about a fridge, he also made a joke. I have never cleaned behind my

fridge. He might have got away with it but in terms of handling a media

problem later, this is probably not how you deal with it best. Was there

a single woman in there who did not laugh at the joke, you sad little

man? You have a Conference brochure with no black faces. What a racist

comment,