24/06/2014 Daily Politics


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Protests from around the world at the imprisonment of three


Are we about to see a rise in the cost of borrowing?


The Bank of England Governor, Mark Caney, is in front of the


Treasury Select Committee, outlining the Bank's plans.


And with food bank use on the rise, what makes someone poor?


Politicians don't just argue about solving poverty, they also


And with us for the whole programme today is the writer,


At 9.41am journalists from around the world,


including here at the BBC, took part in a silent protest against


the imprisonment in Egypt of the Al Jazeera journalists Peter Greste,


A court in Cairo found the three men guilty of spreading


false news, the trio denied the charges and are expected to appeal.


Here are some of the scenes from this morning.


Just after the minute's silence, the BBC Director of News,


James Harding, spoke to journalists outside Broadcasting House.


He explained why it is important for the BBC to support the Al Jazeera


journalists sentenced in Egypt. While we compete every day for


stories, journalistic news organisations, we have to stand


together when it is a question of journalists being imprisoned for


simply doing their job or for trying to report the news. Then there is a


bigger issue of principle here, which is why the BBC, which


obviously has a stake in freedom of expression and the freedom of


journalists to do their job, must stand up when something like this


happens. Jack, your response to what has happened to these three


journalists being imprisoned and others convicted in absencia? I


think it is a sad day for journalism all over the world. As journalists


we are expected to report on events as they happen and without bias and


events in a free way. I think restricting on what you report on,


based on the country you are reporting from or the government you


are reporting under, is a sad day for freedom of speech and for


journalism everywhere. Do you think journalist also be frightened of


being into countries like Egypt and reporting on what is going on,


because of potential consequences? I do. I think it'll have an impact on


how what journalists choose to report. We need free dom of speech


to learn about what is going on over the world and things can't get


hidden or tucked away by corrupt or not diplomatic governments. You saw


the pictures pictures of silent protests. How much do you think that


will help in terms of showing solidarity? As the guy from the BBC


said - we have to stand together as journalists and say this is wrong.


Yes we compete journalists and say this is wrong.


Yes we for news stories every day but we have to stand together and


say it is wrong. Protests on social media and protests using technology


and the internet have been quite successful in the past. It is a way


of all get together in one place and saying - this is wrong and we all


think it is wrong. Joining me now from Doha is


Sue Turton, one of the Al Jazeera journalists who was convicted in


absentia of spreading false news. Thanks for coming on to the


programme, Sue. Your thoughts now for your colleagues n Cairo? Well,


our thoughts really are how do we get this verdict overturned? How do


we try to get the pressure turned up so much on the Egyptian government


that they decide this is a travesty themselves and realise that it is


not doing Egypt any service keeping three bona fidy, strong, independent


journalists locked up in prison. We have tried Sol many avenues in the


last few months since they were incars nated and as the trial has


been ongoing. I suppose, quietly, I hoped the Egyptian judicial system


would recognise this was politically-motivated and that we


wouldn't be found guilty. But now we are left with a scenario that all we


can do is keep putting on the pressure and hope that our


colleagues around the world and the leaders, indeed, around the world do


the same. You mentioned the politics there. How much of this is about the


politics of the Gulf, Al Jazeera's relationship with Qatar, their


support of the Muslim Brotherhood and Mohamed Morsi before he was


removed from power? I think all of this has fed into the situation and


what can awfully be described as a perfect storm. I think there is


definitely a huge media crackdown going on. There has been since the


coup last summer in Egypt. I think really because Al Jazeera Arabic is


the most-watched Arabic channel, it was still being broadcast in Egypt


and where we have a domestic media that don't say anything that goes up


against the government in Egypt, Al Jazeera was still saying it on the


it much V screens, if you like. That's fed into it. -- on the TV


screens. Although it is true that Qatar backed the Muslim Brotherhood


and Mohamed Morsi when he was elected into power after the


revolution and there is no love lost now between the Qatari government


and Egyptian government. So I think we have been caught in the middle of


that, for sure, but all of these, I think have added to the same thing,


really, that Egypt has wanted to, one, shut up Al Jazeera. Couldn't


arrest any Al Jazeera Arabic reporters because they are no longer


operating there. We were the only ones still trying to do the job


there. And we were still trying to do the job, fairly, Bali and with no


bias with any particular group. We were caught out when they announced


the Muslim Brotherhood was a terrorist organisation. They decided


to go to our guys who were still in thep country. They put me on the


charge sheet. I left in noe. I wasn't in the country when they were


announced as a terrorist organisation. Your movements are


restricted. Yes, for sure I can't go to Egypt or I would be arrested. But


the African leadership has put Egypt back in. That means if I walk into


an African country it is beholden on them, because I'm a convicted


terrorist in Egypt's eyes, to hand me over to the Egyptian authorities


that. Wipes out the African continent. I cover conflict zones


for Al Jazeera. I can't go near those but there is also the Middle


East. Bahrain, Saudi Arabia, the UAE, all backing the Egyptian


government. I have been advised by lawyers - don't think of stepping


foot in Dubai, it would not be worth the risk. All right. Thank you.


Today it's about Ed Miliband, and he's hiring an apprentice to


If any of you want the job it pays ?8.80 an hour and to apply you just


need to write 250 words explaining what interests you about working


But what qualifications do you need for the job?


At the end of the show, Jack will give us the correct answer.


Now, the Governor of the Bank of England, Mark Carney, is in front


of the Treasury Select Committee this morning to discuss the Bank's


He's expected to shed more light on the timing and size


Earlier this month he said a rate rise could happen "sooner


The Bank of England has kept rates at a record low 0.5% since March


2009, in an attempt to revive the flagging economy.


But as the recovery continues - interest rates are expected to rise


to more "normal" levels to stem concerns over a housing bubble


Well, it could be good news for savers who rely


But it's not so good for those with mortgages without a fixed rate


of interest, who would see their monthly payments increase.


Data from property company Savills suggests an interest rate rise


of 1% would add ?1,312 a year to the average interest-only mortgage.


That equates to just over ?110 a month.


And if there's a 3% rise by 2018, the Resolution Foundation think-tank


say 1.2 million households would struggle to afford their repayments


Citizens Advice warning of a "financial ticking timebomb"


But, David Miles, one member of the Bank of England's Monetary


Policy Committee, which sets interest rates, said a rise would be


"good news" as it represented the "sustained recovery" of the economy.


So, are the Bank of England right to consider raising interest rates.


We'll discuss that in a moment. But first, here is Mark Carney telling


MPs rates won't rise until unemployment rate has fallen further


We are making sure we use up - make sure the economy absorbs wasteful


spare capacity concentrated in the labour market. That is, that it is


absorbed over the forecast horizon. We think - and this is the guidance


we have given - that that will require the start of normalisation


of interest rates. In other words, increases in interest rates. The


exact timing of that will be driven by the data. But the most important


aspect of the guidance that we are giving is that our view is that the


increases in rates over the forecast horizon, in our best estimates, will


be limited and gradual. With us now is Fraser Nelson, he's


editor of the Spectator magazine, and Ann Pettifor from the New


Economics Foundation think-tank. Let's start with you. Do you think


there is a lot of unnecessary panic in the media about interest rate


rises? Mark Carney indicated it will be gradual, he is giving plenty of


warning. Has this been over-hyped? No, not at all. We are heavily


indead ited as a nation. I think the media is -- indebted as a nation. I


think the media is right to bring up concerns. We don't understand


deflation, so little do we understand deflation that we don't


have a Bank of England deflation report. And deflation, the fall in


prices and wages, effectedively, increases the cost of debt without


even raising ing interest rates. So the value and the cost of debt is


rising anyway. If it is exacerbated by a real increase in rates, God


help us all who have mortgages and who have unpayable mortgages,


effectively. Fraser Nelson, there is an argument that says to continue


allowing people to borrow in an extended era of relatively cheap


credit, is only going to exacerbate the problem that Ann's talking


about, increasing personal debt And it could blow up another bubble.


Right now we are trying to still borrow our way out of a debt crisis


which saying - we'll make debt cheap. Borrow lots and revive the


economy that way. That works after a while but right now, as you are


saying, just a small increase in interest rates would mean a lot of


people could not afford to pay the mortgage on their thousands. Nobody


is doubting they are going to go back to the historic norms of 5%. If


we can't take that as country, we have a proper getting bigger all the


time. I don't think interest rates should go up to 5% tomorrow but they


should start to crawl back up, so people can look down the line and


see and ask themselves the question - before I take out this big loan on


the house, would I able to afford it, if the rates were 3% or 4%. The


Government is encouraging people to take out loans on houses,


particularly low income earners. That's what Help to Buy is about. We


have the Government encouraging us to borrow and condition superand on


the and on the other hand, using the only tool that's available, ie the


Central Bank's interest rates to clobber that and force us back,


whereas actually what we should be looking at is how to pay down this


department of the best way to pay it down is through income. Increase


people's incomes and they'll be able to pay down their debt. Secondly, we


could restructure the debt. We could make it go longer-term and so on but


we are not doing that. We are only threatening high interest rates.


That's scary. How big a problem, in your mind, will it be for people who


own homes, who have mortgages if those mortgages go up, even by a


fraction? We have heard that up to 1.2 million people would struggle to


make their mortgage repayments if the interest rates started to rie.s


I'm in agreement is we need to raise income rather than keep income where


it is and raise interest rates, even creeping them up, which would make


mortgages unaffordable from people. I have heard from people who said if


their interest rates went up 0.5%, they are in fear of losing their


hopes. They are spending all income on mortgage and outgoings and there


is no wriggle room for people. Isn't Help to Buy irresponsible bearing in


mind what has gone before n terms of the crash and the overreliance on a


housing bubble and property market to encourage people it take out


loans that perhaps not now, but in five years' time they won't able to


afford to play back. It is deeply irresponsible. I cannot believe


George Osborne is getting away with it. He is wanting people to buy and


thank the Tory government for it will stop but it does not get away


from the fact rates will go back up. If we cannot afford it, we are


living in a new bubble. They would have to go up, when would you do


it? The Bank of England does not have control of the mortgage rate,


only the base rate. The only people who borrow at 0.5% are bankers. They


are doing well. They can borrow at negative interest rates right now,


which is crazy. The average is 4%. If you look at deflationary, it is


higher than 4%. Anything between 1.75 cent and perhaps 4%. That is a


lot more than 0.5% if you have borrowed ?300,000. Do you agree that


the economy is recovering, unemployment is falling, growth has


returned. When is the point where you have to lift the base rate to


get a sustained recovery? It might come when there is a threat of


inflation, but the threat now is deflation and we do not understand


it. There is a threat of an asset bubble and the only way you can


combat it is to put rates up to something resembling normality.


There are other ways of managing asset bubbles and they refuse to use


other tools rather than interest rates. But you cannot punish the


people you have encouraged to borrow crazy money by using the weapon of


interest rates. My point is the Bank of England is not in control of the


process. When your bank decides on the rate of interest on your


mortgage, it is a process between you and the bank. They can fix


almost any rate depending on the level of risk you represent. The


Bank of England has no control over the spectrum of interest rates, only


the base rate. It has control in setting the base rate. I take your


point to a certain degree but let's look at inflation. It is not high at


the moment. If you used it as the benchmark to avoid and he wanted to


increase base rates for that reason, it is not there. It is at the lowest


level in four years. The bubble is in London and the south-east. If you


took the idea that the only way to raise them is to keep the inflation


low, we could expect low inflation for some time. It is a false test of


whether things are overheating. We need to look at asset prices. We are


walking into a new bubble if we do not deflate it now. What about


prices? Labour has talked about a cost of living squeeze. Is that how


you see it in terms of rising prices for certain goods and services


compared to income? There are things more expensive, such as food. Basic


food. Food prices on some products fall, but on basic supermarket


ranges they are rising. Things like a jar of jam that was 19p is now


31p, things like that. If you applied to those levels of


inflation, daiquiri cheese at ?7 would be ?14. Because it is


low-level goods, people do not notice. People who are putting them


in their shopping baskets notice. I do the live below the line


challenge, spending ?5 in five days to raise money for Oxfam. Over the


past three years, my shopping basket with a ?5 has got smaller every year


until this year the challenge was almost impossible because I could


not buy ?5 and decent food to last five days. When would you put up


interest rates? Definitely before the end of the year, in October


time. Do you think you will do it, or he is talking about it to get the


market to correct and count in the rate rise and he will not do it


until after the election? I think he wants to do it. He realises his


reputation is on the line. George Osborne does not want a rate rise


before the election. I have confidence he will blow the whistle


on this. It's something that our guest


of the day, Jack, knows a thing or two about having spent a


number of years trying to look after But an actual definition has been


the cause of heated debate over And it matters


because it holds the government to account and helps them work out


where to direct their efforts. Speak-macro most of us think we have


an idea what poverty looks like and some of us as children might


remember living in it. In the debate of food banks, one can see 70 years


ago food was provided for those who could not afford it. Many are


fortunate in that we will not experience poverty, but many are one


pay slip away from doing so. And how do we define it? Is it needing to


visit a food bank like this one in London? Being poor is most of them


described on as living on 60% less of the national median income.


People think of the 60% of median income, which is important, it is


about whether people can participate in society and how they do relative


to others. If you look at measures in the child poverty act, there is


one about the absolute level of income, a baseline to meet basic


needs, one is about the duration of poverty, whether it is a fleeting


experience, or drawn out. The other is about material deprivation,


whether they have items are others consider essential. There is a


problem, which is why Iain Duncan Smith wanted the relative income


measure changed. The maths will tell you there are less poor. In


improving times, there is an opposite. Any change in government


figures runs a risk and the Treasury were not keen on a change, or a


suggestion made by the man who reported for them on poverty. We


keep these figures otherwise people will say you are fiddling the books.


It is in adequate. keep these figures otherwise people


will say you are fiddling the What we need to run alongside is life


chances. The key thing is have we got measurements which while


measuring a snapshot of numbers of people below the poverty line, what


is happening to the children in those families? Poverty inhibits


life chances, which are tricky to quantify. The other problem is


statistics cannot show the difference between those choosing


between heating and eating to exist and the excluded poor, who can


afford to survive, but not take part in society. We try to address


material need first. But we have a view of poverty that it is


relational, spiritual, also. We want people to have dignity restored.


Poverty is about affording housing, heating and food, which account for


a greater proportion of income. It is about working in the nature of


employment. If you think measuring is complex, it is nothing compared


to trying to solve it. Watching that with Jack was


Mark Hoban, who's been a minister at both the Treasury and the


Department of Work and Pensions. What is the best way to measure


poverty? It is a challenge and it is the debate the government started a


couple of years ago. The measure of relative poverty that has been in --


introduced, does lead to spending decisions, but it does not help


government to tackle the causes, which are around education and


whether you are in work. Relative poverty, using that as the


definition, it can distort the way money is spent, do you agree?


Relative poverty is a good measure of inequality, but I think that


using relative poverty as a definition is not absolute poverty


like in the third World, which is complete deprivation. It makes it


harder to pinpoint resources. There will be people who always argue


there will be people who earn 60% of the median and are not really poor.


We need a better definition. Iain Duncan Smith tried to change part of


the definition, why did the Treasury not allow it? This is a complex


issue. If you wanted to do something like looking at minimum standards of


living, it is difficult to quantify. Some measures we looked at was


around unemployment, education, housing, management debt. Many


different dimensions. It is controversial. Everybody knows the


current definition is flawed. Relative poverty fell towards the


end of the recession because median income fell. Why does the government


not change it? It is moving to a different basket of indicators that


is challenging. You outlined what you would look at, unemployment,


debt, lack of education, why can you not come up with a convincing


definition? The challenge is not to get bogged down in how you measure


poverty, but what you do about it, to improve life chances and give


young people and education to get into work, what are you doing to


help people to progress up the earnings scale? How important is the


definition if you use it as a benchmark to measure the government


against? It is important to use as a benchmark for measuring the


government, but we can get too wrapped up in definitions and being


academic about it. If you ask somebody queueing at a food bank,


they will not care whether you'd call it absolute poverty, fuel


poverty, they know they are queueing up to feed themselves and a child


and do not want to be in that situation. How do you define someone


who needs extra help? People living in insecure housing and who do not


have access to basic things like food and cannot pay fuel bills and


cannot look after themselves in a way that is acceptable in the UK,


one of the richest countries in the world and we have 1 million food


parcels handed out last year. I would call that unacceptable. It


seems impossible to eradicate it, and impossible challenge the


government. If you look at families included in poverty, many of are


working families. 85% of families are in work. The chances of being


poor are higher if you are out of work. We need to make sure when


families are in work we do what we can to help them increase earnings.


There is part-time work and people cannot get the hours. Most of the


jobs created since 2010 have been full-time. Raising the personal


allowance for income tax has taken people out of tax, which helps


families. Skills and training will help people to increase earnings. We


need to tackle unemployment and the lack of educational achievement.


Concentrating on children in poorer families would be affected.


There's just time before we go to find out the answer to our quiz.


The question was what qualifications do you need to apply


for a new job as an apprentice working in Ed Miliband's office.


Is it a degree in politics? A Masters in image management? Or


GCSEs in English and maths? I would like to say GCSEs in English and


maths, but it is probably the first. The last is right, you got the right


answer. English and maths. Thanks to our guests. Andrew and I will be


here at 11:30am tomorrow with Prime Minister's Questions.


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