22/09/2014 Daily Politics


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Good morning from the Labour Party conference here in sunny Manchester.


The shadow Chancellor Ed Balls has a lot of convincing to do.


Morning, folks and welcome to the Daily Politics.


Ed Balls warns that a Labour government will have to make more


cuts to balance the budget - including capping child benefit -


we'll bring you his speech live at midday.


Conservative MPs descend on the Prime Minister's country


house, Chequers, to demand a better deal for England after the promises


Labour accuses the Prime Minister of playing politics with his promise of


English votes for English laws - we ask the folks here what they think.


And I've been out and about sampling the conference nightlife here


in Manchester - finding out if they're in any mood to party.


Ed has got to project himself as the future prime ministers. I did not


vote for him. I voted for David Miliband.


All that coming up in the next 90 minutes - oh yes,


you get 90 minutes today of this Daily Politics Conference Special.


First this morning - Ed Balls has been doing the traditional


He chose a Sure Start children's centre to deliver his message that


Labour would cap child benefit - a move he says will save ?400


We'll be investigating that figure in a minute.


First, here is what Mr Balls had to say. I cannot make spending


commitments we cannot pay for. If, in the first two years, we keep that


child benefit rise to 1%, I hope we can go on and the child benefit


rising by more than that later in the parliament. It is one of the


things we say we will have to do to get the deficit down in a fairway.


If we do not get the deficit down, if we do not balance the books, we


will not be able to deliver on all the we want to see. Let's set the


scene here in this formidable Manchester conference centre.


of the Daily Mirror, and the Spectator's Isabel Hardman.


What is the mood of the conference? I think it is pretty flat. A member


of the National executive said to me it feels like Labour have lost an


election rather than they are about to fight one. Maybe that is because


part of the energy and oxygen was sucked up last week by the


referendum in Scotland which was a momentous moment in Britain's


history. It is very hard to have a conference straight after that with


any zip in it. Have you found that, Isabel? Gas, and there are not many


policies. I sat here yesterday afternoon and there were no new


announcements. Just run hunt gave a speech about education but he did


not announce anything -- Tristram Hunt gave a speech about education.


We have Ed Balls' speech coming up at noon. It is always the shadow


Chancellor Monday speech which is the big one from him. They have said


they will freeze child benefit for another year or limited to a 1% cap.


Is that it? They are way behind on the polls when it comes to economic


credibility. Do we need something to put lead in their pencil? He is 25%


behind in the polls on that question. It is very hard to create


excitement because you normally create excitement by spending money


and promising something. If you say you're going to tackle the deficit,


can you give money away? We have not been briefed about further


announcements. It could be they are held back for Ed Miliband tomorrow


afternoon. The word is there will be something on the NHS. We know it is


a weak point for the Conservatives. If you look at the polling, the


Conservatives win on economic confidence, UKIP win on immigration


and the third bid F -- the third big issue is the NHS which Labour are a


head-on. After austerities, you would think he was saying, rather


than another freeze, he would come up with something saying things are


changing and Labour will make it better will stop this is the balance


the house to strike. What he is announcing today goes nowhere near


anything like a difficult decision. He is freezing child benefit which


voters will probably not notice. It is not like you are taking something


away. They will notice it does not match their earnings. That is not


the shopping difficult decision that people get upset about. It is very


small. Ed Miliband came up with the minimum wage going up to ?8 an hour


but that is by 2020, in six years' time. If you look at the growth


enrages -- in wages before the crash it would match that. He wanted to


give something but it did not quite work. A lot of the chat now is David


Cameron, English votes for English laws. It is a very tricky issue for


Labour because they have so many MPs in Scotland and Wales to defend. I


think David Cameron himself, he did not rise to the occasion of the


Scottish referendum result, it was dirty, no politics, but it has been


pretty effective in the short term. He may in the long-term playing to


Nigel Farage's hands. If you are going to play an English nationalist


game, UKIP will trump you every time. Is it all down to Mr Miliband


tomorrow? Is he the 1 who will have to set the tone? He did last year at


the conference, the freeze on energy prices, that set the political


weather for months afterwards. He has got to do that again, so no


pressure. We often underestimate Ed Miliband's speech. He did rate 12


years ago and we said he could not replicate that but he did again. He


does have to produce policies in some sense of a manifesto which I


have not got the impression is taking place. Thank you to both of


you for kicking off our conference coverage.


A group of Conservative MPs are having lunch at an English country


house - the Prime Minister's country residence - Chequers.


They're pressing him for more powers for English MPs


after promises of the swift transfer of significant extra powers to


the Scottish parliament before last week's referendum.


In particular they want "English Votes for English Laws".


Well, our correspondent Mike Sargeant is outside Chequers.


Mike, is the Prime Minister there to listen to what his backbenchers have


to say, or is he telling them what the policies will be. I think it


will be a bit of both. A glorious day here today. A quintessential


English seem to consider the issues of identity and national powers. The


Conservative MPs are coming here with a message which they believe is


in the interests of fairness, to rebalance the powers in the United


Kingdom, to give England more in terms of funding and votes at


Westminster. There will be more with Labour saying these issues cannot


just be decided by a group of Conservative MPs over a nice lunch


in a country house. Is Mr Cameron's idea of English devolution, does it


just come down to English votes for English laws? Is it just the answer


to the West Lothian question. Is that it? The Prime Minister said on


Friday, all of these issues would have to be considered in hand, and


at the same pace as giving the powers up to Scotland that were


promised. The English votes for English laws is something that was


in the Conservative manifesto. These Conservative MPs now believe it is


time to enact that. But what form that would take? Would it be a soft


version like the Mackay commission that the government organised which


said you would need a majority in England, but the final say would be


by UK MPs. Would you move to a system where you had two classes of


MPs? Would there be an English administration, a federal system?


These are big, big questions and some of it could be settled quickly


but these bigger questions of what kind of structures we have with our


parliament and administration may take a lot longer. Separate to that


is all the questions about funding, the Barnett formula and all the


rest. Have you had any clear briefing from Downing Street on


what, if any, is the link between the promised devolution for Scotland


and the Prime Minister now talking about English devolution. On Friday


morning at 7am, the Prime Minister said English devolution would have


to take place into hand and at the same pace Scottish devolution. Since


then I am told that Downing Street is saying maybe they are not linked.


Any clearer picture? I think the briefing that was emerging over the


weekend from Downing Street was trying to give the strong sense that


a vow has been made on Scottish powers. That thou has to be


honoured, regardless of anything else that happens -- that thou has


to be honoured. Many MPs here today believe that the question of English


powers has to be sorted out, or at least the direction of travel has to


be established. They think politically it is very difficult to


be seen to be giving a lot of extra powers to Scotland without


addressing what they see as some of these fundamental constitutional


imbalances. Downing Street is very clear that it is not conditional,


but would like these things to happen at the same time, parallel


process. I think that is as close as we have got to understanding what is


going on at the moment. That is interesting. Thank you for that.


But what do the Lib Dems think about all this?


Well, the Business Secretary Vince Cable joins me now from Westminster.


Welcome to the Daily Politics. Do the Lib Dems support English votes


for English laws? We certainly support the principle. There is an


anomaly at the moment and it has to be rectified. It is a complex


problem. The Mackay commission a couple of years ago looked at this.


It has some ideas for dealing with this through parliamentary


procedure. We certainly do not favour setting up some sort of


elaborate English Parliament with all the paraphernalia around it. We


do recognise the anomaly while we are also dealing with the Scottish


devolution issue. But I thought the Lib Dems believed in federalism.


Wouldn't federalism involve an English parliament? Not in a formal


way. Setting up a new talking shop and institution is not necessary to


capture the spirit of federalism. We are federal party. We see merit in


going down the route that successful countries like Germany, Australia


and the US have. But in order to introduce a fully federal system,


you have a whole series of steps to navigate. The immediate issue is how


you deal with the English votes for English issues. There are ways to


deal with it and the Mackay commission suggests how best we do


it. You say it is complicated but isn't it quite easy, if the bill


does not apply to Scotland, Scottish MPs do not vote on it? That is a


simple principle. When Mackay looked at it, he looked at different stages


of the parliamentary process, one of the problems here is you have to


separate out the issues which involve money, where of course there


is partial devolution, and issues involving legal powers which are


fully devolved. The issues are complex. A lot of thought by


nonpolitical people have gone into this. There is no silver bullet. The


principle of devolution in England, the principle of rectifying the West


Lothian question, that is something Liberal Democrats fully accept. If


the Prime Minister puts down a motion before Parliament this side


of the election on English votes for English laws, how would the Lib Dems


vote? It depends what the detail is. As I have said already, the


principle has got to be addressed. There is a West Lothian question. It


has to have a solution. But the devil is in the detail, rather than


in the general principle, and that is what we have got to work through.


There is a blueprint of a kind and we want to go back to the Mackay


commission and see how much of that can be put into practice in a


reasonable timescale. But you will know that the Mackay commission is


not go nearly far enough for many people now, because it has simply


said the English MPs could have a monopoly on the scrutiny of


legislation for England, but at the end of the day, it would be the UK


Parliament with everybody voting on it, as to whether it became law or


not. That is not satisfactory to many people who think it has to be


much more clear-cut. You have put your finger on one of the


difficulties. That is not the only one. We have to negotiate this in


parallel with more devolution to British cities. There is a clamour


for Manchester, Birmingham, Newcastle, Bristol and so on to have


more powers. London already have too some degree. The question is how you


reconcile devolution to the cities with devolution to England as an


entity within Parliament. This is all very tricky stuff and it has got


to be dealt with carefully. Shouldn't that be a matter for


English votes for English laws? Shouldn't it be up to the English to


decide if they are going to decentralise to the major cities?


That is what already happens. We already have city deals. That has


not been a problem. There has been no conflict with Scottish


colleagues. We did not extend the English city deals system to


Glasgow. Within the UK we have this, we can entertain this


imaginative arrangement. Mr Cable, can you still hear me? I can hear


you very well, thank you. OK. Somebody must have cut us off. Can


you clarify one final thing - given that it's been a Liberal Democrat


policy for a long while and many people said you've been ahead of the


game on voting for a federal UK and Menzies Campbell said, "We'll not


wait to wait long before we can see a federal United Kingdom." If the


Scots have their own Parliament and the Welsh and Northern Ireland too,


why not the English? It comes down to what you mean by an English


Parliament. If you are talking about a shiny building and new


politicians, I don't think there's an appetite for that. But if you are


talking about a place within Westminster, within the UK


Parliament, where English issues are dealt with by English MPs, then that


is an issue we have to focus on. As I've said, the Mackay Commission


suggests a way forward and it also points out some of the problems.


What about an English executive? If you had a fully federal system, but


then you would have to have - within the UK it's unbalanced, the country


is so much bigger and then you talk about regions and city regions and


how power is devolved. You have to resolve all those problems before we


talk about English executives. What we don't want to do is create an


uber complex country. We have too much of that at the moment. We


better leave it there. Thank you. Labour has most to lose if Scottish


MPs are prevented from voting. They have 40 Labour seats in Scotland.


What do delegates here think of the idea? Adam went out with his famous


mood box to find out. Everyone's talking about the issue of English


votes for English laws, so for the first mood box we are asking Labour


delegates should Scottish MPs be banned from voting on English issues


or not? No, I don't think so. Most legislation is sorted out across all


national boundaries. What we need is decentralisation of power from


Whitehall to local authorities. Do you know what the West Lothian


question is? No. Our first banner. Do you think Scottish MPs should be


allowed to vote on English matters in Parliament? Well, House of Lords


can vote on English matters and they're not enelected. If Scottish


people vote on their own, then we should, so I say no. You're on David


Cameron's side of the argument? Can he retract what he said? We'll have


the West Dorset question. The Tories determine the NHS and poverty and we


have to make sure that people from the left are represented and the


people in the poorest communities get represented equally. No holidays


in Dorset for you for a while? No. I'm from Northern Ireland. We depend


on the Barnet formula and we need to vote on English matters and we can


know the share of the budget we are getting. I'm from the north-east of


England and people are talking about it there, because in the north-east


we feel that an English Parliament is what we need like a hole in the


head. Should Scottish MPs be banned from voting on English issues in


Parliament? Is there anyone Scottish here? I'm struggling to find anyone


Scottish. They are not here yet. They'll be here later today, because


they've been given the morning off because of the referendum. This is


an interesting one, because you are a Scottish English MP. I'm a British


MP and I think there's a lot of change going to have to occur at


Westminster as a result of devo max, but it's not something cue do on the


back of a fag packet. This is the Conservative Party. It has to be


consistent. Therefore, we need a separate federal Parliament. Where


would it be? London. That's not very devolutionary, is it? No. Yorkshire


maybe? Can I take you back to front-line politics? It's a


wonderful question on the balance of... How about Resident Milburn?


I'm warming to your theme. That will get you back, being President? Oh,


yes, watch out. That's pretty overwhelming people here do not want


the ban. I suppose the only irony is, we didn't get a single vote from


a Scottish MP. Jim Murphy grabbed the headlines after he was pelted


with eggs by question question supporters. -- "yes" supporters. He


joins me now. It was two accurates -- crates, one for each of my size


13 feet. You managed to duck the mood box. Where would you have put


the ball? The majority of people, so no. What is wrong with Scottish MPs


not voting on matters that only effect England? I think there's a


lot of things we have to discuss. All the disappointments of the


post-referendum period is that the parties worked better together in


beTer together. -- Better Together. The result were over? The ink was


hardly dry and he was out there making his own proposals. Scotland


took two years and taken two decades to get to this point. David Cameron


seems to have done it in a few short moments and I think it's naked party


politics and that's where we were in the Scottish referendum. It


shouldn't be where we are when it comes to suggesting the United


Kingdom's unwritten constitution. It also gells with people's idea of


fairness. Scottish MPs vote for - Scottish politicians vote on


Scottish laws, why shouldn't English politicians vote on English laws?


What about Northern Ireland MPs? On any law that was England... Or the


Welsh? Any law that affects only England, only English MPs vote?


David Cameron is focussing on the Scots for the reason of party


politics. When we had devolution in Northern Ireland no-one is talking


about them or Wales. He said English vote for English people. We have


devolution in London with the Mayor of London and London MPs vote on


issues in the House that don't affect their constituents on


transport, so there's so much here way beyond the single soundbite that


David Cameron comes up with at 7.00am on Friday morning. We should


have a convention and if we are looking at the lessons of Scotland,


there is one lesson, I would like to see votes at 16 and 17. That was a


great success. We should look at constitutional convention to look at


all of the issues rather than one single issue as to whether Scottish


MPs get to vote in the second reading of a housing bill. Why do


you need a constitutional convention to tell you it's unfair that


Scottish MPs interfere in English matters when English MPs don't


interfere in Scottish matters? I've already said, there are London MPs


voting and it doesn't affect their constituents. It's nothing like the


power of the Scottish Parliament. On what basis should they not be


allowed to vote on transport? This shows where we have an unwritten


constitution that has evolved over the decades, and over the centuries,


now surely we have time to reflect at a slower pace through a


convention involving all the parties, civic societies... You want


to kick them into touch? The answer is politically desperate for you,


without your 40 Labour MPs from Scotland you cannot enforce your


will in England? It's not about that at all. Of course it is. Everybody


knows that. It's desperate of David Cameron to come up with this


quarter-baked plan early in the morning on Friday. Surely we should


do this at a reasonable pace, have a convention, allow the public of the


United Kingdom in on this and should we have a Bill of Rights? Should we


have a written constitution and people vote at 16 or 17? All of


those issues are more important than the vote of Scottish MPs. You as a


Scottish MP voted to increase top-up fees for English students. The bill


was only enforced on England because of people like you and yet your


constituents weren't facing top-up fees. You forced it on England and


yet the Scots got away with not having it at all. How is that fair?


I don't think that's correct in terms of the balance of votes in the


House, but we'll leave that to one side. The Labour Government was only


able to push it through on the back of 38 Scottish Labour MPs, a piece


of legislation that affected England, but not Scotland. The


Liberal Democrats voted against it and the Tories voted against it too.


The principle is the maths. The Government want -- won by five


votes. They wouldn't have won without the 37 Labour MPs. We have a


situation where the constitution is a bit of a stramash in a haphazard


way and we add on and take parts away. In the Scottish Parliament


there's been a more careful way of doing it and I would rather do it


more considered and my preference would be for a written constitution,


where we can discuss the issues over voting powers and rights and who get


to vote and which members of the public do vote. In the meantime, you


are going to devolve income tax powers to the Scottish Parliament,


that's part of the vow that your party and David Cameron made. So,


the Scots will set their own income tax rates. Why should you have any


right to set income tax rates for England? The Scots already have the


power to set their income tax. The principle was agreed. The Parliament


from day one had income tax power and through the Commission in


2012... To devolve it further? I accept it's further. In 2012 they


were devolved through the Commission and there was an ability to fade --


vary the rates in income tax. You are right to say there are further


powers. I think there has to be a response across the UK to all the


issues. We'll look at Scotland and how to rebalance the constitution of


the United Kingdom and do it effectively. Someone, not me,


someone cleverer than me, described this approach as a dangerous dog


act. Let's not do this in a rush. What is David Cameron's rush? I


suspect he's trying to win a general election. It's naked Tory politics.


Your party and the Tories and the Liberal Democrats did a huge rush


when you looked like you might be losing the referendum. Let me ask


you this - is it Labour policy to devolve all income tax powers to


Edinburgh? It wasn't our policy in our proposals and we came forward


with our proposals. The Liberal Democrats had theirs. I'm not asking


about them. What is Labour's policy? We came forward with a policy. It


wasn't full devolution. What is it now? No what we'll do is discuss


with the Tories and the Liberal Democrats and let the people of


Scotland in on the conversation and all three parties will have to give


and take. We have our position and they have theirs. We'll try to find


a common cause, even though the referendum is offer, with the three


parties and involve the people of Scotland. I can't announce the


outcome of something we have only just started doing. That's what


David Cameron has done. Scottish devolution is happening at


break-neck speed. There's no question about that. You've agreed


to the speed. Yet, you sit here and you cannot tell our viewers what


Labour's position is on devolving income tax to Scotland? Scottish


devolution is not happening quickly. It's taken two decades. The campaign


ran for two years. It's quicker, but it's not break-neck speed. What we


are doing is the three parties, Labour, Conservative Party and


Liberal Democrats their own plans and dint plans. We have said in


light of the referendum, how can we speed up the plans and how can we


find common cause? The only break-neck speed here is David


Cameron and his haphazard quarter-baked ideas about how to


treat Scottish MPs. One more time - can you tell me what Labour Party


policy is in devolving income tax? Our policy is the same as it was on


Friday mourning, to discuss with the Conservative Party, the Liberal


Democrats and the people of Scotland to see what the right policy would


be in terms of the balance of income tax. It's not complicated. I'm not


going to make up a new policy on your programme today.


What is your policy on devolving income taxed to Scotland? Our


approach is to try and find an agreement with the other two parties


who had a different policy. I know you have to sound frustrated... I am


frustrated! That is your fault. You are not answering the question. I am


not going to make up a new policy in three days. We will work with the


other parties, discuss it with the people of Scotland and come to a


consensus if we can. And then we will have a constitutional


convention to rebalance the unwritten laws and the Constitution


of the UK. I know when I am beaten, Jim Murphy. I will have some Irn-Bru


next time I interview you! It is good for you.


Just a few minutes until Ed Balls delivers his conference speech.


In a moment I'll be talking to Nick Robinson about what we can


But first Ed Balls is known, of course, as a political bruiser -


but yesterday he showed that he can get a bit physical


He was playing what was supposed to be a


"friendly" charity match against a team of journalists, but Ed's elbow


left one of his opponents with four stitches in his cheek ? ouch.


And we're joined now by the journalist in question, Rob Merrick.


How are you? I am fine. How did you feel? I was disappointed to go off


because we were winning at the time. The rest did not even give a free


kick. Look at that picture. Our shadow Chancellor? The pictures do


not do him any favours but I have been sent off in this fixture before


now so I am the last to complain about a few robust challenges. His


response was your tackle was a bit tough. I am not sure he said that.


He said I was trying to net a ball off him and he was putting up his


arms to protect himself and he caught me on a soft spot. So no hard


feelings? Definitely not. I'm convinced Ed will be hurting other


people. We beat them 3-1 and he did not manage a target on shot. You


will play him again? We will never retire. Speaking of a man who never


retires, here Nick Robinson! I love the idea of it Ed Balls said you ran


into his elbow, your face ran into his elbow. He has a nasty little


bruise. That is the excuse people give the police on a Friday night,


he ran into my fist. Has Ed Balls got more to say on what has been


leaked so far? I think he has. We often get full briefings and


full-text. We have not. I can tell you the little I know. What we have


had so far is clearly designed to bolster what we will get. By saying


I will take a tough decision, by saying I will take a decision on


child benefit, albeit a small amount of money, what is he trying to do?


He is trying to say to his conference critically and the


public, look, I mean what I say when I say I am not going on a spending


spree. There will be a lot of people saying we will be in power next


year, boys and we will get spending again. He needs to say to them,


honestly, I am not going to. Crucially, he needs to say to the


country because Labour is way behind in terms of the credibility and


opinion polls. Doesn't he also have to rally the troops are bit as well?


They are way behind on economic competence in the polls. But he also


have to give something, not just more cuts on child benefit,


something that lift their spirits? The giveaway is the backdrop of the


conference. They put those words up for a reason. We often think it is a


load of old la. Labour's plan. Why does it say that? Every time someone


stands up and says we have got a long-term economic plan in the


Conservative Party, that has been hurting them. A lot of people do not


like the coalition or the Tories but they say, at least that Cameron and


Osborne have got a plan. I think what Ed Balls is going to try to do,


but crucially Ed Miliband will do in his speech tomorrow, is to say, this


is not just a series of little measures which do not connect, we


have a plan and we know what we will do if we get in. I think the upside


of what Ed Balls will do is to say, Yes one apprenticeships and


house-building, we will do all of those but we will also deal with the


deficit at the same time. Did he not give you a preview of his speech to


make up for what he did? No I do not think I got an extra preview. I did


come back from A to a story about Ed Balls making cuts which is the


come back from A to a story about ultimate irony. I think he is the


ultimate metaphor. He was toying with the joke yesterday about I can


be guaranteed to deliver more bloody cuts but I think he took the view


that that would not be appropriate. If he makes the gag later on about


being in stitches! We can show you the picture as it builds up.


Margaret Beckett is speaking to the conference at the moment. There is


Ed Balls getting ready. And Mr Miliband. I can tell you that his


speech has been delayed. It is not reckoned that he will speak until


12:20pm. Do you know why, Nick? Not a clue. But I can bring you the


vital news that this speech has been practised on an ironing board in the


balls Cooper bedroom. You practised on an ironing board in the


have something which is the practised on an ironing board in the


of a podium. There is an ironing board in Ed Balls


of a podium. There is an ironing Cooper's bedroom. It has on it a


speaker's lector which apparently they bought from the United States.


They had been trying it out on their aides who are under no pressure of


course to laugh and clap. All right. We are now hearing that he will get


on his feet at 12:11pm. -- Patsy has been told to hurry up. -- perhaps he


has been told to hurry up. Because Labour have a different attitude to


borrowing, to the current coalition and particularly the Tories, he


would have room to borrow up to ?28 billion more, over three years from


2015 to 2018, the time of the next election, he would have the room to


spend and borrow ?28 million more. Why? Because the Tory goal is to


effectively stop borrowing in 2018. Ed Balls argues that there is


nothing wrong with borrowing to build things, to invest, and that


would allow in this kind of room. The irony is it is eye-catching to


talk about child benefit, which may save he says 400 million. The


Treasury are saying it will save about a third of that, but actually,


this is chicken feed compared to these big differences in


macroeconomic policy which gives them a lot more room. I understand


he is saying he will run a surplus on the current spending, and he will


still borrow to invest in capital spending, on infrastructure and


things like that. But he is also saying he will pay down the national


debt. He cannot pay down the national debt if he is continuing to


borrow on capital account. Unless the runs a very big current account


service. He would have to run a lot. I have not seen any figures to


explain that. I do not think you will get them today either, in


truth. His defence always is that you do not know the state of the


economy so it is mad to set out the figures early. They are all haunted


by the great shadow budget as it was known of John Smith before the 1992


election, which spells out a lot of detail, designed to tackle the


Tories' claim that the figures did not add up and you did not know what


Labour would do. The state of politics and the economy changed and


they were stuck with this plan which was two years old and some argue


that helped Neil Kinnock lose the election against John Major. We are


talking about nurses pay, teachers' pay, welfare spending, all the


things which makes this party and the country tick. Guess, and you're


certainly not talking about meeting that goal by a couple of hundred


million on curbing child benefit. There is no way that that would meet


that. You would need something much more substantial. Is a Mr Balls


running out of time? It has been four years now, there has been a lot


of austerity and still Labour's credibility on economic matters is


way behind the Conservatives and we are only seven or eight months until


the election? Jelena I think that is what so many people fear, that it is


too late to make up the ground. I wonder if they have underestimated


how popular with activists in cutting child benefit will be. I


have a message on my phone from someone who is furious about it. It


is not meaningful in economic terms as you explained. I wonder if it


will play worse than he expects. Margaret back -- Beckett has sat


down. She is a Labour veteran. The huge hall looks pretty busy. I think


we are ready to see the shadow Chancellor get to his feet. He is


being introduced. The big speech, I guess is Ed Miliband tomorrow. This


is preparing for it, laying the foundations for it. Ed Miliband has


two convince people that they can see him as Prime Minister. Let's go


to Ed Balls now. Thank you very much, Angela.


Conference, 20 years ago, at this Labour conference, we'd together


took the historic step of reforming our party's Constitution. The result


is on the back of our membership card today. Our goal, a community in


which power, wealth and opportunity are in the hands of the many, not


the few. Our conviction that by the strength of our common endeavour, we


achieve more than we achieve alone. 20 years on, that Labour vision, our


Labour values are more relevant than they have ever been. While our


economy is growing again, taxes are up, wages are down, NHS waiting


times are rising, most working people are not seeing any benefit


from the recovery. It is no wonder that the country is crying out for


change. But at a time when trust in all politicians is at an all-time


low, and when even after deep spending cuts and tax rises for


working people, our deficit is still high, this is our task. Not to


flinch from the tough decisions we have to make, but to show the


country there is a better way forward. Labour's plan for


Britain's future, our common endeavour, to build an economy that


works for the many, not the few. For all working people in every part of


our United Kingdom. APPLAUSE


And conference, when we think of those words, by the strength of our


common endeavour, we achieve more than we achieve alone. Don't they


resonate more loudly, after the events of the last few days and


weeks, because conference, we meet here in Manchester, a united party


in our still United Kingdom. APPLAUSE


And let us pay tribute to Joe and Lamont and Margaret Curran, Alistair


Darling and Gordon Brown, Anna Sarwar, Jim Murphy, Douglas


Alexander, Cathy Jamieson, all the MPs, MSP 's, party workers,


volunteers, up more beyond our MPs, MSP 's, party workers,


as well, who worked so tirelessly to win last week's


as well, who worked so tirelessly to thank them all -- Johann Lamont. But


let us never forget. After all the campaigning and the brilliant


barnstorming speeches, the decision to stay together and shape


Scotland's future within our United Kingdom, was not made by politicians


or pundits. It was made by the people of Scotland. They voted to


retain the shared prosperity and security and solidarity our union


brings. But the people of Scotland did not vote for the status quo.


They voted for the opportunity to shape Scotland's future with greater


devolution and it is our duty to deliver on that promise, and for


Wales and for the cities and regions of England as well. Yes, we do need


to change our constitution and reform and strengthen our union in a


fair way. A process which as Ed has said, must start with


fair way. A process which as Ed has politicians. We know too that in


Scotland and across the rest of the United Kingdom people want bigger


change than that. Change which goes beyond powers and processes and


Parliaments and constitutions. It's radical change. To build an economy


that works for all working people. Knocking on doors, in my


constituency a few Sundays ago, I spoke to a mum and she told me her


teenage son had finished college and he had been looking for a job for


ages. She so relieved when he finally found a job, but she was


worried because he's on a zero-hours contract. Every morning he rings in


at 7.00am to see if they want him and when they say no, he has to wait


around all day. She said, "It breaks my heart, because he deserves better


than that." She is right and that story's no exception. It's one of


thousands and thousands of doorstep stories all of us here across the


country every week hear. Parents worried about whether their children


will get a job or apprenticeship and whether the next generation will be


worse off than ours. And they are relying on us, Labour, to make


things better. Families and pensioners seeing prices rising in


the shops, heating bills going up and up. Millions of people in the


private and in the public sectors struggling without a pay rise or


unable to get the hours they need, still not feeling benefit from the


recovery and relying on us, Labour, to make things better. Young people


struggling to save to buy a house. Disabled people and family carers


forced to pay the Government's bedroom tax and thousands of people


working in the NHS and millions more relying on our NHS, worried about


waiting times, rising and creeping privatisation, rely on us, Labour,


to make things better. And conference, we must not let them


down. And that is why it's our job to go on and win the next general


election and change Britain and deliver this country from this


unfair out-of-touch and failing Tory government. And conference, we all


know the great weight of responsibility we carry on our


shoulders. That is why this party is so united and determined and fired


up to get Ed into Downing Street. Over the last four years, Ed has led


us from the front, reforming our party and leading a shadow Cabinet


with more women and more candidates than ever before and modernising our


relationship with the trade unions and standing up for the victims of


phone hacking and speaking up for the people of Britain on the cost of


living crisis and demanding the reforms we need to change our


economy at every stage and he has led this party with courage and


strength and vision and principle and he will do the same for this


country, our leader, Britain's next Prime Minister, Ed Miliband.


APPLAUSE As for David Cameron and George


Osborne, going around the country saying they've fixed the economy and


telling people they've never had it so good, how out of touch can you


get? Prices still raising faster than wages and the Tories say


they've fixed the economy. The lowest recovery for 100 years,


business investment still lagging behind and the lowest level of house


building since the 1920s. One in six young people out of work and the


gender pay gap widening. Over a million zero-hours contracts and


working people, 1600 a year worse off and the Tories say they've fixed


the economy. What planet are they on? Conference, working people


cannot afford five more years of this Tory government.


APPLAUSE You know, when the Tories say


they've fixed the economy we know what they've really meant. The


millionaires who got a massive tax cut, that's who they've fixed it


for. The hedge funds funding the Tory Party and the big investors


buying Royal Mail and Russian oligarchs in tennis mashes with


Boris and Dave. Conference, it's the same old Tories.


APPLAUSE It's the same old Tory economics


too. Cutting taxes at the top, and hoping wealth will somehow trickle


down. Standing up for a privileged few, while everyone is left behind


for the few, not the many, David Cameron, George Osborne, Nick Clegg,


it's the same old Tories every one of them.


APPLAUSE And now, David Cameron thinks a


grateful and devoted nation is going to give him another five years in


Downing Street. Another five years. You know what, even his own party


don't believe him any more. APPLAUSE Do you remember Cameron's A


list? Nine Tories elected in 2010 already standing down from the A


list to the exit door innious four years. Nine Tories leaving. Another


scurrying off to UKIP. And Boris scrambling back to Westminster


preparing to elbow David Cameron out of the way. Although, perhaps today


the less said about elbows the better. That's today's Tories. Going


on about Cameron, giving up on the general election, starting to fight


the next Tory leadership election instead. Conference, just remember


what Boris - Michael Gove said, just remember what he said a few weeks


ago over a boozy dinner with his old boss, Rupert Murdoch, which somehow


found its way into the newspapers. I don't know how? ! Michael Gove said


that Boris Johnson has no gravitas. He said Theresa May has no friends.


He said only George Osborne is fit to lead. Only George Osborne is fit


to lead? And how did Michael Gove explain his comments? He said he was


tipsy. LAUGHTER Tipsy?


He must have been completely legless!


Conference, we know working people can't afford five more years of the


Tories, but this is no time for complacency, because this is the


hard truth that we learned not just from events in Scotland, but also


from the local and European elections, the rise of you cup from


the conversations we have on doorsteps and in workplaces week


after week. Yes, the Tories are deeply unpopular, yes, the country's


crying out for change, but even after the progress and successes of


our last four years, we have more to do to show Labour can deliver the


change people want to see. That we have learned from our time in


government. To show we will make the tough decisions to get the deficit


down and that we can change our economy and make it work for working


people. Conference, it's more important than ever that we, the


Labour Party, are honest with the country about what the last Labour


government got right and what we got wrong. Like you, I'm proud of so


many of the things we did. Conference, we, Labour, introduced


the first-ever national minimum wage and we will raise the minimum waning


if we win the election next year. APPLAUSE


We, Labour, introduced free nursery places for the first time ever and


we will expand free childcare for working parents if we win the


election next year. APPLAUSE


We, Labour, introduced civil partnerships and paved the way this


year for our country's first-ever same-sex marriages and opened 3,500


children's centres and made the right call not joining the euro and


starting in 1997, after 18 years of neglect, we we formed the NHS, we


invested in the NHS, we cut waiting times from 18 months to 18 weeks in


the NHS. Conference, we saved our National Health Service from the




Next year, after just five years of David Cameron, with waiting times


rising, fewer nurses, a crisis in A, we will have to save the NHS


from the Tories once again and we will do what it takes, because


conference, it's the oldest trick in the book - you can never ever trust


the Tories with the NHS. APPLAUSE


Conference, we can be proud of many of the things we did. But where we


made mistakes, like all government do, we should be grown up about it.


We should put our hands up, learn from the past and explain how we'll


do things differently in the future. We should have had tougher rules on


immigration from eastern Europe. It was a mistake not to have


transitional controls in 2004. We must change the rules in the future.


Longer transitional controls for new countries. A longer time people have


to work before they can get benefits. Stopping people claiming


tax credits and child benefit and sending it to families abroad and


cracking down on employiers who exploit migrant working by avoiding


the minimum wage and tough controls and fairer rules. That is what we


mean when we talk about fair movement, not free movement. And


conference, while it was the banks which caused the global recession,


it was the global recession which caused deficits to rise here in


Britain and around the world and the truth is we should have regulated


the banks in a tougher way. It was a mistake. We should apologise and I


do. Plaus plau


-- APPLAUSE Paver As we get the deficit


down again, we must reform the banks, so it can never happen again.


And conference, we didn't do enough to tackle the underlying causes of


rising spending on housing benefit and in-work poverty, so we'll raise


the minimum wage and build more homes and cap overall spending on


social security. And we should not have scrapped the 10 pence starting


rate of tax. APPLAUSE


Conference, we don't just need to learn from our mistakes, we also


need to put right the mistakes this Government is making. So, we won't


pay for new free schools in areas where there are excess school


places. APPLAUSE


Conference, we will repeal the NHS bill and stop the creeping


privatisation of the National Health Service. And yes, conference, in our


first Budget, the next Labour Government will scrap the bedroom


tax too. We'll build on our record and


leadership the mistakes from the last government and put right the


mistakes of the Tories. We will change Britain and change the Labour


Party changing Britain, but we'll also face great challenges. Working


people are already paying more taxes, our public services are under


great pressure. We know there would have had to have been tough


decisions on tax and pay restraint, whoever was in Government, but three


years of lost growth at the start of this Parliament means we'll have to


deal with a deficit of ?75 billion. Not that balanced Budget George


Osborne promised. That will make our task hugely difficult and this goes


to the heart of the political challenge we'll face.


balance the books and we will make the sums add up and we will not duck


the decisions they face if they return us to government. Working


people have to balance their own books and they are clear that


government has to balance its own books as well. We will balance the


books. There will be tough fiscal rules. We will get the current


budget into surplus and the national debt falling as soon as possible in


the next Parliament. Tough fiscal rules, our National policy Forum


endorsed in July, said however difficult, our party can unite in


tough times to agree a radical, credible and fully costed programme


to government. We will legislate those rules in the first year of


government. They will be independently monitored by the


office for budget responsibility. In our manifesto there will be no


proposals for any new spending paid for by borrowing. No new commitments


without saying where the money is coming from because we will not make


promises we cannot keep and cannot afford. And because we will need an


iron commitment to fiscal discipline, we want the office for


budget responsibility to be allowed independently to audit the costing


and spending for every tax measure in Labour's manifesto and those in


other parties as well, a bold reform which the Tories are desperate to


block, because they are running scared from having their own


manifesto subject to independent scrutiny and because David Cameron


and George Osborne want to carry on peddling untruths and smears about


Labour's plans. Conference, the next Labour government will get the


deficit down. Ed Miliband and all my shadow cabinet colleagues are


clear, it will mean cuts and tough decisions. We will take the lead. I


can announce today that if we win the election on day one of the next


Labour government, the pay of every minister will be cut by 5%.


Ministerial pay will be frozen each year until we have achieved our


promise to balance the nation's books, because we are clear that


everybody in the next Labour government must be fully focused on


the task of getting the deficit down. Our 0-based review of public


spending is examining every pound spent by government to cut waste and


make difficult choices and setting out how we can make money and


improve care by having a single budget and joint management. If it


has set out how police forces will work more closely together to make


savings and we will scrap Police and Crime Commissioners so we can do


more to protect front-line policing -- Yvette Cooper has set out how


police forces will work more closely. Hillary is working with the


toughest and best generation of local government leaders to make


savings and free up resources for the front line. We will look to


prioritise early intervention now which can save billions of pounds in


the future and we will insist that all the proceeds from the sale of


our stakes in Lloyds and RBS, are used not for a frivolous


pre-election giveaway, but instead, every penny of profit will be used


to reduce the national debt. Conference, that is fiscal will


sponsor the little in the national interest. And we will have to make


other decisions, which I know will not be popular with everyone. At a


time when the public services that pensioners rely on are under such


pressure, we will stop paying the winter fuel allowance for the


richest 5% of pensioners. Over the long-term, as life expect in the


rises, we will need to continue to raise the retirement age to keep our


pension system affordable. We will cap social structural security


spending and keep the benefits cap, but we will make sure it properly


reflects local housing costs. Conference, I want to see child


benefit rising again in line with inflation in the next Parliament,


but we will not spend money we can't afford. For the first two years of


the parliament, we will cap the rise in child benefit at 1%, we will save


400 main pounds in the next Parliament. All the savings will go


to cutting the deficit -- ?400 million. We will ask those who have


the most to make the biggest contribution. That is why we oppose


David Cameron cutting the 50p top rate of tax. Now cannot be the time


to give the richest 1% of people in the country 3 billion tax cut. As we


get the deficit down in the next Parliament, the Labour government


will reverse this Tory tax cut for millionaires. We will balance the


budget in a fairer way. In the next Parliament, when we will continue to


face tough spending constraints, I want pay settlements which are both


affordable and fair. Private and public sector workers should all


sharing rising prosperity. Labour will not undermine fairness and the


independent pay review bodies by rejecting their advice out of hand.


Instead, we will work with the pay review bodies, employers and


employees, to ensure pay settlements are affordable and fair, and do more


for those on the lowest pay with tough settlements at the top.


Conference, we will also scrap the shares for rights screen. We will


reverse the tax cuts for hedge funds is. We will crack down on tax


avoidance and loopholes. And we will levy a tax on the highest value


properties, a mansion tax on houses worth more than ?2 million. But we


will do it in a fair, sensible and proportional way, raising it in line


with house prices, putting in protections for those who are asset


rich and cash poor. And ensuring those with properties worth tens of


millions of pounds make a significantly bigger contribution


than those in houses just above the limit. How can it be right that a


billionaire overseas buyer this year of ?140 million, penthouse in


Westminster, will pay just ?26 a week in property tax, the same as


the average value property in that area? Conference, we will make


different choices for fairer deficit reduction and to safeguard our vital


public services. That is Labour's plans to balance the books in a


fairer way. APPLAUSE


Conference, our plan will balance the books. But an economic plan must


do much more than that. We also need to change the way our economy works.


We must restore the broken link between the Wealth of Nations and


finally for finances and deliver prosperity for all -- family


finances. Across the world, rapid technological change is replacing


not just on skilled but skilled jobs as well, in banking and offices, as


well as on production lines. The result is our hollowing out in our


Labour market with low-wage and insecure it employment on the rise.


Conference, in this new world, we cannot succeed the Tory way to a


race to the bottom with British companies simply competing on cost,


as people see their job security row did and living standards decline. We


can only succeed and create the number of good jobs we need in a


race to the top. Labour's economic plan will transform vocational


education. We will work with employers to produce a gold standard


technical education and radically expand apprenticeships and we will


get young people back to work. Rachel Reeves will introduce


compulsory jobs guarantee, a pledge for young people and they


un-employed which people will have to take up or lose benefits. It will


be paid for by repeating the tax on bank bonuses. We will end the


scourge of long-term unemployment once and for all.


APPLAUSE And because a modern economy depends


on not just traditional infrastructure, but on the most


important modern infrastructure of, we will increased the bank levy to


expand childcare for working parents to 25 hours a week to help mums and


dads balance family life. We will give tax breaks to firms which paid


a living wage. We will end the exploitative use of zero hours


contracts and by the end of the next Parliament, Labour will increase the


national minimum wage to ?8 an hour. APPLAUSE


And what is the Tory plan for the next Parliament? They want to spend


?3 billion on a tax break for a minority of married couples. People


who are separated, widowed or divorced, they will not get it.


People who fled and divorced and divorced an abusive partner, they


will not get it. Read the small print, two thirds of married couples


will not get it. Five out of six families with children will not get


it either. And the Tories call that a flagship policy for families. In


our first budget, we will scrap this unfair policy and instead use the


money to introduce a 10p starting rate of income tax. A tax cut for 24


million people on middle and lower incomes. More working people will


benefit. More women will benefit. More married couples will benefit.


More families will children will benefit. That is a fairer way to


help working people in tough times. And conference, Labour's economic


plan means modern industrial policy to back the new growth sectors,


manufacturing, clean technology and the creative industries. We want


proper competition in banking and energy markets. New takeover rules


to support long-term investment, not as stripping. Proper investment


banks and businesses get the finance they need. Chuka Umunna and I have


asked Graeme Cole, chair of Augusta Westland UK, to also review what


more we can do to back British exports. We will keep our


corporation tax rates the lowest of the G7, but instead of another


corporation tax rate next year, our plan will instead that money to cut


business rates for small firms because it is time, conference, that


we had a fairer deal for small businesses in our country.


Conference, why should decisions on what skills Manchester needs be made


in Whitehall? Why should a Transport Minister in Westminster make


decisions about all the transport needs of Birmingham, Newcastle or


Leeds? Our economic plan will devolve power and resources, not


only to Scotland and Wales, but to the city and county regions in every


part of England. Our new independent national infrastructure commission


will end dither and delay on big infrastructure decisions we need for


the future. And whatever the outcome of the Howard Davies review into egg


port capacity, we must resolve to finally make a decision on airport


capacity in London and the south-east, expanding capacity while


taking into account environmental impact. No more kicking it into the


long grass, but taking the right decisions for Britain's long-term


future. And conference, in the housing market, demand is


outstripping supply, risking a premature rise in interest rates,


the housing benefit bill is rising. Following the Lions report which we


will publish in a few weeks and making housing priority, within the


existing capital settlement for the next Parliament, Laboureconomic plan


will get at least 200,000 new homes built by 2020. Creating jobs,


helping first-time buyers and building the homes Britain needs for


the future. APPLAUSE


. Labour's economic clan is based on the clear conviction that Britain


has always succeeded and can only succeed in the future of open,


internationalist and outward facing trading nation. We need reform in


Europe will stop cutting wasteful subsidies, getting the euro area


growing again, reforming jobs and ending the waste of two European


Parliaments, let us all build the alliances to secure reform and


change Europe so it works better for Britain. As we heard so powerfully


this morning from the Chief Executive of Airbus, we are not


going to earn our way into higher living standards by walking away


from our biggest single market. Let us say loud and clear, walking away


from Europe would be a disaster for British jobs and investment. On


Europe, this party will always put the national interest first.


APPLAUSE Conference, that's Labour's economic plan. It's the kind of


government we should be, ambitious, reforming, doing what it takes to


deliver, an economy that works for working people in every part of


Britain. And that's the kind of Chancellor I want to be too. People


rightly want to know who we are, what drives us on, what makes us


tick. Let me say this - I'd always rather taxes were lower, but my


first tax cuts would be for millions of hard-working people and not


millionaires. I hate wasteful spending, but I hate the waste of


one in six young people out of work. I'm pro-business, but not business


as usual. I'm pro-Europe, but never join the euro. I love the NHS, I'll


do whatever it takes to save it. And above all else, I want to build a


better and fairer country for my children and all our children.


Because, as soon who has grown up with a stammer being I've worked all


my political life to breakdown barriers so that all children can


succeed. To get extra help and support to those children who need


it, because I don't want to live in a society where children are held


back by their special need or their disability by their parents' income


or the colour of their skin. That's why I'm Labour. I'm a real list.


APPLAUSE I'm a realist and an optimist. I don't believe in


dpuBGing difficult decisions, unpopular decisions hard truths, but


I believe in the power of politics and public service to make a


difference. That's who I am. And that's what our Labour Party is for


and that's why I am proud to be a member of this party and to serve in


Ed Miliband's Shadow Cabinet. Conference, we have learned from our


past and mistakes. We are tough enough to make the difficult


decisions and with Ed Miliband's leadership by the strength of our


common endeavour, we can make a change that Britain needs.


Conference, this is what our first Labour Bumminget will do -- Budget


will do, business rates cut, tax avoidance tackled, the deficit down


fairly, infrastructure decisions made not delayed, the minimum wage


raised, energy bills frozen, jobs guaranteed for young people, tax


cuts for millions, not for millionaires, bank bonuses taxed,


the bedroom tax scrapped, are NHS saved, that's what Labour's first


Budget will do. Fixing the economy for everyone, a plan for the many,


not the few, people are relying on us to deliver this. Conference, we


will not let them down. Thank you. APPLAUSE El balls, the Shadow


Chancellor takes the applause as he comes to the end of his speech. A


rousing end. Rather more rousing than the middle or the beginning.


There weren't too many policy changes to our attention. He


apologised for not getting bank regulation right, but he's done that


before. He apologised for not having tougher rules on immigration and


he's done that before. He said he will scrap the tax rate for married


couples and the pre-announcement was that he'll keep the 1% increase on


child benefit for an extra year. We'll talk about that with Rachel


Reeves in one moment. He indicated, though, that the Davies Report on


airport capacity, which is about expanding in the south-east of


England in particular, it sounded to me they will accept the report and


that Ed Miliband will not try to expand Heathrow Airport. At least,


that's what it sounded like. He interestingly had nothing to say


about the devolution of income tax to Scotland. That is one of the


great promises made to the Scottish people during the referendum


campaign. Nick Robinson was in the hall and listening and he joins me


now. A lopping speech, but nothing new? It was interesting how he's


targeting different audiences. The message to voters via the media, we


got that yesterday. I'm tough on spending. As well as that child


benefit, curving of benefit increases that we read about, as


well as the cut in ministerial pay, we got the general statement that he


will not put anything in the manifesto that will require no new


spending commitment or extra borrowing. As we have been


stressing, his existing rules for borrowing are much more lax than the


current coalition, so he's got a lot of extra borrowing and spending, but


he said there would be no new spending. The message to the party


was, look at all the things we can change, raise the minimum wage and


jobs guaranteed for the Jung and so on. That is -- young and so on. It's


clearly the makings of the plan. I've no doubt by the end of this,


we'll be handed the plan. I was most interested by this targeting of


business. They've got a real problem, Labour, with business.


There are few things they are trying. First, to say the Tories


will get you out of the EU, we won't. The thing you mentioned about


airports, very important, Ed Miliband


airports, very important, Ed Secretary and was opposed to


expansion. The speech in code, but carefully briefed to the CBI, we are


not against it, we are still going to have tests about the environment


and noise, but do not think we are going to ignore expansion. It has to


be done. And if so, we'll do it. Very wealthy viewers, he said the


way that Labour's mansion tax would work and it's people in houses worth


more than ?2 million, they would vary the rate, so the person,le


billionaire who can afford a ?20 billion and there are some of those


in central London, would pay at a higher rate from those people just


above the limit, who may actually be in the jarring an, asset rich and


income poor. Crudely, a widow who inher receipts a house from someone


and the house is up, but there isn't much ready cash to spend. There are


little nuggets, but frankly, on the eve of the general election it


didn't feel like we got much that we didn't already know. Now, the dog


that didn't bark, no mention about devolving income tax to Scotland. I


think you and I both understand that's because Mr Balls is not that


keen on this. He's not happy with the way Gordon Brown just made this


announcement. We understand that he wasn't even consulted. And that he


does not want all income tax to be devolved to Scotland? Definitely


not. There's no doubt at all that as Shadow Chancellor he fought


proposals that were drawn up not just a few weeks ago, but last year


in the Scottish Labour Party, to devolve more taxes to the Scottish


Parliament. A draft report emerged, written by Joanne Lamont and when


the final report emerged it would be massively watered down. Why? Because


Ed Balls had intervened. His argument is, if I'm going to be a


Labour Chancellor I want controls of economic leaders and if you devolve


all of income tax you are devolving yet another thing that holds the


United Kingdom together. What he would call shared risk. They are the


things we do together. He didn't like it being done last week in the


heat of the referendum campaign and I think he'll continue to fight it.


Thank you. We are joined now by the Shadow Work and Pensions Secretary,


Rachel Reeves. Can you enlighten us on what Labour plans to do on income


tax for Scotland? All these things need to be worked through, but the


people of Scotland, they voted to remain part of the United Kingdom,


to pool and share risk and that. We do know that. All these details need


to be worked out. You can't tell us. This freezing of child benefit at 1%


for up to two years in the first year, you say that will save ?400


million? Over the course of the next Parliament. 200 million of that is


in plans, because the first year involves only 1%, so the net saving


that you have announced can't be more than 200 million? It's around


300 million during the course of this Parliament. It's the saving in


the year one... But it's factored into the next year's plans. So only


one extra year. It's around 300 million. You also assumed a higher


rate of inflation that is now impossible, so on the Treasury's


calculations you've only saved 120 billion. The Bank of England


forecasts at inflation on what we use to make the forecast and that is


having inflation going up to around 2%. First of all, it is penalised


anyway? 400 million is a big contribution towards the deficit


reduction and getting the debt down. It's 75 billion. Child benefit is


not the only thing. The tax on properties worth more than ?2


million, repeating the bank bonus tax and increasing the top rate of


tax up to 50 pence and the winter fuel allowance not going to the


richest pensioners. It's important if you add it all up to. What is it?


Several billion. The key point and way to get the deficit down is to


have an economic recovery that leaves no-one behind. Our


announcement on the national minimum wage is really important for deficit


reduction, because in the last 12 months we have spent ?270 million on


tax credits and benefit payments because the minimum wage hasn't kept


up with inflation. Increasing that is important component as well,


because if people aren't paid a wage to live on they have to draw on


benefits to make ends meet. If they're not getting the extra


benefits, if the benefits are withdrawn from them as the wage goes


up, they don't get the whole benefit of the minimum wage. They are


marginalised. For every pound that you get that lift you above the


minimum wage saves taxpayers 49 pence in the pound. I'm not the


people who are independent of it. They are not getting all of the


money, but if you have a pay rise then it would be around ?3,000


better off a year compared to the minimum wage where it is today. That


is a massive difference. You say you're going to balance the current


budget, or runcy surplus even and pay down the national debt? As soon


as possible. Then you'll borrow more for investment? No, what Ed said in


the speech and this is important, there will be no spending commitment


in the manifesto that aren't paid for, so there will be no extra


borrowing in our manifesto. Everything we set up, whether


capital spending or current, will be paid for. You are still going to


borrow? No, what we are saying. In the manifesto, there will be no


proposals for further borrowing whether for capital or current. You


are actually going to run a surplus on the current and the capital


account? What we are saying is that as soon as possible, in the next


Parliament, we want to run a surplus overall and national debt falling.


He doesn't say that. He said he could get the current budget and pay


down the fashle debt. He didn't say that he was going to have an overall


budget surplus. What he says in the speech there will be no further


spending in the manifesto for current or capital expeed tour,


because we can't make promises we can't keep. That is what the Liberal


Democrats did going into the 2010 general election. You conditioned


kid people there will be loads of extra money. I need to clarify this,


because it's important. If you are telling me now that you don't intend


to borrow for investment and you are going to run a current spending


surplus, you are planning to run an overall budget surplus? We are


planning to get the national debt down, which means you have to be


running a surplus to be able to that. If you are national debt


falling you have to have a surplus overall. On current and capital


accounts or both? To get debt falling you have to have a surplus


on overall spending, so... It was only a couple of months ago he was


saying it was all right to borrow to invest. ! Listen to what he said


today, no commitments in the manifesto for further borrowing.


Everything in manifesto will be paid for, not by further borrowing. That


is really important. It's significant OK, thank you for


clarifying that. That's is for today. I'll be back tonight after


Newsnight on BBC Two. There is more tomorrow at midday, with live


coverage of the big speech from Ed Miliband from 2.00 onwards. Hope you


can join me then. Goodbye. The guns fell silent on


November 11th 1918, but the shadow stretched long into


the 20th century. Historian David Reynolds


examines its devastating impact.


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