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The start of the Tory conference in Birmingham has been battered with

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defection and scandal. Can George Osborne steady the ship? There is

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talk of tax cuts and economic growth.

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Welcome to the Daily Politics live from the Conservative Party

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conference in Birmingham. If we cannot beat that shower of an

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opposition we don't deserve to be in politics, so said David Cameron last

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night. But after the worst start to a Tory conference in recent memory

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it is looking harder than it did, especially with Michael Ashcroft

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helpfully producing polls saying Ed Miliband is going to win big-time.

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Over to this man, George Osborne, who not the first time is expected

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to produce a political fix for his party's predicaments. We will bring

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you his speech live and uninterrupted. Could this woman win

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this affected Tory voters in Scotland? We will be speaking to the

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Tory heroine of the Better Together campaign, Ruth Davidson. Who would

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the Tories rather jump into bed with, Ukip or the Liberal Democrats?

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I just happen to like Nigel Farage. I have shared beers with him. It

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does not mean I share the same politics. All that in the next two

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hours of public sector broadcasting at its cheapest. It is George

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Osborne's big day at conference, he will be addressing the party

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faithful just before midday. He will announce plans to abolish a death

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tax on pension pots to allow hundreds of thousands of elderly

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people to leave their money to their loved ones after they died. It is a

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measure designed to appeal to court Tory voters, to get those back

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tempted by UKIP. Will it work? We have Kevin Maguire from the Daily

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Mirror. How difficult will it be for this conference to get over the

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terrible start at the weekend? It's interesting, going round the bars

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last night, they pay us a terrible salary and force us to drink... It

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has had the opposite effect as the first defection, it has had a

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unifying experience, Douglas Carswell was a loss to the Tory

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party, Mark Reckless was seen as a loner, an oddball, they are unifying

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around this perfidious act, yet it seems to be a rallying call. And the

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Chancellor will be getting focus away from these things and onto the

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economy. Yes, they have more credibility on that than Labour.

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They are on the traditional Tory ground of offering tax cuts and

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bashing benefit claimants. I think only UKIP, the Tories think they can

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beat Mark Reckless. He has a 10,000 majority, has not got the personal

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appeal of Douglas Carswell. They think if they can beat him there

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they will halt the UKIP bandwagon. We mentioned Ashcroft's survey,

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showing that what ever happened last week, it was very flat for Labour,

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it looked like he might have taken another stumble towards Downing

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Street. UKIP is the ghost at the feast. It hangs over everything they

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do, every hope they have of winning the election, every right-wing Tory

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MP, they look at and wonder who will be next to defect. They are asking

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the wrong questions. UKIP is a monumental protest against business

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as usual. It is anti-Westminster, it is anti-politics. Expect to see

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quite a lot from George Osborne. One that we have not been told about?

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Some sort of massive totemic benefits cut, it will be a typical

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George Osborne move, challenging Labour to match his austerity

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measures. What was the public interest defence in your paper in

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trapping Brooks Newmark? If you have a minister charged with getting more

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women into politics but seems to have more interest in getting them

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into bed, there is huge public interest. There is no criminality,

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no wrongdoing, massive stupidity, where is the wrongdoing or the

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criminality? There is a huge question of judgement, when you have

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a 56-year-old father of five sending lewd pictures to someone he believes

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is a 21-year-old young woman, trying to meet her at the Tory conference.

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That is stupidity, if it was a matter of judgement we would not

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have the ministers in the Cabinet. You went on a fishing expedition.

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You did not have reasons to believe he was up to something stupid, you

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just went on a fishing expedition. The journalist says he did not, he

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had word that about have a dozen Tory MPs were using social media to

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meet people in an inappropriate way, so he went to investigate. You only

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tried to entrap Tory MPs. Why? That is where he had his information. I

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remember bringing John Prescott when he was Deputy Prime Minister about

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his affair with a civil servant. That was an affair, this was social

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media. Why were only Tory MPs targeted in this fishing

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expedition? His information was these Tory MPs, there were questions

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to be asked. It turned out he was wrong on all the others except

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Brooks Newmark? The newspapers studied his evidence, that he had

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evidence to mount this fishing expedition? They went through it

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very carefully over the week. It has been reported to the new press

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regulator, which will look at it. I would like all the evidence to be

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published so you can see all the e-mail trails, then you can make

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your own judgement, we can all judge at their when everything is in the

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public eye. You know that entrapment is only justifiable if there is a

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serious public interest at stake. People might regard this as stupid,

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they do not regard it as a serious public interest. Andrew, I dispute

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that. If I thought a minister, unmarried father of five in a

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responsible position was chasing young women like this, I would think

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that is a matter of public interest. Does this go on in the Daily Mirror

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newsroom? Or the BBC? Or at the Sun newspaper, which was awash with

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drugs and infidelity. For the record, I was never in that

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newsroom. Will you take a high moral position on this? If you want to

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take some shifts we can fit you in. You cannot afford me. We are not

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trying to sound too morally high because I'm sure Mike paper has

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committed moral mistakes. We turned down the story. It was offered to us

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then the mail on Sunday, they turned it down as well. The new press

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regulator, the bar is a little bit higher. We need to be careful of

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entrapment. In our judgement, and I'm not saying this is right... Let

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me get this right, the Daily Mirror is using stories that the Sun

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newspaper and the mail on Sunday turned down? We do not have a

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problem with the problems the Sun newspaper does have, which is why I

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believe they did not go near the story. We went over this with

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lawyers for a week. There will be a ruling, I will come back and discuss

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it with you happily. Maybe you could get your editor to come. That would

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be interesting. I am rather lower in the food chain than you are. As

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usual it turns out the media is more interested in the conference. Two

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MPs have defected to UKIP, Douglas Carswell and Mark reckless. -- ten

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Mac. Dan Hannan has not yet defected. He joins us from the

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Westminster studio. Welcome to this programme. You were not just

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colleagues, you were a close personal friend. You must have known

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one of them was jumping ship. Yes, they are friends of mine. It is

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difficult for me. I think they've made a mistake. I'm not going to

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disown my friendship. They have acted on principle. Nobody does this

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kind of thing lightly. They wrestled with the decision for a long time,

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turning your back on relationships you have built up is not something

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you do frivolously and they have done it after a lot of

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soul-searching. You must have known that one or the other was going to

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jump ship. I'm not going to get into what we discussed before. So they

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did consult you? I've just answered that. All right, then I take it they

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did. You say you will not defect, but Mark Reckless said he would not

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defect either. How do we know you're not fibbing? I am not fibbing. I've

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explained at length, there are possible parties of government, one

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will give a referendum, the other will not only cancel that referendum

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but we'll do it what it did last time, it will void our Treasury, and

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employment will rise, the deficit will rise again, we will cancel the

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welfare reforms and education reforms. It is a terrible pity,

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there are good patriotic people voting UKIP and conservative, and

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even though combined they mark out half the electorate, because of that

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split, it looks as though Ed Miliband on the current polling will

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be Prime Minister with 35% of public support. Let's get a straight

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guarantee from you. You will guarantee this morning that you will

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not effect to UKIP this side of polling day May 2015? Yes. Why not?

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I just explained why. Had the Conservative Party not offered

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referendum, I would have found it difficult to fight the last European

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elections as a conservative, but David Cameron has made that its

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policy. The issue that animates me and a lot of people in the

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Conservative Party is being able to be a free, independent country,

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trading with Europe at embracing wider opportunities of other

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continents. It seems to be the only way to settle that issue, with a

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national referendum. The tragedy would be if we don't get that

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referendum because of UKIP, from the best of intentions, they become the

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agency that prevents us getting that referendum because the vote is split

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and Labour and Lib Dem candidates form a majority with a derisory

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share of the vote. But Mark Reckless and Douglas Carswell claim this

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referendum is preordained to deliver a yes vote, even if it is small

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changes, he will come to the British people and say he has renegotiated.

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I agree with that analysis but I have a much higher opinion of my

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fellow countrymen than to think they will fall for the same trick Harold

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Wilson pooled in 1975. Ultimately, it will not be any of us who decides

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this, it will be the British people as a whole. It is already pretty

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clear that what we will end up with is something very close to the

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existing terms, we've had 40 years to get used to the European Union of

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which we are members, the question we will face is whether we remain

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part of it, they will not be any significant change, we will still be

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in many of the same policies, but are we happy to be part of that

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united Europe, the only trade bloc in the world that his shrinking, or

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are we going to raise our eyes to more distant horizons and embrace

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the opportunities that come to us as a global nation? That is clearly why

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you will vote against this, if we get a referendum. Can I just be

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clear, you think even if only marginal changes are made to our

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status within the European Union, Mr Cameron and the Tory establishment

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will campaign to keep us in the European Union? That's a question

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you'd have to put to the Prime Minister, but my working assumption

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is that he and I will be on opposite sides because even if his stated

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objectives were met there would not be any fundamental change in Irish

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and with the European Union, we would still be in the common

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external tariff, part of the common diplomatic corps, the justice and

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common home affairs policy, we would still have European citizenship. It

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is a pity. He does have the opportunity and he may pull

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something out of the hat, he has the opportunity to go for a

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substantially different relationship, something closer to

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what other countries do, being inside the free market but outside

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the political union. That is plainly on offer, it is a deal enjoyed by

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other countries at the moment, and it is indicated that it would be

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available. For whatever reason, it does not seem to be something they

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are interested in going for. That's a question to put to them.

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An Thank you for turning up in Westminster today. Good to speak to

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you. Which, if you hadn't noticed,

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is still in tact, Yesterday afternoon it was the hot

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topic of debate here in Birmingham with key addresses from the

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Conservative Leader in Scotland, and new party heroine, Ruth Davidson,

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and the Leader of the House of Commons, William Hague,

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who delivered his final speech to We must reshape our union, so that

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each of its nations is comfortable in its own clothes. For Scotland,

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that means having a Parliament that finally had to look tax payers in

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the eye. Right now, the First Minister of Scotland have a block

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grant transferred from Westminster. Their only concern is how to spend

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it. This has allowed a nationalist Government to spend seven years

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telling the people of Scotland that everything good in the country is

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down to them for spending money on it and everything bad is

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Westminster's fault for not handing over enough. I want a a Scottish

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Parliament that is in charge of raising more of the money it spends.

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I want the working people of Scotland to know when they look at

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their pay check the right-hand column is going direct to Holyrood.

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A more direct link to what is raised in Scotland is what is spent. Less

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reliance on a block Brant and a more physically reliable policy. And when

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that happens and people see their tax sent directly to Scotland, they

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will hold future First Ministers to account. No more free passes. No

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more false promises, no more excuses and no more cries of - only with the

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powers of independence. It is time for the way decisions are

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made to be fair to all, including the voters of England. And my

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long-standing view is that when Parliament makes decisions affecting

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only the people of England, or only the people of England and Wales,

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then those decisions should be made only by the MPs elected to represent

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them. APPLAUSE

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If the representatives of Scotland are well able to decide many of

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their own laws, as they surely are, then when we representatives of

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Yorkshire, Kent or Norfolk are gathered together, we have the

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ability and right to do so as well. The Prime Minister has asked me to

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Chair the committee of the Cabinet to address, at last, this question.

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We have begun our work and we're open to the views of all. But we are

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not open to attempts to evade and dodge this issue for years to come.

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If no agreement can be reached, then each party must present its

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proposals to the electorate. So we will argue our case with the other

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parties, but in the absence of agreement, we will relish taking our

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case to the country. APPLAUSE

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And we are joined now by Ruth Davidson, the leaders of the

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Conservatives in Scotland. Welcome to the daily iks Mr. You are

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generally regarded as having had a good referendum. How are you going

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to translate that into more Tory needs more of the border? Where the

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Conservatives took the looed in the Better Together campaign and it was

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cross party. We took the lead in places like Angus, and pertshire.

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Used to be Tory territory. And places in Aberdeenshire and Scottish

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borders, we have really good opportunities there. If you look at

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the sort of voting intentions, about 170,000 people that voted SNP at the

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last Scottish election, voted no. They are the people we want to go

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after. How many seats are targeting with a hope of winning? We are going

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to target a number of seats. I'm not going it tell you that number. Why?

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Because I bear the scars of 2010, because somebody said it was we were

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well-placed in 12 seats and we got slaughtered in 11 of them. You don't

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want to repeat that. At conference they did that, as well. I will not

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do the same. Are you confident enough that, when we wake up, those

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of us who have been up all night probably and we see the results in

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Scotland that you will have more Tory MPs in Scotland than pandas?

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Certainly I hope so, to put that joke to bed. You'd only need three

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Our great strength in Scotland, our great weakness, our vote is spread

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evenly. Ourselves, the Liberals and SNP got between 400,000 and 500,000.

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We got 413,000. The Liberal Democrats got 465. We got one seat,

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they got 11. It is about being able to build-our campaigning ables and

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our levels of support in pockets in the way they have done. --

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campaigning ability. What is the strategy? Will you fight

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on a specifically Scottish manifesto in the election? Well, the Scottish

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electorate is incredibly sophisticated. Which is why you see

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so much tactical voting. People understand what they are voting for

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in different elections. You just need to look at the referendum when

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you see the participation levels and the level of understag standing in

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politics. People know Westminster is in charge of the economy, foreign

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affairs, and the Armed Forces, it is in charge of taxation, all of these

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areas, so we will be talking about that. It is not in charge of - in

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Scotland - health, or education or huge swathes of transport. So, you

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will just fire on the London manifesto? No, we will explain what

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we are doing in Scotland. For us, a general election in 2015 and

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Scottish election in 2016, you kind of have to have in part, your

:21:45.:21:47.

manifestos ready for both. I'm still not sure what is going to change

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things. You came out of the referendum well. We understand that,

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but, you know, you lost every seat in Westminster in 1997. Your share

:21:55.:21:58.

of the vote has not really changed very much since then. What is going

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to change it anyhow that will be a step change, so that -- to change it

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now, that will be a step change so the Tories matter Lord Ashcroft did

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a poll across Scotland and found that people don't vote Tory in

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Scotland because they think you can never elect any Tories. So they look

:22:17.:22:21.

for an anti-Labour vote. That has often found its home in the Liberal

:22:22.:22:26.

Democrat party or in the SNP. If you vote SNP you know you are voting for

:22:27.:22:30.

another referendum. Lots of people that moved to them won't vote SNP

:22:31.:22:35.

again. And the Liberal party have had a collapse, polling in the low

:22:36.:22:40.

single figures. Are you going to win some Liberal seats? I hope so.

:22:41.:22:45.

Where? Again, I bear the scars of 2010. You hope to pick up seats in

:22:46.:22:50.

the north-east of Scotland, a mixture of Liberal Democrat and SNP

:22:51.:22:53.

territory. There is a lot of lapsed Tory voters up there. That must be

:22:54.:22:58.

parting of your taergting? It looks like you are writing my strategy for

:22:59.:23:03.

me. Thank you very much. No I'm not. You may win even fewer seats than

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you have if I was doing it. What does more power for the Scottish

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Parliament look like, as far as you are concerned? I want to sort out

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the problem that we have had in the Scottish Parliament which is that it

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has the power to spend lots of money but no power to raise money T

:23:19.:23:21.

doesn't have to look tax payers in the eye. Every Scottish election is

:23:22.:23:26.

a spending competition. And it is not very good for the people of

:23:27.:23:29.

Scotland. It is not right that people who are making decisions

:23:30.:23:32.

don't have to look tax payers in the eye. What do you want? For example,

:23:33.:23:38.

I want to see the wholesale devolution of income tax. All income

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tax? We want starting grid to be the same, so bar the personal allowance.

:23:45.:23:48.

The Strathclyde report. Exactly. You want a chunk of that to be sent

:23:49.:23:53.

north? We looked at that and we would quite like to have had as a

:23:54.:23:58.

federal field tax. You want a trunk sent north. We would like to empower

:23:59.:24:02.

businesses, lots of businesses involved in manufacturer or retail.

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They make their money off of selling things. And if there is an incentive

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for the Government in Scotland to make it easier for people in

:24:10.:24:12.

Scotland it make and sell things, I think they should do it. This is

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fascinating. It is not that long ago that you promised a line in the sand

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against any more powers for the Scottish Parliament. What happened?

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It was years ago and I don't know if you have noticed. But there has been

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a massive debate in Scotland about exactly the constitutional powers

:24:29.:24:31.

the people of Scotland want to have. You were wrong? My view has changed

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and for incredibly good reasons. Because the Scottish nationalists

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have done so well and they looked at one stage as if they were going to

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win the referendum. Isn't the civil message for Scotland - if you want

:24:43.:24:46.

more powers for a Scottish Parliament, you vote Scottish

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Nationalists and then the rest of you all run after them? Well, more

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powers isn't a consolation prize for the SNP. It isn't a coming second or

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the gold fish you get if you miss at the funfair. This is about securing

:25:01.:25:04.

the UK. Nations need to be comfortable in themselves. The way

:25:05.:25:08.

to ensure it is to vote nationalists. You used to be against

:25:09.:25:12.

more powers. Labour is very iffy about what powers they will give.

:25:13.:25:24.

The one way to ensure Mr Samaras -- Mr Salmond's phrase - we hold your

:25:25.:25:29.

feet to the fire - is to vote nationalist. There have been changes

:25:30.:25:33.

to devolution since it came in. Even with Donald Dewar, he was never

:25:34.:25:38.

going to get something right first time. So we have developed

:25:39.:25:41.

devolution. The people who have stood outside that have been the

:25:42.:25:46.

SNP. We voted, the Sovereign will of the Scottish people, in 1997. Do you

:25:47.:25:51.

want a Parliament, yes or no, tax-raising powers. I voted for it.

:25:52.:25:55.

The only people that handed the power back was the SNP. They hand

:25:56.:25:59.

powers back. They wouldn't take part in a commission, they boycotted it

:26:00.:26:05.

for the Scotland act. They have never been interested in making

:26:06.:26:10.

devolution work. Your Prime Minister has also enshrined the Barnett form

:26:11.:26:14.

Formula which gives a disproportionate amount of money to

:26:15.:26:17.

Scotland. What do you say to the Welsh Tories who get a fraction of

:26:18.:26:21.

what Scotland gets, from the Tories here to the poorest regions of

:26:22.:26:25.

England. Why does Scotland get this money and they don't? We have

:26:26.:26:29.

regional demographic differences but if you have the wholesale devolution

:26:30.:26:34.

of income tax that offers the grant. There is a de-Tubbing method where

:26:35.:26:38.

the SNP are on board. You top slice part of the grant. That will come

:26:39.:26:44.

away. And you fill up with direct income taxation. The rest of the

:26:45.:26:47.

Barnett Formula will still be overpaid to Scotland? The rest of

:26:48.:26:51.

the block grant is made up of the Barnett Formula. But that means that

:26:52.:26:53.

Barnett becomes less important because it makes up a lesser

:26:54.:26:56.

proportion of the money directly coming from Scotland. It is more

:26:57.:26:59.

about fiscal responsibility and something as a centre-right

:27:00.:27:02.

politician, I'm fully in favour of. You are now from a country with

:27:03.:27:07.

three of the main parties led by women And also the speaker of the

:27:08.:27:10.

House. In a part of Britain that used to be famous for its misogyny

:27:11.:27:15.

Well, what can I say, women are doing it for themselves up there? #

:27:16.:27:19.

So what is the mood of conference? Do they lurrrve UKIP

:27:20.:27:23.

and hate their coaltion partners, Only one man has

:27:24.:27:25.

the balls to find out. Ask any Conservative at this

:27:26.:27:28.

conference what they want after And if they don't get it,

:27:29.:27:34.

then some of them would prefer to be But if they had to choose,

:27:35.:27:40.

if they had to do a deal with another party, who would

:27:41.:27:43.

they prefer, the Lib Dems or UKIP? I think it is social liberalism,

:27:44.:27:49.

at the end of the UKIP are Their policies are just

:27:50.:27:55.

not right for Britain. I think after five years we

:27:56.:27:58.

can trust the Lib Dems. Yes, they have let us down

:27:59.:28:01.

on a few things, like the boundary changes, but

:28:02.:28:03.

but we know we can work with them. With UKIP, you have

:28:04.:28:07.

a party where we have the red UKIP, and then you have the former

:28:08.:28:10.

libertarian UKIP party, so it'll be too much of a mixed bag and too much

:28:11.:28:12.

confusion within Government. There was a very definite

:28:13.:28:15.

choice there, why is that? I feel UKIP is closer to us,

:28:16.:28:29.

obviously both being two centre I feel we share similar similarities

:28:30.:28:32.

of distrusting the European Union. What's really interesting,

:28:33.:28:35.

of course there is a binary choice, UKIP or the Lib Dems, is the number

:28:36.:28:37.

of people who go - oh, no, I don't want to answer that one and

:28:38.:28:41.

go scurrying back up through there. It's going to have to be the

:28:42.:28:44.

Lib Dems, I'm afraid. Very definite because I think UKIP

:28:45.:28:48.

are not credible. I think a lot

:28:49.:28:58.

of their people are dodgy. It just doesn't feel

:28:59.:29:01.

comfortable to me. I consider myself to be a right-wing

:29:02.:29:03.

Conservative but I'm pro-Europe and I'd rather dive naked into a barrel

:29:04.:29:06.

of wasps than do a deal with either. I don't particularly know what

:29:07.:29:11.

the UKIP party believe in, so, no, I wouldn't want to do

:29:12.:29:14.

a deal with UKIP. You are thinking about it now,

:29:15.:29:16.

aren't you? No,

:29:17.:29:18.

I just happen to like Nigel Farage. Doesn't mean I share

:29:19.:29:20.

the same politics. He's good bloke but he has

:29:21.:29:23.

different politics to me. I would prefer the UKIP party but I

:29:24.:29:25.

don't like UKIP either. We have a lot more in common with

:29:26.:29:38.

UKIP than Liberal Democrats. We as a party have got quite

:29:39.:29:40.

a lot done in this Parliament with Are you suggesting that with

:29:41.:29:46.

the UKIP coalition they wouldn't be quite such a pushover,

:29:47.:29:51.

as a smaller party? I think joining UKIP would be

:29:52.:29:53.

a backward step. There are so many problems here

:29:54.:29:58.

with both of those parties. You know that,

:29:59.:30:01.

that's why you have asked me that I think they are slightly easier to

:30:02.:30:03.

control than UKIP, if they come in and I don't think

:30:04.:30:16.

UKIP will get a decent number Now, I've got to say that's

:30:17.:30:20.

a little surprising because I was told in Doncaster last

:30:21.:30:24.

week by UKIP - they would say that wouldn't they - that if I asked this

:30:25.:30:27.

question they would walk it. Well they haven't,

:30:28.:30:30.

that's either because the sort of Tory that likes UKIP isn't here,

:30:31.:30:32.

or they are wrong and this big win for the Liberal Democrats, well,

:30:33.:30:36.

about one-third of the people who say they are closer to us,

:30:37.:30:38.

they are more Cameroon-type Tory. Two-thirds

:30:39.:30:41.

of that is better the devil you I am joined by the leader of

:30:42.:31:07.

Portsmouth City Council and Bromley Council. I know that you want a

:31:08.:31:12.

majority, if you don't get one, who would you prefer to be equal lotion

:31:13.:31:19.

-- in coalition with? I am focused on achieving a majority government.

:31:20.:31:24.

I think we need to give consideration to running a minority

:31:25.:31:26.

government, possibly going back to the country. It has been hugely

:31:27.:31:32.

frustrating being in college and with the Liberal Democrats. They

:31:33.:31:35.

speak about fairness and yet one of the things they blocked was the

:31:36.:31:38.

Rowntree commission change, which has meant inequality throughout the

:31:39.:31:44.

UK. UKIP are an unknown quantity. I think it's very difficult... Who

:31:45.:31:51.

knows? I'm optimistic. Should David Cameron have done that in 2010,

:31:52.:31:59.

formed a minority administration? I don't think so, we have achieved

:32:00.:32:04.

some amazing things. You think it was right to form coalition then but

:32:05.:32:09.

not next time? If he had formed a minority government he would have

:32:10.:32:12.

had to go back to the country very quickly, egos he would not have got

:32:13.:32:17.

things through. There have been some real successes, in particular, the

:32:18.:32:21.

way the deficit has been reduced hugely? Actually, it has not been

:32:22.:32:26.

reduced hugely. What do you think? If you end up with another hung

:32:27.:32:33.

parliament, is it UKIP or the Lib Dems? That would be them doing a

:32:34.:32:42.

deal, they did not put me on. If we did, it would be UKIP, because Nigel

:32:43.:32:51.

has a point. What is his point? The fact is we are where we are because

:32:52.:32:54.

of Ed Miliband and the Labour Government previously cocking up not

:32:55.:32:59.

only the economy but also immigration and a whole range of

:33:00.:33:01.

issues that brought us to this place. Why don't we take that as

:33:02.:33:09.

read. What is Nigel's point? Over the period of the last Labour

:33:10.:33:12.

government we have had 4 million people coming into this country,

:33:13.:33:16.

that is a population increase of over 4 million. When you have that

:33:17.:33:21.

sort of increase it has a knock-on effect on services, planning. Is

:33:22.:33:29.

Nigel's point immigration? It is part of it. You don't say he has got

:33:30.:33:40.

points, you said... Nigel, you may have a point. That single point is

:33:41.:33:46.

about immigration? It is not framed right, it is about population.

:33:47.:33:50.

People feel the effect of population growth, not the same as immigration.

:33:51.:33:54.

So he's got a point but an obscure point? He is concentrating on the

:33:55.:34:01.

wrong issue. I fundamentally disagree with this, I don't see how

:34:02.:34:05.

you can take seriously a party not yet in Parliament with one policy,

:34:06.:34:10.

pulling out of Europe. Nigel Farage says he will spend more on defence

:34:11.:34:14.

by pulling out of Europe, spend more on the NHS by pulling out of Europe.

:34:15.:34:18.

His ansa to everything is pulling out of Europe. I want to renegotiate

:34:19.:34:24.

our terms with Europe, not out at any cost. If Mr Cameron succeeds in

:34:25.:34:30.

bringing a lot of power back would you vote to stay in? It would depend

:34:31.:34:36.

on the trading agreements, if we would not be hammered by tax,

:34:37.:34:40.

absolutely. If we could not negotiate that point then I would

:34:41.:34:43.

vote no because that would be detrimental to the economy. Do you

:34:44.:34:48.

think the man with a point and Mr Cameron could work together? You

:34:49.:34:56.

mentioned Lord Ashcroft's thing, and UKIP are pulling higher than the

:34:57.:34:59.

Liberal Democrats. There are more UKIP voters out there. That is

:35:00.:35:04.

interesting but has nothing to do with the question I has to queue. Do

:35:05.:35:09.

you think David Cameron and Nigel Farage could work together? I do

:35:10.:35:15.

not. I think David Cameron is big enough to work with anyone, he has

:35:16.:35:19.

worked with the Liberal Democrats, so if he can work with them... Is

:35:20.:35:25.

the answer yes? And are you in the same party? Yes, we agree are lots

:35:26.:35:30.

of things, we don't want to see a Labour government. Why don't you

:35:31.:35:35.

think they could work together? I think David Cameron is a qualified

:35:36.:35:39.

enough politician to go alone, he does not need propped up by somebody

:35:40.:35:43.

who does not even have one MP in Parliament, only has one policy, and

:35:44.:35:46.

that is being out of Europe at any cost. Your government has lamentably

:35:47.:35:53.

failed to hit immigration targets, do you want to remind me what the

:35:54.:35:57.

figures work? If we compare to where we were... There is almost no

:35:58.:36:04.

difference from five years ago. You promised less than 100,000, there

:36:05.:36:07.

has been 200,000. That is only if you take the figures surely as they

:36:08.:36:13.

are in terms of net immigration. That is the figures you set! You are

:36:14.:36:21.

comparing the figures to pre-Conservative Government, but if

:36:22.:36:25.

we had not brought in the changes we brought in, they would be much

:36:26.:36:28.

higher, so there has been real success. You and I both know that

:36:29.:36:33.

was not the promise. Well, we have achieved a lot. I had aspiring

:36:34.:36:38.

Labour politicians and they work very on message, it is nice to have

:36:39.:36:45.

ones that are not on message. It has made my day. I don't think it has

:36:46.:36:49.

done your career is much good but it has brightened up the programme.

:36:50.:36:56.

Whilst we have been on air, Sajid Javid has been addressing the

:36:57.:36:59.

conference. His speech covered the expansion of broadband. To reason,

:37:00.:37:04.

the strength of the British film-making industry, the music

:37:05.:37:10.

industry, arts funding, he made even -- he may be even mentioned the BBC.

:37:11.:37:16.

It is true that we have had to take some difficult decisions and cut

:37:17.:37:20.

taxpayer funding, but because of our national lottery reforms we have

:37:21.:37:23.

protected most budgets, so don't let anybody tell you that conservatives

:37:24.:37:30.

don't care about culture. We do, but we just want to make sure that your

:37:31.:37:36.

money is spent carefully. It's the same with the BBC. We froze the

:37:37.:37:43.

licence fee in 2010. I continue to challenge them to do more with

:37:44.:37:49.

less, because spending public money is a privilege, not a right. I ask

:37:50.:37:56.

myself also, can it be right that somebody goes to prison for not

:37:57.:38:01.

paying their licence fee? That is why I am reviewing this issue. In

:38:02.:38:12.

all of these areas... In all of these areas, there is more to do,

:38:13.:38:16.

but to do it, we need to get re-elected.

:38:17.:38:22.

In seven months, our country faces a choice, a choice between economic

:38:23.:38:31.

security with the Conservatives or a return to high spending and higher

:38:32.:38:36.

taxes with Labour, a choice between a Conservative Party that respects

:38:37.:38:40.

and rewards hard work or a Labour Party that encourages a culture of

:38:41.:38:44.

dependency. A choice between a Prime Minister and Chancellor who have

:38:45.:38:49.

repaired the economy and given it into the fast lane or handing back

:38:50.:38:52.

the keys to the team that crashed the car. We need the country to make

:38:53.:38:58.

the right choice, to choose jobs, to choose growth, to choose ambition,

:38:59.:39:03.

to choose opportunity, and to choose David Cameron as Prime Minister of a

:39:04.:39:06.

majority Conservative Government. That was Sajid Javid. He joins us

:39:07.:39:36.

now. Welcome. Did the Sunday Mirror entrapped Brooks Newmark? I am very

:39:37.:39:42.

sad about it. He was a good friend of mine. I think he made the right

:39:43.:39:45.

decision to leave office. The question of whether it is entrapment

:39:46.:39:51.

is one that I cannot answer. You either minister of media, you can a

:39:52.:39:55.

view. It is precisely because I am the Minister responsible for media

:39:56.:40:02.

policy that I think it is irresponsible to pass verdict. It is

:40:03.:40:08.

possible Brooks Newmark might take legal action and if that happens it

:40:09.:40:15.

would be the view of the courts. Can you discern any public interest in

:40:16.:40:19.

what was done? I cannot comment on this, if he decides to take legal

:40:20.:40:22.

action that is something I don't want to prejudice in any way,

:40:23.:40:27.

especially given my role being responsible for policy. Do you

:40:28.:40:33.

welcome a referral of this case to the new independent press standards

:40:34.:40:37.

organisation? That's up to the organisation, I understand there

:40:38.:40:40.

have been requests for referral. Would you welcome that? The

:40:41.:40:44.

organisation is there for people to make referrals and if that has been

:40:45.:40:47.

made then if the organisation wants to look at it they should. Would you

:40:48.:40:53.

welcome it? It is an independent organisation. You don't have a view

:40:54.:40:56.

as the minister responsible for media? I don't want to have

:40:57.:41:01.

involvement in this. Is there any point in being responsible for the

:41:02.:41:05.

media if you cannot comment? Yes, there is, but when something goes

:41:06.:41:10.

before the courts. Anything could go in front of the courts and then you

:41:11.:41:16.

could not comment on anything. This is something where there are strong

:41:17.:41:20.

rumours today that this may go in front of the court and I should not

:41:21.:41:24.

prejudice that. Coming on to the economy, why is progress on cutting

:41:25.:41:29.

the deficit so slow? Let's look at what the oh BR said about it, the

:41:30.:41:36.

original targets were set by the oh BR. They had hoped it would be

:41:37.:41:41.

stronger. If you look at their analysis it was the Euro crisis, the

:41:42.:41:45.

commodity crisis, other problems around the world, with the emerging

:41:46.:41:51.

markets and growth falling there. That may explain why you've not done

:41:52.:41:54.

it as quickly as you might have wanted to but in 2010 you said you

:41:55.:42:01.

would get rid of the deficit by 25th -- 2015. By 2015, if you're lucky,

:42:02.:42:08.

you will only be 40% of the way there. 60% to be done. Why so slow?

:42:09.:42:17.

Judge me by the deficit, said George Osborne, judge me by cutting the

:42:18.:42:22.

deficit. Look at the process made, -- progress made, we had down by a

:42:23.:42:27.

third. We keep making progress. I don't think anybody thought you can

:42:28.:42:32.

turn down a deficit that is the biggest in the Second World War

:42:33.:42:39.

overnight. It's going to take time. Why are you making progress when

:42:40.:42:46.

borrowing has risen? What I do is look at financial year by financial

:42:47.:42:51.

year. It is rising. I'm confident that the deficit will keep falling,

:42:52.:42:53.

judge that when we get the latest set of numbers. Why has it been

:42:54.:43:00.

rising? There is always a seasonality to borrowing figures, so

:43:01.:43:05.

what matters most is the actual year. I'm confident we will keep

:43:06.:43:10.

cutting the deficit. Even based on the projections, by the end of this

:43:11.:43:15.

financial year the deficit will still be around ?95 billion, it is

:43:16.:43:19.

still very big but we made huge progress. Why have you made less

:43:20.:43:29.

progress in cutting the deficit than the United States, Italy, Germany,

:43:30.:43:35.

Greece, Spain? Why have you done less well than even those countries?

:43:36.:43:42.

For two reasons, we had the deepest recession in almost 100 years. You

:43:43.:43:47.

did not have a deeper recession than Greece or Spain. As you know, they

:43:48.:43:52.

have other issues around their currency, the problems that has

:43:53.:43:56.

caused, we did not join the euro and that will not happen under a

:43:57.:44:00.

Conservative government ever. But we had a deeper recession, the deepest

:44:01.:44:04.

and 100 years in this country. Why were they able to cut the deficit

:44:05.:44:09.

more quickly than you? Our deficit was the largest of any major

:44:10.:44:14.

industrialised economy, 10% of GDP, on hundred Greece had more than

:44:15.:44:23.

that, America was almost that. We also had -- Greece also had a major

:44:24.:44:26.

currency crisis. That makes it even worse! I put it to you the reason

:44:27.:44:33.

you have not cut the deficit is income tax receipts are barely

:44:34.:44:37.

rising and income tax receipts are not rising because ordinary people

:44:38.:44:40.

in this country are going through a huge squeeze on their wages, they

:44:41.:44:44.

are falling in real terms, not paying the tax you thought, able are

:44:45.:44:50.

suffering. That is the reason. I don't accept that. Plenty of people

:44:51.:44:54.

are still facing significant charges every day. Our plan is to see what

:44:55.:44:59.

we can do more than we've already done to keep on with that plan. Back

:45:00.:45:05.

to income tax, you raised that issue, income tax receipts are not

:45:06.:45:08.

rising because the income tax cuts we have introduced, the increase in

:45:09.:45:13.

the personal allowance means lower paid people have all seen tax cuts,

:45:14.:45:19.

the average tax cut is much higher. We have taken people out of tax

:45:20.:45:23.

altogether. I'm proud of that. You might say that is a reason. Even

:45:24.:45:29.

after that tax cut, real take-home pay is falling, it is down 5%. We

:45:30.:45:37.

are heading no 410 year freeze -- we are heading for a ten year freeze.

:45:38.:45:45.

Are you proud of that? Now I am not. We have the fastest-growing economy

:45:46.:45:52.

in the world. I how much have -- I how much have average wages risen?

:45:53.:45:59.

When you've had the deepest recession in 100 years, a

:46:00.:46:02.

contraction in GDP of more than 6%, people will feel your. -- people

:46:03.:46:09.

will feel badly. How much have wages risen? We have had difficulty... It

:46:10.:46:18.

depends what class of wage... I am talking about average wages. They

:46:19.:46:25.

have risen by 0.1% so far. 0.1% after four years of Conservative led

:46:26.:46:29.

government. In real terms, people's wages are still down. I might have

:46:30.:46:35.

average wages risen for people who have found a job? 2 million jobs

:46:36.:46:40.

have been created. Sure, they've got a job. Those jobs would not have

:46:41.:46:44.

been created if we had not done this to the economy. Plenty people are

:46:45.:46:51.

working zero hours... If you want to investigate that, part-time jobs are

:46:52.:46:54.

now more higher than they have been in the past but the number of people

:46:55.:47:00.

on 0-hour contracts is less than 1%, we have more people employed than

:47:01.:47:02.

ever before, more women employed than ever before and I'm proud of

:47:03.:47:07.

that. But people are suffering. There are real wages are being

:47:08.:47:10.

squeezed and it looks like on the current projections we have, the

:47:11.:47:16.

report out this morning, there is going to be no relief for people on

:47:17.:47:19.

average wages for the foreseeable future. The most important thing is

:47:20.:47:24.

that we have a growing economy that creates jobs. We've got a plan for

:47:25.:47:28.

that, it requires difficult decisions, but that will be put at

:47:29.:47:32.

risk if we abandon this plan. That is Labour's policy, remember, you

:47:33.:47:36.

had a conference last week with a leader who did not mention the

:47:37.:47:42.

deficit, he forgot that. If he cannot deal with the deficit we

:47:43.:47:45.

cannot have a brilliant NHS, create jobs...

:47:46.:47:49.

I understand that's the line. It is more than a life. It is reality.

:47:50.:48:02.

Do you know the lowest 10% is just down ?300. ?300 lower in real terms,

:48:03.:48:07.

despite your growing economy. People on low wages are not seeing

:48:08.:48:11.

any benefit from this recovery. If you work full-time you have seen

:48:12.:48:14.

your income tax bill cut by two-thirds if you are on the

:48:15.:48:18.

national minimum wage. If you work full time. That's something, despite

:48:19.:48:21.

all the challenges that we have had, that shows we are doing what we can

:48:22.:48:25.

o to help people in difficult circumstances. The figures I have

:48:26.:48:32.

given you are after tax. They take that tax cut into account. Ethen

:48:33.:48:37.

their real take home pay is lower than it was in 2008. This recovery

:48:38.:48:41.

is not reaching the people who matter most It is reaching people in

:48:42.:48:45.

terms of helping the economy grope and creating jobs. You ask anyone

:48:46.:48:49.

out there - do they want to see a growing economy for them and their

:48:50.:48:56.

children and make sure they wrant to create jobs, and growing faster than

:48:57.:48:59.

any other nation. Did you say anything about the BBC this morning?

:49:00.:49:04.

I did. Good things? All good. I hope you continue after this interview.

:49:05.:49:06.

Thank you. Well, it's about 10 minutes before

:49:07.:49:11.

George Osborne gets to his feet. Everyone hopes is hoping it'll turn

:49:12.:49:22.

around the mood of the conference. Let's see if conference fever is

:49:23.:49:26.

over way. Let's go to Giles. What would you like to hear from the

:49:27.:49:29.

Chancellor? That he is still on course for rescuing the country from

:49:30.:49:32.

the damage done by the last Labour Government. I think I want to hear

:49:33.:49:37.

that he has plans to sustain that programme, so that over the coming

:49:38.:49:42.

hearse, all the people in this country will be a lot better off.

:49:43.:49:46.

Well, I want him to reinforce how incredibly well we have done in

:49:47.:49:52.

getting the deficit down. Too many people just sort of are getting

:49:53.:50:00.

ridiculous headlines. I don't think that the country understwhands an

:50:01.:50:03.

incredible job he has done. Steady the ship. Stay on course for what we

:50:04.:50:10.

are doing. Ton cut where we need to and provide a stronger economy for

:50:11.:50:13.

the future which is what he has been doing for the last four years and

:50:14.:50:19.

and I'm sure that's his tension for the next five years if we get

:50:20.:50:22.

another Government Conservative. Does the death tax cut help? Does it

:50:23.:50:27.

grab people? I think so. It has been uttered around before and I think

:50:28.:50:32.

UKIP have been trying it claim it as their own. I think it is really

:50:33.:50:35.

good. What are you expecting? The same as before. Securing what we

:50:36.:50:39.

have been doing for the past four years and working towards the

:50:40.:50:43.

long-term plan. Given this difficult climate at the moment. It is

:50:44.:50:45.

difficult coming into the election, does he need to do something a

:50:46.:50:49.

little more than just the same as before, or is that the point? I

:50:50.:50:52.

think that's the point. The point is, the whole message of the

:50:53.:50:55.

conference seems to be - look, it is working, stick to the plan, move

:50:56.:50:58.

forward. When you go into an election and he makes a speech like

:50:59.:51:05.

that, does he need to give a sort of particularly good one, or are you

:51:06.:51:08.

looking for steady the ship? Steady the ship. That's the word. Make sure

:51:09.:51:12.

we are steady and going on. Tax cuts. I think he is doing a good

:51:13.:51:17.

job. I think he has actually stuck to the course. Stuck to the plan.

:51:18.:51:21.

And it's actually paid off. You know, it is having that

:51:22.:51:23.

determination of spirit and that belief in what he is doing and I

:51:24.:51:27.

think he's got that. Is he a good speaker? I think he is. You see him

:51:28.:51:33.

on the news and just doing a bit to camera, maybe not as good but in a

:51:34.:51:37.

hall like that, he really gets people going. He has that passion.

:51:38.:51:41.

Well, the Chancellor, George Osborne, is about five mintues

:51:42.:51:43.

Let's have a word with the BBC's Political Editor, Nick Robinson.

:51:44.:51:49.

We understand the warm-up man for the Chancellor is Digby Jones? I

:51:50.:51:55.

don't know if you have heard anything about this. Has he come out

:51:56.:52:02.

as a Tory now? There he is, standing before the conference? He could be

:52:03.:52:06.

pretty Tory-minded. I wasn't aware he was coming here but remember,

:52:07.:52:10.

though he was a minister in Gordon Brown's Government and you might

:52:11.:52:15.

have thought a Labour peer, he never took the Labour whip, so, he said,

:52:16.:52:19.

yes, as a leading businessman and Director-General of the CBI I'm

:52:20.:52:23.

happy to help the Government drum up trade but I'm in the a Labour man N

:52:24.:52:27.

increasing weeks, as you say, he has been critical. He likes to think of

:52:28.:52:30.

himself, Digby Jones as Mr Birmingham. Here we

:52:31.:52:31.

himself, Digby Jones as Mr Birmingham. It is his roots and it

:52:32.:52:35.

might be for that reason. All right, the Chancellor. A lot hanging on

:52:36.:52:40.

that. The conference needs him to turn this around, get away from

:52:41.:52:44.

defections and online sex scandals and back to the economy, which the

:52:45.:52:47.

Tories will put centre stage at the election campaign. Back to the

:52:48.:52:51.

economy, back to what they hope will be n Gordon Brown's famous phrase -

:52:52.:52:55.

the dividing lines with the other side. So, I expect George Osborne to

:52:56.:52:58.

announce a significant cut in welfare spending. They have already

:52:59.:53:02.

been signalling this, haven't they, as a couple of days have gone on,

:53:03.:53:07.

didn't get much coverage because of the talks of defection but their

:53:08.:53:11.

first announcement is they would stop single young people under-21

:53:12.:53:14.

being able it claim housing benefit. They said the money they saved would

:53:15.:53:19.

be spent on apprenticeships. The Chancellor this morning on the radio

:53:20.:53:23.

and elsewhere in interviews signalled he wanted to curb welfare

:53:24.:53:26.

spending. They have always had a hole to fill, the Tories. They say

:53:27.:53:31.

they need to save about another ?12 billion in welfare spending in the

:53:32.:53:34.

next Parliament before the deficit is eliminated. Physical that happens

:53:35.:53:39.

on time, it hasn't up until now -- if that happens on time. It would be

:53:40.:53:42.

midway through the next Parliament, 2018. He, I suspect, will want to

:53:43.:53:47.

put a downpayment on how he will meet some of that ?12 billion and in

:53:48.:53:51.

effect say it the Labour Party - here is what I will do, will you

:53:52.:53:55.

match it? If not, what will you do? This will be a change not between

:53:56.:53:59.

now and the election but an indication of - look, this will be

:54:00.:54:03.

in our manifesto, Mr Osborne will say - if you want this, you will

:54:04.:54:07.

have to vote for us. Remember his next financial statement is the

:54:08.:54:11.

Autumn Statement. It is increasingly in the winter. It is in December

:54:12.:54:15.

this year. But it is called the Autumn Statement. That's when he

:54:16.:54:17.

sets out the plans. There is no suggestion that the Liberal

:54:18.:54:20.

Democrats, the coalition party will be willing to sign up to new welfare

:54:21.:54:24.

cuts. But this is a waive him saying - this is what I would do if I was

:54:25.:54:30.

on my own, with a majority Tory Government. This is what he would

:54:31.:54:33.

claim he would do and Labour can't match. How worried are they about

:54:34.:54:38.

UKIP and more defections? Of course they are worried. One of the reasons

:54:39.:54:41.

they are worried is they simply cannot know the answer to the

:54:42.:54:44.

question. Any sensible person wants to ask... Well, a, they are fibbing,

:54:45.:54:51.

b, people may not know, c, people may be think being it but waiting to

:54:52.:54:56.

see. In other words, if you are the sort of person who might defect as a

:54:57.:55:00.

Tory MP to UKIP, one thing you might want to do, presumably you are not

:55:01.:55:06.

you haved not made up your mind and waiting for the moment of maximum

:55:07.:55:12.

damage like Mr Reckless, you might be waiting to see how the

:55:13.:55:16.

by-elections G the significant thing is the Tories, behind the scenes

:55:17.:55:21.

scenes are ect effectively writing off the by-election next week, they

:55:22.:55:25.

think UKIP will win it. Pretty extraordinary. In a safe Tory seat.

:55:26.:55:29.

That they'll lose to u kitsch they are putting their energies into the

:55:30.:55:35.

-- to UKIP. They are putting their energies into the Rochester and st.

:55:36.:55:44.

Stroud seat. They they may be thinking - I want it save my skin.

:55:45.:55:50.

They are saying, oh, no, it isn't, it is the way to lose your career.

:55:51.:55:55.

If all their eggs are going into the Rochester basket, and for the

:55:56.:56:02.

reasons you have written off Clacton, if they lose Rochester, it

:56:03.:56:07.

is Krakatoa. Yes and people who are thinking - I quite like being in the

:56:08.:56:11.

House of Commons, how do I survive? Maybe I have to switch party. A sign

:56:12.:56:16.

of the anger here, you saw this phrase used by the party Chairman.

:56:17.:56:21.

He has lied and lied and lied rvings David Cameron was touring the

:56:22.:56:24.

parties that take place, late at night there is a reception for the

:56:25.:56:28.

West Midlands and the North of England and this party and that. I

:56:29.:56:34.

saw one speech, in which a really fired up David Cameron said - I vow

:56:35.:56:38.

to get that seat back to the Tories. I bumped into someone who heard him

:56:39.:56:47.

speaking half an hour later and he said quo, "Mark Reckless got his fat

:56:48.:56:55.

arson the benches of the -- cars on the benches of the House of Commons,

:56:56.:57:02.

because of the Tories hard work." And there is a different approach to

:57:03.:57:07.

Douglas Carswell and Mark Reckless? Very simple, they loathe him.

:57:08.:57:14.

Carswell was seen as a slightly eccentric, character. Mark Reckless

:57:15.:57:17.

has been loathed. He has been loathed at university. Like Gordon

:57:18.:57:22.

Brown and Robin Cook. Who was at university? Oxford University with

:57:23.:57:34.

Mark Reckless? George Osborne. Were they in the Bullingdon Club? He He

:57:35.:57:40.

went to a posh public schoofrnlts I don't think he would have been

:57:41.:57:44.

invited. Why do they loathe him? They think he is pious. They think

:57:45.:57:49.

he takes himself much more seriously than they do him and, of course,

:57:50.:57:54.

loathes them back. I mean, part of the roots of this - you always have

:57:55.:57:59.

to look at the roots of this. I once joked I would write a book called

:58:00.:58:06.

how the small snub made history. Mark Reckless tried a rebellion for

:58:07.:58:14.

David Cameron to cut EU budget. When it was cut, Cameron said publicly -

:58:15.:58:18.

your rebellion made no difference, I would have done it anyway. Not the

:58:19.:58:24.

greatest way to keep onside. He is not great at party backbench

:58:25.:58:29.

management. There is a dismissiveness. If you are Mark

:58:30.:58:33.

Reckless, you are - I'm quite a guy, you know, you don't much like that.

:58:34.:58:38.

There is another by-election in a Labour-held seat in Manchester, just

:58:39.:58:41.

north of Manchester. Is there any possibility that UKIP could win that

:58:42.:58:45.

one? Well, certain lay be possibility which, in itself is

:58:46.:58:47.

quite extraordinary. I have not yet had a chance to go and visit the

:58:48.:58:52.

seat. People who have say they think there is a chance. Saving said that,

:58:53.:58:58.

the guys I read and respect and who study UKIP think it is not quite

:58:59.:59:02.

going to happen. He they think UKIP could do well but they don't see

:59:03.:59:06.

them winning the seat. The big thing about Clacton, the at the think they

:59:07.:59:12.

will win, is you have a popular local people, who had a direct male

:59:13.:59:17.

strategy of knowing, by name, a huge percentage of his own electorate who

:59:18.:59:22.

he kept in touch with and asked of their opinions and conveniently all

:59:23.:59:25.

that data, I suspect has gone with him, to UKIP. Now the Chancellor's

:59:26.:59:28.

speech and the Prime Minister's speech at lunch time on late

:59:29.:59:33.

Wednesday morning, they are always planned in tandem. Do we have any

:59:34.:59:40.

idea how they've divvied up the announcements or the overall tone of

:59:41.:59:44.

the speeches? I think the answer to that, but I don't know for certain,

:59:45.:59:47.

is that David Cameron doesn't have announcements. . He tends to do

:59:48.:59:51.

theme, argument and wrap the whole event together. If you think about

:59:52.:59:55.

it, we cannot think of a big announcement since the announcement

:59:56.:59:57.

that he would pursue gay marriage some years ago. Given how well that

:59:58.:00:02.

went down with the Conservative Party, you might think is not an

:00:03.:00:06.

ideal precedent for making an announcement nobody knows about. It

:00:07.:00:09.

is much more likely that the meat comes in this Osborne spee. The meat

:00:10.:00:14.

of a downpayment for welfar cuts, an attempt to put the deficit back on

:00:15.:00:18.

the agenda, to essentially try to claim the Tories are the serious

:00:19.:00:23.

party, the party making difficult choices where Labour they will claim

:00:24.:00:26.

was avoiding the choices, didn't want to talk about the deficit. That

:00:27.:00:30.

will be the efforts, I think of George Osborne and David Cameron, in

:00:31.:00:33.

a way, has it use the fact he has still - despite the fact he is not

:00:34.:00:38.

popular here - he is more popular with the public than his party. And

:00:39.:00:41.

he, I think will try and turn it into a leadership choice. It is me

:00:42.:00:46.

or it is him in number ten. Which means that the Tory election

:00:47.:00:51.

strategy, to be brutal about it, will be built around the economy and

:00:52.:00:54.

Mr Miliband. They are the two issues that the Tories will make the

:00:55.:00:58.

election. We always mock the slogans. Where is it - Securing a

:00:59.:01:05.

Better Future. There is it is. There is an enormous amount of work by

:01:06.:01:12.

market researchers and ad men goes into these apparently banal. They

:01:13.:01:15.

work on that? You might think - what the hell does that mean? I will tell

:01:16.:01:20.

you what they think it means. They think it means the electorate have

:01:21.:01:25.

bought the fact that they have "A long term economic plan." The

:01:26.:01:28.

electorate are suspicious of their motives and they have a feeling that

:01:29.:01:32.

the long-term economic plan is either about the poor or helping

:01:33.:01:37.

their mates. Or it is about getting them re-elected part of the effort

:01:38.:01:42.

is - no, you get help with pension and help with kids getting an

:01:43.:01:46.

apprenticeship. They know the public is worried about security hence the

:01:47.:01:52.

word "securing" and they are worried about the future, in the sense of,

:01:53.:01:56.

will life be worse for my children and grandchildren than it is for me.

:01:57.:02:00.

Every speech has been put through the prism of how do you say to

:02:01.:02:04.

people, it is not just a deficit plan, it is something for central

:02:05.:02:09.

and how do you show it helps ordinary people's children and

:02:10.:02:13.

grandchildren. Of Whether it gets through is another question. Well

:02:14.:02:18.

Digby Jones is still speaking to the conference. They are now run being

:02:19.:02:22.

16 minutes late. Always a mistake, I think to give Digby too much room.

:02:23.:02:27.

He likes to make long speeches. The Chancellor getting warmed up here.

:02:28.:02:38.

Lord Ashcroft, former Tory party treasurer, always helpful to the

:02:39.:02:42.

party leadership with his polls. They are not good reading for the

:02:43.:02:47.

Tories, they see them losing out in a whole raft of marginal seats. I

:02:48.:02:54.

depressed by that, or do they shrug off the polls? -- are they

:02:55.:03:00.

depressed. They do not shrug them off, but it is like being in a race

:03:01.:03:03.

where you can see the guy in front of you, you have a pretty shrewd

:03:04.:03:07.

sense that he cannot go any faster. Their view of Labour is, at their

:03:08.:03:14.

conference they may now progress -- they made little progress, there was

:03:15.:03:20.

no bounce, Ed Miliband did not and to questions about his economic

:03:21.:03:24.

credibility. They think they've got the opponent in their sights. The

:03:25.:03:27.

difficulty they have got is two problems. On the one hand they are

:03:28.:03:32.

bleeding support to Ukip, their traditional supporters from 2010. On

:03:33.:03:37.

the other hand, Labour are holding onto people who voted Liberal

:03:38.:03:42.

Democrat in the past, and maybe because of the Iraq war, because

:03:43.:03:47.

they thought Labour had forgotten the importance of Civil Liberties,

:03:48.:03:50.

they have managed to get 6% of them back. If Ed Miliband can hold onto

:03:51.:03:55.

those ex-Liberal Democrat and if the Tories cannot read Jane the Ukip --

:03:56.:04:02.

cannot regain the Ukip voters, they will lose. They are trying to take

:04:03.:04:09.

the 28% that voted for Gordon Brown and add-on 6% of disaffected Lib

:04:10.:04:14.

Dems. That is exactly right. That is why there is tension for the Tories.

:04:15.:04:20.

Some on the Tory Right say, for God sake, harden up your promise on

:04:21.:04:26.

Europe, say that you would vote against it if you don't get the deal

:04:27.:04:31.

you want, spell out the negotiating strategy, explain how you would curb

:04:32.:04:35.

immigration, that is one group here at the conference, another says, we

:04:36.:04:40.

need to get the people who have gone over to Labour, that is much more

:04:41.:04:44.

traditional appeal, speak about homeownership, apprenticeships, tax

:04:45.:04:49.

cuts for pensioners. The bread and butter, nuts and bolts issues that

:04:50.:04:57.

might make people think this austerity has been worthwhile. Digby

:04:58.:05:02.

Jones has finished. He is getting a standing ovation for his work. Now

:05:03.:05:07.

we can see George Osborne taking the stage. Two stone lighter than when

:05:08.:05:14.

he last spoke to the conference thanks to going on a diet and a new

:05:15.:05:19.

haircut. Modelled on the Julius Caesar look. Let's see if he gives

:05:20.:05:25.

an emperor's speech. Thank you for that typically robust worming

:05:26.:05:32.

welcome. -- Birmingham. Gathered in this whole other representatives of

:05:33.:05:38.

Britain's great party of progress, the party of enterprise and

:05:39.:05:44.

discovery, of liberty and the law. Of the wide open seas and global

:05:45.:05:51.

free trade. We meet to lay out our case before the nation and to ask it

:05:52.:06:04.

to choose the future, not the past. In broad Street, just around the

:06:05.:06:09.

corner from this conference, stands the statue of the golden boys, the

:06:10.:06:14.

three great British pioneers, Matthew Boulton, William Murdoch,

:06:15.:06:20.

James Watt, studying intently their plans for the new steam engine. It's

:06:21.:06:25.

an image that captures a golden age for our country. When the spirit of

:06:26.:06:30.

invention was alive, when the marriage of business and science

:06:31.:06:34.

made everything possible. A time when we faced the future with

:06:35.:06:38.

confidence and were not afraid of the big and sewers to the big

:06:39.:06:48.

questions. -- big answers. I want to be that Britain. Let's raise the

:06:49.:06:51.

ambition of the nation so that everyone has a chance to succeed.

:06:52.:06:53.

APPLAUSE.. I believe it is personally --

:06:54.:07:06.

perfectly possible for Britain to be the most prosperous major country on

:07:07.:07:11.

earth. The most prosperous, the most dynamic, the most creative, but only

:07:12.:07:16.

if this generation provide the big answers to the big questions, only

:07:17.:07:19.

if we choose the future, not the past. For anyone who doubts this is

:07:20.:07:27.

possible, just think about what we've done together, these last four

:07:28.:07:35.

years. Four years ago our economy was in crisis, our country on the

:07:36.:07:39.

floor. We did what we Britons do best when we are being counted out,

:07:40.:07:44.

we picked ourselves up, we sorted ourselves out and we got back in the

:07:45.:07:50.

fight. We set out our long-term economic plan and worked through it.

:07:51.:07:55.

And then two years ago in this Jerry Hall, when the clamour -- in this

:07:56.:08:02.

very hall, when the clamour from our opponents was loudest, they insisted

:08:03.:08:08.

we abandoned the plan, we held our nerve and recommitted ourselves to

:08:09.:08:13.

the course we had set. Today I can report this to you, written is the

:08:14.:08:19.

fastest growing, most job-creating, most deficit reducing of any major

:08:20.:08:24.

advanced economy on earth. Britain, we did this together.

:08:25.:08:39.

We made a choice. To leave behind a past of spending beyond our means,

:08:40.:08:47.

borrowing from our children, we chose the future, not the past.

:08:48.:08:55.

We've come this far. The deficit falling, investment rising, record

:08:56.:09:01.

numbers of new firms, business growth, faster in the North than

:09:02.:09:05.

anywhere else. Long-term unemployment down. Youth

:09:06.:09:09.

unemployment down. The fastest fall in unemployment on record, the

:09:10.:09:20.

long-term economic plan is working. APPLAUSE.

:09:21.:09:27.

These are the statistics. Behind each number is a person. In fact,

:09:28.:09:37.

millions of people. Because of what we've done together, they have a

:09:38.:09:41.

job. Because of what we've done together, they run their own

:09:42.:09:45.

business. Because of what we've done together, they are providing for

:09:46.:09:48.

themselves and their families. Everybody in this file should be

:09:49.:09:55.

proud of that. -- in this hall. I don't stand here marvelling at how

:09:56.:10:01.

much we have done. On the contrary, I am humbled by how much more we

:10:02.:10:06.

have to do. The debt that needs reducing, the small businesses that

:10:07.:10:10.

need supporting, the jobless that need employing, the infrastructure

:10:11.:10:14.

that needs building, the better future for Britain that needs

:10:15.:10:18.

securing, we resolve we will finish the job that we have started.

:10:19.:10:21.

APPLAUSE. We know that beyond the confines of

:10:22.:10:37.

all these party conferences, Britain still faces huge economic risks. At

:10:38.:10:45.

home, though we have brought it down, there remains a large budget

:10:46.:10:50.

deficit and our national debt is dangerously high. Abroad, the

:10:51.:10:54.

biggest markets in the Eurozone are not growing. Anybody who thinks

:10:55.:11:01.

Britain can ease up should look across the Channel, look to the

:11:02.:11:03.

countries who thought they were out of crisis, used up -- eased up and

:11:04.:11:14.

is no risk returning to crisis. Then there is the wider world. The

:11:15.:11:18.

borders with Russia are aflame. A terrible virus sweeping through West

:11:19.:11:29.

Africa. We are engaged in a struggle against barbaric Islamic extremism.

:11:30.:11:35.

Our forces are risking their lives to protect our freedom. Let us

:11:36.:11:39.

together salute their courage. APPLAUSE.

:11:40.:11:52.

Any and all of these events have an impact not just on our

:11:53.:11:59.

national-security but on our economic security. These are big

:12:00.:12:04.

questions. They are not the only ones we face. We are also living

:12:05.:12:11.

through an economic upheaval as big as the Industrial Revolution. Every

:12:12.:12:17.

single day, new technologies, new countries, new economies are shaking

:12:18.:12:22.

up the established way of doing things. It's extraordinarily

:12:23.:12:30.

exciting, and we, as conservatives, applaud the power it places in the

:12:31.:12:35.

hands of citizens. It has never been easier for thousands to start their

:12:36.:12:38.

own business in Britain and reach the whole world. But a single

:12:39.:12:43.

application can appear overnight and disrupt an entire industry, so it

:12:44.:12:49.

can be exciting yes, but unsettling as well. This technology brings

:12:50.:12:55.

intense competition that spells rapid decline for any sector or any

:12:56.:13:01.

country that feels to keep up. These are big questions that require big

:13:02.:13:09.

cancers and it is -- big answers and it is our job to provide them and

:13:10.:13:12.

the next Conservative government will.

:13:13.:13:20.

That's what our party has always done, apply our values and ideas to

:13:21.:13:31.

the challenges of the age and March of this country towards progress.

:13:32.:13:36.

That's what we will do again. Labour cannot do that. Did you see that

:13:37.:13:42.

speech last week? Ed Miliband made a pitch for office that was so

:13:43.:13:48.

forgettable, he forgot it himself. APPLAUSE.

:13:49.:13:54.

I have to tell you, in all seriousness, forgetting to talk

:13:55.:14:03.

about the deficit is not just some hapless mistake of an accident prone

:14:04.:14:08.

politician, it is completely and totally a disqualification for the

:14:09.:14:09.

high office he seeks. The economy may mean nothing to

:14:10.:14:29.

Labour, but it means everything to the people of Britain. It means our

:14:30.:14:34.

security and whether we pay our bills and provide for families and

:14:35.:14:38.

have rewarding jobs and enjoy decent retirements. Do you know what? There

:14:39.:14:46.

is a fashionable claim made these days, I claim that the link between

:14:47.:14:50.

the prosperity of the national economy and people who live in that

:14:51.:14:57.

economy has been broken. -- a claim. I want to take that head-on. It is a

:14:58.:15:04.

dangerous fallacy. At the millions of people who lost their jobs, whose

:15:05.:15:09.

incomes were cut, aspiration is destroyed by Labour's great

:15:10.:15:13.

recession, Ascot them whether they think the link between their lives

:15:14.:15:17.

and the lives of the economy was there. -- ask them. They will tell

:15:18.:15:22.

you from bitter experience they have paid a heavy price for that. Ask the

:15:23.:15:26.

people who have bought a home because we created the conditions

:15:27.:15:31.

for builders to build and they will say that it is the economy that

:15:32.:15:39.

builds houses. Ask the millions each stage who rely on the NHS, last week

:15:40.:15:47.

you heard Thomas is built on sand. -- each day. You cannot have a

:15:48.:15:54.

properly funded National Health Service unless you have a properly

:15:55.:15:55.

run economy. APPLAUSE Put another way - it's only

:15:56.:16:10.

because we were willing to take difficult decisions on spending in

:16:11.:16:14.

other departments that we are able to increase the NHS budget every

:16:15.:16:19.

year of this Parliament. So, don't let anyone in this party concede the

:16:20.:16:25.

NHS to Labour. They would ruin our NHS. The real party of the NHS is in

:16:26.:16:33.

the hall today. APPLAUSE The idea that you can raise

:16:34.:16:46.

living standards, funds the brilliant NHS we want, or provide

:16:47.:16:50.

for our national security, without a plan to fix the economy, is a

:16:51.:16:55.

nonsense. It is the economy that creates jobs. It's the economy that

:16:56.:17:04.

pays for hospitals. The economy that puts food on the table. And we are

:17:05.:17:08.

the only party in Britain with a plan to fix the economy. That is the

:17:09.:17:14.

leadership. We have offered the country these five years in office

:17:15.:17:18.

and this is the leadership we should offer for the next five years. True

:17:19.:17:23.

leadership. Leadership that is working. The leadership offered by

:17:24.:17:26.

our Prime Minister, David Cameron. APPLAUSE

:17:27.:17:37.

And Britain faces some big choices. Choices about whether or not we are

:17:38.:17:44.

going to live within our means or let rising debts threaten our

:17:45.:17:47.

economy again. Choices about whether we are going to win business and

:17:48.:17:52.

investment or drive it away. Choice abouts whether we are going to

:17:53.:17:56.

tackle -- choices about whether we are going to tackle youth

:17:57.:17:59.

unemployment and poor standards in our schools or let down a

:18:00.:18:03.

generation. Choices about building the infrastructure our future

:18:04.:18:07.

economy needs or letting it decay. Choices about whether we are going

:18:08.:18:11.

to trust hard-working tax payers to make their own decisions about their

:18:12.:18:15.

lives and their communities, or take control away from them. The past or

:18:16.:18:21.

the future, that is the choice Britain faces. And we, in this hall,

:18:22.:18:30.

have no doubt - we will choose the future. Now, we face some immediate

:18:31.:18:43.

choices. About protecting Britain's hard-won economic stability. Earlier

:18:44.:18:48.

this mornings just before I came on, you heard from Paul Bunnion. He gave

:18:49.:18:53.

us a powerful testimony of what economic security looks like in real

:18:54.:18:57.

life and what happens when you lose it. And he knows because seven years

:18:58.:19:08.

ago he was working in a branch of Northern Rock in Newcastle. He

:19:09.:19:16.

watched the people queueing desperate to withdraw from the bank.

:19:17.:19:20.

He saw Britain on the brink. He says we must never go back and so do

:19:21.:19:43.

with. We have to have the security of knowing our banks are face, so

:19:44.:19:49.

they are safe from the riskier trading floors. The security of

:19:50.:19:54.

making sure our housing market doesn't bring down our financial

:19:55.:20:02.

system. I'm giving the Bank of England extra powers to curb

:20:03.:20:06.

property booms and of giving mortgages to people who can't afford

:20:07.:20:10.

to repay them. We also need the securing of knowing Britain can pay

:20:11.:20:14.

its way. The Budget deficit is approaching half of what it was when

:20:15.:20:18.

we came to office. But it is still far too high. So we will see through

:20:19.:20:22.

our plan to eliminate it. And then to ensure our country is never in

:20:23.:20:26.

this position again, we must run surpluses in the good years. And

:20:27.:20:32.

when I say "surpluses", I mean the Government raising more than it

:20:33.:20:36.

spends. Now Labour claim they will balance the books. But the

:20:37.:20:42.

independent experts tell you the truth - their plans would mean they

:20:43.:20:47.

would borrow ?28 billion more each year. Running an overall surplus is

:20:48.:20:55.

the only sure way of getting our dangerously high national debt down.

:20:56.:21:00.

And let the message go out from this conference, after what they have put

:21:01.:21:04.

the country through, we will fix the roof when the sun is shining.

:21:05.:21:07.

APPLAUSE And that presents me with a choice.

:21:08.:21:27.

Indeed, it presents all politicians with a choice. We can either pretend

:21:28.:21:30.

to the British people, before the election, that this can be done with

:21:31.:21:35.

hardly any cuts - that's what we saw last week. Or we can level with

:21:36.:21:40.

people now and tell them the kind of difficult decisions that are still

:21:41.:21:44.

required to fix the economy. I have done this job for almost five years.

:21:45.:21:50.

And I can tell you - it's only because we've levelled with people

:21:51.:21:53.

that we have been able to take them with us on the journey our country

:21:54.:22:01.

has had to take. Here are the facts: The latest Treasury estimate is that

:22:02.:22:09.

to eliminate the deficit requires a further ?25 billion of permanent

:22:10.:22:13.

public expenditure savings or new taxes. And I tell you in all canned

:22:14.:22:19.

o, that the -- candour, that the option of taxing your way out of the

:22:20.:22:24.

deficit no longer exists, if it ever did.

:22:25.:22:25.

APPLAUSE In a modern global economy, where

:22:26.:22:36.

people can move their investment from one country to another at the

:22:37.:22:41.

touch of a button and companies can relocate jobs overnight, the

:22:42.:22:44.

economics of high taxation are the economics of the past. And we chose

:22:45.:22:53.

the future -- and we choose the future. The problem for a modern

:22:54.:22:57.

country like Britain is not that it taxes too much, it is that it spends

:22:58.:23:05.

too much. -- taxes too little, spends too much. And as for the

:23:06.:23:10.

heart of what we offer - and the proposals that Labour present to the

:23:11.:23:14.

country - for higher taxes on incomes, taxes on business, taxes on

:23:15.:23:18.

savings, on investments, on financial, pensions homes and on

:23:19.:23:23.

jobs, will be an economic disaster for every person in the United

:23:24.:23:29.

Kingdom. And by the way, when Scotland is rightly given greater

:23:30.:23:34.

control of its taxes, I suspect the people of Scotland will choose to

:23:35.:23:44.

put them down, not up. APPLAUSE And let me be clear, we

:23:45.:23:51.

will honour, in full, our commitments to Scotland and we are

:23:52.:23:55.

also absolutely clear that as Scots get more control over their taxes,

:23:56.:24:00.

it is right that Northern Ireland, Wales and England should get more

:24:01.:24:04.

control over their taxes and their laws, too.

:24:05.:24:05.

APPLAUSE I'm not going to pretend that

:24:06.:24:22.

finding ?25 billion of spending savings will be easy. But nor is it

:24:23.:24:27.

impossible. We have already found ?100 billion of savings in this

:24:28.:24:36.

Parliament. We have shown what can be done if you have discipline and

:24:37.:24:39.

grit. In every election I have thought - Conservatives are argued -

:24:40.:24:45.

you can have better public services without borrowing and spending more.

:24:46.:24:48.

But it is about making Government more efficient and effective and

:24:49.:24:52.

Labour have argued you cannot. I believe that the record of this

:24:53.:24:56.

Government has settled this argument for good. Labour were wrong and we

:24:57.:25:00.

were right. APPLAUSE Theresa May has reduced the

:25:01.:25:18.

Home Office budget by almost 20%. But crime is down. Michael are Gove

:25:19.:25:24.

and Niki Morgan have cut education Boyer crasscy in half but school

:25:25.:25:33.

standards are up. And please thank me in in thanking our Treasury team

:25:34.:25:42.

who have helped us attain this. APPLAUSE

:25:43.:25:50.

I can see Rob liked that bit of the speech.

:25:51.:25:59.

So, to eliminate the deficit and finish the job, we will rere dues

:26:00.:26:03.

Whitehall spending by at least the same rate for the first time two

:26:04.:26:07.

years of the next Parliament as we have done through this Parliament.

:26:08.:26:11.

That will save at least ?13 billion. We will go on restraining public

:26:12.:26:17.

sector pay and there will have to be less welfare spending, too.

:26:18.:26:26.

APPLAUSE Now, welfare spending makes up one-third of the entire

:26:27.:26:30.

Government budget. We are going to live in a country where the elderly

:26:31.:26:37.

have dignity in retirement and the vulnerable and people with

:26:38.:26:40.

disabilities are protected. But we can't afford to live in one, where

:26:41.:26:46.

we spend ?100 billion in welfare payments for people of working age.

:26:47.:26:56.

?100 billion. And we have such debts and even with the reforming

:26:57.:27:00.

decisions that Iain Duncan Smith and I have taken, benefits have risen

:27:01.:27:03.

more than earnings since Labour's great recession. That is not

:27:04.:27:07.

sustainable for any nation and it is not fair, either. So, I can tell you

:27:08.:27:13.

this today - working age benefits in Britain will have to be frozen for

:27:14.:27:18.

two years. This is the choice Britain needs to take to protect our

:27:19.:27:24.

economic stability and to secure a better future. The fairest way to

:27:25.:27:29.

reduce welfare bills is to make sure that benefits are not rising faster

:27:30.:27:33.

than the wages of the tax payers who are paying for them.

:27:34.:27:33.

APPLAUSE We will provide a welfare system

:27:34.:27:49.

that is fair to those who need it and fair to those who pay for it,

:27:50.:27:52.

too. APPLAUSE This freeze in working age

:27:53.:28:01.

benefits saves the country over ?3 billion. It's a serious contribution

:28:02.:28:07.

to reducing the deficit. Pensioner benefits and disability

:28:08.:28:11.

benefits will be excluded. And to those in work, I say this - where is

:28:12.:28:16.

the sense in taxing you more, only for you to be given some of your own

:28:17.:28:23.

money back, in welfare? The best way to support people's incomes is to

:28:24.:28:27.

make sure that those out of work get a job and those in work pay less

:28:28.:28:31.

tax. APPLAUSE

:28:32.:28:40.

And that is why I am the Chancellor, in budget after budget, who is

:28:41.:28:51.

increasing the tax-free personal allowance to ??10,500, meaning

:28:52.:28:54.

working people on low and middle incomes keep up to ?800 more of

:28:55.:28:59.

their hard-earned money. It is why we have cut taxes for savers, for

:29:00.:29:03.

home-owners, for small businesses, self-employed. Cut taxes for

:29:04.:29:07.

everyone who I pas their council tax or fills up their car. And that is

:29:08.:29:12.

why we have cut jobs taxes and increased work incentives and as a

:29:13.:29:16.

result there are almost 2 million more in work. That is the choice

:29:17.:29:20.

that we have made. APPLAUSE

:29:21.:29:26.

And the good news is that youth unemployment has fallen sharply. The

:29:27.:29:34.

sad news is that there are still too many young people who have fallen

:29:35.:29:38.

into a culture of welfare dependency and a life on the dole. It is a scar

:29:39.:29:46.

on our society. It is a tragic waste of human talent and we can end it in

:29:47.:29:51.

the next Parliament. So let this party of progress make another

:29:52.:29:55.

choice. Let's abolish long-term youth unemployment altogether.

:29:56.:29:56.

APPLAUSE So here is how we will do it - we'll

:29:57.:30:13.

replace Jobseeker's Allowance, reform housing benefit and take the

:30:14.:30:18.

benefit cap we have introduced down to ?23,000, because families out of

:30:19.:30:21.

work should not get more than the average family in work.

:30:22.:30:32.

APPLAUSE And all of these savings, all of

:30:33.:30:39.

these savings will be used to fund 3 million new apprenticeships. 3

:30:40.:30:41.

million more chances for a better life. So we help our citizens get

:30:42.:30:46.

jobs, instead of more immigration from abroad. We have a choice

:30:47.:30:50.

between paying our young people for a life on the dole, or giving them

:30:51.:30:56.

the keys of opportunity and be in no doubt which side this party is on,

:30:57.:30:59.

we choose their future. This country must pay its debts,

:31:00.:31:21.

pull up its young people. It must be the place where business invests and

:31:22.:31:29.

businesses thrive. I thought Digby Jones spoke well about this. It is

:31:30.:31:34.

not by accident that more than 2 million private sector jobs have

:31:35.:31:38.

been created under this government. It is the deliberate policy of this

:31:39.:31:44.

government to support job creators. And yet, for the first time in my

:31:45.:31:49.

adult life, we have a Labour Party that is positively anti-business. It

:31:50.:31:54.

came through in every sentence Ed Miliband remembered. The bits we

:31:55.:32:01.

wished he'd forgotten. By the general election, we will have

:32:02.:32:09.

delivered on a promise I made to you in my first speech as Chancellor in

:32:10.:32:15.

Birmingham. Britain will have the lowest, most competitive business

:32:16.:32:18.

taxes of any large country in the world. APPLAUSE.

:32:19.:32:27.

Unbelievably, Labour want to reverse this. This is their policy, to be

:32:28.:32:37.

firm against firms. Their business to be against business. As if they

:32:38.:32:40.

forgotten that people work in businesses and their wages come from

:32:41.:32:44.

firms. We instead are proud to be the party of firms and businesses,

:32:45.:32:51.

of income and jobs, and livelihoods. When we choose to be on the side of

:32:52.:32:55.

enterprise we are choosing to be on the side of the British people.

:32:56.:33:07.

This party of progress is the party of free markets and their markets.

:33:08.:33:16.

How dare the Labour Party attempt to give lessons on fairness? Who is the

:33:17.:33:21.

party restoring the real value of the minimum wage? Who is the party

:33:22.:33:26.

tackling abuse of 0-hour contracts? Who is the party capping payday

:33:27.:33:31.

loans, not 13 years of Labour, they were too busy capping each other. It

:33:32.:33:35.

is ask, the Conservative Party who understands markets must be fair if

:33:36.:33:37.

they are to be free. -- it is us. It is this pro-business conservative

:33:38.:33:54.

Chancellor who says to some of the biggest technology companies in the

:33:55.:33:58.

world this today. You are welcome here in Britain with open arms. You

:33:59.:34:03.

have the advantages of our skilled population to work for you, what

:34:04.:34:08.

band connections to deliver your services and our NHS to keep

:34:09.:34:13.

employees healthy. -- broadband. They are advantages that must be

:34:14.:34:17.

paid for. Whilst we offer some of the lowest business taxes in the

:34:18.:34:23.

world, we expect those taxes to be paid, not avoided, and some

:34:24.:34:26.

technology companies go to extraordinary lengths to pay little

:34:27.:34:32.

or no tax here. If you abuse the tax system then you abused the trust of

:34:33.:34:36.

the British people, and my message to these companies is clear, we will

:34:37.:34:41.

put a stop to it, low taxes but low taxes that are paid. Part of our

:34:42.:34:46.

effort to reduce the deficit. Our choice is that we are all in

:34:47.:35:03.

this together. It was this government that started the global

:35:04.:35:10.

work on changing international tax rules. This autumn we will lead the

:35:11.:35:14.

world in implementing those changes here in Britain. The future for

:35:15.:35:23.

Britain is to be a low tax country where people play by the rules. The

:35:24.:35:26.

future for Britain is to be a pro-business country. We also have

:35:27.:35:32.

to build for that future. Big decisions on infrastructure have

:35:33.:35:37.

always been controversial and always will be. The railways were bitterly

:35:38.:35:46.

opposed in the 19th century. The motorways were opposed in the 20th

:35:47.:35:50.

century. Let's face it. Even today, this country has spent 40 years

:35:51.:35:55.

failing to take a decision about building a new runway in the

:35:56.:36:00.

south-east of England. There are always 100 reasons to stick with the

:36:01.:36:04.

past but we need to choose the future. We should ask ourselves what

:36:05.:36:10.

the golden boys in that statue outside this hall would have done.

:36:11.:36:14.

What choices would those great Britons have made? Would they have

:36:15.:36:22.

said, our trains may be packed, roads congested, transport system

:36:23.:36:26.

cannot cope, but we will not build any more new roads railways? Would

:36:27.:36:32.

they have said, we mind for called the Underground and explored for oil

:36:33.:36:36.

in the sea but we should leave the extraordinary shale gas reserves

:36:37.:36:39.

untouched beneath our feet? They would not. Would they have said the

:36:40.:36:46.

country that had built the first nuclear power station should not

:36:47.:36:50.

build any more? They would not. Would they have said, it is OK if

:36:51.:36:53.

our children cannot afford houses so long as we can? They would not.

:36:54.:37:01.

Would they, who were part of an age of Enlightenment, that discovered

:37:02.:37:05.

the vaccine for smallpox, have said we are not going to have any

:37:06.:37:09.

research into genetic medicines and crops that will save countless lives

:37:10.:37:12.

in the future? They would not. We must choose the future. We will tap

:37:13.:37:17.

the shale gas, commission nuclear power, guarantee energy for the

:37:18.:37:23.

future. We will build the High Speed Rail Bill, decide where to put our

:37:24.:37:31.

runway, and support the Next Generation with starter homes in a

:37:32.:37:35.

permanent Help To Buy. We must learn from the past, not be the past.

:37:36.:37:39.

Decide or decline, that is the choice and we must choose the

:37:40.:37:40.

future. You know what? This future cannot

:37:41.:37:56.

just be about prosperity for one corner of her country. I grew up in

:37:57.:38:01.

London, I'm full of wonder at the way it has become a global capital,

:38:02.:38:07.

attracting the young, the ambitious, the talented from across the world.

:38:08.:38:11.

That's a huge strength for the whole of Britain. But I'm also the first

:38:12.:38:17.

Chancellor for almost 40 years to represent a constituency in the

:38:18.:38:22.

North of England and I can see the risk that our capital city will

:38:23.:38:25.

dominate. It's not healthy for our country or our economy. The answer

:38:26.:38:31.

is not to pool down or hold back our greatest global asset, that would be

:38:32.:38:38.

crazy. The answer is to build up the rest of the country, create a

:38:39.:38:41.

northern powerhouse of the cities across the Pennines, correct up the

:38:42.:38:47.

south-west, put the Midlands at the centre of the great manufacturing

:38:48.:38:51.

revival. People know that the disparities between different parts

:38:52.:38:54.

of our countries have grown up over many decades, under governments of

:38:55.:39:01.

all colours. Treat people as adults, not pretend we can reverse something

:39:02.:39:06.

like this overnight. Equally, let's not give up, say that it cannot be

:39:07.:39:12.

done, look at what Michael Heseltine achieved at the docks of Liverpool

:39:13.:39:15.

and London. This party of progress knows what it takes to create

:39:16.:39:23.

flourishing economies. Top universities, strong leadership that

:39:24.:39:29.

comes with powerful elected members of cities. These are the ingredients

:39:30.:39:33.

of the northern powerhouse. That is how we deliver prosperity and

:39:34.:39:36.

security for families across the nation and it is one of my driving

:39:37.:39:42.

missions to do everything I can. Let us choose today to make reducing the

:39:43.:39:47.

gap between North and South one of the central ambitions of the next

:39:48.:39:49.

Conservative government. APPLAUSE. There is one final choice we should

:39:50.:40:07.

make. A choice this party of progress always makes. That is to

:40:08.:40:12.

trust people with their own money. That is why in my budget this year I

:40:13.:40:17.

applied that philosophy with far reaching new freedoms in the way

:40:18.:40:20.

people can access their pensions. These freedoms are based on the

:40:21.:40:32.

simple idea that people know better how to spend their money than

:40:33.:40:38.

governments do. This party that gave people the right to buy their own

:40:39.:40:41.

home is the party that is giving people ownership of their own

:40:42.:40:49.

pension as well. APPLAUSE. But I want to go further. There are still

:40:50.:40:54.

rules that say you cannot pass on to the next generation any of your

:40:55.:40:57.

pension pot when you die without paying a punitive 55% tax on it. I

:40:58.:41:06.

could choose to cut this tax rate. Instead, I'd choose to abolish it

:41:07.:41:08.

altogether. APPLAUSE. People who have worked and saved all

:41:09.:41:27.

their lives will be able to pass on their hard earned pensions to the

:41:28.:41:31.

families tax free, effective from today. APPLAUSE.

:41:32.:41:46.

The children and grandchildren and others who benefit will get the same

:41:47.:41:52.

tax treatment on this income as any other, but only when they choose to

:41:53.:41:57.

drive down. Freedom for people's pensions, a pension tax abolished,

:41:58.:42:03.

passing on your pension tax-free. Put into place and delivered by

:42:04.:42:07.

conservatives in government right now. APPLAUSE.

:42:08.:42:19.

We are eight months away from one of the most important general elections

:42:20.:42:28.

in a generation. We can face it with confidence, because we go to the

:42:29.:42:32.

people as the party of progress. For five years Britain has pursued a

:42:33.:42:39.

clear economic policy, whilst all over Europe there has been in crisis

:42:40.:42:42.

and uncertainty. Britain has been the land turning the storm. Now we

:42:43.:42:48.

seek a new mandate as the party of jobs and security and a strong Prime

:42:49.:42:55.

Minister against the party of higher taxes, more debt and Ed Miliband. We

:42:56.:42:59.

are going to offer political resolve and economic competence, a confident

:43:00.:43:04.

future for Britain as the most prosperous country in the world. We

:43:05.:43:07.

are going to say to the British people, choose jobs, choose

:43:08.:43:13.

enterprise, choose security, choose prosperity, choose investment,

:43:14.:43:19.

choose fairness, choose freedom, choose David Cameron, choose the

:43:20.:43:20.

Conservatives, choose the future. The Chancellor spoke for longer than

:43:21.:43:49.

we'd been told. Almost 40 minutes. He is taking the applause of the

:43:50.:43:52.

conference now. The inevitable standing ovation. He began by

:43:53.:43:57.

telling the conference how good the British economy was but he did say

:43:58.:44:02.

there would have to be another 25 billion in public spending cuts in

:44:03.:44:08.

the next Parliament. That is to get a surplus. He ruled out increases in

:44:09.:44:14.

taxes and instead he went for cuts in public spending. He promises that

:44:15.:44:21.

there will be a freeze on all working age benefits for two years

:44:22.:44:27.

in the next Parliament, starting in 2016, hoping to save ?3 billion per

:44:28.:44:33.

year. He also promised some tougher taxes on companies that have not

:44:34.:44:38.

been paying their fair whack. An upbeat speech from the Chancellor,

:44:39.:44:47.

who will be hoping this conference is back on the economy. What did you

:44:48.:44:51.

make of it? There are two announcements at the heart of it,

:44:52.:44:55.

one was on benefits and the other was the Google tax. On benefits,

:44:56.:45:02.

this is the third stage of the clamp-down for benefits of working

:45:03.:45:05.

age people. What a first it was change the operating, so benefits

:45:06.:45:10.

were not rated with the retail prices index, but the consumer Price

:45:11.:45:18.

index which is lower. Second stage was in 2012 when they said they

:45:19.:45:26.

would not be in line with inflation at all. It meant a cut. Now he says

:45:27.:45:33.

if he is re-elected, the Tories would freeze working age benefits,

:45:34.:45:37.

let's be clear what those are, job-seeker's allowance, income

:45:38.:45:42.

support, child tax credit, working tax credit, employment support

:45:43.:45:45.

allowance, which goes to those deemed capable of work, not those

:45:46.:45:50.

incapable of work, and the element of housing benefit known as local

:45:51.:45:54.

housing allowance. It does not mean freezing benefits for pensioners.

:45:55.:45:59.

Child benefit is frozen. It does not mean, we are told, are freeze for

:46:00.:46:03.

people who are disabled. A dramatic move. One of the Liberal

:46:04.:46:14.

Democrats refused to go along with, both in 2010 and 2012. Let's be

:46:15.:46:18.

honest, it is designed to do two things - one, save a lot of money

:46:19.:46:22.

quickly. ?3 billion is a significant sum to saved but designed to put his

:46:23.:46:27.

opponents on the spot and say - here is my downpayment on the Bev sit.

:46:28.:46:31.

What's yours? Stick with us, we'll speak to Matthew Hancock, Tory

:46:32.:46:35.

minister in a minute to go through some of the Chancellor's reactions.

:46:36.:46:39.

Well, what did Labour make of the Chancellor's speech?

:46:40.:46:41.

Joining me now is the Shadow Treasury Minister, Chris Leslie,

:46:42.:46:44.

Welcome to the Daily Politics. Do you support Mr Osborne's changes on

:46:45.:46:50.

pensions, that he has called, the pension death tax? Well, this is, of

:46:51.:46:57.

course, the 55% rate that George Osborne himself introduced, yes, in

:46:58.:47:02.

July 2010. We raised our concerns back then, in some of the

:47:03.:47:07.

legislative discussions about it and questionied about whether people

:47:08.:47:10.

were being over-taxed. But I think it is good to simplify some of these

:47:11.:47:14.

mention rules but, it is interesting, isn't it, that he

:47:15.:47:20.

didn't U-turn also on the granny tax, the so-called granny tax,

:47:21.:47:25.

remember when he abolished the aged allowance which took a lot more from

:47:26.:47:29.

pensioners. Just to clarify, Labour will support the end of the 55% on

:47:30.:47:35.

pensions? Yes. We said at the time that it was a George Osborne

:47:36.:47:39.

invention in the first place. It is funny, isn't it, how, after an

:47:40.:47:44.

election George Osborne raises some of the taxes but before you get to

:47:45.:47:48.

the next election, he would like to give you the impression he is taking

:47:49.:47:51.

them away. All right. I get the point. What about the freeze on

:47:52.:47:57.

working age benefits which Nick, as I think you heard outlined, what

:47:58.:48:01.

benefits it covers from 2016. Will Labour support a freeze on these

:48:02.:48:05.

benefits? Well, I just heard the list. I think there is a bit of

:48:06.:48:09.

confusion on that. I will look at the detail. Don't forget at our

:48:10.:48:12.

conference last week we said that tough decisions are going to have to

:48:13.:48:16.

be taken on public spending, so, for example, on child benefit we have

:48:17.:48:23.

said not just for 15/16 but for 2016/17, a 1% cap on child benefit

:48:24.:48:30.

but there is being something a bit depressing, the choice George

:48:31.:48:32.

Osborne is making. He said nothing about the squeeze on real earnings

:48:33.:48:37.

and the wages that people have had over this last few years and what

:48:38.:48:42.

his choice is, is to take ?3 billion from those who are of working age,

:48:43.:48:46.

rather than the ?3 billion that he has given away in the tax cuts to

:48:47.:48:52.

the very wealthiest 1% through a millionaire's tax cut, earnings over

:48:53.:48:58.

?150,000. All I say is that that is a very interesting choice from the

:48:59.:49:01.

Chancellor which says all we need to know about how he stands up, always

:49:02.:49:05.

for the very wealthiest few rather than for the vast majority in this

:49:06.:49:09.

country. I think a lot of people who are out there working, day by day,

:49:10.:49:14.

thinking about tax credits, think being maternity pay, for example,

:49:15.:49:18.

all these other things will be saying - hang on, you talk that we

:49:19.:49:22.

are all in this together but what about those at the very top? What

:49:23.:49:25.

about the mansion tax and some of those people who can afford to pay

:49:26.:49:28.

more and contribute more? All right. OK. I take that point, Mr Leslie.

:49:29.:49:35.

So, why are you even considering supporting the freeze?. Because we

:49:36.:49:39.

are going to have to make tough decisions. There is none point in us

:49:40.:49:42.

getting elected and telling people that everything can be wonderful. We

:49:43.:49:46.

are going to have a deficit in this country that has been left behind.

:49:47.:49:49.

Because this is a Chancellor who promised he would get rid of it by

:49:50.:49:53.

now and of course, he hasn't done. In fact, deficit reduction as you

:49:54.:49:56.

know - because you know the figures -- has been a thing of the past for

:49:57.:50:00.

the last couple of years. Deficit is rising, borrowing is up in the most

:50:01.:50:03.

recent figures. The thing about George Osborne is he just doesn't

:50:04.:50:07.

get it, some of the drivers of higher welfare cost, the drivers of

:50:08.:50:12.

the rising deficit are housing becoming unaffordable because of the

:50:13.:50:15.

lack of housing supply and will he pay that is indome across our

:50:16.:50:20.

country. It requires the tax credit subsidies. Nothing in his speech

:50:21.:50:24.

about that. The very sense in which he is trying to divide the country

:50:25.:50:28.

between the wealthiest and the rest and this is' bus they are a divided

:50:29.:50:34.

party. Party. -- and that's bus they are a divided party. We can see if

:50:35.:50:38.

he can persuade his own Conservative Members of Parliament about it. All

:50:39.:50:41.

right, is there anything the Chancellor announced this morning

:50:42.:50:44.

that you will oppose? I will look at the detail. Parliament isn't

:50:45.:50:48.

sitting. You know, I have my concerns about the general direction

:50:49.:50:52.

of travel of where he is going. I think there is a lot of omission

:50:53.:50:56.

here. It is the choices he is making. He always wants to raise

:50:57.:51:00.

taxes and have cuts that hit those in work, but he does nothing for

:51:01.:51:04.

those in the world that he inhabits, who are doing quite well right now.

:51:05.:51:09.

In fact, in the sort of wealthiest 1%, share share of income noe this

:51:10.:51:14.

country has grown, whereas 90-odd % of the rest of the country, their

:51:15.:51:18.

share has fallen. It is that trickledown economics, he has said

:51:19.:51:22.

today, that he wants to stick with. All right, Chris Leslie, thank you

:51:23.:51:26.

for joining us from London. Just a quick recap. The surprise

:51:27.:51:29.

announcements in the Chancellor's speech was a freeze on certain

:51:30.:51:34.

working-age benefits which he says will save ?3 billion a year which

:51:35.:51:38.

will go towards cutting the deficit which will still be about ?95

:51:39.:51:42.

billion or more by the end of this Parliament. Proposed freeze will

:51:43.:51:45.

come into effect if the Conservatives are re-elected. It

:51:46.:51:48.

won't start until 2016, the first full year of a new Government. Let's

:51:49.:51:53.

look at the detail. The benefits freeze would include Jobseeker's

:51:54.:51:56.

Allowance, income support and Employment Support Allowance. It

:51:57.:52:01.

also expends to child and working tax credits.

:52:02.:52:09.

And, to child benefit as well. But, the Chancellor will exclude

:52:10.:52:13.

pensions, disability benefits as well as maternity and paternity pay.

:52:14.:52:15.

pensions, disability benefits as well as maternity and paternity pay.

:52:16.:52:20.

So, there we have it. A proposal which will no doubt be in the next

:52:21.:52:24.

Conservative manifesto. We are joined by the business minister,

:52:25.:52:28.

Matthew Hancock. Can we establish, from the start, that a freeze on

:52:29.:52:33.

benefits n real terms, is a cut? -- in real terms? Well, it depends on

:52:34.:52:37.

the future rate of inflation but it is a freeze in cash terms we are

:52:38.:52:41.

talking about. So benefits will be cut by whatever the rate of

:52:42.:52:45.

inflation is, in real terms? Well, it depends how you measure it, of

:52:46.:52:51.

course. Well, it is by the CPI? That's the general measure of

:52:52.:52:54.

inflation and we are talking here about a cash freeze in the amount of

:52:55.:53:00.

benefits because we think that is the fairest way to tackle the

:53:01.:53:03.

overspending on welfare that's grown up over the last few decades. By

:53:04.:53:11.

what measure is it fair, when the average wages of most ordinary

:53:12.:53:18.

workers are falling in real terms, that you now say, not only will your

:53:19.:53:23.

wages fall in real terms but any benefits that you get will now fall

:53:24.:53:27.

in real terms. Well, to support people who are nor work and to make

:53:28.:53:31.

sure that work pays, we are cutting taxes and income tax, focussed on

:53:32.:53:35.

the lowest paid. And I thought that the Chancellor was very clear in his

:53:36.:53:42.

speech, the best way to help people who are working, to keep more money

:53:43.:53:45.

in their pockets, is to make sure they don't pay as much in tax. What

:53:46.:53:50.

is the point of taking it away in tax and recycling it, in terms of

:53:51.:53:54.

benefit? That's a very straightforward principle. But the

:53:55.:53:59.

take-home pay of average and below average earners is falling, even

:54:00.:54:03.

after your tax cuts. Take-home pay is falling, in real terms and now

:54:04.:54:07.

their benefits will fall, in real terms. So it is a double whammy for

:54:08.:54:11.

ordinary workers, isn't it? Their real wages are falling and real

:54:12.:54:16.

benefits will fall? No, the measures of real wages after tax are

:54:17.:54:19.

positive. No, they are not actually. Well, they are on the measures that

:54:20.:54:24.

- and we can go into the statistics, but the big picture point is this -

:54:25.:54:29.

we have to deal with the deficit. As you saw, Labour have no plans and

:54:30.:54:33.

they don't know what to think of this. They were rather muddled on

:54:34.:54:37.

whether they would attack this or support it. Stay with the Toriesment

:54:38.:54:42.

We have a big task to do as a country, which is to make sure we

:54:43.:54:46.

work through this plan, which is clearly working. We have never

:54:47.:54:49.

argued it was going to be easy to put... Why are you putting all the

:54:50.:54:53.

burden on toll average and below average. To correct you... We are

:54:54.:54:57.

also talking about making sure companies pay their fair share. I

:54:58.:55:00.

have to give you the figures. Real take-home pay for the bottom 10% of

:55:01.:55:09.

earners was ?7,361 in '08. It is now around ?7,000. It has fallen. Real

:55:10.:55:14.

take-home pay and you are now going to cut real benefits. If you are

:55:15.:55:20.

taking that measure, from the great recession and as the Chancellor said

:55:21.:55:23.

in his speech - there is a very strong link between having a

:55:24.:55:28.

recession as a country and people's pay, and absolutely because of the

:55:29.:55:33.

recession, undoubtedly, on average, pay has fallen. We all know that. Do

:55:34.:55:38.

you know why? Because when there is a recession the economy shrinks and

:55:39.:55:43.

the economy is nothing more than the accumulation of the financial income

:55:44.:55:49.

of everybody in it. But if the real take-home pay of people on average

:55:50.:55:54.

and below average earnings are falling, why are you hitting them

:55:55.:55:59.

with a benefits cut. You have muddled it up. Why are you hitting

:56:00.:56:06.

them with a benefits cut You are it has fallen. It is falling, and we

:56:07.:56:10.

had Labour's great recession and boy are we not going to let them forget

:56:11.:56:15.

T we are turning than around. It is not easy. The best thing we can do

:56:16.:56:19.

to support people on low pay is cut their income tax. If you have a

:56:20.:56:24.

two-earner couple with a family on ?13,000 each per year, you will lose

:56:25.:56:29.

around ?400 because of this, but you will gain over ?1,100 because of the

:56:30.:56:34.

tax measures that we have taken and that means that you are overall

:56:35.:56:40.

better off. OK Now that is the sort of change we are making but it is

:56:41.:56:44.

part of a broader picture which is that you have to get control of the

:56:45.:56:48.

nation's finances if we are going to have a stronger and more secure

:56:49.:56:51.

future. And that is the big picture. But let's just... When the economy

:56:52.:56:55.

runs into the sand, everybody gets hit by this. And what is Labour

:56:56.:57:02.

offering... But people hit by it most of all are people on average

:57:03.:57:05.

incomes and below. Meanwhile you have cut the top tax rate for the

:57:06.:57:10.

rich. Now you are going to give this huge middle class benefit for people

:57:11.:57:14.

with big pensions, you are abolishing the 55% tax.

:57:15.:57:17.

Overwhelmingly of benefit to the middle class as you freeze benefits

:57:18.:57:21.

for the working poor. That's in the true, actually. Not only are the

:57:22.:57:26.

most well-paid paying the highest proportion of the tax take than they

:57:27.:57:32.

have in recent times, but, also, the change to pensions is about making

:57:33.:57:37.

sure that it pays to save. So why did you introduce the 55% tax rate

:57:38.:57:42.

in 2011? Well, on many people it was 85% before that and we brought it

:57:43.:57:46.

down. It was 35% and you increased the to 55% for most people. If it

:57:47.:57:51.

was right to do it then, why is it wrong now? It was 85% for some and

:57:52.:57:57.

35% for some. We simplified it to 55% and now we have got rid of it

:57:58.:58:02.

altogether. You are getting rid of something you Z No, we are taking

:58:03.:58:07.

the next ste. We cut it from 85% to 55%. It was mainly 35% for some, you

:58:08.:58:12.

increased it to 55%. There is no mainly about it. Final thoughts. You

:58:13.:58:17.

have been putting to Mr Hancock undoubtedly what Labour would say.

:58:18.:58:22.

Chris Leslie hinted at it but didn't go all the way - which is you are

:58:23.:58:26.

taking money from the working age poor. When we talk to benefits, some

:58:27.:58:30.

goes to people out of work, a lot goes to people in work. They'll say

:58:31.:58:34.

that's unfair. Others will say - we have had a squeeze on our earn, of

:58:35.:58:38.

course, benefits have to be squeezed to.

:58:39.:58:42.

Thank you both very much. I will be here at 11.30am tomorrow with all

:58:43.:58:48.

the big stories and we'll have Boris Johnson's speech to conference.

:58:49.:58:52.

Obviously not interest in that and we'll be speaking to the Foreign

:58:53.:58:57.

Secretary. For now, from Birmingham, goodbye.

:58:58.:59:09.

Saxon hoard. Basically, the Holy Grail of treasure-hunting.

:59:10.:59:13.

is the Holy Grail of treasure-hunting.

:59:14.:59:17.

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