18/07/2017 Daily Politics


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Hello and welcome to the Daily Politics.


The Cabinet is told to end the backbiting and public


disagreements following a series of damaging leaks.


But can the Prime Minister instil unity and discipline?


Australia's Prime Minister says his country is very


keen to do a trade deal with the UK after Brexit.


But how much will trade increase with countries


The Labour Party has backed the idea of a so-called Robin Hood tax


to raise money from the financial sector to help alleviate poverty.


And Australia's parliament and political traditions look


We'll have our very own political slanging match.


of the programme today is the Australian High Commissioner


In a previous life, he was briefly Leader


of the Opposition in Australia, before going on to be his country's


longest serving Foreign Minister under Prime Minister John Howard.


First today, the UK's headline rate of inflation dropped slightly -


down from 2.9% in May to 2.6% in June.


Let's get all the details from our business correspondent, Jonty Bloom,


Why and what has caused the slight fall? We were expecting a small fall


this month but this was much more than expected. Principally it is


done to a fall in the international old forests and that has seen the


price of petrol and diesel on the garage forecourt full sharply --


international oil price. There are still inflationary pressures of


course in the system. But this is quite a sharp fall and much sharper


than people were predicting. It was unexpected and bigger than people


thought, but what about the cost of everyday goods, including food and


household products, did they continue to rise? Yes, they have.


Food is going up by 0.2% in the last month, not as quickly as it has been


rising in the past few months. And also what we are seeing is the price


of raw materials for factories and producers does not seem to be


increasing as quickly as it has been which could mean inflationary


pressures which we were expecting to come through in the next few months


will not be quite as large as expected. People are


talking that inflation, although it has not peaked quite yet, will peak


soon. Do you think it will not get the 3% people had thought might


happen? And would therefore put more pressure on the Bank of England who


of course have to make the decision about base rates. The bank itself


was predicting inflation would reach 3% towards the end of the year. That


is still quite possible but it is still unlikely the Bank of England


will act. The pound fell in value this morning because people were


predicting it means it is far less likely the Bank of England will


increase interest rates. It sees it as a temporary inflation problem


caused by devaluation of the pound principally and it thinks that will


go out of the system, through the system, in a couple of months and


prices will come back to a more acceptable level. As inflation has


risen, albeit with this drop today, it is obviously eating into people's


wages which are rising more slowly. Does this drop take the pressure off


the Government which is in the middle of a big row over what to do


about public sector pay? I am not sure it will totally reveal pressure


or reduce it because you have to remember people in the public sector


had a pay freeze for two years in 2010-11 and the vast majority have


seen pay frozen at an increase of 1% for the last five years and the


Government has committed to keeping that going for another three years


at least. When you are increasing wages by only 1% and prices are


increasing by 2.6%, you are feeling much worse off every year. I do not


see that pressure being reduced very much by just these figures. It has


been a long-running issue and lots of people in the public sector are


very angry and feeling a lot worse off than they were seven years ago.


The noises coming out of the Treasury from the Chancellor in


terms of pay for public servants, do you have any update? We had an


announcement this morning that the pay rises for top civil servants,


judges and top military staff will increase by 1%. That seems to be


confirmation the Treasury is sticking to the tough line. Thank


you. Cost of living, that is what voters are most concerned about. As


an astute observer of British politics, do you think our public


servants are in line for a pay rise? I will be careful making judgments


because presumably when the analysis is done, you compare private sector


wages with public sector wages, you make an over the nation assessment


of the situation and there is a relationship between wages and


employment. One of the features of the UK since the great recession in


2008 is the way you have kept unemployment so low. Your


unemployment rate is around 4.6%. You have had through the private


sector and public sector, probably both, substantial pay restraint, but


the benefit is you have kept unemployment down. What do you make


of the conundrum, as you say and the Government likes to point to the


jobs miracle and there are high rates of employment, but wages have


been either static or rising slowly after the last ten years, yet


inflation is on its way out. Usually, inflation is pushed up by


rising wage costs and that is not the case. Labour would say it is


because of the types of jobs people have, insecure, self-employed, zero


hours contracts. The reason you have inflation at the moment, it seems to


me, is a function of the depreciation of the pound which was


a result of the Brexit folk. The pound, I think, on average must have


depreciated by around 15%, making imports more expensive, that does


have... It should only be temporary effect on prices, but it will have a


temporary effect. In the case of Australia, when we have had


substantial declines in the value of our currency, and it has happened in


the last three, former careers, 20% depreciation in the currency, that


has had a significant effect on the price of imports -- three, four


years. You would expect the inflation impact of the devaluation


to wash through here in the UK before long and maybe we will see


the beginning of the end of that exchange rate effect. We will find


out when we get the next set of figures.


The Bank of England is unveiling the new ?10


note this afternoon which has a picture of Jane Austen on.


In September, the Reserve Bank of Australia is putting a new $10


note in circulation, but who is on it?


At the end of the show, Alexander Downer will give


I think you can probably deduce from that.


So, after days of briefing and backbiting, Theresa May


is attempting to get her class in order.


Cabinet met this morning and Theresa May is keen to show


that her government is getting on with the job.


Yesterday, the Education Secretary, Justine Greening, announced an extra


?2.6 billion for schools over the next two years, although Labour


points out there's no new money as the cash will come


Also yesterday, Transport Secretary Chris Grayling was in the Commons,


laying out the proposed route for the next phase of the High Speed


2 rail link, connecting Birmingham with cities in the North of England.


And of course, Brexit Secretary David Davis was enjoying


the delights of Brussels to launch the second round of formal talks


He's called for both sides to get down to business


Mr Davis has his detractors, however.


Yesterday, Dominic Cummings, one of the leading figures


in the Vote Leave campaign tweeted that he thought David Davis


was "thick as mince, lazy as a toad, and vain as Narcissus."


So Theresa May is attempting to get a grip on all the briefings


She told a group of Conservative backbenchers last night


that there must be "no backbiting, no carping" and that the choice


was "me or Jeremy Corbyn, and nobody wants that".


And this morning, in their weekly Cabinet meeting, the Prime Minister


reinforced the message by reminding her colleagues


that their meetings must be kept private.


The Cabinet meeting has now finished and our political correspondent,


Eleanor Garnier, joins us from outside Number 10.


Was that meeting private or have you heard the entire contents of the


Cabinet this morning? Not yet, but I would not hold your breath. It is


like a really tough school where you have a head teacher who is pretty


weak and all of the pupils are kicking off, just tap the last


school assembly of the term, so far, none have been expelled -- just had


the last school assembly. After the leadership gossip, the leaks from


Cabinet and the hostile briefings, Theresa May is trying to get a grip


of things, to instil discipline. We know at Cabinet today, she was


laying down the law to the senior ministers to keep Stumpf as they go


away on the summer holidays. She wants everyone to calm down and come


back after the holiday hopefully with a bit of a sense of unity. We


can see pictures of members of the Cabinet trooping out of the famous.


They do not look too unhappy, maybe she did not shout too much. What


about the drinks on the terraces last night at the House of Commons


with MPs? She is not only telling her senior ministers they have to


behave and stop bleating, but she told Conservative MPs at a summer


drinks thing they had last night on the terrace that they needed to stop


carping, stop backbiting, to calm down. She said, go away over the


summer, have a good break, but let us be ready to get down to serious


business when we come back after the summer holiday when Parliament


returns in September. Eleanor Garnier outside Number


The reality is that you have to deliver. I know from speaking to


teachers during the general election that they were hurting and needed


extra money put in. So there is a bitter rejigging going on within the


department and that was where the 1.3 billion a year is coming from.


To use your phrase of the magic money tree, you found a lot of it


for the DUP. It is priorities. Let us concentrate


on education, you will take that money or make savings from the


existing schools budget for England, is it annoying the money was going


to be used for more free schools and now it has been taken away? For me


who believes in our manifesto promise of getting more grammar


schools where they were wanted, I am a bit disappointed, but the brutal


reality of a minority government is we cannot get through the policies


we originally wanted. That is where we are. The pressure of course is


going to continue from the big spending departments. The Institute


for Fiscal Studies has pointed out that even with the ?2.6 billion over


two years as a real terms freeze, not increase. Is that really


addressing the issue? It is going a step in the right direction, it is


certainly not stepping backwards. Yes, there is ?1.3 billion extra


that will be put into education. Let us say it has been mildly welcomed


already by the profession. They want more. Of course, I do not blame


them. But it is a step in the right direction. Would you like to see


more? Absolutely. But the reality is, where will it come from? We have


the budget coming in November and that is probably the appropriate


time to find out whether Philip is going to release the firm grip he


has got on the Exchequer. Do you think he should? Is he listening to


the pleas, not just from the sectors themselves, health and education and


others, but also from ministers within the Cabinet? I hope so.


Particularly for those who work in teaching at the lower level, those


with low levels of money in the National Health Service, not by


managers, some of whom are earning over 100,000, 200,000, 300,000, we


are talking about the ones on 20000 and less. You are on the side of


Boris Johnson rather than Philip Hammond. I am on the side of the


National Health Service and education. I am not picking members


of the Cabinet as to whether they are supporting a lifting of the


restraint or not. That is one of the reasons we heard the reason may at


the 1922 drinks last night to ensure we got the message across -- Theresa


May. Boris was there, David Davis and Philip Hammond. The last party


they were at together, it seems they fuelled the Sunday paper pages


completely with their gossip, if not personally, their people. Great to


see them there along with half of the Cabinet at the drinks reception.


No prosecco. It was chilled champagne, beer and red wine and


white wine. Times are hard on the terraces in the House of Commons!


Theresa May addressed the 22 and got her point across beautifully, I


thought. To get back to the issue of public


sector pay, are public servants overpaid? No. So Philip Hammond was


wrong? From what I read, it was taken out of context. And I


shouldn't really know what Philip Hammond is saying in a cabinet


meeting where you should have the freedom to be absolutely frank in


what you say and do not expect to see it appearing on the front page


of any newspaper. It is being aired publicly and he didn't deny that he


said something along those lines. Once you take pensions into account,


did he have a point? Again, I don't know exactly what he said and in


what context. Well, he didn't deny it, so let's just say he said that


public sector workers are paid more than private sector workers, says


he, when you take pensions into account. If that is the reality,


that is the reality. But part of the problem is when you get partial


titbits fed to newspapers by people who are not on your side. It is not


helpful. Here is what he said on the Andrew Marr Show. Philip Hammond


defended his position, saying public sector pay had raced ahead of the


private sector after the economic crash in 2008. Are these the sorts


of things you want to hear from the Chancellor? Well, he is the one who


has to ensure that the books are balanced. At the last count, we had


?1.7 trillion of debt. And who has been in government since 2010? Well,


all of this was built up under the Blair and Brown regime. So you are


still blaming the former Labour government. I certainly am. The


interest we are paying on that is 43 billion a year. Philip Hammond is


right to ensure that we are pulling back on how much we are borrowing to


get to a situation where we can write off the debt. It will benefit


the National Health Service, education and public sector if we


can do this. But you said you want him to release his iron grip on the


finances. At the lower levels. So you would like to see more money


going to the lowest paid? I would prefer some of these managers who


are earning eye-watering salaries to get nothing, and the people lower


down who do the dirty jobs to get more. Let's talk about the


backbiting. Do you think anything Theresa May says now, whether in


cabinet or last night when you were there with those ministers, will


have an iota of difference? Yeah, because we are angry. People on the


backbenches are coming up to me and telling me we should not be having


to listen to plotting is going on either directly by Cabinet ministers


or by people on their behalf, with or without their permission. You


were briefly leading yourself in Australia. How difficult is it to


discipline the troops? Pretty difficult. The equivalent of the


Conservative Party in Australia is the Liberal party, and these are


parties that believe in individual freedom, which seems to me to be


freedom of speech and expression. So you can't corral them into some


quarters -- sort of Stalinist regime. It is a huge challenge to


exercise a degree of discipline. But let's face it, a political party is


made up of a large number of people with different views. If only one


view counted, there would only be one person who ever spoke or made


decisions. Listening to Nigel talking about public sector pay, you


get competition about the allocation of scarce resources. And that is


fine. Everyone knows there is a difference of opinion. The point is,


should it be aired publicly by people who are supposed to be under


what is known as collective responsibility? Well, leaking from


Cabinet in Australia is regarded as a serious offence. What happens to


those who do that? Well, can you prove who did it? In all of my


years, I spent nearly a dozen years in cabinet and there were not many


leaks. But when there were, I never knew the culprit. I fought hard to


ensure that we got back to Cabinet government after the general


election would we found out what was going on and people who were not


part of the Cabinet had more power and were telling the cabin at what


to do. But with that comes a responsibility and they have to


ensure that they can be critical, but within Cabinet. But Theresa


May's authority has been weakened. She was the one who called a snap


election after saying she wouldn't. And then she lost the Tory majority.


So you can understand why people might be upset. As you said, you are


joint chair of the 1922 Committee. Joint secretary. How many letters


have been sent to you? They would be sent to the chairman. How many? I


don't know. I wouldn't ask. I would expect -- wouldn't expect Graham to


tell me, either. The vast majority of backbenchers are supporting the


Prime Minister. Normally, the men in grey suits, as we are called, go up


to the Prime Minister and tell them when it is time to go and make way


for somebody else. This time, we have gone to the Prime Minister and


said to her, we support you 100%. We want you to use the message from the


1922 Committee to tell your Cabinet to get in line. Alexander Downer


said you never know who is doing the leaking, but if people have a good


idea, should ministers be sacked? I believe they should be. If they are


found to be briefing against one another and against the Prime


Minister, I don't think they should last any longer. The Prime Minister


does have the authority to do that. She would of the 1922. Did she seem


seem OK? Absolutely superb. There were also members of Parliament who


had lost their seats in their -- in the room that night. She made a


special point of reflecting on the fact that they were there after they


had lost their jobs. I don't want an early general election. The best way


to do that is by the Cabinet getting a man and supporting the Prime


Minister. Nigel Evans, thank you. Now, on yesterday's show,


you may recall we were joined by the Conservative MP,


Robert Halfon, and the Labour And there was something of a row


about apprentices and pay. The industrial strategy,


for example, talked about the Government spending


2.5 billion on apprenticeships by 2020 and over 53%


of apprentices are women. What is the pay disparity


between men and...? Women get paid ?1 less


as apprentices than men. The surveys that I saw said,


suggested, that women get paid more Surveys suggested,


but you don't know for a fact? Maybe that's something


we need to check. We said we would look


into it, and we have. They have been working away,


the Daily Politics research team. Now, there is nothing


to support your claim, Robert Halfon, that women earn


more than men. The figure that Jess quoted,


that's ?5.85 for men, ?4.82 for women, that's


from a Young Women's Trust report which does suggest female


apprentices are paid ?2,000 a year But women are not necessarily


being paid less than men in the same It is to do with sectors men


and women tend to go into. So, do you want to revise


what you said before? I am very happy to, but let me find


where I thought that I had seen this Well, Robert Halfon


got in touch with us after the programme and gave us


the following figures and sources. He directed our attention to


the 2014 Apprenticeship Pay Survey, done by the Department for Business,


which estimates that the average hourly pay for level two and three


female apprentices across England is higher than for males -


?6.38 as opposed to ?6.16 for men. Jess Phillips, however, was quoting


from a Young Women's Trust report done in March,


2016, which found that female apprentices are paid ?4.82 an hour


and men are paid ?5.85. To help provide some


clarity, we're joined now by Matt Whittaker,


chief economist at the Resolution Foundation, a not-for-profit


research and policy organisation, which says its goal is to improve


outcomes for people on low Can you clear it up? Who is right


when it comes to who is paid more per hour as an apprentice? The great


news is that they are both right. I knew you would say that. Looking at


the latest figures for apprentices specifically looking at basic hourly


pay rates, there is a small gap in favour of female apprentices.


However, that gap reverses as you move up the spectrum. So if we are


thinking about lower-level apprentices, women tend to earn more


than men. But if we look at the high-level apprentices, and those


are the ones that we want to drive, then you see men earning more than


women. And what is the reason for that? It is because they are very


different roles. Nine in ten of those entering and engineering


apprenticeship last year were men. Eight in ten of those entering a


health and social care apprenticeship last year were women.


So in many ways, the gender debate around apprenticeships is something


of a red herring. We know a lot about the gender pay gap, and it


really starts to kick in later in a person's career around childbirth.


When people are entering the labour market, we don't see that going on.


There are bigger issues with apprenticeships rather than what is


going on between men and women. Although it does feed into a broader


debate about equal pay for men and women. But it depends which sector


you enter. So it is still the case that women are entering what might


be termed as poorer paid professions of a lifetime of working, such as


childcare or health, and men are still going into construction and


engineering in larger numbers? That's right. Interestingly, when


you switch from looking at the hourly pay rate you get in your


doctor thinking about what is more important for living standards like


what you get over the course of a week, you see the gap opening in


favour of men. That is partly because male apprentices are working


longer hours than female apprentices, but men also going into


roles where they get paid overtime, and female apprentices aren't. Men


are getting bonuses and female apprentices are not. So those


sectoral choices are then driving what happens. But when you look at


like-for-like, if they were a man and woman starting as apprentices in


the same profession, would they be paid equally and do the statistics


back that up? As far as we can push the statistics. The problem is, and


this is a point that the government needs to improve so that the


government can monitor what is going on with the policy, the statistics


we have are firstly a bit old and secondly do not represent a big


sample. And because there is such a big distinction between the roles


men and women are going into, it is hard to control for everything else


and say, in the same roles, are they getting paid the same? Is there


anything that surprises you about these statistics when in the end, it


comes down to try to attract women to go into different professions


that they have traditionally? Lo, this is the same phenomenon we have


in Australia. It is about gender and occupation. It is not about equality


of pay for equality of work. But it has been in the past and that has


only been rectified recently. Over many years, there has been equal pay


for equal work. But the same thing happens in Australia. Female


apprentices tend to go into areas like child care and health work, and


males focus more on engineering and the like, with everything that has


been said about overtime and bonuses applies as well. So the question is,


why is it that women into the lower paid occupations? Are there


obstacles to them going into the higher paid occupations? These are


difficult questions, but that is the central issue. And how do you think


that can be addressed? That is a question we do not have answers for


right now, but the key thing is in terms of the apprenticeship policy


the government has put in place, it is welcomed across the spectrum as


being a worthwhile thing to do. But the key is to make sure we get


quality as well as quantity of apprenticeships and ensure that we


are creating new opportunities for young people and providing a wage


boost. At the moment, the bigger statistic is that you few have a


higher level apprenticeship, you are getting a wage boost compared to


somebody who doesn't get an apprenticeship. But if you are at a


lower level apprenticeship, you often don't see a wage boost. And


what are the figures now? Is it improving? It has been improving


since we have had the apprenticeship levy put in place. We have started


to see some improvement, but it is early days. We just don't have good


data on this. Alongside introducing a policy which is raising revenue


and creating some upheaval for firms and is billed as being a big boost


to productivity and skills, we need to have the tools in place to


monitor it. And what is the response from companies? As you say, it is a


big upheaval. The generally quite supportive but


they have had quite a lot coming in at the same time. Increased auto


enrolment of pensions and the national living wage. Really, you


have Brexit as well. For certain firms, relying on migrant labour,


that is an issue as well. Firms generally are feeling hard done by


in many ways but there is a genuine support I think for improving the


skill base and trying to drive productivity through investing in


people. The tricky thing and this is always very difficult with


apprenticeships, how do you ensure that firms are not just re-badging?


Call it an apprenticeship, thank you very much. That is what the


Government needs to stay on top of to make sure the policy does what


they wanted to do. Thank you for coming in.


After Brexit, Britain will be looking to secure a range of trade


Trading more with countries like Australia, Canada


But how easy is it to trade with countries that


Some say Brexit could mean big opportunities for Britain to expand


its business. For consumers, in theory, it could mean there will be


new global produce for us to buy at better prices. The think tank open


Europe says according to its research at the moment we're not


realising the full potential of markets outside of the EU. We found


we are under trading in goods and services with lots of countries we


should be doing more with. But some experts warn distance makes some


trade more difficult. We can always trade with other countries on


the other side of the world, but it is costly and expensive and a bit


awkward to do so. We do have trade with countries like Australia and


New Zealand, but nothing like the amount of trade we have with our


neighbours in Europe. Being in the same time zone, having goods tied up


in ships is bad news. Before we joined the EU, Britain used to trade


more with the Commonwealth. They are being shipped to Australia to


improve the strain of cattle there, they will be better beef for your


table ban a foreigner can supply. Some argue re-establishing these


links will be key post Brexit and because the services industry now


plays a bigger role, according to Open Europe, distance does not have


to be a drawback. We still may have to get on the plane occasionally to


meet someone face-to-face, but a lot can be done online. Digital services


change the way companies can trade across the world. And that is


something being echoed by trade secretary, Liam Fox. The real game


for the UK is to get a global liberalisation in the services


sector. He is already laying some of the groundwork for trading further


afield and has told an Australian parliamentary committee the UK wants


to rapidly establish a free-trade deal with Australia after the UK's


exit from the EU. But there are warnings that getting deals with


countries further afield may be a slow task and deliver less than some


may hope for. We are not being realistic about how long it will


take and I think we are probably not being realistic about how much extra


trade we will get. Australia is a relatively small economy and a lot


of the trade we already have actually is not interfered with by


trade barriers. Great, if we can have a trade agreement, but it will


not change the world. For all the talk, it is only when the UK really


gets down to the business of carving out a new trading position in the


world will we find out whether our ambitions can be realised.


Let us look at the logistics. The point was made a few times, a


commercial flight from London to Australia, 23 hours, time zones,


Canberra is nine hours ahead of London, when it comes to the free


movement of goods and people, it is a lot easier to do it with


geographically close neighbours? It is not a principle of economics we


apply. We look for markets where we can sell and some are approximate


and some are not. The nearest country to Australia is Papua New


Guinea. That is not one of our major trading partners. The next nearest


is Indonesia and that was our 12th largest trading partner. Our biggest


trading partners, a long way away, China, Korea, Japan, the US. Is that


not a symptom of where you are, Australia? We have the continent of


Europe right on our doorstep. It is not, in other words, a principle but


we trade just with countries near to us. That principle is wrong. It is


where you have a comparative advantage that you trade. We used to


have a huge amount of agricultural trade with the UK and the distance


was exactly the same then, as it is now. A huge amount of agricultural


trade. That was cut out when Britain joined the EU. It proves the point


that if we had free-trade again with the UK, I don't know what we would


export, it is hard to predict, but Australian exporters would be


interested in the British market. More than that, Australian importers


would be interested in the UK. It is a place you could get things of


higher quality at a good price. If you look at even the quantity of


trade currently done when it comes to UK trade and Australia, it is a


fraction of the trade obviously with the EU and I know one does not have


to rule out the other necessary, but you are talking about a massive gap.


You will not cut off all trade with the EU. I said that. People often


make this point. It is not a zero-sum game. It is fatuous to say


all British trade with the EU will end. I am sure an enormous amount of


trade will continue. It is also not just to think about Australia alone,


but to think about trading relationships with all sorts of


countries, China, the second-biggest economy in the world, growing at


6.5%, it has a rapidly growing, as you do, through Asia, a rapidly


growing middle class. For us, in Australia, we have targeted, not


because the countries are close, they are a long way away, Beijing is


no closer to Sydney than it is to London. Are we right to looked to


Australia and New Zealand and other countries outside of the EU as the


great utopia outside of the EU, UK exports to Australia last year were


worth ?9 billion, UK exports to the EU were ?240 billion? Even taking


your point we will not stop trading with the EU, there would have to be


an awful lot of trade done with other countries to justify, if you


like, in the words of the Government that it is worthwhile. As an


outsider, it might be a bit presumptuous of me to say this, but


it seems to make perfect sense for you to retain some kind of free


trade arrangement with the EU, but number two, just to make a


mathematical point, if 60% of your trade is with the outside world, 60%


of your trade is not with the EU, it does make sense to liberalise as


much of the 60% as you can as well as maintaining liberal trade with


that 40%. That is win- win for the UK, if you can achieve that. The


practical arrangements, the free-trade deals cannot be done


until the UK actually leaves the EU. March, 2019, the date talked about,


but we could have transitional arrangements. That is probably quite


likely. Do you think during the transitional period that the UK


should be able to negotiate its own free-trade agreements, even if it is


part of the customs union? Number one, let me say, we would not have


thought transitional arrangements would be very surprising because in


our trade negotiations, we inevitably have transitional


arrangements before the new trade agreement takes full effect. If you


were to do the same, it would not be surprising. Number two, it would


depend. If you remain in the customs union, you cannot in the customs


union have free-trade agreements with other countries. It could be


many years before we have anything like a trade deal with Australia.


However, it depends on how long you remained on the customs union and


the extent to which the EU would nevertheless be happy you having


left the EU, which is an issue of legal competence in relation to


trade, having left the EU, you could, I suppose, negotiate a trade


agreement with another country which would not come into force until


you... You agree with Liam Fox, the international trade secretary, who


says you should be able to negotiate in the transitional arrangement


which we cannot do now, you can just scope out, as he has called it. I


would make an observation about the debate about the towns of you


leaving the EU, it is a negotiation. Nobody quite knows how it will turn


out -- the terms. There are a lot of quid pro quos. The British public's


clay aspiration is to negotiate trade agreements with other


countries once it leaves the EU and to retain free trade with the EU. In


those circumstances, that would be good for our bilateral relationship


and for your relationship with a whole range of countries like Japan,


China, India and so on. Will it work out that way? It depends how the


negotiations transpire. That will be part of it. What are your views on


freedom of movement when it comes to a bilateral trade deal between


Australia and the UK? Whenever we leave, when that happens, Amber Rudd


said in October last year, she had no plans to increase the UK's intake


of Australians. Do you agree with that? Well, we do not believe with


any of our trade agreements in negotiating at the same time


complete freedom of movement. The only exception we have is with New


Zealand. But we have no freedom of movement arrangements with any


country in the world other than New Zealand. And we have no plans to do


that. We have a non-discriminatory policy in relation to people


visiting Australia. As well as migrants. Not everybody, by the way,


who comes to Australia would be defined as a migrant. People who


come to Australia with the intention of permanently settling migrants. We


have a non-discriminatory policy. In a negotiation on trade, we might


look at ways of enhancing facilitating people like academics,


students, business people, being able to move between our


countries... With larger numbers? Possibly, yes. We already have some


access to Britain for Australians in certain circumstances and we could


perhaps facilitate access for business people in companies that


are investing in the UK. To make it better than it currently is. All


right, let us leave it there. There were some stormy exchanges


in the Commons last night over the scheduling of business


in the House. The Commons leader Andrea Leadsom


faced pressure over the debates that have been scheduled


since the election. So there was a debate


about, well, debates! The Government has not


provided for an opposition day before the summer recess,


making the earliest opposition This means a staggering eight


months, nearly as long a time as it takes to have a baby,


without a single opposition day, denying vital scrutiny


of government business, with the last opposition day,


as you know, Mr Speaker, Last week, we had a vital debate


on the Grenfell inquiry. Many powerful points were raised


from members on all sides of the House and it's right


that we have prioritised giving time to such a catastrophic


and tragic event. This week, we are having a general


debate on what more can be done to eradicate the evil


of drug misuse. And today, although now under


threat by this debate, we are scheduled to have a debate


on the intimidation and abuse of candidates


in the general election. Mr Speaker, this urgent debate


as a result of party Nearly 30 million people voted


for the party opposite to come I don't believe they were voting


for petty time wasting by Labour. Perhaps unfavourably,


this Parliament has already been dubbed the zombie parliament,


but I actually think that comparison gives the flesh-eating


undead a bad name. This is turbo-charged


political zombiism. But it is a curious type


of zombiism, Mr Speaker, because if you look at them,


not only are they tearing the flesh from the public, they are starting


to consume themselves. If the Government had a programme,


I would be happy for us to debate the Government's programme,


but there isn't any legislation. The Leader of the House


refers to the Air Travel That isn't a bill, that is barely


a clause in a bill. That is where I think


the opposition has today misfired. To everything there is a season


and a time to any purpose under heaven, but this was not the season,


this was not the time. There is so much that is going


on of general urgency and this strikes me as fiddling whilst


Brussels burns. Passions running high in the Commons


there. Now, during the general


election, the Labour Party announced their support


for a so-called Robin Hood Tax, This, they said, would raise


?26 billion over five years. Here's Shadow Business


Secretary Rebecca Long-Bailey explaining the policy to Andrew


on the Sunday Politics to ensure that we have fairness


in our financial sector. Ordinary British people


are still paying for a banking crisis that they didn't cause,


so the aim of this tax is to restore Another important point is the fact


that stamp duty reserve tax was actually brought


in in the 1600s. There have been little reforms over


the years, but certainly, the sector has changed significantly


and we have to provide changes With high-frequency trading,


we have a state of affairs where a lot of our shares are traded


on computers We have to ensure that we have a tax


system that keeps up with that. This afternoon, John McDonnell


is hosting an event where one of his speakers will be


Avinash Persaud, chairman of Intelligence Capital and a former


global head of currency research His report on a financial


transaction tax formed the basis Stamp duty is already 0.5% on


shares. Are you suggesting that that figure should be raised or should


apply to more financial products? Not raised. There are two problems


with that number. Firstly, we have a market exemption that is being


abused. Traditionally, market-making, which is an important


activity, used to be ten to 15% of trading on the exchange. It has now


become 50 to 60%, and that is because people who are not really


market makers like hedge funds and high-frequency traders are saying


they will be there. But when the Isas comes, they are not there for


the marketplace. So we need to end the market maker abuse and we need


to extend the securities from equities towards debt, because the


tax system has long favoured debt versus equities, and we need to


include derivatives. But if you look at the amount it would raise, Labour


said ?26 billion over five years. Currently, stamp duty reserve tax,


the tax on buying shares, raised ?3.3 billion a year in 2015-16. So


even if you extend that and you closed the loopholes or you removed


the exemptions and put it on derivatives, would it raised ?26


billion over five years? That is actually a Conservative estimate. We


assume that raising attacks would have no impact on behaviour. We all


know that raising taxes causes people to think, do we need to do


this? Can we change the timing? So we have taken into account a very


conservative view of how much behaviour will change. That is where


you get the 26. Without behaviour changes, it is 65 billion. But even


John McDonnell said it was a gamble and you couldn't rely on those


figures. Even if it is a cautious estimate, it sounds like a big


amount of money to be raised in an area where people are potentially


very mobile and where people could, as you say, either leave or set up


somewhere else, and that would mean you would net far less. There is a


lot of deliberate confusion about relocation. If you are an American


investor today and you are trading a French or Australian stock in


London, you don't pay stamp duty. And you will not pay stamp duty in


the future, because you are an American resident and you are


treading a non-UK instrument. There is no incentive to relocate your


trade. If you are a British citizen and you are trading in Frankfurt or


Hong Kong, you are still liable for income tax and Capital Gains Tax and


you are still liable for taxes on UK insurance. Are you in favour of


financial tax? I am not going to get into the British tax system, except


to say that one of the reasons why a lot of Australian companies use the


City of London is because it not only has the skill set and very


strong legal protections, but because it is a competitive market


to use. So when you look at these kind of arguments, you might like to


take into account the alternative. We could use Singapore or Sydney,


New York and so on. If you make London less competitive, inevitably


that will have some impact on the amount of business that is done


through London. Then it would damage the City? No, because if you are on


Australian doing business around the world in London and you are treading


American securities etc, you don't pay stamp duty. That is an important


point. This is not a tax on where you trade, it is a tax on who is


trading and what they are trading. But could it be done unilaterally?


If you don't get some sort of international cooperation and we


know the EU has talked about this and is still talking about it. They


haven't agreed anything. France was supposed to be the lead nation on


this, and Emmanuel Macron is apparently shown no sign of making


this a priority, which leaves the City vulnerable. Second biggest


myth. The first biggest myth is relocation. We have had this tax for


322 years. A fair amount of time to innovate and four other countries to


lure business away from London. It hasn't happened. In the G20 report,


the IMF report to the G20, they found that 20 countries had


unilateral FTTs, raising $30 billion a year already, including the


fastest-growing countries. India and Hong Kong and Thailand and Singapore


have one. To do think it is a myth that it is something that is always


used by politicians and businesses alike to say, if you impose a tax


and make us less competitive, we will relocate, but there is now


evidence to show that it has happened? It doesn't matter what tax


was introduced 300 years ago. That is irrelevant, because the City of


London has grown in that period in spite of it, not because of the tax.


The overall picture is that if you want the City of London to remain


the world's greatest financial centre and you think that is


virtuous for your economy, I suppose some people in Britain don't think


that is a good idea. But if you think it is a good idea, however you


taxi system, I am not getting into that, but you need to keep it


reasonably competitive. If you don't make it competitive... Look, people


might decide they don't want the country to make huge amounts of


money out of financial transactions. So if you want to do something else


as a country, fair enough, but people will move. Competitiveness is


an important point and in our post-Brexit environment, having


competitive industry will be vital. Financial services being important.


Germany have a competitive economy and if you ask what makes them


competitive, they will say long term finance. Our financial sector is


obsessed with the short term, not lending to industry. So this tax


will rebalance our financial sector and make it more fit for purpose,


more lending for industry to be competitive. George Osborne


obviously thought it was a bad idea, and Sadiq Khan, the current Labour


mayor says it is madness. He was referring to a previous idea some 12


months ago. What idea was that? He was talking about general financial


transaction taxes, not this design. Has he said anything about this


particular idea? I haven't seen anything. But he is of course


running London, and he says any taxes that might damage the City of


London would be madness. So how are you going to persuade him? The key


thing is that this tax will actually increase the stability of our


financial sector. We have seen a big increase in flash crashes ever since


we have seen an increase in high-frequency trading. The May we


make our financial sector more resilient and more attractive is if


we don't have these flash crashes. Thank you for coming in.


Now, in many respects, the political system in Australia


is much like the system here in the UK.


A Prime Minister and a Cabinet, responsible to Parliament.


They even have red benches in their Senate and green benches


proceedings can sometimes get a little heated -


There will be a ballot for the leadership and deputy


leadership of the Labour Party at 4.30 today.


In the meantime, take your best shot.


I think I know what my mother would say.


She'd look across the dispatch box and she would say


"Put on a proper suit, do up your tie and sing


Madam Speaker, I have a further personal explanation to make.


It had better be better than the first two.


Madam Speaker, that sort of commentary...


Madam Speaker, the Leader of the Opposition is the Mr Potato Head


I said to him, he didn't write off the mortgage the taxpayers


I didn't receive a proper answer then.


The Leader of the Opposition slept right through the critical vote.


He can disgrace his party, but what is intolerable


is that he has cynically raised the hopes of hundreds


You're a miserable pipsqueak of a man!


Well, Tom Watson, shouting at Michael Gove and ending that film.


Did it make you proud to relive those moments in the Australian


Parliament, people shouting at each other? I am glad you didn't have a


clip of me. We thought about it! It shows you how unbiased the BBC is.


It is part of the robust nature of Australian life. People who are


members of Parliament enjoy it. The public are forever saying it is


childish behaviour. But of course, overall, if we took the life like


that out of the Australian Parliament and made it suitably dull


to make it look like a university seminar or some such thing, we would


lose a lot in our national life. Which Parliament do you think is


more rowdy, the Australian order UK? Australians use language...


Australians are actually very polite people, but they use language more


brutal it. They are incredibly friendly. But in Parliament, the


language is pretty tough. The right word is brutal. But you make your


point that way. We don't want to leave people unsure about what we


think. But you have been very polite and well behaved on this show, and


yet we know there are clips of you coming up against Paul Keating. Even


you can flare-up. I am not saying this of myself, in case some


Australian journalists are watching this. But you do see in politics,


and this might be true here as well, a certain amount of what you might


call confected anger. When we showed those clips, do you think that is


what is going on? It is not true passion? It is, but it is passion


for the cameras. In the Australian Parliament, we have Question Time


and the Prime Minister is in question Time everyday, unlike here.


And the idea is to get a so-called run on the news. If you are in the


opposition, if you can while at the Prime Minister and then you get your


story on the news, there is a bit of that going on. I don't know if that


happens here, because I have never been that involved. I think you will


find there was something similar in that sense. But the public don't


like it, you say? The public say they don't like it. It is like


negative advertising in an election campaign.


We have just got time to do the quiz. A new Australian $10 note is


being put in circulation. Who is on its? Kylie Minogue, Alexander


Downer, the poet Banjo Patterson or Rod Laver? I think it would be Banjo


Paterson. You are probably right. It would be nice to think it might be


Kylie Minogue all your good self, but it is Banjo Paterson. A great


national hero and a beautifully behaved Australian tennis player.


I'll be back at 11.30 tomorrow with Andrew for live coverage


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