18/07/2017 Daily Politics

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