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powerful storms to hit the region in 30 years. Those are the headlines. | :00:00. | :00:04. | |
Now, time for HARDtalk. Welcome 30 years. Those are the headlines. | :00:04. | :00:17. | |
HARDtalk. The battle lines for the next British general election are | :00:17. | :00:22. | |
being drawn up. With the economy growing after years of stagnation, | :00:22. | :00:26. | |
David Cameron's conservatives are claiming vindication for their stiff | :00:26. | :00:31. | |
dose of fiscal austerity. The Labour conference has to convince the party | :00:31. | :00:40. | |
that the centre—left has the better pass for a quick recovery. My guest | :00:40. | :00:46. | |
Welcome to the programme. Three years in opposition. Soul—searching | :00:46. | :01:13. | |
believes that the inside of the and plenty of reviewing. Why do | :01:13. | :01:24. | |
believes that the inside of the party is puzzled about the direction | :01:24. | :01:24. | |
the Labour Party wants to go in party is puzzled about the direction | :01:24. | :01:29. | |
this anaemic recovery... They are been setting the weather. We have a | :01:30. | :01:42. | |
this anaemic recovery... They are not exactly boasting so much as | :01:42. | :01:46. | |
economy, which is that for the first time in a long time, we have signs | :01:46. | :01:48. | |
OECD says we will grow by 1.5% year. We are not disputing growth, | :01:48. | :02:00. | |
boast about this recovery when this but it is rich for the government to | :02:00. | :02:02. | |
boast about this recovery when this is the slowest recovery on record, | :02:02. | :02:11. | |
for most people, this economy does not feel like it is fixed. For most | :02:11. | :02:11. | |
getting harder than ever. The reason not feel like it is fixed. For most | :02:11. | :02:18. | |
getting harder than ever. The reason for that is simple. In 38 of the 39 | :02:18. | :02:20. | |
months that David Cameron has been Prime Minister, prices have been | :02:20. | :02:27. | |
rising much faster than wages. We will get to the economic argument in | :02:27. | :02:31. | |
a moment, but I want to start with just looking at what the Labour | :02:31. | :02:34. | |
Party is doing to define itself today. John Prescott, a senior | :02:34. | :02:38. | |
minister in the Blairite and Brown government, says we are failing | :02:38. | :02:46. | |
minister in the Blairite and Brown William Labour need radical change | :02:46. | :02:48. | |
to our policies and our delivery so that people know what we are is | :02:48. | :02:52. | |
standing for —— we in the Labour Party. We are still... You had three | :02:52. | :02:58. | |
years to think about it. We are Party. We are still... You had three | :02:58. | :03:03. | |
years away from manifesto time. First, we got back in touch with the | :03:03. | :03:07. | |
people who left us at the last election. The last election was | :03:07. | :03:10. | |
people who left us at the last terrible result for the Labour | :03:10. | :03:14. | |
Party. Two thirds of working people said that Labour was not a party in | :03:14. | :03:19. | |
touch with them. For the party of working people, that was a heck | :03:19. | :03:23. | |
touch with them. For the party of an achievement. Ed Miliband has | :03:23. | :03:25. | |
turned those figures around. With respect, he has not. The figures for | :03:25. | :03:32. | |
him are terrible. He has some of the lowest approval ratings for any | :03:32. | :03:33. | |
opposition leader in modern times lowest approval ratings for any | :03:33. | :03:38. | |
opposition leader in modern times assessment of who do you touch —— | :03:38. | :03:43. | |
trust to manage the economy, George assessment of who do you touch —— | :03:43. | :03:48. | |
farther ahead than Ed Miliband and Osborne and David Miliband, out | :03:48. | :03:54. | |
farther ahead than Ed Miliband and Ed Balls. You could have said much | :03:54. | :04:02. | |
Thatcher in the past. Ed Miliband has defined this living standards | :04:02. | :04:05. | |
crisis and this is what is going to define the next election. People | :04:06. | :04:12. | |
at the last election? The answer for question. Am I better off than I was | :04:12. | :04:14. | |
at the last election? The answer for the vast majority of people in this | :04:14. | :04:28. | |
phrase. Surely the weather is set by the Conservative description for | :04:28. | :04:31. | |
managing the economy, which is that in the end, the main priority is | :04:31. | :04:35. | |
drawing down debt, getting rid of deficit that the state has been | :04:35. | :04:42. | |
running. They are course over the next four or five years to deliver a | :04:42. | :04:46. | |
balanced budget and your party seems to have bought into that new weather | :04:46. | :04:48. | |
Chancellor Ed Balls now says he to have bought into that new weather | :04:48. | :04:54. | |
apply iron discipline to the public finances. He is effectively buying | :04:54. | :04:58. | |
into the austerity programme of finances. He is effectively buying | :04:58. | :05:02. | |
Conservatives. Labour has always responsibility. The deficit was | :05:02. | :05:11. | |
brought down dramatically before the financial crash hits. I have to | :05:11. | :05:19. | |
interject. You are the one who left that infamous note when Labour left | :05:19. | :05:21. | |
office that you were afraid there traditional note left by every chief | :05:21. | :05:33. | |
secretary since the 1930s. I don't think so. The political record is | :05:33. | :05:39. | |
there. Do you regret that? It has dogged you every day since you wrote | :05:39. | :05:43. | |
it. Even yesterday, we had Nick Clegg talking about that note. It | :05:43. | :05:48. | |
was a sign to the British people is an old Treasury position. —— | :05:48. | :06:04. | |
tradition. Did it demonstrate an arrogance that you did not care | :06:04. | :06:12. | |
you accept that Ed Balls and Ed mess? It was nothing more than an | :06:12. | :06:26. | |
you accept that Ed Balls and Ed Miliband have now bought into the | :06:26. | :06:29. | |
increase in a two—day spending but by the government? We have said | :06:29. | :06:39. | |
increase in a two—day spending but what we have also said is that we | :06:39. | :06:40. | |
should listen to the wise heads what we have also said is that we | :06:40. | :06:43. | |
the IMF, who say that what Britain needs right now is for us to ring | :06:43. | :06:51. | |
investment to the order of about £10 billion. That would make a great | :06:51. | :06:56. | |
difference to the situation in this construction workers back into work. | :06:56. | :07:07. | |
left—wing headbangers. They are sensible, reasonable people, and | :07:07. | :07:11. | |
they are sending the people of Britain a clear message that we | :07:11. | :07:14. | |
believe the Chancellor should listen phrases... Iron discipline, working | :07:14. | :07:19. | |
within the spending forecast... phrases... Iron discipline, working | :07:20. | :07:24. | |
that is the message Ed Balls is sending, how does that fit with | :07:24. | :07:27. | |
that is the message Ed Balls is capital expenditure programme you | :07:27. | :07:31. | |
are talking about? Is Labour talking have said... Argue?We have been | :07:31. | :07:46. | |
saying, trust us, we will borrow more in the future? We will send out | :07:46. | :07:50. | |
those public spending plans closer to the election but if we were in | :07:50. | :07:54. | |
power today, we would say that we should listen to the IMF, bring | :07:54. | :07:58. | |
forward capital investment to get the economy growing faster, and | :07:58. | :08:01. | |
forward capital investment to get challenge, this is the challenge for | :08:01. | :08:03. | |
most people in Britain today, is that because there is a little work | :08:03. | :08:08. | |
to go around, wages are taking a hammering. The average family in | :08:08. | :08:09. | |
Britain today makes exactly the hammering. The average family in | :08:09. | :08:15. | |
as they did back in 2000. People are £1500 per year poorer than they | :08:15. | :08:20. | |
as they did back in 2000. People are at the last election. You say you | :08:20. | :08:21. | |
cannot make borrowing commitments generally, and this gets to the | :08:21. | :08:28. | |
radical and different agenda from the Conservative party, are you | :08:28. | :08:31. | |
taxes to ensure that you can deliver the Conservative party, are you | :08:31. | :08:40. | |
taxes to ensure that you can deliver responsibly? Then act we have said | :08:40. | :08:46. | |
86% this year while small companies tax? You will be taxed higher under | :08:46. | :09:02. | |
86% this year while small companies struggle to get credit and 1 million | :09:02. | :09:04. | |
young people are locked out of work. It back but that is still not going | :09:04. | :09:10. | |
to get the money that you need for this capital expenditure. But with | :09:11. | :09:15. | |
respect, we say that a tax on bank young people locked out of work | :09:15. | :09:25. | |
respect, we say that a tax on bank a job. Second, we say there should | :09:25. | :09:28. | |
be a mansion tax on property is worth more than £2 million, because | :09:28. | :09:31. | |
that will give us the money to introduce a 10p rate of tax for | :09:31. | :09:39. | |
that will give us the money to low—paid. Put that together with a | :09:39. | :09:41. | |
serious plan to take on the energy companies, a plan to bring forward | :09:41. | :09:47. | |
different set of choices. What about higher tax rates for the rich, for | :09:47. | :09:51. | |
example? The Liberal Democrats, supposedly a centre ground party in | :09:51. | :09:54. | |
their description, is talking about that. You are the left of centre | :09:54. | :09:59. | |
Labour Party. Many people around the world are going to start wondering | :10:00. | :10:03. | |
when the Labour Party is going to redistribution message, part of | :10:03. | :10:08. | |
which would be significantly more tax on the wealthy in this country? | :10:08. | :10:13. | |
see the public finances picture election? Everytime George Osborne | :10:13. | :10:25. | |
see the public finances picture government is borrowing billions of | :10:25. | :10:26. | |
pounds much more than they forecast. government is borrowing billions of | :10:26. | :10:28. | |
pounds much more than they forecast. Who knows what that picture will | :10:28. | :10:30. | |
look like once we get to 2014 or Who knows what that picture will | :10:30. | :10:34. | |
us. We know that the picture will 2015. It would be irresponsible | :10:34. | :10:42. | |
us. We know that the picture will not be pretty. Absolutely. And so 18 | :10:42. | :10:42. | |
your particular area, Work and not be pretty. Absolutely. And so 18 | :10:42. | :10:54. | |
your particular area, Work and Pensions. You have written and been | :10:54. | :10:57. | |
also Australia... And in many of involved in some interesting studies | :10:57. | :11:08. | |
also Australia... And in many of those countries, the left has not | :11:08. | :11:09. | |
performed very well recently. You those countries, the left has not | :11:09. | :11:12. | |
performed very well recently. You say part of the reason is that those | :11:12. | :11:16. | |
in the squeezed middle are now very redistribution and when it comes to | :11:16. | :11:20. | |
welfare, they are very wary on wasteful public spending. Is that | :11:20. | :11:25. | |
your way of saying that Labour welfare, benefits, pensions? That | :11:25. | :11:34. | |
there must be a new way? Yes.What is it? First, we have to set a cap | :11:34. | :11:41. | |
on the annual welfare budget. The government has already done that. | :11:41. | :11:44. | |
They have not done it yet. They government has already done that. | :11:44. | :11:50. | |
still in consultation. But we know they will do it. They say that if | :11:50. | :11:55. | |
you are without a job, a family without a job, you cannot have an | :11:55. | :11:59. | |
overall package of benefits that amounts to more than the average | :11:59. | :12:03. | |
wage, £26,000 per year. Do you support that? We believe there | :12:03. | :12:08. | |
should be a benefit cap but we want Conservatives are happy for people | :12:08. | :12:15. | |
They have set no cap on the amount of time someone should be able to | :12:15. | :12:20. | |
spend out of work. We don't think that's right. We don't believe | :12:20. | :12:23. | |
people should be able to languish on the dole for more than two years. We | :12:23. | :12:27. | |
say there should be a limit on the dole of two years. That is it. And | :12:27. | :12:32. | |
then no more unemployment benefit? Exactly. And then what? We will | :12:32. | :12:42. | |
then no more unemployment benefit? sure there is a supply of jobs | :12:42. | :12:43. | |
available for those who have been out of work for two years and we can | :12:43. | :12:47. | |
do that I changing the pension tax rates of the very rich. But the | :12:47. | :12:50. | |
message should be simple. You cannot live a life on welfare. Once you | :12:50. | :12:54. | |
I am afraid you have to get a job. have been out of work for two years, | :12:54. | :12:59. | |
I am afraid you have to get a job. We will invest in your chances | :12:59. | :13:02. | |
who think that you talk way too you have to take them. You are | :13:02. | :13:10. | |
who think that you talk way too tough and give out the wrong message | :13:10. | :13:12. | |
benefits but I very interested to about labour and Liberal's policies | :13:12. | :13:20. | |
benefits but I very interested to hear you say that you accept the | :13:20. | :13:20. | |
welfare in the UK. Would you reverse hear you say that you accept the | :13:20. | :13:27. | |
welfare in the UK. Would you reverse it or not? We think there should not | :13:27. | :13:35. | |
government has done? We believe independent panel of experts to | :13:35. | :13:47. | |
government has done? We believe at the right cap in London and | :13:47. | :13:49. | |
second—guess what conclusion they will make. Just on one more issue, | :13:49. | :13:53. | |
some call it the better in tax. will make. Just on one more issue, | :13:53. | :13:57. | |
a penalty for those who live in social housing and have what is | :13:57. | :14:03. | |
regarded as a spare bedroom. Very definitely guarantee to reverse | :14:03. | :14:09. | |
regarded as a spare bedroom. Very We think this is an iniquitous, | :14:09. | :14:12. | |
vicious attacks. You have condemned it, but would you reverse it? Then | :14:12. | :14:17. | |
we think it should be dropped and at the manifesto, we will set out how | :14:17. | :14:22. | |
we will deal with it when in office. watching that this tax will be | :14:22. | :14:28. | |
eliminated under do? We have said we will set out our plans for the | :14:28. | :14:33. | |
election. We think it should be dropped now. Look, people are being | :14:33. | :14:39. | |
pushed into extraordinary debt by this. The figures are out now that | :14:39. | :14:41. | |
show one third of people hit by this. The figures are out now that | :14:41. | :14:46. | |
bedroom tax are already in arrears. That is after just five months. | :14:46. | :14:49. | |
18 months? I have to ask you a on earth is it going to be like | :14:49. | :15:02. | |
Benefits and tax credits account for Benefits and tax credits account for | :15:02. | :15:08. | |
and would if we cut the benefits ballooned and went up to 13% by | :15:08. | :15:21. | |
and would if we cut the benefits bill? Yes, we think that what's | :15:21. | :15:24. | |
and would if we cut the benefits strike could soak —— Social Security | :15:24. | :15:27. | |
to come down for a simple reason. Welfare went up during the crash. | :15:27. | :15:40. | |
That's what happens in a recession. You need those automatic stabilisers | :15:40. | :15:43. | |
to work. The problem is, it's not That is not sustainable. What is the | :15:43. | :15:52. | |
target for labour? To cut eye how much, in percentage terms, when | :15:52. | :15:59. | |
target for labour? To cut eye how are in power? We will have to look | :15:59. | :16:02. | |
at the state of the books. Who knows what's going to happen? We have | :16:02. | :16:08. | |
at the state of the books. Who knows put the Social Security system back | :16:08. | :16:13. | |
believe you do that by getting people back into jobs. I'm getting | :16:13. | :16:18. | |
the sense that there will be real cuts, real—time cuts, the status quo | :16:18. | :16:22. | |
can't be allowed to be returned cuts, real—time cuts, the status quo | :16:22. | :16:27. | |
Let's get some important principles. Any benefit system in the Western | :16:27. | :16:29. | |
world has to address these issues. Universal benefits, is labour now | :16:30. | :16:36. | |
actively seeking to change those universal benefits? By that I mean, | :16:36. | :16:45. | |
automatically entitled, whatever their status or wealth, to a free | :16:45. | :16:49. | |
bus pass, free TV license, a winter fuel are allowance. This is a great | :16:49. | :16:58. | |
question. Every generation has to strike a balance between universal | :16:58. | :17:02. | |
benefits and targeted benefits. This is the end of the era of universal | :17:02. | :17:05. | |
benefits. There will be some that state. Why?Was the national health | :17:05. | :17:11. | |
service is quite important. Child and effort for those who need it is | :17:11. | :17:15. | |
quite important. Education systems universal benefits, what's the logic | :17:15. | :17:22. | |
about... Even pensions. It needs to that says, actually, we have to | :17:22. | :17:34. | |
about... Even pensions. It needs to be changed. Let me turn this around. | :17:34. | :17:36. | |
restore. Restoring child benefits be changed. Let me turn this around. | :17:36. | :17:44. | |
for those who are wealthier, we can't restore that. We fuel payments | :17:44. | :17:45. | |
for the wealthy of pensioners, we can't restore that. We fuel payments | :17:45. | :17:49. | |
for the wealthy of pensioners, we believe they should go. Free bus | :17:49. | :17:51. | |
But some things should be more believe they should go. Free bus | :17:51. | :17:58. | |
But some things should be more universal. So, labour introduced | :17:58. | :18:00. | |
automatic second private pensions for people. The government has | :18:00. | :18:05. | |
carved 1 million people out of that system, mainly low—paid women. We | :18:05. | :18:09. | |
think that should be reversed. Secondly, this is something I feel | :18:09. | :18:14. | |
passionate about, the way we treat scandal. People who are vulnerable | :18:15. | :18:21. | |
are trapped in a system that denies them personal safety, access to | :18:21. | :18:25. | |
are trapped in a system that denies and sometimes a home and care. | :18:25. | :18:25. | |
That's wrong. That's why we say and sometimes a home and care. | :18:25. | :18:30. | |
should look at ideas, as they have in Australia, for comprehensive | :18:30. | :18:33. | |
disability insurance, that brings together social care and the back to | :18:33. | :18:37. | |
work system and a new universal system. Got that. A quick final | :18:37. | :18:40. | |
thought on what you say is a radical Looking at one stat, 47% of European | :18:40. | :20:50. | |
exports to China right now confident Germany. How will Britain change | :20:50. | :20:55. | |
that? I've been obsessed with this question. How will Britain pay its | :20:55. | :21:00. | |
way in a world that's been dominated by Asia for some time? I've come out | :21:00. | :21:04. | |
of my research as an optimist. Britain has huge potential but we | :21:04. | :21:09. | |
need to get our act together. That's what Germany has done over the last | :21:09. | :21:18. | |
labour's commitment to raising the minimum wage, taxing financial | :21:18. | :21:23. | |
services in a whole new way, the overall envelope which suggests | :21:23. | :21:26. | |
labour costs would rise under the Labor Party, is that really going to | :21:26. | :21:34. | |
Britain won't win a race to the bottom. Many factory workers are | :21:34. | :21:42. | |
paid 90% less than British workers. But we have seen an ultra efficient | :21:42. | :21:43. | |
simple. What you see is Germany But we have seen an ultra efficient | :21:43. | :21:50. | |
simple. What you see is Germany becoming very high value as an | :21:50. | :21:57. | |
China, for example, is to become partners in innovation. One wants | :21:57. | :22:00. | |
have some great universities. We become a leading science power. | :22:00. | :22:05. | |
in the Pacific century, perhaps should be bringing those things | :22:05. | :22:23. | |
in the Pacific century, perhaps globalisation and want it to stop. | :22:23. | :22:25. | |
They want to stop the bus and get consumer boom in Britain over the | :22:25. | :22:31. | |
next ten years. Our investment is still bad. The only way I think | :22:31. | :22:36. | |
next ten years. Our investment is can grow in the years to come is by | :22:36. | :22:38. | |
becoming a mighty trading nation again. That, I'm afraid, means | :22:38. | :22:48. | |
you more friends further away. China's consumer market may grow by | :22:48. | :22:53. | |
There is no other market in the world that will grow at that speed. | :22:53. | :22:57. | |
We need to get in there. Final thought. Is a part of this, part of | :22:57. | :23:00. | |
the UK succeeding in exploiting thought. Is a part of this, part of | :23:00. | :23:05. | |
is on offer in Asia, is the UK working presumably with Europe. | :23:05. | :23:10. | |
Absolutely. Look at what's happening in the UK today. The Conservative | :23:10. | :23:12. | |
in our referendum, the Lib Dems in the UK today. The Conservative | :23:12. | :23:20. | |
patently moving in that direction. The Labor Party may go into the | :23:20. | :23:23. | |
election as the only party telling the British public but you cannot | :23:23. | :23:27. | |
have a vote on the state of the European Union. Everyone I spoke to | :23:27. | :23:29. | |
when I was writing my book said European Union. Everyone I spoke to | :23:29. | :23:34. | |
we should be using our membership to the world's greatest free—trade | :23:34. | :23:38. | |
blood to battle open the doors exporters. —— club. Instead, we | :23:38. | :23:43. | |
blood to battle open the doors destroying our political capital in | :23:43. | :23:47. | |
Europe by asking for a referendum. Last question. Your message is, | :23:47. | :23:51. | |
it. We are saying that now, when we know it so important we stay in | :23:51. | :24:06. | |
need so much growth, there is a chance to restore our power as a | :24:06. | :24:08. | |
mighty trading nation, we should be harnessing the EU or that political | :24:08. | :24:13. | |
purpose. Instead, we are destroying what political capital we have got | :24:13. | :24:16. | |
and destroying our influence. We have to end there. Liam Byrne, | :24:16. | :24:19. |