26/06/2013 Newsnight


26/06/2013

Stories behind the headlines with Jeremy Paxman. Including reaction to the chancellor's £11.5 billion public spending cuts, and Australia's first female prime minister steps down.


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worked, as the Chancellor promised it would, so there is to be more of

:00:16.:00:21.

it. �11.5 billion more will be cut from public spending, masses of

:00:21.:00:25.

jobs will vanish, benefits will be cut and this apparently a sign that

:00:25.:00:29.

the economy is recovering. What did you make of it Allegra? I tell you

:00:29.:00:33.

what I made of it, I think the Chancellor just dictated the terms

:00:33.:00:36.

of the next general election. will see what the Education

:00:36.:00:40.

Secretary has to say in a moment or two.

:00:40.:00:45.

And the editors of a couple of our national newspapers are having a

:00:45.:00:49.

quiet drink as they discuss how tomorrow's newspapers interpret

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what George Osborne had to say. Funnily enough, although we can't

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afford all sorts of areas of public spending, the Chancellor believes

:00:56.:01:02.

we can afford to spend another �9.5 billion building a faster train

:01:02.:01:07.

line from London to Birmingham and points north that won't be working

:01:07.:01:13.

for years. Also tonight: Strewth, the Australian Prime

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Minister gets dumped by her party for the bloke that she unseated

:01:19.:01:28.
:01:29.:01:30.

years ago. What has gender got to do with it? They thought this

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wouldn't be necessary and it wouldn't have been had the

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Government's economic plans worked out as they would have hoped. Sod

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the Chancellor of the Exchequer was obliged to tell the nation how he

:01:40.:01:46.

planned to save a further massive amount of money, �1.5 billion in

:01:46.:01:50.

total. We will speak to the Education Secretary about it

:01:50.:01:59.

shortly we begin our coverage tonight with our political editor.

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You thought this morning you woke up in 2013, but get with the

:02:04.:02:08.

programme. Or at least get with Newsnight. Lift your eyes up and

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over to the horizon of the first year of the next parliament. Day

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break in April 2015 will see the skyline of these Government

:02:18.:02:25.

departments shrunken. And the state smaller. This is why. We have

:02:25.:02:29.

always believed that the deficit mattered, that we needed to take

:02:29.:02:33.

tough decisions to deal with our debts, and the opposition to that

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has collapsed into incoherence too. Today I announce the next stage of

:02:38.:02:43.

our economic plan to turn Britain around.

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But hold on, didn't we have a clear plan for getting rid of the deficit,

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already? In 2010 the Government thought they could eliminate the

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structural deficit by 2014/15, like this. But economic growth did not

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transpire, and so they need even more cuts to get back on track.

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This is the revised timetable to eliminate the structural definite

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by 2018. To hit this target the Government needs to find �11.5

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billion of additional cuts in the year 2015, which is why we are here

:03:19.:03:24.

today. We have applied through principles

:03:24.:03:29.

to the spending round I set out today, reform to get more from

:03:29.:03:35.

every pound we spend. Growth to give Britain the education

:03:35.:03:38.

enterprise and economic infrastructure it needs to win the

:03:38.:03:46.

global race. And fairness, making sure we are all in it together.

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free schools, a social care package and bold claims on infrastructure,

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these allow him to claim the progressive mantle. There are

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plenty of sizeable cuts. Local Government, transfor the,

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environment, Work and Pensions, and even an example-setting Treasury,

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all hit by around 10%. The clear winners are those departments with

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ring-fenced budgets. Health, international development and

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education getting away virtually scot free.

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In the run up to this process, many cabinet ministers kicked up, they

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really did not want deep cuts to their department, and they were so

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virulant about it they even got nicknamed the national union of

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ministers. Now, in the round, when we look at what cuts departments

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have taken, actually it does seem that those who shouted loudest

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might have had the blade blunted. At the Ministry of Defence it

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wasn't as bad as it could have been. The overall budget does continue to

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fall, but there is no further cuts to Armed Forces personnel. And the

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security and intelligence agencies even got a 3.4% increase. At Vince

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cable's department, their cut was 5.9%, but again George Osborne

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bought the pitch that the business department is a growth department,

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so science and apprenticeships were relatively protected. Over at the

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Home Office cuts were also deep at 6%. But again they could have been

:05:14.:05:18.

deeper. The policing budget, already down 20% now faces the

:05:18.:05:25.

prospect of another cut, but it will be less than the 6% figure.

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Elsewhere Ministry of Justice, Foreign Office, DEFRA, they all saw

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truly deep cuts, perhaps their minsters hadn't been so vocal.

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increasing level of realisim about the state of the UK public finances

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is continuing to grow. George Osborne just toughened his position

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again. The next Government will toughen again in 2015. You know

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finally we are seeing the kind of decisions that we have been waiting

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for about five years now. But the big surprise of the day was that

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the welfare department, which had been deemed too politically

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sensitive for any more cutting, it did get further cuts, so now there

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will be a new seven-day waiting period for those who need

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unemployment benefit, and those who don't have functional English have

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now been told they must learn English or lose their benefits.

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Neither of these are massive revenue raisers for the Government,

:06:20.:06:28.

but her symbolically potent. From next year's budget the Office for

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Budget Responsibility will monitor Britain's new welfare cap. All we

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know is it will apply to welfare spending over �100 billion. While

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it leaves out the state pension, it targets housing benefit, disability

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benefit and tax credits. Their cost is currently stuck at around �112

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billion. This makes possibly as much as �12 billion of welfare

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spending vulnerable. And with that graph we now know much more about

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the entirety of the next parliament. That bit of welfare spending that

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is above �100 billion is now fair game for cutting. It could be that

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politicians go into the next election pledging that they will

:07:10.:07:15.

get rid of some �10 billion of welfare spending. Put that into

:07:15.:07:20.

context, in the last parliament we have seen �18 billion. Nearly the

:07:20.:07:25.

same magnitude is on the horizon. To showcase its new fiscal

:07:25.:07:28.

discipline, Labour agreed with the Chancellor's headline spending cuts.

:07:28.:07:34.

But it still went on the attack. This out-of-touch Chancellor has

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failed on living standards, growth and the deficit and families and

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businesses are paying the price for his failure. Over that horizon, not

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actually that far away, at the next election Labour intends to pledge

:07:52.:07:54.

fiscal discipline alongside massive infrastructure investment. The

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Government knows this and tomorrow will announce something similar. A

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general election may be many moons away, but positioning for it is

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dominating every waking hour in Whitehall. Allegra and Paul Mason

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are both with us now. What was the stand-out political issue for you?

:08:20.:08:24.

The stand-out political, the broad picture-wise, the reason I say I

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think he dominated, or dictated the terms of the next general election

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is that this is a man who actually stood up today and announced what

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he announced, in terms of extra cuts today, because his own plan

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hadn't worked. Even though his own plan hadn't worked he has still

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managed to get the Labour Party and the Liberal Democrat party to agree

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to the figures that we just went through in that package. The stand-

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out broad political theme at the moment of today is that this could

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have been a moment of ignominy for him. But his stature in his own

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party had increased and he had to actually put the number on the 2015

:09:03.:09:06.

general election. What do we learn about going forward in the

:09:06.:09:11.

governance management of the economy? When Labour left office,

:09:11.:09:15.

Liam Byrne, the Treasury Secretary, famously left a note saying "I have

:09:15.:09:19.

to say there is no money left". This was the kind of note to the

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next Government whoever it is, saying there are no cuts left.

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There are no cuts left to do of the kind we have been doing for three,

:09:26.:09:30.

four, five years by the end of the parliament. That is ring-fenced

:09:30.:09:36.

health, education, pairing away at departments. If you look at the

:09:36.:09:40.

�11.5 billion, �5 billion is efficiency savings. The Government

:09:40.:09:43.

has provided a handy list of things that might happen and some case

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studies of stuff that is happening. It has not given a list of where

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that �5 billion is coming from. We know �2 billion from local

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Government. Even the big headline about stopping public sector

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workers getting automatic increments, the Education Secretary

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you are about to speak to has abolished in his department. But

:10:03.:10:07.

the health service have something like a million workers and can't do

:10:07.:10:10.

that. They are going to link it more closely to performance and

:10:10.:10:14.

seek further reforms. That is where that �5 billion, some of that �5

:10:14.:10:18.

billion is coming from. They are really at the bottom of the barrel

:10:18.:10:23.

of this kind of cut. But there is another kind of cut, which is the

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big specific political moment, not the thematic one, which is this new

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welfare cut that we have been talking about on this programme for

:10:30.:10:38.

some six months now. The cuts to AMY, we try to not mention this

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phrase but there isn't any better shorthand. Welfare has been allowed

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to go up with demand and it means it goes up unchecked. Today they

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set out, for the first time, not the exact cap, but it will be

:10:50.:10:54.

targeted at all spending above �100 billion. In the graph we showed in

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the piece, it shows that right now it has been stuck for a few years

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at �112. Do the math, it is not that difficult. It is �12 billion.

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This is the significance of this. I'm not saying the Conservatives

:11:10.:11:14.

will go into the next election, and the Liberal Democrats will not be

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wholly comfort with it. Going in saying they will put �12 billion,

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but that is the extreme of what they will cut. Going forward Paul?

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This was the moment in the parliament where you saw almost the

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future shape of, and I say this for a reason, of a Conservative Britain.

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It might be a coalition budget, but the Chancellor is a Conservative,

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it was a Conservative speech. I think the speech marred. It wasn't

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the subtext but the absolute core of it was we have done austerity

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without tanking the economy. We have got the opposition to sign up

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to most of the austerity we know about going forward. Britain's

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businesses and the work force, the work force has accepted pay cuts

:11:52.:11:56.

and business has been innovative and created jobs. That part of the

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matterive, up until now, has happened. -- narrative, up until

:12:03.:12:08.

now has happened. The politicians were on a roll from the front bench,

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but you felt that George Osborne was on a narrative that he felt

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comfortable with it. The Shadow Chief Secretary to the Treasury,

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Chris Leslie is with us, also with us, the Education Secretary,

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Michael Gove. This is what you call efficient management of the economy

:12:23.:12:28.

is it? I think it is a series of decisions that ensure the taxpayer

:12:28.:12:32.

gets a better deal. That the services people properly expect the

:12:32.:12:34.

Government to provide will be protected. And across Government we

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are making sure that we deliver the services more efficiently and

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effectively. But it is only two years since we were told by your

:12:43.:12:48.

esteemed leaders that these further cuts would not be necessary? Yes.

:12:48.:12:55.

Since then we have had catastrophic economic conditions in the eurozone,

:12:55.:12:57.

our major trading bodies. The facts change and we have to change in

:12:57.:13:00.

order to deal with that. One of the things we have had to acknowledge

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is the rate of growth that the independent Office of Budget

:13:05.:13:06.

Responsibility predicted would happen hasn't happened. The

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responsible thing to do in those circumstances is to make sure that

:13:09.:13:14.

you still carry on with the deficit reduction strategy but take it

:13:14.:13:17.

slightly more slowly than you otherwise would have done, that is

:13:17.:13:21.

a view which most independent observers believe is the prudent

:13:21.:13:25.

way to approach. It is certain low a point of view that the Labour

:13:25.:13:32.

Party has finally come to accept despite its suspicions and obdurcy.

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It means any predictions made today are equally worthless? There were

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worthless predictions by the Labour Party. Your management of the

:13:41.:13:45.

economy? Let's talk about that. One of the things we have had a million

:13:45.:13:52.

private sector jobs created. We were told if you cut at George

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Osborne's levels those jobs wouldn't be created. That is an

:13:55.:13:58.

economic achievement. We were also told at the same time if we would

:13:58.:14:02.

cut spending in the Home Office that crime would increase with

:14:02.:14:08.

devastating economic impact, it hasn't. Crime has fallen. In 2011

:14:08.:14:12.

you did not see what has made today's further cuts necessary. It

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follows from that, does it not, that you are equally unable to be a

:14:20.:14:23.

clairvoyant now as you were then? certainly wouldn't claim I was the

:14:23.:14:27.

gift of second-sight. What I do have is the capacity to be able to

:14:27.:14:31.

recognise that when you do have turbulence of the kind that we

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faced in the eurozone, when you do have the impact that global

:14:35.:14:42.

economic factors have had...Can You...The Features were made by the

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Office of Budget Responsibility, which is an independent body we

:14:44.:14:47.

created. They are not George Osborne's figures, they are the

:14:47.:14:52.

figures of a group of people who operate with a degree of authority

:14:52.:14:56.

that they would never have had. cuts were not George Osborne's,

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they were not the office of budget response the. They produced that

:14:59.:15:04.

Jeremy. Can you tell us then whether these �350 million worth of

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cuts to welfare are the last word on welfare cuts? No, by definition

:15:08.:15:13.

they are not. Of course you can't. The key point about the cap is we

:15:13.:15:18.

will ensure that if, in the future, any Government feels that it is

:15:18.:15:20.

appropriate to increase welfare spending they will have to come to

:15:20.:15:23.

the House of Commons and explain why, or they are going to have to

:15:23.:15:26.

think hard about how housing benefit and other benefits are

:15:26.:15:31.

allocated. So it may well be the case in the future if we are

:15:31.:15:34.

fortunate enough to have a Conservative, or Conservative-led

:15:34.:15:38.

Government re-elected, that we will have more efficiency in welfare.

:15:38.:15:41.

Labour can't make that promise. There could be further cuts. The

:15:41.:15:47.

question of the �100 billion cap? Everyone recognises immediately

:15:47.:15:51.

after 2015/16, whichever party is in power, there will have to be

:15:51.:15:55.

spending disciplines. Nobody is saying that immediately after 2016

:15:55.:15:59.

Nirvana will return. Everyone is in favour of discipline, but you say

:15:59.:16:04.

there will be a cap. This word has been bandied about all day.

:16:04.:16:09.

bandied about, used with precision. With precision! How exactly will

:16:09.:16:13.

this cap work? Pensions and jobseeker's allowance will not be

:16:13.:16:16.

covered by it. But other parts of the welfare budget will be managed

:16:16.:16:20.

in the same way as other departmental budgets are managed.

:16:20.:16:25.

You asked me to explain, I will try my best. It means in areas like

:16:25.:16:29.

disability benefit or housing benefit that there will be an

:16:29.:16:33.

absolute total which the Government can't spend. What is the cap?

:16:33.:16:38.

Around �100 million. Supposing you exceed it? The Chancellor said if

:16:38.:16:40.

for any reason a Government feels they have to exceed it, they have

:16:41.:16:43.

to come to the House of Commons and to explain why, but the

:16:43.:16:46.

responsibility will be on them to do what the last Government didn't

:16:46.:16:50.

do. Will they sit on the naughty step or something. There is no

:16:50.:16:53.

sanction here at all? There is a self-imposed discipline, it will be

:16:53.:16:59.

a significant thing to do, having a cap not to stick to it, it will be

:16:59.:17:02.

a significant penalty that any minister will face. What is this

:17:02.:17:06.

penalty, he has to make a statement to the House of Commons? He has to

:17:06.:17:10.

explain why it is he's doing things differently. That is a penalty is

:17:10.:17:12.

it? Sometimes, considering some of the people you find in the House of

:17:12.:17:17.

Commons. The particular thing about the welfare cap is that it is

:17:17.:17:23.

placing the department much work and mention -- of Work and Pensions

:17:23.:17:25.

under the same discipline I face in the Department of Education and

:17:25.:17:29.

elsewhere. We have budgets we have to meet. We have to manage the

:17:29.:17:34.

expenditure we can't simply allow it to let rip. One of the problems

:17:34.:17:37.

with the mismanagement of the welfare budget under previous

:17:37.:17:41.

Governments is it was allowed to let rip without this degree of

:17:41.:17:46.

discipline being imposed. It is entirely ingrained with other

:17:46.:17:48.

changes that George Osborne has announced today that will

:17:48.:17:52.

incentivise people not to work. We will not have a situation whereby

:17:52.:17:58.

people can turn up at a Jobcentre and then demand their benefits

:17:58.:18:02.

first, without producing hard evidence that they are putting job

:18:02.:18:06.

seeking first, producing that CV, making sure they learn English if

:18:06.:18:09.

they don't have it, and making sure for example if they take time off

:18:09.:18:15.

to raise a child, they are serious to get back to work. We will step

:18:15.:18:19.

aside of the question of why it has taken so long to get to that?

:18:19.:18:23.

don't think you can say the Government has been idle.

:18:23.:18:27.

appear to have only just in theed this discrepancy. But let's deal

:18:27.:18:31.

with the �12 billion, there is a difference between �100 billion,

:18:31.:18:36.

which is supposedly the cap, and the �100 billion which you are

:18:36.:18:42.

running. What will you cut? Eligibility to housing benefit

:18:42.:18:48.

needs to be tackled. One of the things we have been led to do

:18:48.:18:52.

remove the spare room subsidy, we will look again at how certain

:18:52.:18:57.

disability and incapacity been fits are allocated, Labour have opposed

:18:57.:19:02.

that. At every turn when we have been prepared to reform the welfare

:19:02.:19:06.

state to incentivise work, Labour have objected and played to the

:19:06.:19:11.

gallery. Now they have come like repentant sinners and said they

:19:11.:19:15.

will exercise discipline. shadow secretary is here and will

:19:15.:19:20.

speak for himself in a moment or two. We will come to you in a

:19:20.:19:25.

moment, if you forgive us. You tell us what you will do? I already have.

:19:25.:19:31.

You have given us a long disposition on what you said Labour

:19:31.:19:36.

won't do? These are alternative, I have explained exactly what we have

:19:36.:19:39.

been doing, changes to child benefit and disability benefit. And

:19:39.:19:44.

one of the things about the way in which Iain Duncan Smith and Nick

:19:44.:19:47.

Clegg have worked together. We have ensured that those genuinely in

:19:47.:19:50.

need continue to receive the support they deserve, but those

:19:50.:19:53.

people, and there are some using the welfare system as an

:19:53.:19:57.

alternative to work, the game is up. Do you think any other departments

:19:57.:20:03.

can be cut any further? Yes.Which ones? That's a matter for the

:20:03.:20:06.

Chancellor. I wouldn't want to usurp his position. You can always

:20:06.:20:12.

look for further cuts. What about your departments? We are looking.

:20:12.:20:21.

Can it be cut further? We could be more efficient. Let me give you

:20:21.:20:24.

specific examples. We have protected the budget. Wasn't it a

:20:24.:20:28.

condition of you being elected? were elected for a whole host of

:20:28.:20:32.

reasons. We have managed to keep that promise in a way that perhaps

:20:32.:20:35.

previous Governments promises have been dishonoured. Within that

:20:35.:20:39.

budget it is undoubtedly the case that the moneykg spent more

:20:39.:20:43.

efficiently and effectively. There are inefficiencies in the way some

:20:43.:20:45.

schools and other educational institutions spend their money. It

:20:45.:20:49.

is also the case within my own department there are inefficiencies

:20:49.:20:54.

that we have driven up and problems we have inherited we have put right.

:20:54.:20:57.

Any inefficiencies still to be put out of your department? Thanks to

:20:57.:21:02.

the brilliant work of my permanent secretary, we are proceeding at

:21:02.:21:11.

pace to do that. In Chris Wormwood I have a big cut well delivered

:21:11.:21:15.

from him. You are accepting all these figures

:21:15.:21:21.

are you, effectively we have seen the state of the 2015 budget now

:21:21.:21:24.

haven't we? On the proviso that there is nothing to be done in the

:21:24.:21:28.

two years before then to stimulate growth and maybe stave off some of

:21:28.:21:37.

the need for the cuts. Obviously you know in an ideal world we would

:21:37.:21:40.

have had a Government that used today to stimulate the economy,

:21:40.:21:44.

which would mitigate the need for some of these cuts. If it looks as

:21:44.:21:48.

though they are carrying on regardless, as it sounded from the

:21:48.:21:50.

education secretary, they don't think anything can be done about

:21:50.:21:55.

the economy. It looks like the next Government will inherit a bleak

:21:55.:21:58.

inheritance. In the possibility, by I suppose we must accept, that you

:21:58.:22:02.

form the next Government, you will be operating a budget according to

:22:02.:22:06.

these guidelines will you? For day- to-day spending, yes. Of course

:22:06.:22:09.

that will have to be the starting point. We would have totally

:22:09.:22:12.

different priorities from this Government, particularly when it

:22:12.:22:17.

comes to things, for example on welfare they are intending to

:22:17.:22:22.

cut...What Would you cut instead? They are intending to give a winter

:22:22.:22:25.

allowance to the wealthiest 5% of pensioners, for example. Or taking

:22:25.:22:29.

it away from people who live in the Tropics? That is of course an easy

:22:29.:22:35.

one to do. I don't know why the Government are waiting until 2015

:22:35.:22:40.

to say those with retirement incomes of �42,000 and above

:22:40.:22:43.

shouldn't get the winter allowance. There is a free schools programme

:22:43.:22:47.

where the education secretary is looking to start new free schools

:22:47.:22:52.

in areas where they already have ample unfilled spare place. That's

:22:52.:22:56.

completely wasteful. There are priorities. There could be some

:22:56.:22:59.

efficencies to come in his department, what other departments

:22:59.:23:04.

do you think could be cut? I think what we have got to do is first of

:23:04.:23:08.

all focus on getting the economy growing. And this is a very big

:23:08.:23:13.

divide. Yes, yes, yes.Not yes, yes, yes. This is a big divide between

:23:13.:23:18.

the political party. Let as assume the decision now are carried

:23:18.:23:21.

through? Why wave the white flag and assume nothing can be done

:23:21.:23:24.

about something in two years time. You heard the Education Secretary

:23:24.:23:29.

saying it was all the fault of the eurozone, and the Office for Budget

:23:29.:23:31.

Responsibility. They could do something about growth and they

:23:32.:23:35.

won't. We know what's going to happen. Let's assume for the sake

:23:35.:23:39.

of argument, since we can't see the future. Let's assume their

:23:39.:23:42.

predictions are right. And let's assume for the sake of argument

:23:43.:23:46.

that you win the next election. Are there Government department that is

:23:46.:23:48.

could be further cut? Of course there are savings that could be

:23:48.:23:52.

made. What are they?For a start we think it is a question whether

:23:52.:23:57.

there should be more money spent on Police Commissioners, for example,

:23:57.:24:02.

than on the existing plort. much will that save -- Police

:24:02.:24:05.

Authority. How much will that save you? We don't want a millionaire's

:24:05.:24:10.

tax cut, that is the wrong priority. We wouldn't have been reorganising

:24:10.:24:14.

the NHS, spending �3 billion on a top-down change that nobody voted

:24:14.:24:19.

for or wanted. There are priorities and changes that can be made.

:24:19.:24:23.

there cuts to be made into departments? We don't want to get

:24:23.:24:28.

into that situation. Nobody wants that situation. They don't need to

:24:28.:24:31.

be in this situation. Do you want to cut public spending, of course

:24:31.:24:35.

doesn't want to cut public spending? The surprising thing is

:24:35.:24:39.

you are absolutely right, Chris talks about historic things, and he

:24:39.:24:43.

has every right to disagree with them. Chris cannot mention a single

:24:43.:24:48.

programme that we are investing in that he would cut. What about the

:24:48.:24:53.

winter allowance. Why wouldn't you do that. It is a tiny sum.Why

:24:53.:24:58.

wouldn't you do it? What else would you cut. What is wrong with making

:24:58.:25:01.

that change for the wealthiest pensioners on winter allowance,

:25:01.:25:05.

why? That is your single transferable spending cut. You have

:25:05.:25:09.

used it to pay for almost everything. What about the

:25:09.:25:12.

millionaire's tax cut, why is that priority, why is it a priority. You

:25:12.:25:15.

are laughing about it. This is incredibly serious, we have cuts

:25:15.:25:19.

that will be hitting people exceptionally hard, this is not a

:25:19.:25:22.

laughing matter. You have the opportunity to stave these off if

:25:22.:25:27.

you focus on growth. I wasn't laughing it was Jeremy. What was in

:25:27.:25:32.

the plan today to stimulate growth? Nothing, this was a neglectful

:25:32.:25:37.

decision by the Chancellor. He's kpwhrotly neglected his

:25:37.:25:39.

responsibility -- neglect -- completely neglected his

:25:40.:25:45.

responsibility to this economy. I think it was said they should got

:25:45.:25:48.

things moving on construction and stimulated capital, that has been

:25:48.:25:52.

cut in education. It is being cut. We will stop this end of the pier

:25:52.:26:00.

show now. Thank you very much. You may not have noticed the

:26:00.:26:04.

announcement today that the cost of high-speed 2's potential charge

:26:04.:26:10.

rose overall by a mere �10 billion. The creation of a high-speed rail

:26:10.:26:14.

line from London to the north of England will, say the Government,

:26:14.:26:19.

produce quantifiable economic benefits to the region. Today the

:26:19.:26:23.

transfor the minister told MPs that the new projected cost to the rail

:26:23.:26:29.

line, linking London to the Midlands had risen to �42.6 billion

:26:29.:26:36.

from the original estimate of �33 billion, and included a contingency

:26:36.:26:39.

fund. I know in the context of the bill the House will want to be

:26:40.:26:49.

updated on the cost of HS2, I will be writing tomorrow to the chairman.

:26:49.:26:56.

HS2 limited, to start a budget. That is �70 billion, this takes

:26:56.:27:01.

account of the environmental and design changes for the scheme. It

:27:01.:27:05.

includes a tunnel to Northolt. Design changes at Euston station

:27:05.:27:10.

and a tunnel under the M6 near Birmingham. As a responsible

:27:10.:27:15.

Government we must be prudent and that means allowing the right level

:27:15.:27:20.

of contingency. In addition we have set an overall indicative amount

:27:20.:27:30.
:27:30.:27:31.

for the budget for phase 1 that is �2.4. For phase II it is �21.2

:27:31.:27:37.

billion. A total of �42.6 billion at 2011 prices. That includes, can

:27:37.:27:43.

I just finish this one point. That includes a �12.7 billion of

:27:43.:27:53.

contingency. Can you explain as a fellow

:27:53.:27:57.

Conservative MP why your party is so keen on this project? It is a

:27:57.:28:02.

party we have inherited from the Labour Party, Lord Adonis, it is a

:28:02.:28:07.

Trojan horse of a project like the 50p tax. I can't explain why they

:28:07.:28:13.

are in favour of it. It is roaring through my constituency causing

:28:13.:28:19.

blight, fear and anxiety. Planning paralysis also. And it will go

:28:19.:28:24.

increasingly overbudget. So you have no idea why all these people,

:28:24.:28:29.

on whose side of the House you sit, all kindred spirits are so

:28:29.:28:34.

enthusiastic about it? There is a lot of political capital put behind

:28:34.:28:39.

this project. The increase in the budget will take this project past

:28:39.:28:42.

the next general election without requiring any further funding.

:28:42.:28:47.

figures are extraordinary. This was an increase today of about �10

:28:47.:28:53.

billion in the contingency fund? top of that �42.6 billion, you have

:28:53.:28:57.

�7.5 billion for the rolling stock which will be increasing at current

:28:57.:29:03.

prices. The whole project as rien to somewhere in excess of �-- risen

:29:03.:29:07.

to somewhere in excess of �50 billion. It will hit �100 billion.

:29:07.:29:12.

The Government says it won't go any higher? The history of large

:29:12.:29:14.

infrastructure in rail in particular, if you look on the

:29:14.:29:20.

continent and internationally they rise by about 45%. I think there is

:29:20.:29:26.

a specific danger with this project because it is a 20-year lead time.

:29:26.:29:31.

Maybe it will be worth it for the jobs create, an estimated 20,000 or

:29:31.:29:38.

so? In constituencies like mine, 30% of the businesses who would be

:29:38.:29:43.

affected have more or less said they wouldn't be relocating but

:29:43.:29:47.

taking the package for that as retirement funds and those jobs

:29:48.:29:53.

will be lost. It will cost lots of jobs. How far does the opposition

:29:53.:29:58.

of HS2 extend in your party? People are affected by the route and they

:29:58.:30:01.

will represent their constituents, as I do in North West

:30:01.:30:04.

Leicestershire, then there are people who will be increasingly

:30:04.:30:14.

concerned about the cost. That will continue to escalate. We have taken

:30:14.:30:21.

a close interest in the story and will so for the next 20 years. The

:30:21.:30:25.

first Australian female Prime Minister is no more. She has been

:30:25.:30:28.

consigned to history. In another shocking development it has turned

:30:28.:30:31.

out that the promise by Miss Gillard's predecessor that there

:30:31.:30:34.

were no circumstances under which he would return to the leadership

:30:34.:30:39.

of the Labour Party has turned out to be what is technically known as

:30:39.:30:44.

a load of horse poo. Although Miss Gillard has repeatedly complained

:30:44.:30:50.

that many Australian men are less evolved on gender issues than the

:30:50.:30:58.

average wallaby, the party line is it is nothing to do with sexism.

:30:58.:31:02.

As we know Australia is a moisturising Metro sexual country,

:31:02.:31:08.

where men no longer hide their feelings behind boarishness and

:31:08.:31:18.
:31:18.:31:24.

alcohol. Hang on here is Bob Hawk at the cricket this year. As the

:31:24.:31:27.

first woman Prime Minister down under, Julia Gillard was on the

:31:27.:31:31.

receiving end of what looked like some pretty ripe sexist attitudes.

:31:31.:31:37.

Her long time partner, Tim, is a hairdresser. And she found herself

:31:37.:31:44.

quizzed about his sexuality on live radio. Tim's gay? Well. That is

:31:44.:31:48.

what they are saying, it is a myth. That is absurd. You hear it, he

:31:48.:31:53.

must be gay, he's a hairdresser. You have heard it, it is not me

:31:53.:31:57.

saying it. Despite the old world curtesy with which the DJ showed

:31:57.:32:07.

her out, he was later fired. Miss Gillard also complained that crude

:32:07.:32:12.

slogans about her appeared to be condoneed by her opponents in

:32:12.:32:17.

parliament. I will not be lectured by sexism and misogyny by this man.

:32:17.:32:21.

The Government will not be lectured about sexism and misogyny by this

:32:21.:32:31.
:32:31.:32:32.

man, not now, not ever. But as so often in politics, your

:32:32.:32:36.

real enemies are on your own side. Gillard ousted the then Labour

:32:36.:32:40.

Party leader, Kevin Rudd, three years ago. Now he has his own back

:32:40.:32:47.

and ousted her. In 2007 the Australian people elected me their

:32:47.:32:52.

Prime Minister. That is a task I resume today with humility, with

:32:53.:32:57.

honour, and with an important sense of energy and purpose. I have been

:32:57.:33:02.

a little bit bemused by colleagues in the newspapers who have admitted

:33:02.:33:06.

that I have suffered more pressure as a result of my gender than other

:33:06.:33:11.

prime ministers in the past, but then concluded that it had zero

:33:11.:33:14.

affect on my political position or the political position of the

:33:14.:33:19.

Labour Party. It doesn't explain everything, it doesn't explain

:33:19.:33:29.
:33:29.:33:32.

nothing, it explains some things. Gillard, one of Australia's finest

:33:32.:33:36.

sons is angry over what some male critics have said about her.

:33:37.:33:41.

they said something about my mother, sister or wife, I would want a

:33:41.:33:44.

seriously deep conversation with him. I think it is a lack of

:33:44.:33:47.

gallantry that has crept into not just politics but the way politics

:33:47.:33:55.

is reported. And I think it gives license to a type of hater that

:33:55.:34:03.

will only further reduce the quality of our lives. But in this

:34:03.:34:08.

Ozzy-run coffee shop back here in the old country, -- Aussie-run

:34:08.:34:12.

coffee shop back here in the old country, others believe sexism

:34:12.:34:18.

isn't the overriding factor in this story. Politics, this is very much

:34:18.:34:21.

the Kevin and Julia soap opera for a good five years now. Today was

:34:21.:34:26.

the climax of that. You have to remember and I have been an adviser

:34:26.:34:32.

to many Australian Governments. That governance in Australia is a

:34:32.:34:37.

fairly vibrant and robust and sometimes brutal event. There are

:34:37.:34:40.

democratic politics around the world in Australia. There can be

:34:40.:34:50.

very much blood on the shag pile. What's that Skippy? It is a doomed

:34:50.:34:57.

11th hour photo -op for Australian Women's Weekly, making Julia

:34:57.:35:03.

Gillard appear more housewifely. Her country may have to review its

:35:03.:35:08.

attitudes about gender. Her legacy will be did she get too much of a

:35:08.:35:11.

hard time, has Australia more of a way to go to be where we want to be

:35:11.:35:16.

on that issue. What I am absolutely confident of is it will be easier

:35:16.:35:19.

for the next woman and the woman after that and the woman after that.

:35:19.:35:28.

And I'm proud of that. Jason Grove is the President of the Overseas

:35:28.:35:33.

branch of the opposition liberal party, whose leader, Tony Abott,

:35:33.:35:37.

famously branded a misogynist. And Paola Totaro is an Australian

:35:37.:35:42.

writer and journalist, and who has written about her country's

:35:42.:35:44.

politics throughout Miss Building Schools for the Future's career. It

:35:45.:35:50.

could just be she's a -- Miss Gillard's career.

:35:50.:35:57.

It could be that she is inept? is true, but should her Prime

:35:57.:36:02.

Ministership or ineptness should go seen through the prism of her hair

:36:02.:36:07.

or her high heels. It has been?I believe if the same prism was

:36:07.:36:09.

applied to David Cameron or Margaret Thatcher, I don't think

:36:09.:36:13.

this electorate would tolerate it. That is a very interesting point,

:36:13.:36:17.

because it also wasn't applying to your leader, Mr Abott? I think if

:36:17.:36:23.

you look at what's happened today, Julia Gillard when she took over

:36:23.:36:33.

from Kevin Rudd, discredited after his first go at leadership. Her

:36:33.:36:37.

ratings went through the roof. People warmed to the idea of a

:36:37.:36:42.

female Prime Minister. When it came down to it she broke a lot of

:36:42.:36:46.

promises, everything she touched was incompetent, she suffered

:36:46.:36:50.

hugely. That was the result today. Your leader delivered a speech

:36:50.:37:00.

under a banner that said "ditch the witch"? Tony Abott

:37:00.:37:06.

is...Sophisticated! Any suggestion that a leader of a modern day party

:37:06.:37:11.

was misogynist or anti-women has no future. Tony is a long way ahead in

:37:11.:37:16.

the polls because he appeals to a wide section of the community,

:37:16.:37:20.

including women. You have to give it to your country, is it your

:37:20.:37:24.

country? In my heart.Australia has a higher proportion of women in

:37:24.:37:33.

parliament than we do here? Does it? Just??I think you "just" is

:37:33.:37:37.

the question. I just might pick up on the point about being embraced.

:37:37.:37:41.

Gillard being embraced. When she was Deputy Prime Minister she was

:37:41.:37:46.

pilloried for a photo shoot in her kitchen. Because her cabinets were

:37:46.:37:50.

not messy enough, didn't look used. So even before she became Prime

:37:50.:37:54.

Minister. That is because they weren't being used. She had been

:37:54.:37:58.

away on holiday if I recall correctly? She just isn't much a

:37:58.:38:05.

cook at home. So what. She's a very good knitter, apparently? That was

:38:05.:38:08.

potentionally probble. If you are foolish enough as a woman to

:38:08.:38:12.

present yourself, or a man, to present yourself knitting a woolly

:38:12.:38:17.

kangaroo for the royal birth, how do you expect to be treated?

:38:17.:38:22.

think that is the point. I have to agree with you there. I think that

:38:22.:38:25.

people didn't really understand who Julia Gillard was. Everything that

:38:25.:38:32.

she did seemed to be a set-up stunt. This was the Australian public

:38:32.:38:36.

wanting Julia Gillard as a person. I don't think it was due to her

:38:37.:38:41.

gender but a lack of genuineness on her behalf. She was in a mint

:38:41.:38:45.

minority Government with a party behind her that was consistently

:38:45.:38:51.

undermining her. As we saw overnight her challenger constantly

:38:51.:38:56.

behind her in the shadow. What do we learn from Australia with this

:38:56.:39:00.

episode? I'm not sure what we learn, as an Australian the public

:39:00.:39:03.

discourse, the political discourse at the moment is embarrassing. I'm

:39:03.:39:08.

not sure that you learn very much at all. Is it true that when Julia

:39:08.:39:12.

Gillard made that speech in parliament, in which show attacked

:39:13.:39:17.

misogyny in Australian politics, actually there was much more

:39:17.:39:22.

attention paid elsewhere in the world than there ever was in

:39:22.:39:25.

Australia? Absolutely true. What she was doing in parliament was

:39:25.:39:28.

defending a speaker of the house of representatives whose number she

:39:28.:39:33.

needed, because he had made the most abhorrent comments about

:39:33.:39:37.

female genitalia. So on the one hand she was attacking misogyny,

:39:37.:39:43.

but on the other hand defending someone who made offensive comments.

:39:43.:39:48.

It attracted more attention outside Australia than in it? It says a lot

:39:48.:39:51.

about the media in Australia, it has been hostile to Julia Gillard

:39:51.:39:58.

all the way through. It took 18 hours for the parliamentary press

:39:58.:40:02.

gallery in Canberra to realise this speech had literally gone viral.

:40:02.:40:05.

think again, I think people in Australia understood the context

:40:05.:40:10.

this was a set-up. It was another stunt by Julia Gillard to try to

:40:10.:40:13.

turn around the disastrous poll ratings, the disastrous performance

:40:13.:40:17.

of had her Government and not something born out of genuineness.

:40:17.:40:23.

The import of what she was saying still resonated. The comment taken

:40:23.:40:28.

out of context did resonate. But Australia is proud to have had a

:40:28.:40:31.

female Prime Minister, I think it is a very great pity it has ended

:40:31.:40:35.

the way it has. Do you think it will be as easy next time for a

:40:35.:40:39.

woman or harder? I hope it doesn't make a difference. We do have a lot

:40:39.:40:42.

of leaders, the deputy leader of my heart is a woman. We still do have

:40:42.:40:47.

a lot of senior women in Australian politics. I hope they are not put

:40:47.:40:51.

off by what has happened today. That is the sad part, young women

:40:51.:40:58.

looking at politics potentially as a career would see this kind of end

:40:58.:41:02.

for as you traia's -- Australia's first Prime Minister as scary, and

:41:02.:41:06.

what came before it more so. Thank you very much. While we have

:41:06.:41:11.

been on air, two of Fleet Street's, or what used to be called Fleet

:41:11.:41:15.

Street's he had stores have been looking at tomorrow morning's

:41:15.:41:22.

newspapers. We have the new editor of the Independent. Aged? 29 Jeremy.

:41:22.:41:29.

Aged 29. Just old enough to be your grandson. You can aspire! And

:41:29.:41:34.

Lionel Barber has been editor of the FT for much longer than that.

:41:34.:41:39.

Not 29 years? Almost eight years, Jeremy. Twice the age of the

:41:39.:41:43.

gentleman to the left, but we will get the facts out on to the table.

:41:43.:41:46.

I don't want to be embarrassed later. Let's talk about newspapers,

:41:46.:41:50.

I guess who has chosen the Independent? I think I have chosen

:41:50.:41:56.

that. Rightly so. What a fantastic- looking front page. We had a lot of

:41:56.:42:00.

the stuff about Spending Reviews a day early. The question today was

:42:00.:42:05.

what particular line we want to go on, Andy Grice, the best political

:42:05.:42:09.

editor in Fleet Street said there was great excitement in Westminster

:42:09.:42:14.

about this idea that payday lenders are going to benefit hugely from

:42:14.:42:18.

the delay when you can take your benefits. It used to be three days

:42:18.:42:24.

and now sevens days. There is limited evidence that it will save,

:42:24.:42:29.

money and it will get people back into the job market. We have

:42:29.:42:33.

rounded up lots of evidence about how it will make people who are

:42:33.:42:38.

poor, poorer. That is enough fantastic, financial sometimes, I

:42:38.:42:42.

imagine you might have chosen this one? No, the news editor has chosen

:42:42.:42:46.

this particular splash. It is interesting because there were some

:42:46.:42:52.

very important statements about austerity lasting way into the next

:42:52.:42:57.

parliament, the coherent now, of more confident Chancellor today. I

:42:57.:43:04.

think he is strutting his stuff a little. I thought so.You know he

:43:04.:43:09.

was confident when he was dropping his "t" like Tony Blair. Because he

:43:09.:43:13.

knows that the Labour Party has accepted his spending cuts plan.

:43:13.:43:19.

What is interesting about this particular story in the FT, because

:43:19.:43:24.

we are highlighting, as you did tonight, this dramatic overspend on

:43:24.:43:29.

HS2. What kind of return are we going to get on this infrastructure

:43:29.:43:32.

project? Not very much I would submit. Why is it being favoured.

:43:32.:43:38.

Is it to bridge the gap between north and south? No, because it is

:43:38.:43:41.

a project that can get up and running. This cost is going to get

:43:41.:43:49.

higher and it will be ending up being named the Lord Adonis

:43:49.:43:54.

memorial railway. Let's go on to the Telegraph. George Osborne

:43:54.:43:58.

wielding the welfare axe. That wasn't a surprise?. No. I know

:43:58.:44:04.

welfare is a big part of our spending, but Osbourne seemed to

:44:04.:44:09.

enjoy talking more as he went on. By the enof the speech it was

:44:09.:44:18.

entirely on well from. What he was talking about at the end of largely

:44:18.:44:22.

about jobseeker's allowance, a tiny fraction of Government spending.

:44:22.:44:26.

When you have made political decisions to project a huge amount

:44:26.:44:30.

of your spending on the NHS, pensions, aid and all the rest of

:44:30.:44:35.

it, there is something ugly about focusing on such a small piece. You

:44:35.:44:41.

will say that welfare is going up and up and up as a portion of

:44:41.:44:46.

Government spending. I wasn't going to say that. What I was going to

:44:46.:44:53.

say is clearly this goes before the election campaign. Mr Osborne wants

:44:53.:44:57.

to draw a dividing line between what he calls strivers and slackers.

:44:57.:45:00.

In one respect this is important, because although he appears to be

:45:00.:45:05.

capping or limited welfare cut, with an ageing society, it is going

:45:05.:45:09.

to present serious pressure on the budget. And there are questions

:45:09.:45:13.

about the future shape of the state, not answered today, for all the

:45:13.:45:23.

talk about cutting Whitehall, some departments hurt more than others.

:45:23.:45:29.

It isn't fantastic that in George Osborne who has made a career about

:45:29.:45:32.

standing against and hating Gordon Brown, this is completely out of

:45:32.:45:35.

the Gordon Brown textbook. Dividing lines, using economics as a pretext

:45:36.:45:39.

to what is a political narrative. This is the sort of thing you would

:45:39.:45:41.

expect from Gordon Brown. Nobody has pointed out today, certainly

:45:42.:45:47.

not on this show, the spending we view he didn't want to make, if he

:45:47.:45:50.

met his own targets he wouldn't be there. That have the very first

:45:50.:45:55.

line of tonight's programme? Really! Pay attention.You should

:45:55.:46:00.

have been more articulated when you said it. You weren't nearly clear

:46:00.:46:04.

enough. It couldn't have been clearer, even for you. Let as try

:46:04.:46:09.

and raise the tone. On the Guardian, this is what I was referring to

:46:09.:46:14.

earlier that austerity is going to go way into the next parliament and

:46:14.:46:20.

it is the cuts that keep on coming, a nice little headline there. And

:46:20.:46:30.

strong, there is the picture of the Chancellor with his mojo back.

:46:30.:46:34.

Do you want to talk about right honourable gentlemaner Federer or

:46:34.:46:39.

spending. So we have had -- Roger Federer or spending. We have had

:46:39.:46:43.

seven number ones dropping out. People have said tennis has become

:46:43.:46:50.

boring, it has become fatastically unpredictable. We led with Federer

:46:50.:46:55.

and Sharpova and the amazing phenomenon of people slipping over.

:46:55.:46:59.

It is slightly wet surfaces that were maybe covered for slightly too

:46:59.:47:02.

long mean all these people were falling over at Wimbledon today,

:47:02.:47:07.

and Federer is one of them. I can't follow that up. I know that Andy

:47:07.:47:12.

Murray is still in, and I think, look, he has been a great champion

:47:12.:47:18.

Presented by Jeremy Paxman. Including analysis and reaction to the Chancellor's £11.5 billion cut in public spending. Also Australia's first female prime minister steps down.


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