26/06/2013 Newsnight

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

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

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

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

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

of the next general election. will see what the Education

Secretary has to say in a moment or two.

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

quiet drink as they discuss how tomorrow's newspapers interpret

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

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

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

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

for years. Also tonight: Strewth, the Australian Prime

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

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

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

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

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

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

total. We will speak to the Education Secretary about it

shortly we begin our coverage tonight with our political editor.

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

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

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

break in April 2015 will see the skyline of these Government

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

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

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

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

our economic plan to turn Britain around.

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

already? In 2010 the Government thought they could eliminate the

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

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

This is the revised timetable to eliminate the structural definite

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

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

today. We have applied through principles

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

every pound we spend. Growth to give Britain the education

enterprise and economic infrastructure it needs to win the

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

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

these allow him to claim the progressive mantle. There are

plenty of sizeable cuts. Local Government, transfor the,

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

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

ring-fenced budgets. Health, international development and

education getting away virtually scot free.

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

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

virulant about it they even got nicknamed the national union of

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

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

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

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

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

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

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

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

so science and apprenticeships were relatively protected. Over at the

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

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

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

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

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

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

is continuing to grow. George Osborne just toughened his position

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

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

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

the welfare department, which had been deemed too politically

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

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

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

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

Neither of these are massive revenue raisers for the Government,

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

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

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

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

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

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

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

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

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

politicians go into the next election pledging that they will

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

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

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

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

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

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

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

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

fiscal discipline alongside massive infrastructure investment. The

Government knows this and tomorrow will announce something similar. A

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

dominating every waking hour in Whitehall. Allegra and Paul Mason

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

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

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

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

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

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

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

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

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

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

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

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

governance management of the economy? When Labour left office,

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

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

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

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

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

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

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

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

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

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

Government. Even the big headline about stopping public sector

workers getting automatic increments, the Education Secretary

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Government to provide will be protected. And across Government we

are making sure that we deliver the services more efficiently and

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

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

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

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

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

is the rate of growth that the independent Office of Budget

Responsibility predicted would happen hasn't happened. The

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

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

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

a view which most independent observers believe is the prudent

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

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

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

worthless predictions by the Labour Party. Your management of the

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

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

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

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

cut spending in the Home Office that crime would increase with

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

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

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

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

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

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

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

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

Office of Budget Responsibility, which is an independent body we

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

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

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

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

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

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

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

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

appropriate to increase welfare spending they will have to come to

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

think hard about how housing benefit and other benefits are

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

fortunate enough to have a Conservative, or Conservative-led

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

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

question of the �100 billion cap? Everyone recognises immediately

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

spending disciplines. Nobody is saying that immediately after 2016

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

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

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

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

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

in the same way as other departmental budgets are managed.

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

disability benefit or housing benefit that there will be an

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

with the mismanagement of the welfare budget under previous

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

discipline being imposed. It is entirely ingrained with other

changes that George Osborne has announced today that will

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

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

first, without producing hard evidence that they are putting job

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

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

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

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

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

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

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

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

running. What will you cut? Eligibility to housing benefit

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

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

disability and incapacity been fits are allocated, Labour have opposed

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

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

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

will exercise discipline. shadow secretary is here and will

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

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

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

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

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

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

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

need continue to receive the support they deserve, but those

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

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

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

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

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

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

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

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

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

previous Governments promises have been dishonoured. Within that

budget it is undoubtedly the case that the moneykg spent more

efficiently and effectively. There are inefficiencies in the way some

schools and other educational institutions spend their money. It

is also the case within my own department there are inefficiencies

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

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

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

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

from him. You are accepting all these figures

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

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

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

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

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

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

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

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

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

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

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

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

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

different priorities from this Government, particularly when it

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

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

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

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

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

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

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

where the education secretary is looking to start new free schools

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

completely wasteful. There are priorities. There could be some

efficencies to come in his department, what other departments

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

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

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

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

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

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

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

Responsibility. They could do something about growth and they

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

that change for the wealthiest pensioners on winter allowance,

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

used it to pay for almost everything. What about the

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

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

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

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

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

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

decision by the Chancellor. He's kpwhrotly neglected his

responsibility -- neglect -- completely neglected his

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

things moving on construction and stimulated capital, that has been

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

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

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

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

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

produce quantifiable economic benefits to the region. Today the

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

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

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

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

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

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

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

includes a tunnel to Northolt. Design changes at Euston station

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

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

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

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

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

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

contingency. Can you explain as a fellow

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

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

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

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

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

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

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

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

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

the next general election without requiring any further funding.

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

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

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

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

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

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

infrastructure in rail in particular, if you look on the

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

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

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

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

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

taking the package for that as retirement funds and those jobs

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

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

will represent their constituents, as I do in North West

Leicestershire, then there are people who will be increasingly

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

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

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

consigned to history. In another shocking development it has turned

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

were no circumstances under which he would return to the leadership

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

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

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

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

As we know Australia is a moisturising Metro sexual country,

where men no longer hide their feelings behind boarishness and

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

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

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

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

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

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

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

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

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

slogans about her appeared to be condoneed by her opponents in

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

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

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

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

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

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

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

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

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

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

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

affect on my political position or the political position of the

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

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

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

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

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

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

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

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

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

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

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

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

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

to many Australian Governments. That governance in Australia is a

fairly vibrant and robust and sometimes brutal event. There are

democratic politics around the world in Australia. There can be

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

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

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

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

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

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

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

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

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

famously branded a misogynist. And Paola Totaro is an Australian

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

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

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

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

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

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

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

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

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

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

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

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

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

promises, everything she touched was incompetent, she suffered

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

minority Government with a party behind her that was consistently

undermining her. As we saw overnight her challenger constantly

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

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

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

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

Gillard made that speech in parliament, in which show attacked

misogyny in Australian politics, actually there was much more

attention paid elsewhere in the world than there ever was in

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

defending a speaker of the house of representatives whose number she

needed, because he had made the most abhorrent comments about

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

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

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

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

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

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

think again, I think people in Australia understood the context

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

turn around the disastrous poll ratings, the disastrous performance

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

editor in Fleet Street said there was great excitement in Westminster

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

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

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

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

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

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

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

this particular splash. It is interesting because there were some

very important statements about austerity lasting way into the next

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

When you have made political decisions to project a huge amount

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Do you want to talk about right honourable gentlemaner Federer or

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

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

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

and Sharpova and the amazing phenomenon of people slipping over.

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

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

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

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