:00:17. > :00:29.the 50p rate of income tax. How does the cat dough Chancellor that even
:00:30. > :00:35.those who sat in Government with him don't buy into it. Ed Miliband says
:00:36. > :00:41.Ed Balls is here to explain why it is time to tax the rich.
:00:42. > :00:48.Mega City 1 is creating ten-times the jobs of its nearest rival, is
:00:49. > :00:55.the capital a life force or a cyst. The woman who survived the death
:00:56. > :01:00.camps by playing the cello. We came to Auschwitz preparing to be gassed.
:01:01. > :01:04.Everything that is not death is a complete surprise. You are not
:01:05. > :01:10.likely to say I'm sorry I don't play here. Her internationally renowned
:01:11. > :01:26.son and his son perform in the studio. If the Labour Party gets
:01:27. > :01:30.re-elected to get another shot at running the country it will make the
:01:31. > :01:35.rich pay for tax, specifically raising the top rate of income tax
:01:36. > :01:39.to 50%. Right and proper says Ed Miliband, representatives of some of
:01:40. > :01:42.those who would have to pay the new rate are understandably scathing,
:01:43. > :01:45.they would be, wouldn't they. More interesting are various architects
:01:46. > :01:50.of new Labour, who think that this is a reversion to the days of Neil
:01:51. > :01:53.Kinnock and all that unhappiness. But policy it is and it is one of
:01:54. > :02:02.the ideas I will be asking the shadow shall about in a moment.
:02:03. > :02:07.First though Emily Maitlis reports. Back in the day of new Labour it was
:02:08. > :02:12.nicknamed the "prawn cocktail offensive". The essential agreement,
:02:13. > :02:16.neither the prawn or twist of lemon, but the approach the party had
:02:17. > :02:21.towards business. It was shorthand to tell those who made money not to
:02:22. > :02:23.be scared. The message Tony Blair and Gordon Brown wanted to send out
:02:24. > :02:27.is the City could trust them with their money and the economy. It was
:02:28. > :03:02.only one part of the strategy but... A new dawn has broken, has it not.
:03:03. > :03:04.businessmen and really recognised that they had to get business on
:03:05. > :03:08.their side, that business was important for the wealth, for the
:03:09. > :03:16.general wealth of the whole country and for economic recovery. We are
:03:17. > :03:20.getting into now that Labour feels it is getting populist and
:03:21. > :03:25.short-termist, it wants the quick win, quick political wins that it
:03:26. > :03:30.knows in its heart of hearts is bad for the economy bad for everyone.
:03:31. > :03:36.The tax Mr Balls announced was only one measure in a speech aimed at
:03:37. > :03:39.reassuring voters of Labour's fiscal responsibility, and the aim of
:03:40. > :03:42.balancing the books within one parliament. Of it the 50p measure
:03:43. > :03:47.that became the headline. The unthat inspired letters to the Telegraph,
:03:48. > :03:53.and even a pro-Labour City minister to rail against it. Ed Balls insists
:03:54. > :03:57.he's not antibusiness and the tax would raise, I quote, "hundreds of
:03:58. > :04:01.millions of pounds more". This is graph to show how much the
:04:02. > :04:05.resurrected 50p tax would bring in. It doesn't have any numbers on it
:04:06. > :04:13.because to be honest no-one has a blue. Clue. -- Let's cut to the
:04:14. > :04:18.chase is it a revenue raiser? We don't know, the best estimates is it
:04:19. > :04:21.probably wouldn't raise too much, there is huge uncertainty, it may
:04:22. > :04:26.raise a significant amount and it may cost a bit. The key thing is you
:04:27. > :04:31.are taking a bit of a gamble doing this. ?3 billion sun likely, ?1
:04:32. > :04:36.million is possible, less than half a billion is most likely. One senior
:04:37. > :04:39.Blairite told us the key question on the 50p tax is whether it is a
:04:40. > :04:43.deficit reduction measure or whether it is about fairness. If it is about
:04:44. > :04:49.definite reduction then it is temporary, which is fine. If it is
:04:50. > :04:58.meant to be a ego galltarian then it is -- egalitarian then it is that.
:04:59. > :05:02.The issue is how long the policy would last and the motivation that
:05:03. > :05:05.lies behind it. Ed Miliband is known to be the more
:05:06. > :05:09.interventionist of the two. His talk of taxing predators to fund producer
:05:10. > :05:14.was seen by many in the party and outside it as a bid for a new kind
:05:15. > :05:19.of capitalism. A recognition, even, after the financial crash, the
:05:20. > :05:23.centre ground had moved to the left. I'm not sure the centre ground has
:05:24. > :05:29.shift today the left. If we look at France, they played it to the far
:05:30. > :05:31.left and yes they did get elected, but what has happened now is they
:05:32. > :05:36.have had to come right back. They have had to come back with lots more
:05:37. > :05:40.probusiness policies, they have had to do an absolute U-turn. I would
:05:41. > :05:43.love if the UK could learn from the U-turn and say what we have done
:05:44. > :05:47.successfully over the last few years say we are probusiness and we want
:05:48. > :05:50.businesses to open here, and we want that investment and jobs to come
:05:51. > :05:56.into the country. We are not going to chase them away with both
:05:57. > :06:00.policies and bat rhetoric. -- bad rhetoric. Of course you thinking,
:06:01. > :06:03.they would say that wouldn't they. Under the Ed Miliband new order
:06:04. > :06:08.perhaps a little bit of business disquiet is no bad thing. Opinion
:06:09. > :06:13.polls this weekend suggest the 50p tax is fairly popular among all
:06:14. > :06:16.voters except Conservatives. It is the populisim and sense of being
:06:17. > :06:20.driven by polling which makes those with experience of past electoral
:06:21. > :06:24.success wary. One former Labour adviser tells me they are in danger
:06:25. > :06:28.of putting together a programme that becomes an electoral platform that
:06:29. > :06:32.is characterised as antibusiness and anti-enterprise. Well we all know
:06:33. > :06:38.how that move Indies. In other words there may be an appetite for a more
:06:39. > :06:42.puritan diet, but you forget the prawn cocktail at your peril.
:06:43. > :06:47.The Shadow Chancellor is with us now. Whose idea was it to bring back
:06:48. > :06:51.the 50p tax rate? I think the whole Shadow Cabinet has been behind this
:06:52. > :06:54.since we have been exposing the 50p cut a year ago. Ed Miliband and I
:06:55. > :06:57.discussed this in the early summer, we both decided it was the right
:06:58. > :07:01.thing to do. There was a question about when was the right time to
:07:02. > :07:05.make this clear, we wanted to get this right. But it was a joint
:07:06. > :07:08.decision of ourselves, but also the whole Shadow Cabinet is behind it.
:07:09. > :07:13.Were they consulted about it? Well of course they were. So the whole
:07:14. > :07:18.Shadow Cabinet was in on the discussion about the 50p rate? All
:07:19. > :07:21.the Shadow Cabinet discussed it before the speech on Saturday, I
:07:22. > :07:28.have discussed with them the top rate of tax cut and its unfairness
:07:29. > :07:31.many times in the last year, and we have discussed the importance of
:07:32. > :07:37.taking tough and fair decisions to get the tax down. Tax you have to
:07:38. > :07:40.handle with care, but everyone is supporting it. Of course they are
:07:41. > :07:45.supporting it now, they have to support it now, were they in on the
:07:46. > :07:48.discussions beforehand? All the Shadow Cabinet talked about it with
:07:49. > :07:54.me and my team before Saturday's speech. But they didn't dismiss it
:07:55. > :07:57.in a meeting of the Shadow Cabinet? We have had very many meetings of
:07:58. > :08:01.the Shadow Cabinet, like last Tuesday where we discussed the 50p
:08:02. > :08:05.rate and the unfairness, and the need for tough decisions and the
:08:06. > :08:08.need to balance the books. I said on Saturday we will balance the books
:08:09. > :08:12.in the next parliament and get the national debt falling, but in fair
:08:13. > :08:18.way, it will mean spending cuts but also fairness in tax. Is it
:08:19. > :08:22.temporary or permanent? We will have said for the next parliament, as we
:08:23. > :08:25.get the deficit down. So it will end at the end of the next parliament? I
:08:26. > :08:30.have been very clear, nothing is set in stone. I would rather tax rates
:08:31. > :08:33.came down rather than went up. It is temporary then isn't it? It is for
:08:34. > :08:37.the next parliament as we get the deficit down. I'm not going to say
:08:38. > :08:41.to you today what our tax policy will be for the parliament after
:08:42. > :08:46.next, that would be completely perverse. When the deficit is gone,
:08:47. > :08:49.so too will this rate of tax? Well we need to get the deficit down, we
:08:50. > :08:53.need do that in the next parliament, in the next parliament we will have
:08:54. > :08:56.a higher rate of tax to do that. I'm not going to say to you today that
:08:57. > :09:00.we have decided on our tax policy for the parliament after. It is to
:09:01. > :09:04.get the deficit down. They are linked. The reduction and removal of
:09:05. > :09:08.the deficit and the 50p rate of tax, they are linked? Of course,
:09:09. > :09:12.absolutely. Our commitment to progressive taxation is fair, it is
:09:13. > :09:18.permanent, but we will get the deficit down in the next parliament
:09:19. > :09:22.using the 50p rate. Sure, so if the deficit is got rid of before the end
:09:23. > :09:27.of the next parliament, say it happens after three or four years,
:09:28. > :09:29.then this rate of tax would stop? It would be fabulous, we had a
:09:30. > :09:33.parliament this parliament where the Government has failed to get the
:09:34. > :09:38.deficit down, you are saying if I'm even more successful. I am take beg
:09:39. > :09:41.your policies and not their's? If I'm more successful we will cope
:09:42. > :09:46.with the consequences of success when we find them. You would be glad
:09:47. > :09:50.because you would have succeeded? I want to get the deficit down. I said
:09:51. > :09:55.on Saturday the sooner we get it down the better, it would depend on
:09:56. > :09:59.growth in the economy, spending cuts and tax. The 50p rate will be there
:10:00. > :10:03.for the next parliament because it is fair. Why stop at 50p? It is
:10:04. > :10:07.important we don't send signals down the world we are going back to the
:10:08. > :10:11.1970s and 8 #0S, I don't want do that. I look at what Francois
:10:12. > :10:15.Hollande did in France, attempting to have a 75p tax rate. I thought
:10:16. > :10:19.that is not sensible policy in the modern world. But we are in a
:10:20. > :10:23.particular circumstance in Britain with large deficit. We need to get
:10:24. > :10:28.it down. George Osborne and David Cameron have given a ?3 billion tax
:10:29. > :10:32.cut to those earning over ?150,000, most people earning the programme
:10:33. > :10:37.will say when my living standards are going down that's not fair,
:10:38. > :10:42.let's keep the top rate at 50p to get the deficit down. When even men
:10:43. > :10:46.who sat in Government with you, like Paul Miners and Digby Jones, when
:10:47. > :10:56.they say this is a duff idea, don't you think maybe they are right? To
:10:57. > :11:01.be fair to Lord Digby Jones he has always been consistent in thinking
:11:02. > :11:04.the 50p tax rate is wrong, that is exceptional in the cabinet. As
:11:05. > :11:07.Alistair Darling said yesterday, the decision to have 50p to get the
:11:08. > :11:09.deficit down was the right decision and supported by the Labour
:11:10. > :11:13.Government and most people in the country. That is still the case
:11:14. > :11:19.today. Digby takes a different view I respect his view but the world has
:11:20. > :11:24.moved on. What about Lord Miners who questions your ability to do GCSE
:11:25. > :11:28.economics? He was in the Treasury in a Government where the Chancellor
:11:29. > :11:36.put it up to 50p, it may be he made hits objections. You used to have
:11:37. > :11:40.this review -- view too? You said you didn't think that in a global
:11:41. > :11:46.economy you can start redressing the balance by capping rewards at the
:11:47. > :11:49.top and paying a big price by your ability to attract investment and
:11:50. > :11:53.talent, it sounds like that to me? Of course that is the case. You have
:11:54. > :11:57.to have an economy where you have wealth creators, entrepeneurs who
:11:58. > :12:01.can make money and earn profits, invest for the future, but, Jeremy,
:12:02. > :12:04.at a time when the deficit is really big, they have to pay the fair share
:12:05. > :12:10.of tax and 50p is fair. What Government has done is given 13,000
:12:11. > :12:13.people, earning over one million pounds. I thought we were talking
:12:14. > :12:19.about your policies? What I want to do is reverse a policy which this
:12:20. > :12:24.year has given 30,000 people earning over a million pounds a tax cut of
:12:25. > :12:29.?103,000. Do you think it is fair to give somebody a can tax cut of
:12:30. > :12:33.?103,000 when most people see the living standards going down, I
:12:34. > :12:37.don't. Do you share your boss's distinction between predators and
:12:38. > :12:42.producers? Of course. Can you give me an example of a predator? That
:12:43. > :12:46.would be somebody who breaks the law... It is a distinction between
:12:47. > :12:49.criminals and others? A criminal would clearly be predatory, a
:12:50. > :12:53.company which gets involved in cartel behaviour, trying to organise
:12:54. > :12:58.and rig a market, that would be predatory. That would be illegal too
:12:59. > :13:03.wouldn't it? It all depends on where the law is able to get to. What he's
:13:04. > :13:07.talking about is criminals, not a distinction between predatory
:13:08. > :13:13.capitalism and producer capitalism, he's talking about? If you take the
:13:14. > :13:20.case of banks earlier year, some of the banks ended up losing touch...
:13:21. > :13:24.Which banks? RBS, Lloyd's. They are predators? There were some banks who
:13:25. > :13:29.lost touch with what they needed to do to serve the economy, to serve
:13:30. > :13:34.their shareholders and only were out making short-term money. Is that
:13:35. > :13:39.predatory or not? Tell me? I think in some of the cases where things
:13:40. > :13:44.went really wrong, Fred Goodwin he stepped over the edge. He was a
:13:45. > :13:47.predator? I think so. Apart from this bogeyman, are there any other
:13:48. > :13:51.predators can you name? The thing I would say is I want to have an
:13:52. > :13:55.economy which is long-termist and competitive. I don't want cartels, I
:13:56. > :14:00.want companies working to create long-term value. You share the view
:14:01. > :14:03.of predators and producer, I'm just trying to find out what we are
:14:04. > :14:09.talking about when we are talking about a predator? I think short-term
:14:10. > :14:14.asset stripping at the cost of long-term value, shareholder value.
:14:15. > :14:18.We're on to asset strippers now, what about energy predators? In the
:14:19. > :14:22.case of the energy companies it is clear you have a small number of
:14:23. > :14:26.companies who have been acting in a pretty anticompetitive and
:14:27. > :14:29.non-transparent market making big profits and not passing on lower
:14:30. > :14:33.prices to consumers. I'm not going to call it predatory, I will say the
:14:34. > :14:37.market hasn't been working and the rules of the game have not been
:14:38. > :14:40.right. We need to get them right and get the investment in. In the
:14:41. > :14:44.short-term let's get some help back to consumers. Probably when we had
:14:45. > :14:48.the windfall tax in 1997 on the privatised utill torics some of the
:14:49. > :14:52.things which happened in the utilities in that period were beyond
:14:53. > :14:56.the pale, absolutely. A long time ago? It was the last time we had a
:14:57. > :15:01.new Labour Government coming in with a windfall tax on energy companies.
:15:02. > :15:03.Can I ask you about suing said yesterday, talking about public
:15:04. > :15:07.spending, you would like to spend more on some areas than you did in
:15:08. > :15:11.Government. And quote, "there would be some spending things we wouldn't
:15:12. > :15:16.do and some we would do differently". What were the things
:15:17. > :15:19.you wouldn't now do? I was asked about public spending of the last
:15:20. > :15:22.Labour Government. I said we didn't spend every pound of public money
:15:23. > :15:27.wisely, but some things we would definitely do less of. There were
:15:28. > :15:31.some areas we should have done more. A good example, the housing benefit
:15:32. > :15:35.bill went up under the Labour Government and it continues to go
:15:36. > :15:38.up, but we didn't spend enough money on affordable housing and housing
:15:39. > :15:42.investment. If you don't build the homes you need you have higher rents
:15:43. > :15:46.and higher housing costs. That is an argument for spending more money?
:15:47. > :15:49.And less, I would like less on the housing benefit bill and more on
:15:50. > :15:53.housing investment. We didn't spend enough in the last parliament on
:15:54. > :15:56.adult skills, and skills for non-university young people.
:15:57. > :16:00.Anything else you spend money on unnecessarily? I thought the scam
:16:01. > :16:04.dome was a waste of money -- I thought the Dome was a waste of
:16:05. > :16:07.money and the Hor rice zone project we shouldn't have done. The same
:16:08. > :16:13.thing is true under this Government as well. There is far more special
:16:14. > :16:17.advisers and things like that going on. Did the global financial crisis
:16:18. > :16:20.get caused by Labour public spending, I have been clear and said
:16:21. > :16:24.we got regulation wrong of the banks, but did we get public
:16:25. > :16:28.spending wrong, that didn't drive the global financial crisis. You
:16:29. > :16:32.were also one of the authors of all that rubbish about boom and bust
:16:33. > :16:37.being ended? I was the author saying we should make the Bank of England
:16:38. > :16:41.independent and get away from a man fingerprintlation of interest rates,
:16:42. > :16:45.and the -- manipulation of interest rates, and the up and down cycle of
:16:46. > :16:47.the 1980s. I was the person who said we shouldn't join the single
:16:48. > :16:52.currency, and many people on my side and other sides who said we should
:16:53. > :16:56.join the euro, that would have been a catastrophic decision. We all get
:16:57. > :17:03.things right in the Government, when you are a grown-up you say it when
:17:04. > :17:08.you get things wrong, we didn't regulate the banks enough, and other
:17:09. > :17:13.good calls we did have like not joining the euro and other things. I
:17:14. > :17:18.want to debate the future? Let's get on to it. Wonderful isn't it, the
:17:19. > :17:21.economy is doing really well isn't t that makes life very difficult for
:17:22. > :17:24.you? At last we are getting some growth back. Do you think up and
:17:25. > :17:28.down the country at the moment when most people are seeing their living
:17:29. > :17:31.standards fall and in most parts of the country there isn't new business
:17:32. > :17:38.investment coming through, do you think this is an economy doing
:17:39. > :17:42.really, really well, it is cloud-cuckoo-land. Unemployment is
:17:43. > :17:47.falling and very shortly we will be at the target set by the Governor of
:17:48. > :17:50.the Bank of England for reassessing interest rates. It is good news,
:17:51. > :17:55.George Osborne is doing rather a good job? Come on Jeremy, in 2010 he
:17:56. > :17:59.became the Chancellor, he raised VAT, he choked off the recovery, for
:18:00. > :18:04.three years of flatlining, living standards are down, finally, finally
:18:05. > :18:06.we are getting growth back in our economy, we are below before the
:18:07. > :18:13.crisis, France is above where we were. They are doing... So France is
:18:14. > :18:18.a model? I'm just saying even France, on France is above it, it is
:18:19. > :18:21.pre-crisis peak, we are below. Finally we are getting growth back,
:18:22. > :18:24.that is good news. The idea it wipes out three years of flatlining
:18:25. > :18:28.absolutely not. All this sort of stuff is going to stop, you won't be
:18:29. > :18:32.doing that much longer will you? I had to do it for a year-and-a-half
:18:33. > :18:36.longer than I expected because the flatlining. What will you be doing?
:18:37. > :18:38.What I have been pointing out is living standards are down for most
:18:39. > :18:43.people in our country, that is reality. And growth is up? Good
:18:44. > :18:48.thing, about time we had some growth. Unemployment down? Question
:18:49. > :18:53.mark why is it not business and investment-led, why not export-led,
:18:54. > :18:57.why are we boosting housing demand but not the supply. Is it a balanced
:18:58. > :19:01.and sustainable recovery, is it built to last, is it for working
:19:02. > :19:05.people, is it fair. The answer to those is no at the moment, business
:19:06. > :19:08.as usual is not good enough. We need things to change n our banks and
:19:09. > :19:11.energy companies, a fair plan, Labour will deliver that, George
:19:12. > :19:14.Osborne and David Cameron are cutting taxes for people on the
:19:15. > :19:16.highest incomes and everybody else is suffering. That is not business
:19:17. > :19:21.as usual, that is the same old Tories. Thank you. Script writers
:19:22. > :19:25.are, even as we speak, looking forward to late night in Washington,
:19:26. > :19:28.for tomorrow President Obama delivers the State of the Union
:19:29. > :19:33.address to Congress. This ritual, for all its occasional folksiness,
:19:34. > :19:37.like the pick out of ordinary citizens as fine examples of the
:19:38. > :19:41.American way has a serious purpose. Particularly for a second term
:19:42. > :19:46.leader like Obama. No-one in recent years has ended the White House on
:19:47. > :19:50.-- entered the White House on you such a surge of he can pecktation,
:19:51. > :19:55.and in three years he will be -- surge of expectation, and in three
:19:56. > :20:00.years he will be out, what was it all for? Washington can be a cold,
:20:01. > :20:04.cruel city, one minute this world is your's, the next it is moving on
:20:05. > :20:09.without you. Barack Obama has three years left in the White House, but
:20:10. > :20:15.already everyone here is focussed on who replaces him. This is Obama's
:20:16. > :20:19.house of cards. If he wants to get anything big done with what remains
:20:20. > :20:33.of his presidency he will need to play a stronger hand. President
:20:34. > :20:38.Obama came on a wave of expectation, it seems an age away. As he prepares
:20:39. > :20:41.for his sixth State of the Union address the only question is, does
:20:42. > :20:46.anyone actually listen any more. His approval ratings have sunk to the
:20:47. > :20:50.lowest ever. He has lost credibility around the world, and then there is
:20:51. > :20:54.his terrible relationship with the gridlocked Congress. Obama craves
:20:55. > :21:00.momentum, but his presidency seems stuck. Let's set party interests
:21:01. > :21:03.aside... At last year's State of the Union address Obama promised action
:21:04. > :21:09.on three big issues, immigration, guns and climate. As of today there
:21:10. > :21:19.has been no legislation on any of them. He believed, wrongly, that
:21:20. > :21:24.sort of some combination of his personality and electoral victory in
:21:25. > :21:29.2008, in his own mind I think his own unique ability to bridge
:21:30. > :21:35.unbridgeable gaps in the past, that things would fall into place more.
:21:36. > :21:40.Political junkies in this town survive on the fix, the blog's
:21:41. > :21:46.editor feeds them a commentary of who is up and who is down. He comes
:21:47. > :21:50.into the 2014 State of the Union, and a much weaker political position
:21:51. > :21:54.than a year ago, the things he hoped to capitalise on the stronger
:21:55. > :21:59.political position a year ago haven't happened. Can he make them
:22:00. > :22:10.happen still? I think it is very unlikely through legislative
:22:11. > :22:13.processing that these will get done. Inside the White House they remain
:22:14. > :22:17.optimistic about the President's agenda. Sometimes you get a more
:22:18. > :22:22.honest take from somebody who has left the administration. This is the
:22:23. > :22:28.best last chance to hit reset. So there is a lot riding on the speech.
:22:29. > :22:35.Robert Gibbs was Barack Obama's first staff member when he became a
:22:36. > :22:39.senator, he stayed on as his first presidential spokesperson, the two
:22:40. > :22:43.are close. It is hard to overestimate the real damage that
:22:44. > :22:49.was inflicted for most of last year on healthcare. You learn quickly in
:22:50. > :22:52.the White House that what really can sap your energy are things you never
:22:53. > :22:56.knew you would be dealing with, or things that were unpredictable and
:22:57. > :23:01.things that completely or largely were out of your control. This was
:23:02. > :23:06.entirely in the control of the White House. And yet, still so badly
:23:07. > :23:10.bungled. Where was the person in the White House going into the Oval
:23:11. > :23:16.Office and saying Mr President, this is not working out? The one thing I
:23:17. > :23:20.have always said is in my time in the White House, when it comes time
:23:21. > :23:24.to knock on that door, and walk in that room and tell the President bad
:23:25. > :23:31.news, not as many people want to be in on that meeting. The healthcare
:23:32. > :23:35.disaster blindsided the White House and it shows. There is an undeniable
:23:36. > :23:39.sense of stagnation in America at the moment, and the world is feeling
:23:40. > :23:43.it. Take the issue of social mobility, it is actually worse here
:23:44. > :23:47.than it is in most of Europe. And the gap between rich and poor is
:23:48. > :23:54.growing faster here than it is anywhere else, but this is the issue
:23:55. > :23:57.that President Obama hopes to use to give Democrats a rallying cry in the
:23:58. > :24:04.mid-term elections and reboot his presidency. It has become a common
:24:05. > :24:08.theme at the White House daily briefing. On income and inequality
:24:09. > :24:11.the President has made it clear this will be a big part of the next three
:24:12. > :24:15.years. But with so little appetite in Congress to do anything about it,
:24:16. > :24:19.how much effort is he going to put behind measures that can actually
:24:20. > :24:24.reduce the trend? Addressing that challenge, addressing that problem,
:24:25. > :24:27.making sure there is opportunity for everyone is something that we can do
:24:28. > :24:34.together with Congress. It is also something that he can tackle using
:24:35. > :24:37.all of the tools in his tool box, as President of the United States. How
:24:38. > :24:43.would he measure success? I think he would measure success by evidence
:24:44. > :24:51.that we have improved economic opportunity in this country for
:24:52. > :24:59.everyone, that the mobility that we have seen declining in this country
:25:00. > :25:04.is on the rise again. The economic problems at home are limiting Obama
:25:05. > :25:09.abroad. Few people have a better take on America's global influence
:25:10. > :25:12.than Andrea Mitchell, she's covered US foreign policy under four
:25:13. > :25:16.Presidents, and today she sees a country in retreat. Of course
:25:17. > :25:20.Obama's responding to America's war fatigue, but Andrea believes there
:25:21. > :25:25.is something else going on as well. Other Presidents have more value of
:25:26. > :25:30.the personal relationships. Even George W Bush, who was so disliked
:25:31. > :25:34.in Europe by a majority of Europe, knew how to maintain a very close
:25:35. > :25:39.relationship with his British counterpart and other leaders. This
:25:40. > :25:43.President just doesn't have that schmooze ability the way other
:25:44. > :25:47.Presidents have, both Democrats and Republicans. Does that hurt America
:25:48. > :25:52.as influence around the world do you think? I think diplomacy does boil
:25:53. > :25:58.down to personal trust. I don't think people in foreign capitals
:25:59. > :26:02.really feel they know Barack Obama. Clearly Obama bears some
:26:03. > :26:06.responsibility for his shrunken presidency, and perhaps the only
:26:07. > :26:11.reason he isn't in worse shape is that his opponents are even more
:26:12. > :26:15.stuck. Michael Steel is the former chairman of the Republican National
:26:16. > :26:22.Committee, he's unusually frank about the state of his party. We
:26:23. > :26:26.have been running on this idea that Obama's the bogeyman, his policies
:26:27. > :26:32.are bad for America, and yet we have put no alternative individual or
:26:33. > :26:37.policy that the American people can gravitate towards. What I'm hoping
:26:38. > :26:42.in this cycle is we see those leaders emerge that begin to push
:26:43. > :26:48.back on this noise inside the party. It has to happen. If it doesn't
:26:49. > :26:55.happen 2016 will be a pipe dream. This is the beginning of the end of
:26:56. > :27:03.productive time for change. Productive time to implement what is
:27:04. > :27:08.left of the President's agenda. Resetting the narrative and the
:27:09. > :27:14.landscape couldn't come at a better time because they need it so
:27:15. > :27:24.desperately. They need to get away from the them radios of 2013. Barack
:27:25. > :27:28.Obama came into the White House thinking he could change the way
:27:29. > :27:32.American Government works. Today a more pragmatic President has to
:27:33. > :27:41.accept that just keeping Government open may have to pass for success.
:27:42. > :27:45.The time for grand ideals is past. Joining us now from Los Angeles is
:27:46. > :27:49.the author and Republican strategist, Leslie Sanchez, we're
:27:50. > :27:52.joined from Washington by Barack Obama's former Director of
:27:53. > :27:56.Speechwriting, Jon Fravreau, who worked on every one of the
:27:57. > :27:59.President's State of the Union addresses until he left the White
:28:00. > :28:06.House early last year. So what's going on inside the speech writing
:28:07. > :28:13.team now, Jon Fravreau, just on the eve of the speech? These are some
:28:14. > :28:16.hectic last couple of days for the speech-writing team and the
:28:17. > :28:20.President. I know they are editing furiously, trying to cut out words
:28:21. > :28:24.here and there so the speech is as tight and short as possible. And we
:28:25. > :28:32.will see what happens tomorrow night. There is a content problem
:28:33. > :28:39.too isn't there? There is always a content challenge in the State of
:28:40. > :28:42.the Union. You have a lot of issues to cover, all the domestic issues
:28:43. > :28:46.and international issues and you have just under an hour to do so.
:28:47. > :28:52.You have to make to sure that you use the words sparingly make your
:28:53. > :28:58.point quickly. Leslie Sanchez, do you think it is a problem specific
:28:59. > :29:03.to the Obama presidency or maybe it just affects every second term
:29:04. > :29:09.presidency? Absolutely correct that it affects every president in the
:29:10. > :29:13.second term, regardless, Republican or Democrat, they are facing a
:29:14. > :29:17.ticking clock which is a lame duck presidency. You are looking at the
:29:18. > :29:21.at a cycle in a few months, the President has a short window to
:29:22. > :29:26.press efforts forward and 2016 people will realise they are waiting
:29:27. > :29:30.out for the next Congress to come in with the next President to see what
:29:31. > :29:36.they can get done then. What do you think the President would be wise to
:29:37. > :29:40.concentrate on tomorrow Jon Fravreau? I think tomorrow he will
:29:41. > :29:44.focus on expanding opportunity for the middle-class. What we can do to
:29:45. > :29:47.keep creating jobs in America and not only creating jobs and making
:29:48. > :29:52.sure those jobs pay a decent wage, if you work hard you can get ahead
:29:53. > :29:56.in this country. So I think that involves proposals around job
:29:57. > :30:01.training, around investments in education, in infrastructure. All
:30:02. > :30:03.the sort of things the President has been talking about for the last
:30:04. > :30:09.couple of years that he hopes Congress can work with him on. Miss
:30:10. > :30:16.Sanchez is that going to wash? Not at all, what the reality is there
:30:17. > :30:21.was no Obama economic recovery. That the legislative team put forward
:30:22. > :30:24.last year in the State of the Union, everything from pre-schools, tax
:30:25. > :30:29.reform, manufacturing hubs, none of them were seen to fruition, you are
:30:30. > :30:33.seeing an American electorate that is increasingly impatient. So there
:30:34. > :30:39.is not a lot of political capital for the President to run on. He has
:30:40. > :30:44.a short window. As regards the rest of the world, Jon Fravreau,
:30:45. > :30:50.President Obama has been notably vague in some parts of the world,
:30:51. > :30:59.hasn't he? What do you mean by vague? I mean he is keen not to get
:31:00. > :31:02.involved? Well look, you know, through the help of American
:31:03. > :31:10.diplomacy as well as our allies, you know, the President did help achieve
:31:11. > :31:12.you know an historic deal to halt uranium enrichment in Iran. That is
:31:13. > :31:19.something that they will be moving forward on. The President's ended
:31:20. > :31:23.the Iraq War and continuing to end the Afghanistan war. By next year
:31:24. > :31:26.our troops will be home from that war as well. I believe the President
:31:27. > :31:30.is very engaged around the world wherever he can be. What do you
:31:31. > :31:35.think of his international position, Leslie Sanchez? I think that many
:31:36. > :31:40.feel there was a lot of missed opportunities, that the US does not,
:31:41. > :31:45.in many ways it comes away more bruised than it is in a position of
:31:46. > :31:47.leadership. When you are talking about the most recent initiative,
:31:48. > :31:50.there is still a lot of scepticism about did the President make the
:31:51. > :31:55.right choices and soon enough. I think that is something that not
:31:56. > :31:58.only the United States but the world community will be anxious to decide.
:31:59. > :32:05.What is mysterious to an outsider, if this President is so frail and
:32:06. > :32:10.faulty, why hasn't the opposition, the Republican Party made greater
:32:11. > :32:15.headway against him? It is a very good point. Many felt that the last
:32:16. > :32:19.mid-term cycle and even the last presidency that you were going to
:32:20. > :32:23.see a rebuff of the President's policies and the President himself,
:32:24. > :32:27.I think a couple of things and lessons learned by Republicans is in
:32:28. > :32:31.many cases we did not have a legislative agenda and a
:32:32. > :32:35.solution-orientated agenda that the Americans could believe. There were
:32:36. > :32:41.many independent voters and swing voters who felt they should do with
:32:42. > :32:46.the candidate they know in a very tough economic time. There wasn't
:32:47. > :32:49.enough of a change agent, enough of a hope that was tangible for people
:32:50. > :32:54.to believe that they should jump ships and support another party.
:32:55. > :32:58.Thank you both very much indeed. Thank Hemps for London, no-one's
:32:59. > :33:04.actually put it like, that but the assessment from a research group
:33:05. > :33:08.that the capital dramatically upped the rest of the country in creating
:33:09. > :33:11.jobs is astonishing. London is creating ten-times more private
:33:12. > :33:17.sector jobs than the next most booming city. Even the public sector
:33:18. > :33:23.is booming too. Not fair cry other cities across the land. The chant of
:33:24. > :33:31.those glorious Londoners, Millwall with their No One Likes Us And We
:33:32. > :33:37.Don't Care, sums up the feelings towards the capital.
:33:38. > :33:42.London is becoming a giant suction machine, draining the life out of
:33:43. > :33:47.the rest of the country. The speed of London's economic growth has
:33:48. > :33:50.become visible in its skyline, with the gherkin building looking short
:33:51. > :33:53.now to the walkie-talkie and the cheese greater. This is how glaring
:33:54. > :33:56.the difference between London and the rest of the country has become.
:33:57. > :34:01.Of the private sector jobs created in the first two years of this
:34:02. > :34:05.Government, 79% were created in London. You can see why if you live
:34:06. > :34:10.in Glasgow or Manchester it looks like the whole economy is skewed
:34:11. > :34:13.towards London. It has barely an 8th of the country's population, but a
:34:14. > :34:17.fifth the jobs and the a quarter of the value of the economy.
:34:18. > :34:21.London's dominance has been the case for decades. People were complaining
:34:22. > :34:25.about it back in 1940, it is the administrative capital and the
:34:26. > :34:28.cultural capital, it has Government here and so much here already, it is
:34:29. > :34:33.difficult to break that cycle. Actually what we want to see is that
:34:34. > :34:37.allstitious London included, but it has some powers, all cities have
:34:38. > :34:41.more power to do what they want for their economy, and make the case for
:34:42. > :34:44.why they are so fantastic for investment, that would turn the
:34:45. > :34:50.tide. When it comes to attracting talent from the rest of the country,
:34:51. > :34:55.the research confirms what Vincent Cable said, London sucks. Only five
:34:56. > :34:59.cities saw population flow the other way. That is also reflected in jobs,
:35:00. > :35:08.in the same time that London created more than 216,000 jobs, other big
:35:09. > :35:12.cities lost thousands. I don't think the economy is skewed towards London
:35:13. > :35:15.f you looked at the headline you would think that is the case, it is
:35:16. > :35:19.easy to paint that picture. The truth is when you follow the money,
:35:20. > :35:24.right, much of the money, if not most of the money that comes into
:35:25. > :35:28.London ends up elsewhere. Whether investment in the tube, where the
:35:29. > :35:34.money is spent in derby or Sheffield, financial services
:35:35. > :35:37.overseas but performing back office functions elsewhere, it is private
:35:38. > :35:41.sector employers and financial services only there because of the
:35:42. > :35:46.headquarters in London. London's success is intrinsic to the success
:35:47. > :35:53.of the country. The two are linked. To stop the drain of talent, radical
:35:54. > :35:57.solutions are being prepared to he devolving cities and taking power
:35:58. > :36:01.away from Westminster. But London looms so large it is hard to see how
:36:02. > :36:05.the picture could change. Sarah Sands, the editor of the London
:36:06. > :36:09.Evening Standard newspaper, and Graham Stringer, the Labour MP for
:36:10. > :36:13.the Greater Manchester constituency of blackly and broughten to. It is
:36:14. > :36:21.obvious isn't it, move the capital out of London? Why. Here we have
:36:22. > :36:26.great cause for celebration and we are treating it with a rage because
:36:27. > :36:30.London is successful. I rather approve of its success, the question
:36:31. > :36:39.is whether it comes at somebody else's cost, do you think it does?
:36:40. > :36:43.London is great city and one of the world's great financial centres, it
:36:44. > :36:46.is God for the country and also in an excellent position for -- it is
:36:47. > :36:50.good for the country and also in an excellent position for trade with
:36:51. > :36:54.Europe. Given those strengths that we then put parliament most of the
:36:55. > :36:59.Civil Service here in London, so they get a treble benefit as well as
:37:00. > :37:03.their natural economic benefit. That's bad for London, it leads to
:37:04. > :37:07.congestion, and it is bad for the rest of the country. You want to
:37:08. > :37:12.effectively move Government out of London? Many of the private sector
:37:13. > :37:16.jobs created in London are dependant on the public sector, the two go
:37:17. > :37:21.hand in hand. Where would you send it to? I would send it to
:37:22. > :37:25.Manchester, but it would be good anywhere else in the country. That
:37:26. > :37:35.it would benefit that. Everywhere this country has set up, new
:37:36. > :37:39.countries coming up after the Second World War, London, Australia and the
:37:40. > :37:43.United States. They have chosen to separate their capital from the
:37:44. > :37:49.major financial city, so one city doesn't dominate. Like London has.
:37:50. > :37:56.They should have gone to Milton Keynes? They should have gone
:37:57. > :38:00.further than Milton Keynes. In a most-industrialeria we are wasting
:38:01. > :38:03.the capacity in those cities. They could make a much greater
:38:04. > :38:07.contribution to the United Kingdom as an economy than it is being made
:38:08. > :38:14.at the present time. We are getting more and more congestion in London.
:38:15. > :38:19.Sarah Sands, it is unattractive when you look at these loads of money
:38:20. > :38:24.characters in London and compare them with the might of some of our
:38:25. > :38:28.great cities. It is a bit upsetting isn't it? We have a lot of people
:38:29. > :38:32.below the poverty line in London. That is A Tale of Two Cities in
:38:33. > :38:36.itself. What seems completely bonkers is to say you move your
:38:37. > :38:41.Government out of your capital city. Is this some other solution then.
:38:42. > :38:45.The other solution is to learn a bit about London about what it is about
:38:46. > :38:51.flexible Labour and this great concentration of talent. London's a
:38:52. > :38:56.magnet city, it has been since dick Whittington. You might as well, you
:38:57. > :39:01.know. That is fair point. London is great city, I don't deny that, why
:39:02. > :39:08.then does it need twice the level of investment per head of population.
:39:09. > :39:15.By far it is the return. Per head of population. Why do you need 90-odd %
:39:16. > :39:20.that The Ghost Writer into London. Because of the return. You are
:39:21. > :39:24.subsidising congestion by putting the money in London. You sort out
:39:25. > :39:27.the congestion if you pay for the infrastructure. As more people come
:39:28. > :39:31.to London, which they will, in their millions, it means you have to sort
:39:32. > :39:39.out public transport which I think is the big challenge. But the reason
:39:40. > :39:43.you invest in London is that is where the return is. It is true to
:39:44. > :39:48.say one pound in five that is earned in the capital goes to the rest of
:39:49. > :39:52.the country. Don't bite the hand that feeds you. London is keeping
:39:53. > :39:58.much of the rest of the country afloat? Yes, totally responsible for
:39:59. > :40:02.the recovery. If you have a billionare rather than trying to tax
:40:03. > :40:10.them at 50p in the pound as Ed Balls is arguing, you will say we won't
:40:11. > :40:15.tax you. We are extraordinarily successful and putting double into
:40:16. > :40:19.transport, that creates economic activity which again brings more
:40:20. > :40:24.people in. What is the evidence it is bad for other places? Exactly.
:40:25. > :40:29.Because that money isn't going into other cities. Could you force it to
:40:30. > :40:34.go somewhere else? London is paying for those cities. We have to go side
:40:35. > :40:39.ways, it is ridiculous that a city like Manchester has to fight five
:40:40. > :40:45.years for permission to have a tram system, and leads and Liverpool
:40:46. > :40:50.can't build it, ?20 billion goes into tube system and CrossRail.
:40:51. > :40:54.Eight million people live in London? There are that many living in the
:40:55. > :40:59.North West of England. When you lock at the amount of money per head of
:41:00. > :41:02.population. It is still a tiny percentage of what is going into
:41:03. > :41:07.London. It makes sense to spread ma money about. You get more bangs for
:41:08. > :41:12.your buck if it isn't put into London. You aren't complaining
:41:13. > :41:17.like-for-like, for London now it is becoming a global city that is what
:41:18. > :41:21.you are comparing yourself with and that is where you get you the money
:41:22. > :41:25.and investment. London is not imagining Manchester in any way, it
:41:26. > :41:28.is comparing itself with all the world cities, that is what it is
:41:29. > :41:35.fighting. I agree with that and I want them to be successful. I think
:41:36. > :41:40.the thing that we are doing. I'm trying to take out money so there is
:41:41. > :41:44.a fair distribution with the cities. I have heard Boris and Ken
:41:45. > :41:47.Livingston argue if you take out a lot of the public sector jobs,
:41:48. > :41:50.London can be better at doing what it does really well. That is being
:41:51. > :41:55.one of the great financial cities of the world. You can't just be a
:41:56. > :41:59.financial city, we have heard great finance, politics, art and tech. The
:42:00. > :42:02.politics could easily go out. That is why people want to do business
:42:03. > :42:09.here. The cultural base, the transport base, the universities are
:42:10. > :42:13.all here, that would remain, but you can stop investing and subsidising
:42:14. > :42:18.congestion and take money out and put it in the other cities. It is
:42:19. > :42:21.not a question of Manchester, Liverpool and Newcastle competing
:42:22. > :42:26.with London, we are part of the same country, it shutted be a share deal
:42:27. > :42:29.-- it should be a fair deal and we should use the capacities in those
:42:30. > :42:33.cities to create the whole economy and not just depend what is
:42:34. > :42:40.happening in London. And which putting in the public money we are
:42:41. > :42:45.not getting as much as we could. Do It was Holocaust Memorial Day today,
:42:46. > :42:48.it was also the 69th anniversary of the liberation of the inmates of
:42:49. > :43:00.Auschwitz. Many of those who survived the Nazi's unspeakable
:43:01. > :43:14.bankruptism brutism. Not a member of the Auschwitz or at thes at that,
:43:15. > :43:22.You arrive at Auschwitz and you go to a special block and people put a
:43:23. > :43:26.number on your arm. That is done by prisoners themselves. I had a
:43:27. > :43:32.conversation with a girl who was processing me. And of course she
:43:33. > :43:37.asked me what did I do before I was arrested, I said I used to play the
:43:38. > :43:43.cello. She said fantastic you will be saved. By that time I was naked,
:43:44. > :43:48.without hair with a number on my arm, not a pretty sight. But I can
:43:49. > :44:01.say without hesitation that it saved my life. Music can't be destroyed,
:44:02. > :44:16.you know, the Germans have destroyed so much but music it is
:44:17. > :44:20.indestructable. Dr Mengelar wanted to hear the tune I was playing. His
:44:21. > :44:24.job was to go to the trains when we aRoyal Navy and look for twin --
:44:25. > :44:27.arrive and look for twins and take them to his laboratory and
:44:28. > :44:38.experiment on the twins until they were dead. So man who did that knew
:44:39. > :44:44.about Schumann, this is the big mystery about these top Nazi, how is
:44:45. > :44:51.it possible that totally normal and called educated men can sink to such
:44:52. > :44:55.a level. So when people ask me how do I feel about it? I don't feel
:44:56. > :45:01.anything about it other than think about how obscene such a situation
:45:02. > :45:18.is. It did not spoil the music for me.
:45:19. > :45:26.We leave you tonight on Holocaust Memorial Day with Antia's son, the
:45:27. > :45:32.internationally renowned cellist, Antia Lasker-Wallfish, along with
:45:33. > :46:33.his own son, Simon, playing Jewish Song, by Ernst Bloch.