27/01/2014 Newsnight


Jeremy Paxman v Ed Balls on 50p income tax. News of the World hacking trial. State of the Union. London leads the recovery. The cellist and Auschwitz.

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the 50p rate of income tax. How does the cat dough Chancellor that even


those who sat in Government with him don't buy into it. Ed Miliband says


Ed Balls is here to explain why it is time to tax the rich.


Mega City 1 is creating ten-times the jobs of its nearest rival, is


the capital a life force or a cyst. The woman who survived the death


camps by playing the cello. We came to Auschwitz preparing to be gassed.


Everything that is not death is a complete surprise. You are not


likely to say I'm sorry I don't play here. Her internationally renowned


son and his son perform in the studio. If the Labour Party gets


re-elected to get another shot at running the country it will make the


rich pay for tax, specifically raising the top rate of income tax


to 50%. Right and proper says Ed Miliband, representatives of some of


those who would have to pay the new rate are understandably scathing,


they would be, wouldn't they. More interesting are various architects


of new Labour, who think that this is a reversion to the days of Neil


Kinnock and all that unhappiness. But policy it is and it is one of


the ideas I will be asking the shadow shall about in a moment.


First though Emily Maitlis reports. Back in the day of new Labour it was


nicknamed the "prawn cocktail offensive". The essential agreement,


neither the prawn or twist of lemon, but the approach the party had


towards business. It was shorthand to tell those who made money not to


be scared. The message Tony Blair and Gordon Brown wanted to send out


is the City could trust them with their money and the economy. It was


only one part of the strategy but... A new dawn has broken, has it not.


businessmen and really recognised that they had to get business on


their side, that business was important for the wealth, for the


general wealth of the whole country and for economic recovery. We are


getting into now that Labour feels it is getting populist and


short-termist, it wants the quick win, quick political wins that it


knows in its heart of hearts is bad for the economy bad for everyone.


The tax Mr Balls announced was only one measure in a speech aimed at


reassuring voters of Labour's fiscal responsibility, and the aim of


balancing the books within one parliament. Of it the 50p measure


that became the headline. The unthat inspired letters to the Telegraph,


and even a pro-Labour City minister to rail against it. Ed Balls insists


he's not antibusiness and the tax would raise, I quote, "hundreds of


millions of pounds more". This is graph to show how much the


resurrected 50p tax would bring in. It doesn't have any numbers on it


because to be honest no-one has a blue. Clue. -- Let's cut to the


chase is it a revenue raiser? We don't know, the best estimates is it


probably wouldn't raise too much, there is huge uncertainty, it may


raise a significant amount and it may cost a bit. The key thing is you


are taking a bit of a gamble doing this. ?3 billion sun likely, ?1


million is possible, less than half a billion is most likely. One senior


Blairite told us the key question on the 50p tax is whether it is a


deficit reduction measure or whether it is about fairness. If it is about


definite reduction then it is temporary, which is fine. If it is


meant to be a ego galltarian then it is -- egalitarian then it is that.


The issue is how long the policy would last and the motivation that


lies behind it. Ed Miliband is known to be the more


interventionist of the two. His talk of taxing predators to fund producer


was seen by many in the party and outside it as a bid for a new kind


of capitalism. A recognition, even, after the financial crash, the


centre ground had moved to the left. I'm not sure the centre ground has


shift today the left. If we look at France, they played it to the far


left and yes they did get elected, but what has happened now is they


have had to come right back. They have had to come back with lots more


probusiness policies, they have had to do an absolute U-turn. I would


love if the UK could learn from the U-turn and say what we have done


successfully over the last few years say we are probusiness and we want


businesses to open here, and we want that investment and jobs to come


into the country. We are not going to chase them away with both


policies and bat rhetoric. -- bad rhetoric. Of course you thinking,


they would say that wouldn't they. Under the Ed Miliband new order


perhaps a little bit of business disquiet is no bad thing. Opinion


polls this weekend suggest the 50p tax is fairly popular among all


voters except Conservatives. It is the populisim and sense of being


driven by polling which makes those with experience of past electoral


success wary. One former Labour adviser tells me they are in danger


of putting together a programme that becomes an electoral platform that


is characterised as antibusiness and anti-enterprise. Well we all know


how that move Indies. In other words there may be an appetite for a more


puritan diet, but you forget the prawn cocktail at your peril.


The Shadow Chancellor is with us now. Whose idea was it to bring back


the 50p tax rate? I think the whole Shadow Cabinet has been behind this


since we have been exposing the 50p cut a year ago. Ed Miliband and I


discussed this in the early summer, we both decided it was the right


thing to do. There was a question about when was the right time to


make this clear, we wanted to get this right. But it was a joint


decision of ourselves, but also the whole Shadow Cabinet is behind it.


Were they consulted about it? Well of course they were. So the whole


Shadow Cabinet was in on the discussion about the 50p rate? All


the Shadow Cabinet discussed it before the speech on Saturday, I


have discussed with them the top rate of tax cut and its unfairness


many times in the last year, and we have discussed the importance of


taking tough and fair decisions to get the tax down. Tax you have to


handle with care, but everyone is supporting it. Of course they are


supporting it now, they have to support it now, were they in on the


discussions beforehand? All the Shadow Cabinet talked about it with


me and my team before Saturday's speech. But they didn't dismiss it


in a meeting of the Shadow Cabinet? We have had very many meetings of


the Shadow Cabinet, like last Tuesday where we discussed the 50p


rate and the unfairness, and the need for tough decisions and the


need to balance the books. I said on Saturday we will balance the books


in the next parliament and get the national debt falling, but in fair


way, it will mean spending cuts but also fairness in tax. Is it


temporary or permanent? We will have said for the next parliament, as we


get the deficit down. So it will end at the end of the next parliament? I


have been very clear, nothing is set in stone. I would rather tax rates


came down rather than went up. It is temporary then isn't it? It is for


the next parliament as we get the deficit down. I'm not going to say


to you today what our tax policy will be for the parliament after


next, that would be completely perverse. When the deficit is gone,


so too will this rate of tax? Well we need to get the deficit down, we


need do that in the next parliament, in the next parliament we will have


a higher rate of tax to do that. I'm not going to say to you today that


we have decided on our tax policy for the parliament after. It is to


get the deficit down. They are linked. The reduction and removal of


the deficit and the 50p rate of tax, they are linked? Of course,


absolutely. Our commitment to progressive taxation is fair, it is


permanent, but we will get the deficit down in the next parliament


using the 50p rate. Sure, so if the deficit is got rid of before the end


of the next parliament, say it happens after three or four years,


then this rate of tax would stop? It would be fabulous, we had a


parliament this parliament where the Government has failed to get the


deficit down, you are saying if I'm even more successful. I am take beg


your policies and not their's? If I'm more successful we will cope


with the consequences of success when we find them. You would be glad


because you would have succeeded? I want to get the deficit down. I said


on Saturday the sooner we get it down the better, it would depend on


growth in the economy, spending cuts and tax. The 50p rate will be there


for the next parliament because it is fair. Why stop at 50p? It is


important we don't send signals down the world we are going back to the


1970s and 8 #0S, I don't want do that. I look at what Francois


Hollande did in France, attempting to have a 75p tax rate. I thought


that is not sensible policy in the modern world. But we are in a


particular circumstance in Britain with large deficit. We need to get


it down. George Osborne and David Cameron have given a ?3 billion tax


cut to those earning over ?150,000, most people earning the programme


will say when my living standards are going down that's not fair,


let's keep the top rate at 50p to get the deficit down. When even men


who sat in Government with you, like Paul Miners and Digby Jones, when


they say this is a duff idea, don't you think maybe they are right? To


be fair to Lord Digby Jones he has always been consistent in thinking


the 50p tax rate is wrong, that is exceptional in the cabinet. As


Alistair Darling said yesterday, the decision to have 50p to get the


deficit down was the right decision and supported by the Labour


Government and most people in the country. That is still the case


today. Digby takes a different view I respect his view but the world has


moved on. What about Lord Miners who questions your ability to do GCSE


economics? He was in the Treasury in a Government where the Chancellor


put it up to 50p, it may be he made hits objections. You used to have


this review -- view too? You said you didn't think that in a global


economy you can start redressing the balance by capping rewards at the


top and paying a big price by your ability to attract investment and


talent, it sounds like that to me? Of course that is the case. You have


to have an economy where you have wealth creators, entrepeneurs who


can make money and earn profits, invest for the future, but, Jeremy,


at a time when the deficit is really big, they have to pay the fair share


of tax and 50p is fair. What Government has done is given 13,000


people, earning over one million pounds. I thought we were talking


about your policies? What I want to do is reverse a policy which this


year has given 30,000 people earning over a million pounds a tax cut of


?103,000. Do you think it is fair to give somebody a can tax cut of


?103,000 when most people see the living standards going down, I


don't. Do you share your boss's distinction between predators and


producers? Of course. Can you give me an example of a predator? That


would be somebody who breaks the law... It is a distinction between


criminals and others? A criminal would clearly be predatory, a


company which gets involved in cartel behaviour, trying to organise


and rig a market, that would be predatory. That would be illegal too


wouldn't it? It all depends on where the law is able to get to. What he's


talking about is criminals, not a distinction between predatory


capitalism and producer capitalism, he's talking about? If you take the


case of banks earlier year, some of the banks ended up losing touch...


Which banks? RBS, Lloyd's. They are predators? There were some banks who


lost touch with what they needed to do to serve the economy, to serve


their shareholders and only were out making short-term money. Is that


predatory or not? Tell me? I think in some of the cases where things


went really wrong, Fred Goodwin he stepped over the edge. He was a


predator? I think so. Apart from this bogeyman, are there any other


predators can you name? The thing I would say is I want to have an


economy which is long-termist and competitive. I don't want cartels, I


want companies working to create long-term value. You share the view


of predators and producer, I'm just trying to find out what we are


talking about when we are talking about a predator? I think short-term


asset stripping at the cost of long-term value, shareholder value.


We're on to asset strippers now, what about energy predators? In the


case of the energy companies it is clear you have a small number of


companies who have been acting in a pretty anticompetitive and


non-transparent market making big profits and not passing on lower


prices to consumers. I'm not going to call it predatory, I will say the


market hasn't been working and the rules of the game have not been


right. We need to get them right and get the investment in. In the


short-term let's get some help back to consumers. Probably when we had


the windfall tax in 1997 on the privatised utill torics some of the


things which happened in the utilities in that period were beyond


the pale, absolutely. A long time ago? It was the last time we had a


new Labour Government coming in with a windfall tax on energy companies.


Can I ask you about suing said yesterday, talking about public


spending, you would like to spend more on some areas than you did in


Government. And quote, "there would be some spending things we wouldn't


do and some we would do differently". What were the things


you wouldn't now do? I was asked about public spending of the last


Labour Government. I said we didn't spend every pound of public money


wisely, but some things we would definitely do less of. There were


some areas we should have done more. A good example, the housing benefit


bill went up under the Labour Government and it continues to go


up, but we didn't spend enough money on affordable housing and housing


investment. If you don't build the homes you need you have higher rents


and higher housing costs. That is an argument for spending more money?


And less, I would like less on the housing benefit bill and more on


housing investment. We didn't spend enough in the last parliament on


adult skills, and skills for non-university young people.


Anything else you spend money on unnecessarily? I thought the scam


dome was a waste of money -- I thought the Dome was a waste of


money and the Hor rice zone project we shouldn't have done. The same


thing is true under this Government as well. There is far more special


advisers and things like that going on. Did the global financial crisis


get caused by Labour public spending, I have been clear and said


we got regulation wrong of the banks, but did we get public


spending wrong, that didn't drive the global financial crisis. You


were also one of the authors of all that rubbish about boom and bust


being ended? I was the author saying we should make the Bank of England


independent and get away from a man fingerprintlation of interest rates,


and the -- manipulation of interest rates, and the up and down cycle of


the 1980s. I was the person who said we shouldn't join the single


currency, and many people on my side and other sides who said we should


join the euro, that would have been a catastrophic decision. We all get


things right in the Government, when you are a grown-up you say it when


you get things wrong, we didn't regulate the banks enough, and other


good calls we did have like not joining the euro and other things. I


want to debate the future? Let's get on to it. Wonderful isn't it, the


economy is doing really well isn't t that makes life very difficult for


you? At last we are getting some growth back. Do you think up and


down the country at the moment when most people are seeing their living


standards fall and in most parts of the country there isn't new business


investment coming through, do you think this is an economy doing


really, really well, it is cloud-cuckoo-land. Unemployment is


falling and very shortly we will be at the target set by the Governor of


the Bank of England for reassessing interest rates. It is good news,


George Osborne is doing rather a good job? Come on Jeremy, in 2010 he


became the Chancellor, he raised VAT, he choked off the recovery, for


three years of flatlining, living standards are down, finally, finally


we are getting growth back in our economy, we are below before the


crisis, France is above where we were. They are doing... So France is


a model? I'm just saying even France, on France is above it, it is


pre-crisis peak, we are below. Finally we are getting growth back,


that is good news. The idea it wipes out three years of flatlining


absolutely not. All this sort of stuff is going to stop, you won't be


doing that much longer will you? I had to do it for a year-and-a-half


longer than I expected because the flatlining. What will you be doing?


What I have been pointing out is living standards are down for most


people in our country, that is reality. And growth is up? Good


thing, about time we had some growth. Unemployment down? Question


mark why is it not business and investment-led, why not export-led,


why are we boosting housing demand but not the supply. Is it a balanced


and sustainable recovery, is it built to last, is it for working


people, is it fair. The answer to those is no at the moment, business


as usual is not good enough. We need things to change n our banks and


energy companies, a fair plan, Labour will deliver that, George


Osborne and David Cameron are cutting taxes for people on the


highest incomes and everybody else is suffering. That is not business


as usual, that is the same old Tories. Thank you. Script writers


are, even as we speak, looking forward to late night in Washington,


for tomorrow President Obama delivers the State of the Union


address to Congress. This ritual, for all its occasional folksiness,


like the pick out of ordinary citizens as fine examples of the


American way has a serious purpose. Particularly for a second term


leader like Obama. No-one in recent years has ended the White House on


-- entered the White House on you such a surge of he can pecktation,


and in three years he will be -- surge of expectation, and in three


years he will be out, what was it all for? Washington can be a cold,


cruel city, one minute this world is your's, the next it is moving on


without you. Barack Obama has three years left in the White House, but


already everyone here is focussed on who replaces him. This is Obama's


house of cards. If he wants to get anything big done with what remains


of his presidency he will need to play a stronger hand. President


Obama came on a wave of expectation, it seems an age away. As he prepares


for his sixth State of the Union address the only question is, does


anyone actually listen any more. His approval ratings have sunk to the


lowest ever. He has lost credibility around the world, and then there is


his terrible relationship with the gridlocked Congress. Obama craves


momentum, but his presidency seems stuck. Let's set party interests


aside... At last year's State of the Union address Obama promised action


on three big issues, immigration, guns and climate. As of today there


has been no legislation on any of them. He believed, wrongly, that


sort of some combination of his personality and electoral victory in


2008, in his own mind I think his own unique ability to bridge


unbridgeable gaps in the past, that things would fall into place more.


Political junkies in this town survive on the fix, the blog's


editor feeds them a commentary of who is up and who is down. He comes


into the 2014 State of the Union, and a much weaker political position


than a year ago, the things he hoped to capitalise on the stronger


political position a year ago haven't happened. Can he make them


happen still? I think it is very unlikely through legislative


processing that these will get done. Inside the White House they remain


optimistic about the President's agenda. Sometimes you get a more


honest take from somebody who has left the administration. This is the


best last chance to hit reset. So there is a lot riding on the speech.


Robert Gibbs was Barack Obama's first staff member when he became a


senator, he stayed on as his first presidential spokesperson, the two


are close. It is hard to overestimate the real damage that


was inflicted for most of last year on healthcare. You learn quickly in


the White House that what really can sap your energy are things you never


knew you would be dealing with, or things that were unpredictable and


things that completely or largely were out of your control. This was


entirely in the control of the White House. And yet, still so badly


bungled. Where was the person in the White House going into the Oval


Office and saying Mr President, this is not working out? The one thing I


have always said is in my time in the White House, when it comes time


to knock on that door, and walk in that room and tell the President bad


news, not as many people want to be in on that meeting. The healthcare


disaster blindsided the White House and it shows. There is an undeniable


sense of stagnation in America at the moment, and the world is feeling


it. Take the issue of social mobility, it is actually worse here


than it is in most of Europe. And the gap between rich and poor is


growing faster here than it is anywhere else, but this is the issue


that President Obama hopes to use to give Democrats a rallying cry in the


mid-term elections and reboot his presidency. It has become a common


theme at the White House daily briefing. On income and inequality


the President has made it clear this will be a big part of the next three


years. But with so little appetite in Congress to do anything about it,


how much effort is he going to put behind measures that can actually


reduce the trend? Addressing that challenge, addressing that problem,


making sure there is opportunity for everyone is something that we can do


together with Congress. It is also something that he can tackle using


all of the tools in his tool box, as President of the United States. How


would he measure success? I think he would measure success by evidence


that we have improved economic opportunity in this country for


everyone, that the mobility that we have seen declining in this country


is on the rise again. The economic problems at home are limiting Obama


abroad. Few people have a better take on America's global influence


than Andrea Mitchell, she's covered US foreign policy under four


Presidents, and today she sees a country in retreat. Of course


Obama's responding to America's war fatigue, but Andrea believes there


is something else going on as well. Other Presidents have more value of


the personal relationships. Even George W Bush, who was so disliked


in Europe by a majority of Europe, knew how to maintain a very close


relationship with his British counterpart and other leaders. This


President just doesn't have that schmooze ability the way other


Presidents have, both Democrats and Republicans. Does that hurt America


as influence around the world do you think? I think diplomacy does boil


down to personal trust. I don't think people in foreign capitals


really feel they know Barack Obama. Clearly Obama bears some


responsibility for his shrunken presidency, and perhaps the only


reason he isn't in worse shape is that his opponents are even more


stuck. Michael Steel is the former chairman of the Republican National


Committee, he's unusually frank about the state of his party. We


have been running on this idea that Obama's the bogeyman, his policies


are bad for America, and yet we have put no alternative individual or


policy that the American people can gravitate towards. What I'm hoping


in this cycle is we see those leaders emerge that begin to push


back on this noise inside the party. It has to happen. If it doesn't


happen 2016 will be a pipe dream. This is the beginning of the end of


productive time for change. Productive time to implement what is


left of the President's agenda. Resetting the narrative and the


landscape couldn't come at a better time because they need it so


desperately. They need to get away from the them radios of 2013. Barack


Obama came into the White House thinking he could change the way


American Government works. Today a more pragmatic President has to


accept that just keeping Government open may have to pass for success.


The time for grand ideals is past. Joining us now from Los Angeles is


the author and Republican strategist, Leslie Sanchez, we're


joined from Washington by Barack Obama's former Director of


Speechwriting, Jon Fravreau, who worked on every one of the


President's State of the Union addresses until he left the White


House early last year. So what's going on inside the speech writing


team now, Jon Fravreau, just on the eve of the speech? These are some


hectic last couple of days for the speech-writing team and the


President. I know they are editing furiously, trying to cut out words


here and there so the speech is as tight and short as possible. And we


will see what happens tomorrow night. There is a content problem


too isn't there? There is always a content challenge in the State of


the Union. You have a lot of issues to cover, all the domestic issues


and international issues and you have just under an hour to do so.


You have to make to sure that you use the words sparingly make your


point quickly. Leslie Sanchez, do you think it is a problem specific


to the Obama presidency or maybe it just affects every second term


presidency? Absolutely correct that it affects every president in the


second term, regardless, Republican or Democrat, they are facing a


ticking clock which is a lame duck presidency. You are looking at the


at a cycle in a few months, the President has a short window to


press efforts forward and 2016 people will realise they are waiting


out for the next Congress to come in with the next President to see what


they can get done then. What do you think the President would be wise to


concentrate on tomorrow Jon Fravreau? I think tomorrow he will


focus on expanding opportunity for the middle-class. What we can do to


keep creating jobs in America and not only creating jobs and making


sure those jobs pay a decent wage, if you work hard you can get ahead


in this country. So I think that involves proposals around job


training, around investments in education, in infrastructure. All


the sort of things the President has been talking about for the last


couple of years that he hopes Congress can work with him on. Miss


Sanchez is that going to wash? Not at all, what the reality is there


was no Obama economic recovery. That the legislative team put forward


last year in the State of the Union, everything from pre-schools, tax


reform, manufacturing hubs, none of them were seen to fruition, you are


seeing an American electorate that is increasingly impatient. So there


is not a lot of political capital for the President to run on. He has


a short window. As regards the rest of the world, Jon Fravreau,


President Obama has been notably vague in some parts of the world,


hasn't he? What do you mean by vague? I mean he is keen not to get


involved? Well look, you know, through the help of American


diplomacy as well as our allies, you know, the President did help achieve


you know an historic deal to halt uranium enrichment in Iran. That is


something that they will be moving forward on. The President's ended


the Iraq War and continuing to end the Afghanistan war. By next year


our troops will be home from that war as well. I believe the President


is very engaged around the world wherever he can be. What do you


think of his international position, Leslie Sanchez? I think that many


feel there was a lot of missed opportunities, that the US does not,


in many ways it comes away more bruised than it is in a position of


leadership. When you are talking about the most recent initiative,


there is still a lot of scepticism about did the President make the


right choices and soon enough. I think that is something that not


only the United States but the world community will be anxious to decide.


What is mysterious to an outsider, if this President is so frail and


faulty, why hasn't the opposition, the Republican Party made greater


headway against him? It is a very good point. Many felt that the last


mid-term cycle and even the last presidency that you were going to


see a rebuff of the President's policies and the President himself,


I think a couple of things and lessons learned by Republicans is in


many cases we did not have a legislative agenda and a


solution-orientated agenda that the Americans could believe. There were


many independent voters and swing voters who felt they should do with


the candidate they know in a very tough economic time. There wasn't


enough of a change agent, enough of a hope that was tangible for people


to believe that they should jump ships and support another party.


Thank you both very much indeed. Thank Hemps for London, no-one's


actually put it like, that but the assessment from a research group


that the capital dramatically upped the rest of the country in creating


jobs is astonishing. London is creating ten-times more private


sector jobs than the next most booming city. Even the public sector


is booming too. Not fair cry other cities across the land. The chant of


those glorious Londoners, Millwall with their No One Likes Us And We


Don't Care, sums up the feelings towards the capital.


London is becoming a giant suction machine, draining the life out of


the rest of the country. The speed of London's economic growth has


become visible in its skyline, with the gherkin building looking short


now to the walkie-talkie and the cheese greater. This is how glaring


the difference between London and the rest of the country has become.


Of the private sector jobs created in the first two years of this


Government, 79% were created in London. You can see why if you live


in Glasgow or Manchester it looks like the whole economy is skewed


towards London. It has barely an 8th of the country's population, but a


fifth the jobs and the a quarter of the value of the economy.


London's dominance has been the case for decades. People were complaining


about it back in 1940, it is the administrative capital and the


cultural capital, it has Government here and so much here already, it is


difficult to break that cycle. Actually what we want to see is that


allstitious London included, but it has some powers, all cities have


more power to do what they want for their economy, and make the case for


why they are so fantastic for investment, that would turn the


tide. When it comes to attracting talent from the rest of the country,


the research confirms what Vincent Cable said, London sucks. Only five


cities saw population flow the other way. That is also reflected in jobs,


in the same time that London created more than 216,000 jobs, other big


cities lost thousands. I don't think the economy is skewed towards London


f you looked at the headline you would think that is the case, it is


easy to paint that picture. The truth is when you follow the money,


right, much of the money, if not most of the money that comes into


London ends up elsewhere. Whether investment in the tube, where the


money is spent in derby or Sheffield, financial services


overseas but performing back office functions elsewhere, it is private


sector employers and financial services only there because of the


headquarters in London. London's success is intrinsic to the success


of the country. The two are linked. To stop the drain of talent, radical


solutions are being prepared to he devolving cities and taking power


away from Westminster. But London looms so large it is hard to see how


the picture could change. Sarah Sands, the editor of the London


Evening Standard newspaper, and Graham Stringer, the Labour MP for


the Greater Manchester constituency of blackly and broughten to. It is


obvious isn't it, move the capital out of London? Why. Here we have


great cause for celebration and we are treating it with a rage because


London is successful. I rather approve of its success, the question


is whether it comes at somebody else's cost, do you think it does?


London is great city and one of the world's great financial centres, it


is God for the country and also in an excellent position for -- it is


good for the country and also in an excellent position for trade with


Europe. Given those strengths that we then put parliament most of the


Civil Service here in London, so they get a treble benefit as well as


their natural economic benefit. That's bad for London, it leads to


congestion, and it is bad for the rest of the country. You want to


effectively move Government out of London? Many of the private sector


jobs created in London are dependant on the public sector, the two go


hand in hand. Where would you send it to? I would send it to


Manchester, but it would be good anywhere else in the country. That


it would benefit that. Everywhere this country has set up, new


countries coming up after the Second World War, London, Australia and the


United States. They have chosen to separate their capital from the


major financial city, so one city doesn't dominate. Like London has.


They should have gone to Milton Keynes? They should have gone


further than Milton Keynes. In a most-industrialeria we are wasting


the capacity in those cities. They could make a much greater


contribution to the United Kingdom as an economy than it is being made


at the present time. We are getting more and more congestion in London.


Sarah Sands, it is unattractive when you look at these loads of money


characters in London and compare them with the might of some of our


great cities. It is a bit upsetting isn't it? We have a lot of people


below the poverty line in London. That is A Tale of Two Cities in


itself. What seems completely bonkers is to say you move your


Government out of your capital city. Is this some other solution then.


The other solution is to learn a bit about London about what it is about


flexible Labour and this great concentration of talent. London's a


magnet city, it has been since dick Whittington. You might as well, you


know. That is fair point. London is great city, I don't deny that, why


then does it need twice the level of investment per head of population.


By far it is the return. Per head of population. Why do you need 90-odd %


that The Ghost Writer into London. Because of the return. You are


subsidising congestion by putting the money in London. You sort out


the congestion if you pay for the infrastructure. As more people come


to London, which they will, in their millions, it means you have to sort


out public transport which I think is the big challenge. But the reason


you invest in London is that is where the return is. It is true to


say one pound in five that is earned in the capital goes to the rest of


the country. Don't bite the hand that feeds you. London is keeping


much of the rest of the country afloat? Yes, totally responsible for


the recovery. If you have a billionare rather than trying to tax


them at 50p in the pound as Ed Balls is arguing, you will say we won't


tax you. We are extraordinarily successful and putting double into


transport, that creates economic activity which again brings more


people in. What is the evidence it is bad for other places? Exactly.


Because that money isn't going into other cities. Could you force it to


go somewhere else? London is paying for those cities. We have to go side


ways, it is ridiculous that a city like Manchester has to fight five


years for permission to have a tram system, and leads and Liverpool


can't build it, ?20 billion goes into tube system and CrossRail.


Eight million people live in London? There are that many living in the


North West of England. When you lock at the amount of money per head of


population. It is still a tiny percentage of what is going into


London. It makes sense to spread ma money about. You get more bangs for


your buck if it isn't put into London. You aren't complaining


like-for-like, for London now it is becoming a global city that is what


you are comparing yourself with and that is where you get you the money


and investment. London is not imagining Manchester in any way, it


is comparing itself with all the world cities, that is what it is


fighting. I agree with that and I want them to be successful. I think


the thing that we are doing. I'm trying to take out money so there is


a fair distribution with the cities. I have heard Boris and Ken


Livingston argue if you take out a lot of the public sector jobs,


London can be better at doing what it does really well. That is being


one of the great financial cities of the world. You can't just be a


financial city, we have heard great finance, politics, art and tech. The


politics could easily go out. That is why people want to do business


here. The cultural base, the transport base, the universities are


all here, that would remain, but you can stop investing and subsidising


congestion and take money out and put it in the other cities. It is


not a question of Manchester, Liverpool and Newcastle competing


with London, we are part of the same country, it shutted be a share deal


-- it should be a fair deal and we should use the capacities in those


cities to create the whole economy and not just depend what is


happening in London. And which putting in the public money we are


not getting as much as we could. Do It was Holocaust Memorial Day today,


it was also the 69th anniversary of the liberation of the inmates of


Auschwitz. Many of those who survived the Nazi's unspeakable


bankruptism brutism. Not a member of the Auschwitz or at thes at that,


You arrive at Auschwitz and you go to a special block and people put a


number on your arm. That is done by prisoners themselves. I had a


conversation with a girl who was processing me. And of course she


asked me what did I do before I was arrested, I said I used to play the


cello. She said fantastic you will be saved. By that time I was naked,


without hair with a number on my arm, not a pretty sight. But I can


say without hesitation that it saved my life. Music can't be destroyed,


you know, the Germans have destroyed so much but music it is


indestructable. Dr Mengelar wanted to hear the tune I was playing. His


job was to go to the trains when we aRoyal Navy and look for twin --


arrive and look for twins and take them to his laboratory and


experiment on the twins until they were dead. So man who did that knew


about Schumann, this is the big mystery about these top Nazi, how is


it possible that totally normal and called educated men can sink to such


a level. So when people ask me how do I feel about it? I don't feel


anything about it other than think about how obscene such a situation


is. It did not spoil the music for me.


We leave you tonight on Holocaust Memorial Day with Antia's son, the


internationally renowned cellist, Antia Lasker-Wallfish, along with


his own son, Simon, playing Jewish Song, by Ernst Bloch.


Jeremy Paxman v Ed Balls on 50p income tax.

News of the World hacking trial.

State of the Union.

London leads the recovery.

The cellist and Auschwitz.

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