27/01/2014 Newsnight


27/01/2014

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

:00:17.:00:29.

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

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

:00:36.:00:41.

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

:00:42.:00:48.

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

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

:00:56.:01:00.

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

:01:01.:01:04.

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

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

:01:11.:01:26.

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

:01:27.:01:30.

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

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

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

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

:01:43.:01:45.

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

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

:01:51.:01:53.

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

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

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

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

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

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

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

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

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businessmen and really recognised that they had to get business on

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

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

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getting into now that Labour feels it is getting populist and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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driven by polling which makes those with experience of past electoral

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

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of putting together a programme that becomes an electoral platform that

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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discussions beforehand? All the Shadow Cabinet talked about it with

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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parliament this parliament where the Government has failed to get the

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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deficit down was the right decision and supported by the Labour

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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company which gets involved in cartel behaviour, trying to organise

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

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

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talking about is criminals, not a distinction between predatory

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

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

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

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

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

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

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

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

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

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

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

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

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

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

:14:10.:14:14.

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

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

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companies who have been acting in a pretty anticompetitive and

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

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

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

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

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

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

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things which happened in the utilities in that period were beyond

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

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

:14:57.:15:01.

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

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

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

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

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

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

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

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

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

:15:32.:15:35.

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

:15:36.:15:38.

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

:15:39.:15:42.

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

:15:43.:15:46.

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

:15:47.:15:49.

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

:15:50.:15:53.

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

:15:54.:15:56.

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

:15:57.:16:00.

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

:16:01.:16:04.

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

:16:05.:16:07.

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

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

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

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

:16:21.:16:24.

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

:16:25.:16:28.

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

:16:29.:16:32.

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

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

:16:38.:16:41.

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

:16:42.:16:45.

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

:16:46.:16:47.

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

:16:48.:16:52.

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

:16:53.:16:56.

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

:16:57.:17:03.

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

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

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

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

:17:19.:17:21.

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

:17:22.:17:24.

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

:17:25.:17:28.

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

:17:29.:17:31.

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

:17:32.:17:38.

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

:17:39.:17:42.

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

:17:43.:17:47.

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

:17:48.:17:50.

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

:17:51.:17:55.

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

:17:56.:17:59.

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

:18:00.:18:04.

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

:18:05.:18:06.

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

:18:07.:18:13.

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

:18:14.:18:18.

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

:18:19.:18:21.

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

:18:22.:18:24.

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

:18:25.:18:28.

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

:18:29.:18:32.

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

:18:33.:18:36.

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

:18:37.:18:38.

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

:18:39.:18:43.

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

:18:44.:18:48.

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

:18:49.:18:53.

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

:18:54.:18:57.

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

:18:58.:19:01.

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

:19:02.:19:05.

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

:19:06.:19:08.

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

:19:09.:19:11.

Osborne and David Cameron are cutting taxes for people on the

:19:12.:19:14.

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

:19:15.:19:16.

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

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

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for tomorrow President Obama delivers the State of the Union

:19:26.:19:28.

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

:19:29.:19:33.

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

:19:34.:19:37.

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

:19:38.:19:41.

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

:19:42.:19:46.

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

:19:47.:19:50.

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

:19:51.:19:55.

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

:19:56.:20:00.

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

:20:01.:20:04.

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

:20:05.:20:09.

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

:20:10.:20:15.

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

:20:16.:20:19.

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

:20:20.:20:33.

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

:20:34.:20:38.

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

:20:39.:20:41.

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

:20:42.:20:46.

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

:20:47.:20:50.

his terrible relationship with the gridlocked Congress. Obama craves

:20:51.:20:54.

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

:20:55.:21:00.

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

:21:01.:21:03.

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

:21:04.:21:09.

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

:21:10.:21:19.

sort of some combination of his personality and electoral victory in

:21:20.:21:24.

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

:21:25.:21:29.

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

:21:30.:21:35.

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

:21:36.:21:40.

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

:21:41.:21:46.

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

:21:47.:21:50.

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

:21:51.:21:54.

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

:21:55.:21:59.

happen still? I think it is very unlikely through legislative

:22:00.:22:10.

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

:22:11.:22:13.

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

:22:14.:22:17.

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

:22:18.:22:22.

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

:22:23.:22:28.

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

:22:29.:22:35.

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

:22:36.:22:39.

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

:22:40.:22:43.

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

:22:44.:22:49.

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

:22:50.:22:52.

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

:22:53.:22:56.

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

:22:57.:23:01.

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

:23:02.:23:06.

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

:23:07.:23:10.

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

:23:11.:23:16.

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

:23:17.:23:20.

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

:23:21.:23:24.

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

:23:25.:23:31.

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

:23:32.:23:35.

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

:23:36.:23:39.

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

:23:40.:23:43.

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

:23:44.:23:47.

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

:23:48.:23:54.

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

:23:55.:23:57.

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

:23:58.:24:04.

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

:24:05.:24:08.

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

:24:09.:24:11.

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

:24:12.:24:15.

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

:24:16.:24:19.

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

:24:20.:24:24.

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

:24:25.:24:27.

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

:24:28.:24:34.

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

:24:35.:24:37.

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

:24:38.:24:43.

that we have improved economic opportunity in this country for

:24:44.:24:51.

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

:24:52.:24:59.

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

:25:00.:25:04.

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

:25:05.:25:09.

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

:25:10.:25:12.

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

:25:13.:25:16.

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

:25:17.:25:20.

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

:25:21.:25:25.

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

:25:26.:25:30.

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

:25:31.:25:34.

relationship with his British counterpart and other leaders. This

:25:35.:25:39.

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

:25:40.:25:43.

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

:25:44.:25:47.

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

:25:48.:25:52.

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

:25:53.:25:58.

really feel they know Barack Obama. Clearly Obama bears some

:25:59.:26:02.

responsibility for his shrunken presidency, and perhaps the only

:26:03.:26:06.

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

:26:07.:26:11.

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

:26:12.:26:15.

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

:26:16.:26:22.

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

:26:23.:26:26.

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

:26:27.:26:32.

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

:26:33.:26:37.

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

:26:38.:26:42.

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

:26:43.:26:48.

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

:26:49.:26:55.

productive time for change. Productive time to implement what is

:26:56.:27:03.

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

:27:04.:27:08.

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

:27:09.:27:14.

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

:27:15.:27:24.

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

:27:25.:27:28.

American Government works. Today a more pragmatic President has to

:27:29.:27:32.

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

:27:33.:27:41.

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

:27:42.:27:45.

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

:27:46.:27:49.

joined from Washington by Barack Obama's former Director of

:27:50.:27:52.

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

:27:53.:27:56.

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

:27:57.:27:59.

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

:28:00.:28:06.

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

:28:07.:28:13.

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

:28:14.:28:16.

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

:28:17.:28:20.

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

:28:21.:28:24.

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

:28:25.:28:32.

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

:28:33.:28:39.

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

:28:40.:28:42.

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

:28:43.:28:46.

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

:28:47.:28:52.

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

:28:53.:28:58.

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

:28:59.:29:03.

presidency? Absolutely correct that it affects every president in the

:29:04.:29:09.

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

:29:10.:29:13.

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

:29:14.:29:17.

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

:29:18.:29:21.

press efforts forward and 2016 people will realise they are waiting

:29:22.:29:26.

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

:29:27.:29:30.

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

:29:31.:29:36.

concentrate on tomorrow Jon Fravreau? I think tomorrow he will

:29:37.:29:40.

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

:29:41.:29:44.

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

:29:45.:29:47.

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

:29:48.:29:52.

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

:29:53.:29:56.

training, around investments in education, in infrastructure. All

:29:57.:30:01.

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

:30:02.:30:03.

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

:30:04.:30:09.

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

:30:10.:30:16.

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

:30:17.:30:21.

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

:30:22.:30:24.

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

:30:25.:30:29.

seeing an American electorate that is increasingly impatient. So there

:30:30.:30:33.

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

:30:34.:30:39.

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

:30:40.:30:44.

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

:30:45.:30:50.

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

:30:51.:30:59.

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

:31:00.:31:02.

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

:31:03.:31:10.

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

:31:11.:31:12.

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

:31:13.:31:19.

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

:31:20.:31:23.

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

:31:24.:31:26.

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

:31:27.:31:30.

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

:31:31.:31:35.

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

:31:36.:31:40.

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

:31:41.:31:45.

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

:31:46.:31:47.

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

:31:48.:31:50.

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

:31:51.:31:55.

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

:31:56.:31:58.

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

:31:59.:32:05.

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

:32:06.:32:10.

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

:32:11.:32:15.

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

:32:16.:32:19.

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

:32:20.:32:23.

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

:32:24.:32:27.

many cases we did not have a legislative agenda and a

:32:28.:32:31.

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

:32:32.:32:35.

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

:32:36.:32:41.

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

:32:42.:32:46.

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

:32:47.:32:49.

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

:32:50.:32:54.

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

:32:55.:32:58.

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

:32:59.:33:04.

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

:33:05.:33:08.

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

:33:09.:33:11.

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

:33:12.:33:17.

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

:33:18.:33:23.

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

:33:24.:33:31.

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

:33:32.:33:37.

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

:33:38.:33:42.

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

:33:43.:33:47.

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

:33:48.:33:50.

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

:33:51.:33:53.

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

:33:54.:33:56.

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

:33:57.:34:01.

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

:34:02.:34:05.

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

:34:06.:34:10.

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

:34:11.:34:13.

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

:34:14.:34:17.

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

:34:18.:34:21.

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

:34:22.:34:25.

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

:34:26.:34:28.

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

:34:29.:34:33.

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

:34:34.:34:37.

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

:34:38.:34:41.

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

:34:42.:34:44.

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

:34:45.:34:50.

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

:34:51.:34:55.

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

:34:56.:34:59.

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

:35:00.:35:08.

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

:35:09.:35:12.

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

:35:13.:35:15.

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

:35:16.:35:19.

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

:35:20.:35:24.

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

:35:25.:35:28.

money is spent in derby or Sheffield, financial services

:35:29.:35:34.

overseas but performing back office functions elsewhere, it is private

:35:35.:35:37.

sector employers and financial services only there because of the

:35:38.:35:41.

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

:35:42.:35:46.

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

:35:47.:35:53.

solutions are being prepared to he devolving cities and taking power

:35:54.:35:57.

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

:35:58.:36:01.

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

:36:02.:36:05.

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

:36:06.:36:09.

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

:36:10.:36:13.

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

:36:14.:36:21.

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

:36:22.:36:26.

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

:36:27.:36:30.

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

:36:31.:36:39.

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

:36:40.:36:43.

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

:36:44.:36:46.

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

:36:47.:36:50.

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

:36:51.:36:54.

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

:36:55.:36:59.

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

:37:00.:37:03.

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

:37:04.:37:07.

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

:37:08.:37:12.

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

:37:13.:37:16.

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

:37:17.:37:21.

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

:37:22.:37:25.

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

:37:26.:37:35.

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

:37:36.:37:39.

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

:37:40.:37:43.

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

:37:44.:37:49.

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

:37:50.:37:56.

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

:37:57.:38:00.

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

:38:01.:38:03.

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

:38:04.:38:07.

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

:38:08.:38:14.

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

:38:15.:38:19.

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

:38:20.:38:24.

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

:38:25.:38:28.

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

:38:29.:38:32.

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

:38:33.:38:36.

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

:38:37.:38:41.

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

:38:42.:38:45.

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

:38:46.:38:51.

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

:38:52.:38:56.

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

:38:57.:39:01.

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

:39:02.:39:08.

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

:39:09.:39:15.

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

:39:16.:39:20.

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

:39:21.:39:24.

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

:39:25.:39:27.

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

:39:28.:39:31.

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

:39:32.:39:39.

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

:39:40.:39:43.

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

:39:44.:39:48.

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

:39:49.:39:52.

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

:39:53.:39:58.

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

:39:59.:40:02.

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

:40:03.:40:10.

tax you. We are extraordinarily successful and putting double into

:40:11.:40:15.

transport, that creates economic activity which again brings more

:40:16.:40:19.

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

:40:20.:40:24.

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

:40:25.:40:29.

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

:40:30.:40:34.

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

:40:35.:40:39.

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

:40:40.:40:45.

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

:40:46.:40:50.

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

:40:51.:40:54.

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

:40:55.:40:59.

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

:41:00.:41:02.

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

:41:03.:41:07.

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

:41:08.:41:12.

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

:41:13.:41:17.

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

:41:18.:41:21.

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

:41:22.:41:25.

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

:41:26.:41:28.

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

:41:29.:41:35.

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

:41:36.:41:40.

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

:41:41.:41:44.

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

:41:45.:41:47.

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

:41:48.:41:50.

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

:41:51.:41:55.

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

:41:56.:41:59.

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

:42:00.:42:02.

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

:42:03.:42:09.

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

:42:10.:42:13.

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

:42:14.:42:18.

not a question of Manchester, Liverpool and Newcastle competing

:42:19.:42:21.

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

:42:22.:42:26.

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

:42:27.:42:29.

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

:42:30.:42:33.

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

:42:34.:42:40.

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

:42:41.:42:45.

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

:42:46.:42:48.

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

:42:49.:43:00.

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

:43:01.:43:14.

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

:43:15.:43:22.

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

:43:23.:43:26.

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

:43:27.:43:32.

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

:43:33.:43:37.

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

:43:38.:43:43.

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

:43:44.:43:48.

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

:43:49.:44:01.

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

:44:02.:44:16.

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

:44:17.:44:20.

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

:44:21.:44:24.

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

:44:25.:44:27.

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

:44:28.:44:38.

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

:44:39.:44:44.

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

:44:45.:44:51.

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

:44:52.:44:55.

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

:44:56.:45:01.

is. It did not spoil the music for me.

:45:02.:45:18.

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

:45:19.:45:26.

internationally renowned cellist, Antia Lasker-Wallfish, along with

:45:27.:45:32.

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

:45:33.:46:33.

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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