27/01/2014 Newsnight

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.