06/03/2017 Newsnight


Will the budget spell the end of austerity, or more of the same? Plus Trump's new travel ban, Holland and the far right, and the Trump internet cheerleaders. With Evan Davis.

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The Chancellor will set out his plans.


But as Mike Tyson famously said, everyone has a plan until they get


Phillip Hammond knows Brexit hangs over everything right now.


But can he carry on the job of getting borrowing down?


I think the public sector is coming to the point


where there are going to be large social costs from increasing amounts


We'll ask if austerity has gone as far as it can


Also tonight, the Netherlands prepares


Is an anticipated far right surge also an identity crisis


for a supposedly relaxed and liberal country?


That is the good thing about the carnival.


Right. What about the rest of the time?


I heard somebody say something about Obamagate.


Looks like it's time for us to investigate!


We'll hear from President Trump's more unusual internet


Hello. This is Budget week.


On Wednesday the Chancellor Phillip Hammond will take


to the dispatch box, and set out his plan for taxes,


for borrowing, for spending, for improving British productivity,


It's a strange one - perhaps the strangest for a while.


Brexit offers an excuse for a pause on painful decisions,


but at some point, if the Chancellor is to match the aims


set out by his party, he'll have to find a way


More public spending cuts are already written


into the government's projections, just as Article 50 is about to hit


Now helping out is the fact that the economic news has been good


But unfortunately he can't rely on bags of money


falling from the sky, and that means this is not an easy


Sometimes you want a safe pair of hands at number 11, a man who does


This is probably one of those times and in


the last few days, he has been out and about, sensibly managing


If your bank increases your credit card limit, I don't think you feel


obliged to go out and spend every last penny of it immediately.


I regard my job as Chancellor as making sure that our economy is


resilient, that we have got reserves in the tank,


so that as we embark on


the journey that we take over the next couple of years, we are


confident that we have got enough gas in the tank to see us through


There are two kinds of budget, those that have a specific problem to


solve, normally a crisis in the public finances. And there are those


where there isn't much to do, chances just have to stand up and


look like they've been keeping busy. Well, this one is more in the latter


category. Part of the reason for that is that breaks it is looming


over everything at the moment. The old slogan used to be, you must fix


the roof while the sun is shining. -- Brexit is looming over anything.


Today might be, there is no point in fixing the roof if you think a great


victory might come toppling down on top of it. You should wait to see


what happens. -- a great big three. Until Brexit getting it down was the


main goal of getting it down, the deficit, and it slowly came under


control. The idea is it carries on going down but the basic job is far


from done. It's fair to say that a lot of people, perhaps ourselves


included, were sceptical about the scope for the scale of public


spending cuts experienced over the last parliament, but those were


essentially delivered as promised without everything falling apart. We


don't need to panic about the level of public borrowing at the moment,


but we do, broadly speaking, need to get it down rather than let it go


up. So we can't expect to borrow more as an answer to all our


prayers. Yet, when you look at the public sector, it's beginning to


scream that it needs more money. So if you are a Chancellor at number


11, you look out there, it doesn't look like there are any easy answers


to the long-term problems. Finding public spending savings now, after a


period of six or seven years of efficiency savings, is a much more


challenging job to do without hitting front line services or


significantly increasing poverty. Imagine you were Chancellor. Where


would you go for further cuts? Defence? Just as Nato is being told


to raise spending? Prisons? Amid the current violence and disorder?


Police? Just last week the official inspector said they were in a


perilous state. In transport, we are meant to be getting Brexit ready by


spending more on infrastructure. In business we are trying to launch a


new industrial strategy and it's already on the cheap. Health? Good


luck with that. Social care? You need to find money and not cut it.


You have to go a long way to look for low hanging fruit nowadays. Most


of that was plucked in 2011 and 2012. There was probably a lot of


low hanging fruit there. If you want to go foraging for some more, the


places to look are presumably, and this isn't what I am suggesting you


should do, but you could look at overseas aid where spending has


risen very fast over the last five or six years, but we have


commitments in that direction. Secondly, spending on pensions and


pension benefits, all of which have been more than fully protected over


the last five or six years in contrast to most areas of spending.


Inside the Treasury, they have got a lot on their plate. Getting to the


next two years is hard enough, and then the long-term beckons


thereafter with some difficult decisions to be taken.


Our political editor Nick Watt is here.


A little bit of news on education spending is out as we speak. Theresa


May and Philip Hammond are saying they want to move on from the era of


George Osborne where we had big political announcements surrounding


a budget. These are serious and earnest affairs. Tomorrow's


front-page headlines on all the papers are a big announcement that


will allow Theresa May to say she is pressing ahead for plans for grammar


schools. Speculation that was on the back burner. The Chancellor will


plough ?320 million into expanding the government's free school


programme. The key point is that will create extra spaces and those


schools would be able to select on the basis of academic ability. That


is obviously the big headline they want to get out tomorrow. The


important thing to remember about this budget is that it is the last


spring budget. In the Chancellor's mind we will have the first autumn


budget later this year. In his mind, that's the big moment where you


would make any big tax changes. And you would have a bit of news about


Brexit by then. What would you look out for as the things he will be


interested in either in this one or autumn? The key thing to remember


about autumn is that Brexit negotiations will be underweight for


several months by then. The French and German elections will be out of


the way. And the belief is the negotiations will be bumpy. They say


to Eurosceptics, who say all those Treasury warnings from George


Osborne were overstating it, they were based on the assumption Article


50 would be triggered immediately. We are about to trigger it, so we


will see what happens. In the autumn budget, will when the funding of


social care is addressed, the Chancellor is wary of taxing


inheritance. No death tax is the cry that is evidently going around the


Treasury at the moment. He's more interested in an idea from Baroness


Altmann, the former tension as minister, who says it's like an ice


for social care. The Chancellor likes that idea, he is responsible


to put on working people. The other thing he is alive to his criticism


on the Tory backbenches that stamp duty reforms from George Osborne


slowing down the housing market and not yielding the revenues talked


about. The Chancellor will hear that, but he needs to see more data.


If the concerns are true, he will be happy to respond.


Labour MP Helen Goodman was a minister in the Department


for Work and Pensions and now sits on the Treasury Select Committee -


A good evening to you both. Helen, what would you cut at this point? As


we have seen, and as your package showed, I think it's extremely


difficult to cut public service now. Adult social care in crisis. Three


quarters of NHS trusts in deficit. I would be amazed if they would spend


money on grammar schools, because across the country individual school


budgets are being cut in real and cash terms now. I think that's very


surprising as a development. I think it's necessary now to go back to


some of George Osborne's tax cuts. It's sensible to help people to save


for the long term for their care, but an inheritance tax cut that


enables people to leave ?1 million home? That is costing the Chancellor


?800 million. Capital gains tax, again reductions made by his


predecessor are costing him ?700 million. I would have thought he


would look there. You are saying, we have done enough on the spending


side, we have to look at taxes next. Chris, do you really believe,


because we haven't cut this year very much at all, there has been a


pause, can they do it and get the spending down? Putting the figures


in context, in 2016 real pounds, total government spending between


2010 and 2020 is about the same at ?760 billion per year in real terms.


People talk about the austerity of cuts, but in real terms the


government budget has stayed the same. In Helen's term, putting up


taxes willy-nilly, the way to clear a deficit is creating jobs and


growth. You help that by cutting taxes. One of the reasons


corporation tax receipts has gone up is because we have cut corporation


tax down from 28 to 20 and shortly 17%. That encourages businesses to


create jobs. It's not about government hand-outs or tax and


spending, it's about encouraging the economy to grow, which is what we


have done. Would you agree there is enormous pressure in many public


services at the moment? You see the headlines and you don't dismiss


that? Of course not. Social care is an obvious example. There is the


better care fund. ?3.5 billion more. Your government didn't manage to


make cuts this year, but the next three years it's intending that real


spending in departments, not welfare, but departments like health


and Home Office and so on, real spending cuts of 2% per head of


population per year. The fact is, the population of our country is


growing quite fast and that has put pressure on public spending, as the


public has told us. The population is growing at about 0.4% per year.


You believe that after six years of austerity, 2% cuts per head in real


terms spending is possible? Population is growing at 0.4% per


year. If you are freezing it, I think we can reduce public spending


per head after inflation by 0.4% per year and maintain services. Your


chart a few months ago showed how the government has progressively


reduced the Labour deficit from 2010 all the way down. The plan is to


continue that trajectory for the next few years until the deficit


hits zero. There is nothing responsible about raising more money


and sending the bill to our children. That's not what I


suggested. You need to take into account we have an ageing


population. The population is not what we had ten years ago. We have


more old people, they are older and more frail, so we have more NHS


needs. There are more adult social care needs. I think it's very hard


in a situation where we have food banks flourishing around the


country, to say, people must be allowed to inherit without any tax


at all, ?1 million inheritance. The inheritance tax will not be enough


to put money into the health service and pay for social care and get the


prisons and police and defence to levels people want. You have to do


have some proper tax increases on the average person as well as just


picking off a few... Not necessarily. As Chris says, for


example, we have already had ?6 billion of cuts in corporation tax


with another one in the spring. It raises more money. Maybe we could


leave corporation tax rate at 19% and not go to 17. Chris, what would


you actually cut? Give us a suggestion of something that would


save ?2 billion, which is the figure we sort of talking about. The


government is controlling spending in all areas. The biggest line


height is the welfare budget, and we have to get people off welfare and


into work. We have been successful. We have record employment, wages are


rising and we have record female employment as well. That's


ultimately the way you reduce public spending. We will have more of this


discussion on Wednesday, I'm sure. Now one of the more intriguing


suggestions that has been trailed as a budget possibility


is an increase in National Insurance It kind of makes sense at one level


as the self-employed people do pay less National Insurance,


and the government thus loses revenue when people switch


from employment to self-employment, which has been happening


more and more. But does it make sense


to Kevin Green, the Chief Executive of the Recruitment


Employment Confederation - the professional body


for the recruitment industry Their members place self-employed


contractors into jobs. Good evening. Just explain to


everyone, what is the difference between employment and


self-employment. In relation to National Insurance, if you're


self-employed, you pay 9% and if you are employed, you pay 12%. That is


what the Chancellor might go after. The much bigger gap, is that my


employer is paying 13%. You do not have an employer if you're self


employed. If you look at some of the business models like Cooper, they


will not be paying National Insurance contributions for the


people who work for them are self-employed and that is a


significantly bigger number. It is about 16% gap. Would it make sense


to do something in this budget to deal with that? The way it has been


positioned it looks like he will go after the worker rather than the


business and I think some of that is because it is much more complex when


you get into the business. We have a number of NEETs that we are waiting


for decisions on like Uber... They do not seem to have done anything


wrong. There is a definition about whether they are workers...


Employment tribunal 's have said that they are self-employed. No,


they said they were workers. We have got a fundamental problem between


employment regulation and taxation policy. Employment regulation you


have three definitions, self-employed, employed and worker


and taxation is self-employed or employee. Fundamentally, is there a


good case for charging self-employed people, basically 15 or 16% less tax


overall on the value of their Labour at the Newchurch employed people?


Clearly in relation to self-employed there is pension contributions,


holiday pay... The key is how do we, but the system which recognises some


of the risk about being self-employed, gives them some kind


of tax advantage but creates clarity and at the moment we have huge grey


areas in relation to tax for employers, employees cover the whole


thing is a mess and what we are looking for is the government to


come up with a systemic way of coming up with a fair taxation


policy for businesses and for employees, which actually aligns


these things so that we get the right tax for people. You're not


against aligning them will stop at some point over time. If you are


this government, you're not going to put 3p or 3% National Insurance on


the poorest least secure workers who are driving a cab for Uber or


working for Deliveroo, you will not say you will be paying more tax.


They are the ones they're trying to help! The Chancellor is clearly


looking for ways to raise tax. The issue at the moment is is this fair


or transparent? If you're employed, should you be paying more tax than


someone who is not employed? You are right, if the government is looking


at the tax from self-employment, it should go after the businesses and


really look that their model as well is looking at the workers because


the workers take more risk, they need to have some kind of incentive


to continue and we do not want to undermine our Labour market which


has been hugely successful. Kevin Green, thank you very much.


President Trump news now, and he has formulated


a new executive order to replace his old travel ban.


Remember, that was struck down in the courts.


This one takes effect in ten days time.


The executive order signed by the President earlier today,


protecting the nation from foreign terrorist entry into


the United States is a vital measure for strengthening


It is the President's solemn duty to protect the American people.


And with this order, President Trump is exercising his rightful authority


Professor Stephen Legomsky was President Obama's Chief Counsel


for US Citizenship Immigration from 2011 to 2013.


evening to you. Do you think this new executive order will get through


the courts? Very difficult to say. There are two kinds of provision in


this executive order and some of them deal specifically with refugees


and others deal with immigrants generally. On the refugee site, the


two main changes are eliminating the indefinite ban on Syrian refugees,


all of whom are still subject to the 120 day moratorium and all refugees


and the other thing they did was to eliminate what had been an exception


for people who are persecuted because of their religion but only


if their religion was a minority religion. This was widely derided,


as a back door attempt to save Christians over Muslims and my guess


is that the courts will not be fooled by it. The religious


discrimination claim is still there and the evidence and pre-tax will


still be a stroll. Why do you say that? Now, it is a country


discrimination, it is not a religious discrimination. He surely


is entitled to say no immigrants but this country or that country,


legally? Absolutely and we do that all the time. What makes this


different is that the plaintiffs are arguing that even though the


document is neutral on its face, it is motivated by a different pre-tax


and to back up that claim they cite multiple statements from President


Trump about his intention to institute a Muslim ban, there is a


statement by his closest adviser, a former New York City Mayor, Rudy


Giuliani to the effect that the troubled campaign reached out to him


to find a way to package the Muslim ban and then there are also the


comments indicating a desire to protect persecuted Christians. The


job for the plaintiffs will be to convince the court that although the


order has changed, it is nonetheless religious discrimination and since


those statements were made in the past, they really cannot be taken


back. The question will be whether the courts by the argument or not.


The courts surely look through his words, they do not listen to what he


said, they look at whether it is a bad weather he said it was and they


will look at this and say it is pretty different to the previous


one. The differences are fairly cosmetic foot, it is true that the


Syrians have been eliminated as a separate group and it is true that


they have eliminated the religious minority exception but on the


refugee site, everything stays the same and on the general side there


is still a 90 day ban on entries from nationals from six countries,


Iraq is off the list and the questionnaire again is whether this


is motivated by religious pretext or whether it is a genuine national


security measure. The process this time, it has been a few weeks


coming, this executive order and it has a ten day lead time, are you


impressed that they got the process side of this more in order than they


did last time? They have clearly made improvements, the 10-day


lead-in is important and in addition, they have exempted very


important categories, for example people who have lawful permanent


residents starters in the UK -- US are exempted as are those who hold


valid current visas and that will go a long way toward strengthening the


government case on the question of whether or not due process or what


would be called natural justice in the UK has been observed but I do


not know whether that gets them past the religious discrimination


argument. Thank you for talking to us.


We've been talking a lot about France and its impending


But there are Parliamentary elections in the


In the country often described as the most liberal in Europe.


They used to joke, "do you know what's illegal in the Netherlands?


Polls suggest many people will vote for Geert Wilders,


a right-wing populist who wants to pull the country out


of the EU and ban immigration from Muslim countries.


He might even win the largest number of seats.


So what happened to the supposedly tolerant, easy-going Dutch?


We've heard from the populists on this programme,


but Newsnight's Gabriel Gatehouse grew up in Amsterdam,


and he's been back to try to find out what liberals there make


The Netherlands is having an identity crisis.


I don't remember people agonising over this question in the past.


We are all the same, and we're very tolerant.


And we drink and eat and play and dance together.


That's the good thing about Carnival.


Some people are not so the same as other people.


I think the whole Islamic thing means that we are more


Geert Wilders, the Netherlands' answer to Donald Trump,


wants to ban the Koran, close the mosques, and the borders.


In defence of their tolerant way of life, many Dutch people


are apparently willing to vote for some pretty intolerant policy.


When I was growing up here in the 1980s, the Netherlands,


and Amsterdam in particular, felt like this sort of inclusive


space, a place that was open and tolerant, where anything goes,


and anyone, really, can come and be themselves.


It doesn't really feel like that any more.


So I've come back here to try and find out what's happened


to that peculiarly Dutch brand of liberalism.


This feels like a country on a difficult journey


A country that has suffered a sudden loss of faith


in a set of truths it once held be self-evident.


On the outskirts of the city, an abandoned shipyard has been


ADM, as it's known, is a community of artists and performers, the sort


of people for whom Amsterdam was once a haven.


It used to be a town with a lot of empty spaces.


It was a paradise for people who want to make things


It was really a part of, a sort of Utopia.


# When I'm hungry, I eat out of the dumpster.


# When I'm thirsty, is that your beer?


# When I'm tired, I find an empty house to sleep in.


# And if you don't like it, lock you!


But the welfare state that nourished that Utopia


These days, there's less space for squatters,


Under pressure perhaps, the collective now has


a surprisingly strict membership policy.


Everyone is allowed in, but we should be able to send them


out if it's not working, and close the gate behind.


If that sounds like something Geert Wilders might like, well,


he's not popular here, but perhaps the fate of the squat


in some ways mirrors that of the country.


The group is small enough to control ourselves,


and now we begin this fantastic, nonconformist little town.


Squatters were once a defining force in radical Dutch politics.


The squatter riots of the 1980s are a vivid and sometimes


In an apparent attempt to defuse the situation,


a policeman dressed as Santa Claus was lifted off the roof by crane.


Against the backdrop of Reaganomics and Thatcherism, the movement


These were battles over the concept of public versus private space.


As the squatters fought the riot police on the streets,


an architect specialising in school design was having a similar fight


I was in the first class of pupils to go to school here.


The architect, Herman Hertzberger, believed that buildings had


His aim was to foster a more egalitarian relationship


And I always had the enormous fight for every square metre, you know?


And this is not necessary, because the classrooms,


The teacher is saying, this is the way the world works,


But I said classrooms is one, but there's also the idea


of doing things together, seeing what the others are doing.


And so we must try to get space also for this communal thing.


The architecture of the Netherlands tells us


Walk along the canals in Amsterdam, you see not one or three


You see thousands of small palaces, of citizens.


At the heart of Dutch liberalism lies a fundamental tension,


between the sometimes competing notions of liberty and equality.


Of individualism versus the common good.


They are not individual portraits of a king or a count or something.


These are portraits of very proud citizens.


We drink together, fight together, without a king, without a leader.


When we talk about being liberal, it was also economically liberal.


Yes, that's deep in the genes of the Dutch.


Descartes, who lived for quite a long time in Amsterdam


at the beginning of the 17th century, said already,


everybody is only occupied here with earning money, nothing else.


Money, money, that's the big go-to here.


The Bergers of the Golden Age turned the Netherlands into the biggest


This new prosperity was driven by immigrants -


Protestants and Jews fleeing persecution in Catholic Europe.


Because we are a society full of minorities and groups,


That creates a society which has to be tolerant,


Growing up, we were taught that tolerance was as much a part


of Dutch culture as eating mayonnaise with your chips.


And that had less to do with the 17th century


I used to live in one of those buildings over there, number ten,


Before I lived there some other people did, whose


names are commemorated here in these plaques.


Seven of them, who were murdered by the Nazis


during the Second World War because they were Jewish.


There were similar plaques all along the canalside here,


and during the War one tenth of the population of this city were


The German occupation had a huge impact on how


Discriminating against people because of their religion,


their cultural or ethnic background, that was something that other


I grew up in a time when all of us in this country were still very much


under the impression that we lived in the most liberal,


I used to actually, literally say this to people -


that I'm from Amsterdam, so I live in the best


country in the world, the best city in the world,


and anything goes, and you are free to be whoever you are.


However, now when I look back I think, oh no,


there was definitely a lot going on under the surface that


Beneath the surface, many people felt uncomfortable


Fuelled by Geert Wilders, the debate has focused on Islam.


A lot of people think that Islamophobia,


or anti-Semitism and racism, they are all different things.


Sylvana Simons has set up a political party trying


to highlight what she says is a hidden current


Death threats is what I have received just for simply


That doesn't sound like the most tolerant,


the most progressive country on earth.


We used to take pride in saying we are so tolerant.


We've been tolerant, we have been tolerating.


And tolerating means accepting something that you really don't


actually agree with, but you are just,


Here's one thing that has definitely changed since I was at school.


People seem to have stopped believing that the future will be


I am from a generation that was just thinking everything


is going to be better, more, and that stopped now.


And we feel that our next generation will have more difficulties


It's still optimistic, but it's not an optimism of,


It's now an optimism of, when we do our best,


So, conservatism and hard work has won out over progressive


This really is a different country to the one I remember.


At the squatters' camp, it feels like the party is almost over.


Don't be surprised if a crack in the ice appears under your feet.


Because you are hippie and tolerant and everything is possible.


Even in ADM, we had a problem, and I was one of the people


always defending everyone, until I found out it's not


A hippie community can burst because everybody has taken too much


drugs or everybody has went to sleep with everybody, and


Perhaps the idea of the Netherlands as free space was never anything


Now, in an age of identity politics, the Dutch are asking themselves some


And does the Netherlands still want to be a place


We are discussing the same topic day after day in many different


manifestations. For opponents of President Trump,


particularly those without much imagination, it is hard


to understand how anyone "What are they thinking?", is


a sentiment quite widely expressed. The idea that a person of colour


might support him would seem Well, two black women -


siblings and keen supporters of President Trump - have made a big


impact on social media. They've even appeared


at his rallies, as the They are Lynnette Hardaway


and Rochelle Richardson, former Democrats who style


themselves Diamond and Diamond on the left,


Silk on the right, and asked them why they thought that


African Americans didn't, African Americans did go out


and they did march to those voting polls and they voted


for President Donald J Trump. The problem that we


have is the left. The Democrats, the Liberals,


that keep pushing an agenda They love that people burn


down their communities. President Trump wants to build


back these communities. President Trump wants


to stop the violence. He is going to be a President,


a good President not just for black You will know, he just lied


about how many people were at the inauguration,


everyone can see that it Let me go ahead and stop


you and we will get you straight. We were there, there were thousands


upon thousands upon thousands We were there, we saw


it with our own eyes. Honestly, Diamond, I think


it was easier to see it from the camera positions


and you really could see, there were more people there under


Obama than there were under Trump. OK, so, OK, why are you debating


me with this question I suppose I'm just interested


in what you think, He sometimes on occasion just


says stuff that is just Excuse me, my President,


wait a minute, my President never That's what's wrong


with you left people. You always want to be


so politically correct, well he is not politically correct,


he is honest and we love Many people are saying he has had


a slightly rocky start, he lost Michael Flynn,


obviously Jeff Sessions, the Attorney General,


has had to recuse himself Lots of questions over


the original travel ban, do you think it has been a bit


messy, who do you blame for that? Do you blame Donald Trump


for that or who you blame? I blame the media for taking


and conjuring up a story about the Russians and insulting


the American people, the millions that got out


and voted for our President, President Donald Trump,


it was not the Russians that hacked the elections,


the American people hacked it, we went to the polls


and we voted for him. Is there anything this guy could do


where you would not say You wouldn't get in a car


and let him drive you over Is there anything this bloke


can do that is wrong? You think it's wrong


because it's not your way. He is trying to secure the border


to keep people safe. He is trying to keep people


from coming into our country wanting The people that come from these


certain countries that do not like Americans,


he is trying to create the atmosphere where people


are thriving again, where the inner and urban cities are


being built again. So we, the American people we love


it, so there is nothing my President The thing is, everybody makes


mistakes, it would be very odd if Donald Trump did not make some


mistakes and I am just wondering if you can think of anything,


can you think of anything he has If you can't, it probably tells us


that you are, you know, you're just big fans and you're


on his side, come what may. Well you know what, the only mistake


that I can think of is the mistake of not continuously every single


day, all day, keeping He needs to do it on a regular


basis, every day. Tweet it out all day every


day about the fake news We are very loyal to our President,


we trust his decision, we trust that he will make the right


decision and the way that it will affect American people,


we trust that he wants to do things that are going to benefit


us and not hurt us. We trust his judgment,


that's why we voted for him Can I ask, do you two ever disagree


yourselves between the two of you or do you always


agree on everything? We agree to disagree


when we have a disagreement. Diamond, Silk, thank


you so very much. We've run out of time


for anything except this, news of the official confirmation


from Guinness that German Engineer Albert Beer and his Robot,


named Sub 1, are now the world As a political side note,


they beat Ed Miliband's 90


Will the budget spell the end of austerity, or more of the same? Plus Trump's new travel ban, Holland and the far right, and the Trump internet cheerleaders. With Evan Davis.

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