:00:00. > :00:13.This is the spreadsheet bit, but bear with me,
:00:14. > :00:15.because I have a reputation to defend!
:00:16. > :00:19.Disruptive technologies like biotech, robotic systems
:00:20. > :00:22.and driverless vehicles are technology I believe the party
:00:23. > :00:33.Under the last Labour government, Corporation Tax was 28%.
:00:34. > :00:36.By the way, they don't call it the last Labour
:00:37. > :00:42.The right honourable gentleman opposite, who is now so far down
:00:43. > :00:49.the black hole that even Stephen Hawking has disowned him!
:00:50. > :00:52.But behind the partisan gags, he's broken a manifesto pledge not
:00:53. > :01:00.The main rate of class four Nics for the self-employed
:01:01. > :01:03.will increase by 1% to 10%, with a further 1%
:01:04. > :01:10.Overall, it felt like a new era in Budget policy-making -
:01:11. > :01:13.a marked change in style, but with a certain
:01:14. > :01:18.We'll hear from the Government and the opposition as to
:01:19. > :01:23.And here in Brentwood in Essex, what's the reaction been
:01:24. > :01:25.on the street where Philip Hammond grew up?
:01:26. > :01:39.Do you remember James Bond in Die Another Day?
:01:40. > :01:45.Everyone loved the gimmicks at first.
:01:46. > :01:50.And then they thought, it's all gone way too far -
:01:51. > :01:53.and they went to Daniel Craig in Casino Royale, and it was all
:01:54. > :01:59.Well, the Budget today is a kind of Casino Royale.
:02:00. > :02:02.It was in a new, plainer style, fewer gimmicks.
:02:03. > :02:07.Deadpan Phil delivers them rather well.
:02:08. > :02:10.But in line with the plainer style, the substance, too,
:02:11. > :02:25.Some have argued that lower borrowing makes a case for more
:02:26. > :02:31.unfunded spending. I disagree. Britain has a debt of nearly ?1.7
:02:32. > :02:36.trillion. Almost ?62,000 for every household in the country. So the
:02:37. > :02:37.only responsible course of action, Mr Deputy Speaker, is to continue
:02:38. > :02:40.with our plan. So, no big change of direction,
:02:41. > :02:43.this isn't the time. And interestingly,
:02:44. > :02:44.while George Osborne's last Budget had 145 pages and 77 different
:02:45. > :02:49.measures in it, Philip Hammond's had Many would say it is a non-Budget -
:02:50. > :02:56.bar one big controversy, First, this really was some
:02:57. > :03:14.moment to celebrate. Because, borrowing is officially
:03:15. > :03:17.more or less back in the range of normality for the first
:03:18. > :03:21.time since 2009. Yes, we're back at levels
:03:22. > :03:23.of borrowing Gordon Brown And, just in time for Brexit,
:03:24. > :03:27.we are at last meeting Overall, public sector net borrowing
:03:28. > :03:38.as a percentage of GDP is predicted to fall from 3.8% last year
:03:39. > :03:42.to 2.6% this year. And, for those who care
:03:43. > :03:45.about such things, it means that we are forecast to meet our 3%
:03:46. > :03:51.EU Stability and Growth Pact target this year for the first
:03:52. > :03:55.time in almost a decade. But I won't hold my breath,
:03:56. > :03:57.Mr Deputy Speaker, for my congratulatory letter
:03:58. > :04:01.from Jean-Claude Junker! Now, before you crack open
:04:02. > :04:07.the Prosecco, the bad news was not It's all about the planned austerity
:04:08. > :04:13.over the next few years. Now, here's the drop,
:04:14. > :04:15.this is what is meant to happen This is spending per head,
:04:16. > :04:30.and it dips several The big gamble is whether those cuts
:04:31. > :04:34.can really be delivered. It's whether we'll stomach them
:04:35. > :04:36.when borrowing is no But there's a funny
:04:37. > :04:41.thing about Budgets - they can become overwhelmed
:04:42. > :04:43.by an argument over one It happens a lot, and it's happening
:04:44. > :05:02.more quickly than it used to. We haven't quite heard the first
:05:03. > :05:08.cuckoo, but spring will soon be upon us, as the buds slowly sprout, it's
:05:09. > :05:17.time to prepare for future crimes, both Sunni and Chile. -- for future
:05:18. > :05:24.climates, both sunshine and Chile. The Budget was and expectant and a
:05:25. > :05:30.list of their, prepared for troubled times. It actually turned out that
:05:31. > :05:37.Spreadsheet Phil is so comfortable in his dream job that we witnessed
:05:38. > :05:41.gag a minute Phil as he cracked a joke about the last Chancellor, who
:05:42. > :05:46.announced the demise of the spring Budget. The Treasury has helpfully
:05:47. > :05:52.reminded me that I am not the first Chancellor to announce the last
:05:53. > :05:55.spring Budget. 24 years ago, Norman Lamont also presented what was
:05:56. > :06:01.billed then as the last spring Budget. What they fail to remind me,
:06:02. > :06:04.Mr Deputy Speaker, was that ten weeks later he was sacked!
:06:05. > :06:11.LAUGHTER So wish me luck today! A Chancellor
:06:12. > :06:15.who thinks he can deliver a deadly serious Budget whilst lightening the
:06:16. > :06:20.mood with some gags at the expense of, well, almost everyone. What
:06:21. > :06:24.could possibly go wrong's when a Chancellor faces a continuing hole
:06:25. > :06:28.in the public finances and pressing demands for extra spending, they
:06:29. > :06:32.have to take the tricky step of raising taxes. So why not ask the
:06:33. > :06:35.self-employed to pay a little more in National Insurance contributions
:06:36. > :06:40.to bring them into line with the rest of the workforce? All so
:06:41. > :06:45.simple, given that they will be benefiting from the new state
:06:46. > :06:49.pension. All so simple on a Treasury spreadsheet. Not so simple when you
:06:50. > :06:57.general election manifesto said decisively the opposite. The
:06:58. > :07:01.alternative to that plan is actually putting up taxes, and I don't want
:07:02. > :07:07.to do that. Note National Insurance rise, that is our vow. I read the
:07:08. > :07:11.manifesto, as you would expect, since the Budget, to have a look at
:07:12. > :07:15.the precise wording and to try and see if there is any way of getting
:07:16. > :07:19.out of the pledge, and as far as I can tell there isn't. It didn't take
:07:20. > :07:25.long for the sleuths of Westminster to turn up Tory election tweets
:07:26. > :07:28.pledging no increase in National Insurance contributions and talk
:07:29. > :07:33.about how Labour was bound to do just that. They have quite blatantly
:07:34. > :07:38.broken their manifesto pledge. Let's remember, they've got form for this.
:07:39. > :07:42.They told us before 2010 that they weren't going to reorganise the NHS,
:07:43. > :07:46.and as soon as they got into power by Jorgensen rated the biggest
:07:47. > :07:50.reorganisation that the NHS has ever seen. -- they orchestrated. I was
:07:51. > :07:53.flabbergasted at today's announcement doing Chris National
:07:54. > :08:00.Insurance the self-employed people, I think it is catastrophic. One of
:08:01. > :08:02.the traditions of Budget Day briefing by Treasury officials
:08:03. > :08:09.outside the Commons chamber shortly after the childless is down. In its
:08:10. > :08:12.heyday, a young Ed Balls -- shortly after the Chancellor sits down.
:08:13. > :08:18.Today's briefing was a less confident of that as the Chancellor
:08:19. > :08:22.'s staff struggled to explain how he had not breached a Tory election
:08:23. > :08:27.manifesto. They attempted to justify the move by saying that legislation
:08:28. > :08:32.implementing the election tax commitment had pledged not to raise
:08:33. > :08:39.National Insurance contributions or Nics in the jargon on employees. It
:08:40. > :08:45.was silent on the self-employed. The Nics shambles was coined not by me
:08:46. > :08:48.but in our office. It is clearly a betrayal of many people who
:08:49. > :08:53.supported the Conservative Party, people who are self employed,
:08:54. > :08:58.whatever age they might be, people perhaps who after the crash in 2008
:08:59. > :09:02.found themselves out of work from an employer and chose to make their own
:09:03. > :09:06.lot and set up their own business. And they are the kind of people who
:09:07. > :09:08.the Government should be thankful to. They kept the unemployment
:09:09. > :09:12.figures lower than they were going to be. Budget they would not be
:09:13. > :09:17.complete without protesters complaining that arms have not been
:09:18. > :09:21.met. Any grief this Chancellor experiences with tax rises will
:09:22. > :09:25.illustrate his central dilemma. In an uncertain time, he still needs to
:09:26. > :09:30.raise revenue. The new cash will help as he injects an extra ?2
:09:31. > :09:33.billion into social care. It is extremely welcome and very
:09:34. > :09:38.important. I was absolutely astonished by the Chancellor's
:09:39. > :09:45.figure of I think 2.5 million more people aged over 75 cents 2010. 2010
:09:46. > :09:51.isn't that long ago. I really didn't know the scale of the problem was as
:09:52. > :09:55.big as that. Label was unimpressed. The most worrying thing today was
:09:56. > :09:58.that the Chancellor proposed a ?2 billion injection into health and
:09:59. > :10:03.social care over three years. That isn't going to even touch the sides.
:10:04. > :10:08.We have an NHS and social care system in a state of extreme crisis,
:10:09. > :10:18.and we have been told that needs between ?8 billion and ?15 billion
:10:19. > :10:22.by 2020s. It is when the days are closing in that he will do the heavy
:10:23. > :10:27.lifting in his first autumn Budget, by which time he can assess the
:10:28. > :10:29.first state of the Brexit talks. Spring may appear a long way off by
:10:30. > :10:31.then. And our Political Editor
:10:32. > :10:39.Nick Watt is here. Nick, this kind of erupted into
:10:40. > :10:46.quite a controversy through the afternoon, this National Insurance,
:10:47. > :10:50.this Nics thing. You have detected unease among ministers. Tim Farron
:10:51. > :10:57.was very proud of his joke of the day. Eynon non-2 subtle reference to
:10:58. > :11:02.George Osborne's omnishambles Budget and the fuss over pasty tax. I don't
:11:03. > :11:05.think we are at that level of a shambles. Nevertheless there is
:11:06. > :11:08.concern among ministers. One minister said to me that the
:11:09. > :11:13.Chancellor had been too confident in all of those gag that he was making.
:11:14. > :11:17.Also this minister said to me, look, the Chancellor has really undermined
:11:18. > :11:20.the Tories' traditional reputation as the party of the entrepreneur,
:11:21. > :11:29.the party of the self-employed. This minister said to me, we are shooting
:11:30. > :11:31.our own people. I was told this idea is going down like a lead balloon on
:11:32. > :11:34.the backbenches. There will be blowback, this minister told me. I
:11:35. > :11:38.was told the Government really needs to do a better job in admitting that
:11:39. > :11:41.it broke its election manifesto, concede and move on, and then there
:11:42. > :11:44.might be some space for the Government to explain the merits in
:11:45. > :11:52.this change. Thanks, Nick. Daivd Gauke, the Chief Secretary to
:11:53. > :11:56.the Treasury, is with me. Do you concede you broke the pledge in the
:11:57. > :12:00.manifesto? No, I don't. You run through the history of this. In the
:12:01. > :12:05.March Budget before the general election, the then Chancellor George
:12:06. > :12:12.Osborne said that we were looking to abolish class two Nics and reform"
:12:13. > :12:16.rope Nics. Yes, there was the manifesto which talked about --
:12:17. > :12:23.class four Nics. The manifesto talked about not increasing, but you
:12:24. > :12:28.have got to remember that by value, 93% of Nics is class one, that is
:12:29. > :12:32.employers and employees' Nics, those are the main rates, that is what we
:12:33. > :12:37.focus on and legislate. White that is not what you said in the
:12:38. > :12:42.manifesto. Do you regret putting it in the manifesto, in the words that
:12:43. > :12:45.you did on page three, we will not raise VAT, National Insurance
:12:46. > :12:50.contributions or income tax. Or, as you put on page seven, we commit to
:12:51. > :12:55.know increases in VAT, National Insurance contributions or income
:12:56. > :13:00.tax. I will go on to explain what we have to support this. We focused on
:13:01. > :13:04.the main rates, employers and employees... It didn't say main
:13:05. > :13:10.rates. We have said contributions. It implied you will not more. It is
:13:11. > :13:14.a on page 27, you said it quite a few times. A Conservative government
:13:15. > :13:18.will not increase the rates. That time you said rates, previously you
:13:19. > :13:21.said insurance. Nowhere did use a class one. You had it in the front,
:13:22. > :13:27.the back and the middle, but you did not say, by the way, we may reform
:13:28. > :13:31.class two and class four, but the class one rate will not change. We
:13:32. > :13:36.were staying at the time that we were not going to abolish. The
:13:37. > :13:40.reason why, in a way it is a surprise that there is a controversy
:13:41. > :13:44.over this, we took the legislation through, and at that point the
:13:45. > :13:51.legislation was absolutely explicit. We were talking about class one, the
:13:52. > :13:58.93% of Nics. We did not include class last two or class four. The
:13:59. > :14:02.Labour Party said, you have enacted your Nics pax. Mike we are entitled
:14:03. > :14:07.to look at what was in the manifesto and not to say, you retrospectively
:14:08. > :14:12.changed what you meant in the manifesto. As I say, it was an
:14:13. > :14:16.ongoing point, it was well-known. Do you think that the pledge got you
:14:17. > :14:20.some boats when you won the election in 2015? Was part of that because
:14:21. > :14:24.you made some pledge on no tax rises? I think in terms of a
:14:25. > :14:30.commitment that we were not going to be increasing VAT, income tax or
:14:31. > :14:37.National Insurance. All contributions. 93% of value is about
:14:38. > :14:45.class one. Did it help you win the election? In terms of... It is very
:14:46. > :14:49.difficult to say. Look, I think in terms of the fact that we have said
:14:50. > :14:54.that we are not a government that is going to be increasing income tax,
:14:55. > :14:59.VAT, all of those, most people, when we had this debate, we would talking
:15:00. > :15:04.about employees' National Insurance. You said it five times in your
:15:05. > :15:10.manifesto. The Labour Party did not have any objection, did anybody in
:15:11. > :15:13.Parliament. Will there be a U-turn on this? There is unease among your
:15:14. > :15:18.colleagues and backbenchers, a lot of people don't like it. Can you see
:15:19. > :15:22.this, as in the omnishambles Budget, it will be reversed? No, and the
:15:23. > :15:28.reason why, people do understand the fairness point. At a time, unlike
:15:29. > :15:32.what has happened in the past when essentially the benefits that the
:15:33. > :15:39.self-employed receive for their contributions, are largely the same
:15:40. > :15:43.as employed people do. It is wrong that employed people pay a lot more
:15:44. > :15:49.in National Insurance contributions. That gap should be married. --
:15:50. > :15:54.narrowed. And I think that fairness margin is one that we obviously need
:15:55. > :15:58.to make and we need to go out there, there will be people who need to be
:15:59. > :16:02.persuaded. You know, this is not about being anti-self-employed, we
:16:03. > :16:05.have done a lot for the self-employed. For example, the
:16:06. > :16:09.self-employed now get the full state pension, the new state pension is
:16:10. > :16:14.worth ?1800 per year. That will require saving something like 50
:16:15. > :16:18.?50,000 worth to benefit from that. That was not the case in the past.
:16:19. > :16:23.We are looking at paternity and maternity.
:16:24. > :16:28.Most of the experts you here will say it is a perfectly sensible tax
:16:29. > :16:33.change, but this is about the principle of the manifesto. In many
:16:34. > :16:36.respects, your manifesto was criticised at the time for
:16:37. > :16:40.unanswered questions about how you were going to deliver the cuts and
:16:41. > :16:46.the balanced budget that you promised. At the time, when you put
:16:47. > :16:53.in the manifesto, we can make this commitment on VAT, income tax and
:16:54. > :16:56.national insurance. Our approach is focusing on reducing wasteful
:16:57. > :16:59.spending, making savings in welfare and cracking down on tax evasion.
:17:00. > :17:04.That is how you were going to achieve balanced budgets and all
:17:05. > :17:10.these things. You have failed to do it in these respects. And people
:17:11. > :17:14.said you were going to fail. They said, you haven't got a plan, and
:17:15. > :17:21.you didn't have a plan. And what are we meant to do now when your own
:17:22. > :17:25.government on the basis of a manifesto was undeliverable? I don't
:17:26. > :17:30.accept that. We talk about tax evasion, and as a Government we have
:17:31. > :17:35.done a lot in terms of... But you are not close to where you wanted to
:17:36. > :17:38.be. You were saying in the election campaign that we are five days away
:17:39. > :17:44.from the national debt started to come down. It is not coming down, we
:17:45. > :17:51.are still 370 days away from that coming down. Runs through the
:17:52. > :17:55.three... You promised a balanced budget by 2018. We don't need to go
:17:56. > :17:58.back to the manifesto and look at the national insurance pledge to see
:17:59. > :18:02.the whole thing was a Charente. What are we meant to do with parties that
:18:03. > :18:09.are going to elections saying stuff that sounds good and then not
:18:10. > :18:12.delivering? If I may answer, run through the particular elements. I
:18:13. > :18:16.accept that there are some challenges we face in the public
:18:17. > :18:20.finances, and we discussed last time I was on this programme why the OBR
:18:21. > :18:25.downgraded some of the tax receipt numbers they had the growth and so
:18:26. > :18:31.on. But if we look in terms of what we are getting an tax evasion,
:18:32. > :18:36.actually we are delivering... So you claim that you have delivered on the
:18:37. > :18:43.manifesto? Those elements. When it comes to delivering on welfare
:18:44. > :18:49.reforms, we have found ?12.5 billion on welfare. And when it comes on
:18:50. > :18:53.public spending, Evan, actually in the last parliament we delivered on
:18:54. > :18:57.our public spending. So your manifesto said from 2019 after a
:18:58. > :19:03.surplus has been achieved, spending will grow in line with national
:19:04. > :19:08.income. Can you make that pledge no? Know, the pledges to cut spending in
:19:09. > :19:12.2019 and to do so quite severely. There have been changes in the
:19:13. > :19:14.economic circumstances which you and I discussed in some length when I
:19:15. > :19:18.was here in November after the Autumn Statement, and that has
:19:19. > :19:23.created challenges for the public finances. There are also some
:19:24. > :19:27.longer-term structural issues with tax receipt and getting that money
:19:28. > :19:32.coming in, which comes back to some of the measures in today's budget,
:19:33. > :19:36.which we are seeking to address, so we have got sustainable tax base, so
:19:37. > :19:43.we can afford to pay for the public services that we need. Economists at
:19:44. > :19:48.the time of your tax pledge criticised, hit out at the proposals
:19:49. > :19:50.to ban tax rises as undermining fiscal credibility and leaving
:19:51. > :19:55.little flexibility to deal with shocks. You have just described a
:19:56. > :20:00.load of shocks. And you didn't have the fix ability to deal with them.
:20:01. > :20:06.You now to say that pledges like, we are not going to raise any major tax
:20:07. > :20:13.like you gave in the last election, those are thing of the past, they
:20:14. > :20:17.were a mistake? We will revisit that issue as we get closer to the next
:20:18. > :20:20.general election. What are we meant to do if you say it next time? That
:20:21. > :20:26.is a matter for some time down the line. I think it was pretty clear
:20:27. > :20:29.that when we fought the last general election, our opponents would have
:20:30. > :20:33.been much more willing to raise taxes... If you come back in 2020
:20:34. > :20:36.and say we are not going to raise taxes and national insurance, can we
:20:37. > :20:41.believe you? What are we meant to do? I come back to the point that we
:20:42. > :20:48.legislated for these measures, we complied with that legislation. I
:20:49. > :20:52.come back to the point, last time I was here, you were saying, you are
:20:53. > :20:56.failing to cut spending this year. One of the things that has come
:20:57. > :21:00.through from today's numbers is we are succeeding in reducing spending
:21:01. > :21:04.this year, and if we can continue at that rate, we will meet our spending
:21:05. > :21:07.plans in this parliament in the same way that we met them in the last
:21:08. > :21:11.Parliament. Thank you very much indeed.
:21:12. > :21:13.Well, let's see how the Budget is going down outside Westminster.
:21:14. > :21:16.Just some background here: One reason for the buoyant economy over
:21:17. > :21:18.the last year is that households have carried on spending,
:21:19. > :21:21.notwithstanding the warnings of economists them about how bad
:21:22. > :21:24.So, are people confident about their own finances?
:21:25. > :21:29.And is the Chancellor seen as a safe pair of hand?
:21:30. > :21:40.A thriving suburban town just outside the
:21:41. > :21:43.London commuter belt, edged with rolling countryside.
:21:44. > :21:49.59% of whom voted for Brexit last year.
:21:50. > :21:56.This is the street Philip Hammond grew up on, and we
:21:57. > :21:59.are here to find out if those locally think their boy has done
:22:00. > :22:01.good with his first, and last, spring Budget.
:22:02. > :22:03.And whether today's announcements will help make their
:22:04. > :22:07.Christine Bennett, a teaching assistant and local school
:22:08. > :22:14.She used to live next door to the man who now holds the red
:22:15. > :22:20.We walked to school together, we walked home together.
:22:21. > :22:22.Yes, it was fun, just a fun childhood.
:22:23. > :22:31.I'd like, well, I said education, a bit more money into
:22:32. > :22:40.Today, he has said that he will put doctors, GPs,
:22:41. > :22:44.into the A departments, and that would help, I suppose.
:22:45. > :22:48.But that's not going to go in for a year.
:22:49. > :22:50.We're short of GPs anyway, so I don't know
:22:51. > :22:56.There's more confidence in the Chancellor a few doors down.
:22:57. > :23:05.Thinks Mr Hammond is the right man to steer the UK economy.
:23:06. > :23:08.I know they call him, is it Spreadsheet
:23:09. > :23:17.Which is not a bad idea for a Chancellor.
:23:18. > :23:23.You actually want somebody who's good with numbers.
:23:24. > :23:25.He's done a sensible Budget to start with,
:23:26. > :23:26.with room to manoeuvre if
:23:27. > :23:29.things keep going as they do to give tax cuts in the future.
:23:30. > :23:31.More money for the NHS, that kind of thing, I'm
:23:32. > :23:36.But he has to have his war chest for the Brexit,
:23:37. > :23:39.and then who knows, we might get more money from that if we don't
:23:40. > :23:44.I think there was a lot of pessimism after Brexit.
:23:45. > :23:47.And I think there were a lot of things said that were
:23:48. > :23:54.And actually as a country we've shown that it's not
:23:55. > :23:58.I know we haven't reached the deal and we
:23:59. > :24:01.haven't arrived there, but we're going into it in a very positive
:24:02. > :24:04.way rather than, oh, you know, we're leaving, everything is going
:24:05. > :24:10.No, it hasn't and it won't, because we're a great country.
:24:11. > :24:13.Just a few streets away, Lynn Mitchell, a publican for 12
:24:14. > :24:24.of a strain to manage the rising cost of being in business.
:24:25. > :24:33.So we haven't really personally got any benefits
:24:34. > :24:41.I can't see that he's done anything for us as business people.
:24:42. > :24:46.You don't think it's a fair Budget for businesses?
:24:47. > :24:51.And it won't just be me, it'll be everybody that
:24:52. > :25:01.Because, you know, there's a lot of small businesses
:25:02. > :25:04.out there that are trying to make a living, and all the time you try
:25:05. > :25:07.to make a living, somebody is having a little dig at you,.
:25:08. > :25:11.Yes, we work hard, everybody who's self-employed that I know,
:25:12. > :25:14.they all work hard to make an average living.
:25:15. > :25:20.And that is what it is, an average living.
:25:21. > :25:21.And then the first time somebody's, you know,
:25:22. > :25:24.business goes down and they say, right, they are on the goal.
:25:25. > :25:26.But sometimes you're better off on the
:25:27. > :25:33.Yes, you get people, they are on the dole
:25:34. > :25:36.and they turn round and they get this benefit, that benefit, they are
:25:37. > :25:40.You ask many self-employed people how many times
:25:41. > :25:43.the year they go on holiday, not many.
:25:44. > :25:48.While there is uncertainty ahead of Brexit, stability is key.
:25:49. > :25:51.There are promises of growth, but what Philip Hammond's former
:25:52. > :26:01.neighbours are wondering is how soon will they feel it.
:26:02. > :26:08.Let's look at some of the other things in the Budget -
:26:09. > :26:13.Our Policy Editor Chris Cook is with me.
:26:14. > :26:19.We haven't talked much about social care. It feels like we have been
:26:20. > :26:25.going round in circles on this front while. What we have today is ?1
:26:26. > :26:33.billion bailout. We have efforts to reorganise the local NHS and local
:26:34. > :26:36.governments, but fundamentally, you can do jazzy things with social care
:26:37. > :26:39.in the medium term, and the Government is coming forward with
:26:40. > :26:46.proposals for what it is going to do soon enough on this topic, and we
:26:47. > :26:50.have had dozens of ideas on how to fund social care coming out over
:26:51. > :26:54.decades. But it is actually quite a simple question in the short term.
:26:55. > :26:57.In the short term it is a question of, you have this many old people,
:26:58. > :27:03.they need this much care, and who is going to pay for it? It is too late
:27:04. > :27:08.to ask them to save for it. Absolutely, you could in 20 years
:27:09. > :27:11.ask people to put money away like a pension, but you can't do that now.
:27:12. > :27:17.So another review at another bit of money. Another area that feels quite
:27:18. > :27:22.radical, further education, vocational qualifications.
:27:23. > :27:26.Vocational education is quite different social care. It is
:27:27. > :27:32.actually very complicated as to why we are not good at it as a country,
:27:33. > :27:36.big cultural and social reasons as to how we regulate the labour
:27:37. > :27:45.market, but Philip Hammond announced today basically half ?1 billion of
:27:46. > :27:50.funding for 16 to 18-year-olds to do technical qualifications. We
:27:51. > :27:54.announce them on a 10-year lease I call and get rid of them, so this is
:27:55. > :27:58.I have to say, I already feel like I have heard some of this before, but
:27:59. > :28:04.there is money there. This is also coming as the Government is putting
:28:05. > :28:07.through 3 million people into an apprenticeship over this Parliament,
:28:08. > :28:11.and that is going to be quite radical. There is a big tax rise on
:28:12. > :28:17.business coming in next month, the apprenticeship levy. We are going to
:28:18. > :28:21.have a lot more emphasis on technical education in the next few
:28:22. > :28:24.years. Businesses who have never had apprentices before are basically
:28:25. > :28:29.going to have to pay that tax or lose it if they don't take on an
:28:30. > :28:33.apprentice, so big things ahead for further education, and whether it
:28:34. > :28:38.works or not, I am sceptical. Chris, thank you very much. The budget gags
:28:39. > :28:41.were mostly at the expense of labour, and it wasn't a good day for
:28:42. > :28:49.them as it came after Prime Minister's Questions.
:28:50. > :28:53.But there is a pattern in politics recently,
:28:54. > :28:56.in which the Conservatives mock Labour for wanting to borrow too
:28:57. > :28:59.much, and then in power implement something closer to the Labour plan
:29:00. > :29:03.And right now Labour has a fiscal credibility rule that would avoid
:29:04. > :29:08.most of the painful cuts to come over the next few years.
:29:09. > :29:08.I'm joined by Peter Dowd, the Shadow Secretary to the Treasury.
:29:09. > :29:16.The Labour equivalent of David Gordon. -- David Gauke. Your fiscal
:29:17. > :29:20.plan, you would still aim at a balanced, not a balanced budget but
:29:21. > :29:26.a balanced everyday spending budget? Yes, we would. At its simplest, yes.
:29:27. > :29:31.The golden rule, quite clear, that we would spend money, day-to-day
:29:32. > :29:35.money, on day-to-day money, we wouldn't be borrowing. And I think
:29:36. > :29:40.if you look at the figures today, it means you would probably have to
:29:41. > :29:43.find something like up to ?10 billion, much less than the
:29:44. > :29:48.Conservatives have to find that their plans, because they are more
:29:49. > :29:52.ambitious, so if you have to find ?10 billion of extra spending cuts
:29:53. > :29:58.or tax rises, what is Labour's big idea for making
:29:59. > :30:07.The Government have made choices in relation to tax cuts, Corporation
:30:08. > :30:10.Tax, bankers levy, in heritage stacks, corporate gains tax. That is
:30:11. > :30:17.a choice we have made in that. We would not have made the same
:30:18. > :30:21.choices. You put that back? They have made choices, and when we get
:30:22. > :30:27.into a situation, we will make that decision. That is an example of
:30:28. > :30:32.choices. You have got to find by ?8 billion to ?10 billion. That is one
:30:33. > :30:37.of the ways of doing it. You want more spending from where we are now?
:30:38. > :30:41.The other thing, it has to sort of, you know, the reset button in this
:30:42. > :30:46.one is the whole question of productivity. Productivity in this
:30:47. > :30:51.country, we are 36% less productive than the Germans, 20% less
:30:52. > :30:56.productive than the French, nine 9% less productive than the Italians. I
:30:57. > :31:01.have got productivity next on my list. You are not going to change
:31:02. > :31:05.productivity in five years, that is a 30 year plan. Of course, but at
:31:06. > :31:08.the end of the day, the Government have said they are going to get rid
:31:09. > :31:13.of the deficit in five years, then it went to ten years, now it has
:31:14. > :31:16.gone to 15 years. But what are you going to do? You are being very
:31:17. > :31:27.clever here about not saying what you are going to do. With the
:31:28. > :31:30.greatest respect, the Government had 15, they have had 15 years to get
:31:31. > :31:33.rid of the deficit, for you to push us into, what are we going to do in
:31:34. > :31:36.five years? It is your fiscal credibility plan, not mine. You said
:31:37. > :31:39.you will balance the books in five years' time. I am not going to lay
:31:40. > :31:46.it out in advance. They are examples that I have given you that Labour
:31:47. > :31:50.would get into. OK, what is your productivity plan? The longer term
:31:51. > :31:54.thing about getting the British nation being more productive.
:31:55. > :31:59.Interestingly enough, the Government has a national investment plan of
:32:00. > :32:03.?480 billion, almost ?500 billion. The point that you made before is
:32:04. > :32:09.the opposite. When the Tories coming with a plan that is ?480 billion,
:32:10. > :32:12.half of it paid for by the private sector, Labour come up with the same
:32:13. > :32:19.plan and we get told that we are being irresponsible, how are we
:32:20. > :32:22.going to pay for it? We would be doing in a way what the Tories are
:32:23. > :32:24.doing, we will be investing. Right, Nics has been the controversial
:32:25. > :32:28.issue of the day, National Insurance contributions going up for the
:32:29. > :32:33.self-employed. It is progressive, isn't it? It is taking from the
:32:34. > :32:39.lesser of, giving to them and taking from the rich. It may well be, but
:32:40. > :32:43.there is sort of a contract here with the taxpayer. They said they
:32:44. > :32:46.weren't going to raise National Insurance contributions, and they
:32:47. > :32:50.broke the contract. The issue at the end of the day, there is a
:32:51. > :32:53.difference between unilaterally breaking the contract and deciding
:32:54. > :32:56.through a review process where you engage with people how that might
:32:57. > :33:05.alter and change. The other thing is, it seems to me that they are
:33:06. > :33:07.taxing people on low paid and not necessarily taxing the companies
:33:08. > :33:09.themselves. I want to finish with a word about your reader. In the
:33:10. > :33:15.Commons today, it did feel quite a lot of the time that ridicule was
:33:16. > :33:19.kind of the mood of the occasion -- your leader. I just wonder what it
:33:20. > :33:24.felt like to use it in there, with the other party laughing at your
:33:25. > :33:27.party -- to you sitting there. In a sense laughing at the party because
:33:28. > :33:31.it doesn't feel credible as an opposition. We have have a perfectly
:33:32. > :33:36.sensible conversation. What outrages me is that they are all laughing
:33:37. > :33:40.today, and that the same time they are increasing factors on people,
:33:41. > :33:44.they are not sorting out the social care problem -- increasing taxes.
:33:45. > :33:48.They aren't sorting out the skills problem or the NHS, and they can sit
:33:49. > :33:51.there and laugh when that sort of situation faces the country, it's
:33:52. > :33:56.absolutely disgraceful point Peter Dowd, thank you.
:33:57. > :34:01.Let's have a dissection of the day with a large panel who are each
:34:02. > :34:02.going to give us one paperweight from the Budget.
:34:03. > :34:08.I'm with Rupert Harrison who is Portfolio Manager
:34:09. > :34:17.of Multi-Asset Strategies at Black Rock Investments,
:34:18. > :34:19.Marianna Mazucatto Professor in the Economics of Innovation
:34:20. > :34:25.The Financial Times' Editor Lionel Barber,
:34:26. > :34:33.co-founder of a Eurosceptic campaign group. Good evening, all. OK, you
:34:34. > :34:40.have one takeaway each. Rupert, let's start with you was. If I'm
:34:41. > :34:46.allowed to, I think Philip Hammond continued to get it spot-on, he is
:34:47. > :34:51.in an incredibly difficult position. Your takeaway, come on! When it
:34:52. > :34:55.comes to caution on public finances and investment in the long term, he
:34:56. > :34:58.is making the right judgment. A lot of the focus on the front pages is
:34:59. > :35:03.going to be this National Insurance rise, that is the risk he has taken.
:35:04. > :35:07.I think it is a sensible change. You can defend the fact that the world
:35:08. > :35:10.is changing, more and more people are choosing to be self-employed,
:35:11. > :35:14.the margin between employment and self-employment is much less
:35:15. > :35:18.well-defined than it used to be so it doesn't make sense to have
:35:19. > :35:22.different rates. He has made it progressive, so I think you can
:35:23. > :35:25.defend it. The one thing we can definitely take away, it is unlikely
:35:26. > :35:30.we are facing a snap election. If you are planning a snap election,
:35:31. > :35:34.you don't tend to do sensible but difficult tax changes. Is there
:35:35. > :35:37.anybody here who wants to say, forgetting the manifesto breach, say
:35:38. > :35:45.that this is the wrong thing to do? Or is it the right thing to do,
:35:46. > :35:50.Marina? It depends how you do it. Companies pay 13.8%, you know, for
:35:51. > :35:52.National Insurance for non-self-employed workers and the
:35:53. > :35:56.self-employed workers would have been one way to do that as opposed
:35:57. > :36:00.to hitting the workers themselves. And also, you know, we have the
:36:01. > :36:04.lowest rate of capital gains, corporate income tax, when there is
:36:05. > :36:09.no evidence whatsoever that those rates affect business investment,
:36:10. > :36:12.they affect profits. Where is the FT on the National Insurance change? We
:36:13. > :36:19.have come out in the economic principle of raising the Nic charge
:36:20. > :36:23.because we do think, we buy the fairness argument. We also think, if
:36:24. > :36:27.you look at the way that the labour market is changing, you can
:36:28. > :36:31.understand it. But the politics is a different question. My one
:36:32. > :36:37.takeaway... I haven't asked you your takeaway, I'm going to go to Ruth
:36:38. > :36:39.first! We will get to all of you. My takeaway, basically the overall
:36:40. > :36:43.Budget was right in its fiscal strategy. It was not a giveaway
:36:44. > :36:49.Budget, it was a neutral Budget. I think to be cautious at this moment
:36:50. > :36:53.is correct. My real takeaway is yet again these forecasting bodies have
:36:54. > :36:57.got it wrong. I remember, I actually wrote something for the Financial
:36:58. > :37:00.Times after the Autumn Statement saying that forecasters have been
:37:01. > :37:05.too pessimistic about the reaction of the economy to the Brexit vote.
:37:06. > :37:10.And so far, I'm right, but I maybe wrong further out. What is
:37:11. > :37:15.interesting is that the OBR has actually obviously upgraded Isgrove
:37:16. > :37:19.for 2017 from 1.4% to 2%. And they have downgraded it for the rest of
:37:20. > :37:24.the period. That is perfectly valid. You know, as the recovery is getting
:37:25. > :37:28.a little bit long in the truth, we have had this recovery since 2009,
:37:29. > :37:38.unless there is a real spurt in productivity growth think the
:37:39. > :37:40.economy will down, nothing to do with Brexit. The short-term forecast
:37:41. > :37:43.bounces up and down. The medium-term forecast, we are going to be where
:37:44. > :37:46.we were going to be, isn't that right? The forecast is steady as she
:37:47. > :37:49.goes until 2020. Sticking to the judgment that there is a longer term
:37:50. > :37:53.impact of Brexit, that is still there in the numbers, we might
:37:54. > :37:56.disagree but the OBR sticking to that judgment. They have had to make
:37:57. > :38:01.random assumptions about all of that. Marina, we have mentioned
:38:02. > :38:05.Brexit as a takeaway. What is your takeaway? Well, first of all we
:38:06. > :38:09.should be caring about the sources of growth. Whether growth goes up or
:38:10. > :38:13.down by half a percentage point is less important than what is actually
:38:14. > :38:16.driving it, and what continues to drive growth in the UK is
:38:17. > :38:22.consumption. And that consumption, as your programme showed before,
:38:23. > :38:25.what, you know, how the spending is being financed is through credit
:38:26. > :38:30.cards, personal debt. So the ratio between personal, not public,
:38:31. > :38:34.everybody talks about public debt, but the ratio between personal,
:38:35. > :38:38.private debt and disposable income is back to record levels before the
:38:39. > :38:42.crisis. The big question with Brexit is will it help or hurt that was
:38:43. > :38:45.Mike and the investment, the investment that will fall by from
:38:46. > :38:49.the private sector, when Brexit happens, it hasn't happened, by the
:38:50. > :38:54.way, but when it happens, the fall in public investment that has been
:38:55. > :38:59.coming from the European Union to the figure of between eight and 9
:39:00. > :39:03.billion between 2007 to 2014 just coming from the research money that
:39:04. > :39:08.now we are starting to gradually increase, you know, we need to
:39:09. > :39:13.figure that out. The investment is your main thing, isn't it? The
:39:14. > :39:17.recovery of the economy... The sources of growth are what matters,
:39:18. > :39:20.it is not investment driven. Business is not investing enough,
:39:21. > :39:28.and they will invest less after Brexit. We don't even hear the word
:39:29. > :39:30.Brexit. You don't know that. Let me have one more bike on the
:39:31. > :39:35.self-employed. Just say, the problem is that the Government hasn't really
:39:36. > :39:40.reconciled, they haven't given a good account of how it is that they
:39:41. > :39:44.are praising in effect the great British drops revolution, where you
:39:45. > :39:48.have got 40% or more of the new jobs created since the global financial
:39:49. > :39:52.crisis being self-employed jobs. If we are going to move, we are
:39:53. > :39:55.threatening to talk about turning Britain into Singapore on the
:39:56. > :40:00.Thames, it doesn't quite match. That is what we would like to see. Big
:40:01. > :40:04.takeaway... I want you to respond to this one about investment. I will
:40:05. > :40:09.let you have yours. I don't want to rush through. Do you agree that
:40:10. > :40:12.investment is a problem, it is a Brexit effect was grown there are
:40:13. > :40:18.other countries apart from European countries that are coming to Britain
:40:19. > :40:21.and creating jobs, not least Japan, China and others. But, where Marina
:40:22. > :40:26.is right is that there are some signs that, yes Mike household debt
:40:27. > :40:30.is rising quite quickly, especially over the last 12 months. Whereas
:40:31. > :40:36.business investment by contrast is sort of slowing down. And that's a
:40:37. > :40:43.worry. That is the pessimist's Tate. If you look at unsecured consumer...
:40:44. > :40:49.I am an optimist. There is data out there, you can look at it. You know
:40:50. > :40:54.what, I look at it! And I'm going to tell you some data. On the unsecured
:40:55. > :40:58.consumer credit is not back at the levels of 2008 yet. It is certainly
:40:59. > :41:01.growing quite quickly, 10% year on year, and I accept the fact that
:41:02. > :41:05.that is partly driving consumption growth, which is perhaps not all, it
:41:06. > :41:09.is not the Holst Ory but it is part of the story. A lot of that is
:41:10. > :41:13.because of what is happening in the car industry. If you look at total
:41:14. > :41:19.consumer that including all of the secured debt, I don't regard that...
:41:20. > :41:23.This is quite important, because we have changed the way that we buy
:41:24. > :41:29.cars and we read them now instead of buying them, it counts as debt -- we
:41:30. > :41:33.went them now. The assets look in good shape. This is unsustainable at
:41:34. > :41:39.consumption, it can't go on forever but it can go on for quite a long
:41:40. > :41:43.time. When you have real incomes that have not been increasing, you
:41:44. > :41:49.have to take out that, just in order to stay put -- take out debt. Lionel
:41:50. > :41:56.has been desperate to get his takeaway, what is it? The wisdom
:41:57. > :42:00.that Chancellor Hammond showed last year in ditching George Osborne's
:42:01. > :42:05.this goal frame, which was very smart politics, boxing the Labour
:42:06. > :42:09.Party into the position where they look, you know, show your fiscal
:42:10. > :42:13.responsibility, but not good economics, it didn't make any real
:42:14. > :42:17.sense to aim for a surplus at the end of parliament. Now, having
:42:18. > :42:23.ditched that coming he's got some room. So it is good economics, much
:42:24. > :42:27.better economics, and that's why we are in a better position and why
:42:28. > :42:31.will have ?26 billion by the end of the parliament as an insurance
:42:32. > :42:40.policy. That is based on a lot of state spending cuts. Rupert there
:42:41. > :42:43.with Lord Osborne, making those plans. Did you agree it was the
:42:44. > :42:46.right thing? I think it was the right thing for full apparent to do.
:42:47. > :42:49.I think it is the right thing for a country like the UK because we have
:42:50. > :42:51.high levels of debt and a large banking system and we are dependent
:42:52. > :42:55.on inflows of capital to sustain the way that we live, and therefore it
:42:56. > :42:58.is complacent to say that we can just afford to get that debt down
:42:59. > :43:02.very slowly. In normal times, you would want to be doing that a bit
:43:03. > :43:11.more quickly, that is what running a surplus means. Right now, we are
:43:12. > :43:14.facing a very uncertain time in the next two years. The lip am and was
:43:15. > :43:16.right to push that we. We are sailing around with no physical
:43:17. > :43:20.view, target or anchor at all. What should it be? Labour's policy... He
:43:21. > :43:24.wants to achieve a surplus as soon as is, that is what everybody seems
:43:25. > :43:29.to be contending with. He has gotten anchor, but it is not very tough. He
:43:30. > :43:33.is talking about cyclically-adjusted and borrowing, 2% of GDP by 2020, I
:43:34. > :43:37.have been pressing that all night. That is a very loose target. And of
:43:38. > :43:44.course, because the OBR is forecasting it will only be 0.9% of
:43:45. > :43:49.GDP, it gives him... None of this actually matters, there is no
:43:50. > :43:53.empirical evidence. The debt to GDP ratio in the UK is not abnormally
:43:54. > :43:57.high compared to advanced countries, what matters is what you are
:43:58. > :44:02.investing in. The US after the prices in 2009 had a 10% deficit but
:44:03. > :44:06.invested that in areas that today is producing growth. The difference is
:44:07. > :44:08.what you are doing. We can grow at the same rate as the US will stop we
:44:09. > :44:08.need to leave it there. We have got to go.
:44:09. > :44:15.Banks, all, -- thank you, all. That's it for tonight,
:44:16. > :44:18.on the day of a Budget speech heavy on gags and light on the traditional
:44:19. > :44:20.rabbits out of hats. And it baffles millions,
:44:21. > :44:30.this, you know. When you get the rabbit,
:44:31. > :45:07.it does, anyway. hello. Springlike weather and
:45:08. > :45:08.sunshine more widely spread across the UK tomorrow than today. There