08/03/2017 Newsnight


A specially extended Budget 2017 edition, with Evan Davis.

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This is the spreadsheet bit, but bear with me,


because I have a reputation to defend!


Disruptive technologies like biotech, robotic systems


and driverless vehicles are technology I believe the party


Under the last Labour government, Corporation Tax was 28%.


By the way, they don't call it the last Labour


The right honourable gentleman opposite, who is now so far down


the black hole that even Stephen Hawking has disowned him!


But behind the partisan gags, he's broken a manifesto pledge not


The main rate of class four Nics for the self-employed


will increase by 1% to 10%, with a further 1%


Overall, it felt like a new era in Budget policy-making -


a marked change in style, but with a certain


We'll hear from the Government and the opposition as to


And here in Brentwood in Essex, what's the reaction been


on the street where Philip Hammond grew up?


Do you remember James Bond in Die Another Day?


Everyone loved the gimmicks at first.


And then they thought, it's all gone way too far -


and they went to Daniel Craig in Casino Royale, and it was all


Well, the Budget today is a kind of Casino Royale.


It was in a new, plainer style, fewer gimmicks.


Deadpan Phil delivers them rather well.


But in line with the plainer style, the substance, too,


Some have argued that lower borrowing makes a case for more


unfunded spending. I disagree. Britain has a debt of nearly ?1.7


trillion. Almost ?62,000 for every household in the country. So the


only responsible course of action, Mr Deputy Speaker, is to continue


with our plan. So, no big change of direction,


this isn't the time. And interestingly,


while George Osborne's last Budget had 145 pages and 77 different


measures in it, Philip Hammond's had Many would say it is a non-Budget -


bar one big controversy, First, this really was some


moment to celebrate. Because, borrowing is officially


more or less back in the range of normality for the first


time since 2009. Yes, we're back at levels


of borrowing Gordon Brown And, just in time for Brexit,


we are at last meeting Overall, public sector net borrowing


as a percentage of GDP is predicted to fall from 3.8% last year


to 2.6% this year. And, for those who care


about such things, it means that we are forecast to meet our 3%


EU Stability and Growth Pact target this year for the first


time in almost a decade. But I won't hold my breath,


Mr Deputy Speaker, for my congratulatory letter


from Jean-Claude Junker! Now, before you crack open


the Prosecco, the bad news was not It's all about the planned austerity


over the next few years. Now, here's the drop,


this is what is meant to happen This is spending per head,


and it dips several The big gamble is whether those cuts


can really be delivered. It's whether we'll stomach them


when borrowing is no But there's a funny


thing about Budgets - they can become overwhelmed


by an argument over one It happens a lot, and it's happening


more quickly than it used to. We haven't quite heard the first


cuckoo, but spring will soon be upon us, as the buds slowly sprout, it's


time to prepare for future crimes, both Sunni and Chile. -- for future


climates, both sunshine and Chile. The Budget was and expectant and a


list of their, prepared for troubled times. It actually turned out that


Spreadsheet Phil is so comfortable in his dream job that we witnessed


gag a minute Phil as he cracked a joke about the last Chancellor, who


announced the demise of the spring Budget. The Treasury has helpfully


reminded me that I am not the first Chancellor to announce the last


spring Budget. 24 years ago, Norman Lamont also presented what was


billed then as the last spring Budget. What they fail to remind me,


Mr Deputy Speaker, was that ten weeks later he was sacked!


LAUGHTER So wish me luck today! A Chancellor


who thinks he can deliver a deadly serious Budget whilst lightening the


mood with some gags at the expense of, well, almost everyone. What


could possibly go wrong's when a Chancellor faces a continuing hole


in the public finances and pressing demands for extra spending, they


have to take the tricky step of raising taxes. So why not ask the


self-employed to pay a little more in National Insurance contributions


to bring them into line with the rest of the workforce? All so


simple, given that they will be benefiting from the new state


pension. All so simple on a Treasury spreadsheet. Not so simple when you


general election manifesto said decisively the opposite. The


alternative to that plan is actually putting up taxes, and I don't want


to do that. Note National Insurance rise, that is our vow. I read the


manifesto, as you would expect, since the Budget, to have a look at


the precise wording and to try and see if there is any way of getting


out of the pledge, and as far as I can tell there isn't. It didn't take


long for the sleuths of Westminster to turn up Tory election tweets


pledging no increase in National Insurance contributions and talk


about how Labour was bound to do just that. They have quite blatantly


broken their manifesto pledge. Let's remember, they've got form for this.


They told us before 2010 that they weren't going to reorganise the NHS,


and as soon as they got into power by Jorgensen rated the biggest


reorganisation that the NHS has ever seen. -- they orchestrated. I was


flabbergasted at today's announcement doing Chris National


Insurance the self-employed people, I think it is catastrophic. One of


the traditions of Budget Day briefing by Treasury officials


outside the Commons chamber shortly after the childless is down. In its


heyday, a young Ed Balls -- shortly after the Chancellor sits down.


Today's briefing was a less confident of that as the Chancellor


's staff struggled to explain how he had not breached a Tory election


manifesto. They attempted to justify the move by saying that legislation


implementing the election tax commitment had pledged not to raise


National Insurance contributions or Nics in the jargon on employees. It


was silent on the self-employed. The Nics shambles was coined not by me


but in our office. It is clearly a betrayal of many people who


supported the Conservative Party, people who are self employed,


whatever age they might be, people perhaps who after the crash in 2008


found themselves out of work from an employer and chose to make their own


lot and set up their own business. And they are the kind of people who


the Government should be thankful to. They kept the unemployment


figures lower than they were going to be. Budget they would not be


complete without protesters complaining that arms have not been


met. Any grief this Chancellor experiences with tax rises will


illustrate his central dilemma. In an uncertain time, he still needs to


raise revenue. The new cash will help as he injects an extra ?2


billion into social care. It is extremely welcome and very


important. I was absolutely astonished by the Chancellor's


figure of I think 2.5 million more people aged over 75 cents 2010. 2010


isn't that long ago. I really didn't know the scale of the problem was as


big as that. Label was unimpressed. The most worrying thing today was


that the Chancellor proposed a ?2 billion injection into health and


social care over three years. That isn't going to even touch the sides.


We have an NHS and social care system in a state of extreme crisis,


and we have been told that needs between ?8 billion and ?15 billion


by 2020s. It is when the days are closing in that he will do the heavy


lifting in his first autumn Budget, by which time he can assess the


first state of the Brexit talks. Spring may appear a long way off by


then. And our Political Editor


Nick Watt is here. Nick, this kind of erupted into


quite a controversy through the afternoon, this National Insurance,


this Nics thing. You have detected unease among ministers. Tim Farron


was very proud of his joke of the day. Eynon non-2 subtle reference to


George Osborne's omnishambles Budget and the fuss over pasty tax. I don't


think we are at that level of a shambles. Nevertheless there is


concern among ministers. One minister said to me that the


Chancellor had been too confident in all of those gag that he was making.


Also this minister said to me, look, the Chancellor has really undermined


the Tories' traditional reputation as the party of the entrepreneur,


the party of the self-employed. This minister said to me, we are shooting


our own people. I was told this idea is going down like a lead balloon on


the backbenches. There will be blowback, this minister told me. I


was told the Government really needs to do a better job in admitting that


it broke its election manifesto, concede and move on, and then there


might be some space for the Government to explain the merits in


this change. Thanks, Nick. Daivd Gauke, the Chief Secretary to


the Treasury, is with me. Do you concede you broke the pledge in the


manifesto? No, I don't. You run through the history of this. In the


March Budget before the general election, the then Chancellor George


Osborne said that we were looking to abolish class two Nics and reform"


rope Nics. Yes, there was the manifesto which talked about --


class four Nics. The manifesto talked about not increasing, but you


have got to remember that by value, 93% of Nics is class one, that is


employers and employees' Nics, those are the main rates, that is what we


focus on and legislate. White that is not what you said in the


manifesto. Do you regret putting it in the manifesto, in the words that


you did on page three, we will not raise VAT, National Insurance


contributions or income tax. Or, as you put on page seven, we commit to


know increases in VAT, National Insurance contributions or income


tax. I will go on to explain what we have to support this. We focused on


the main rates, employers and employees... It didn't say main


rates. We have said contributions. It implied you will not more. It is


a on page 27, you said it quite a few times. A Conservative government


will not increase the rates. That time you said rates, previously you


said insurance. Nowhere did use a class one. You had it in the front,


the back and the middle, but you did not say, by the way, we may reform


class two and class four, but the class one rate will not change. We


were staying at the time that we were not going to abolish. The


reason why, in a way it is a surprise that there is a controversy


over this, we took the legislation through, and at that point the


legislation was absolutely explicit. We were talking about class one, the


93% of Nics. We did not include class last two or class four. The


Labour Party said, you have enacted your Nics pax. Mike we are entitled


to look at what was in the manifesto and not to say, you retrospectively


changed what you meant in the manifesto. As I say, it was an


ongoing point, it was well-known. Do you think that the pledge got you


some boats when you won the election in 2015? Was part of that because


you made some pledge on no tax rises? I think in terms of a


commitment that we were not going to be increasing VAT, income tax or


National Insurance. All contributions. 93% of value is about


class one. Did it help you win the election? In terms of... It is very


difficult to say. Look, I think in terms of the fact that we have said


that we are not a government that is going to be increasing income tax,


VAT, all of those, most people, when we had this debate, we would talking


about employees' National Insurance. You said it five times in your


manifesto. The Labour Party did not have any objection, did anybody in


Parliament. Will there be a U-turn on this? There is unease among your


colleagues and backbenchers, a lot of people don't like it. Can you see


this, as in the omnishambles Budget, it will be reversed? No, and the


reason why, people do understand the fairness point. At a time, unlike


what has happened in the past when essentially the benefits that the


self-employed receive for their contributions, are largely the same


as employed people do. It is wrong that employed people pay a lot more


in National Insurance contributions. That gap should be married. --


narrowed. And I think that fairness margin is one that we obviously need


to make and we need to go out there, there will be people who need to be


persuaded. You know, this is not about being anti-self-employed, we


have done a lot for the self-employed. For example, the


self-employed now get the full state pension, the new state pension is


worth ?1800 per year. That will require saving something like 50


?50,000 worth to benefit from that. That was not the case in the past.


We are looking at paternity and maternity.


Most of the experts you here will say it is a perfectly sensible tax


change, but this is about the principle of the manifesto. In many


respects, your manifesto was criticised at the time for


unanswered questions about how you were going to deliver the cuts and


the balanced budget that you promised. At the time, when you put


in the manifesto, we can make this commitment on VAT, income tax and


national insurance. Our approach is focusing on reducing wasteful


spending, making savings in welfare and cracking down on tax evasion.


That is how you were going to achieve balanced budgets and all


these things. You have failed to do it in these respects. And people


said you were going to fail. They said, you haven't got a plan, and


you didn't have a plan. And what are we meant to do now when your own


government on the basis of a manifesto was undeliverable? I don't


accept that. We talk about tax evasion, and as a Government we have


done a lot in terms of... But you are not close to where you wanted to


be. You were saying in the election campaign that we are five days away


from the national debt started to come down. It is not coming down, we


are still 370 days away from that coming down. Runs through the


three... You promised a balanced budget by 2018. We don't need to go


back to the manifesto and look at the national insurance pledge to see


the whole thing was a Charente. What are we meant to do with parties that


are going to elections saying stuff that sounds good and then not


delivering? If I may answer, run through the particular elements. I


accept that there are some challenges we face in the public


finances, and we discussed last time I was on this programme why the OBR


downgraded some of the tax receipt numbers they had the growth and so


on. But if we look in terms of what we are getting an tax evasion,


actually we are delivering... So you claim that you have delivered on the


manifesto? Those elements. When it comes to delivering on welfare


reforms, we have found ?12.5 billion on welfare. And when it comes on


public spending, Evan, actually in the last parliament we delivered on


our public spending. So your manifesto said from 2019 after a


surplus has been achieved, spending will grow in line with national


income. Can you make that pledge no? Know, the pledges to cut spending in


2019 and to do so quite severely. There have been changes in the


economic circumstances which you and I discussed in some length when I


was here in November after the Autumn Statement, and that has


created challenges for the public finances. There are also some


longer-term structural issues with tax receipt and getting that money


coming in, which comes back to some of the measures in today's budget,


which we are seeking to address, so we have got sustainable tax base, so


we can afford to pay for the public services that we need. Economists at


the time of your tax pledge criticised, hit out at the proposals


to ban tax rises as undermining fiscal credibility and leaving


little flexibility to deal with shocks. You have just described a


load of shocks. And you didn't have the fix ability to deal with them.


You now to say that pledges like, we are not going to raise any major tax


like you gave in the last election, those are thing of the past, they


were a mistake? We will revisit that issue as we get closer to the next


general election. What are we meant to do if you say it next time? That


is a matter for some time down the line. I think it was pretty clear


that when we fought the last general election, our opponents would have


been much more willing to raise taxes... If you come back in 2020


and say we are not going to raise taxes and national insurance, can we


believe you? What are we meant to do? I come back to the point that we


legislated for these measures, we complied with that legislation. I


come back to the point, last time I was here, you were saying, you are


failing to cut spending this year. One of the things that has come


through from today's numbers is we are succeeding in reducing spending


this year, and if we can continue at that rate, we will meet our spending


plans in this parliament in the same way that we met them in the last


Parliament. Thank you very much indeed.


Well, let's see how the Budget is going down outside Westminster.


Just some background here: One reason for the buoyant economy over


the last year is that households have carried on spending,


notwithstanding the warnings of economists them about how bad


So, are people confident about their own finances?


And is the Chancellor seen as a safe pair of hand?


A thriving suburban town just outside the


London commuter belt, edged with rolling countryside.


59% of whom voted for Brexit last year.


This is the street Philip Hammond grew up on, and we


are here to find out if those locally think their boy has done


good with his first, and last, spring Budget.


And whether today's announcements will help make their


Christine Bennett, a teaching assistant and local school


She used to live next door to the man who now holds the red


We walked to school together, we walked home together.


Yes, it was fun, just a fun childhood.


I'd like, well, I said education, a bit more money into


Today, he has said that he will put doctors, GPs,


into the A departments, and that would help, I suppose.


But that's not going to go in for a year.


We're short of GPs anyway, so I don't know


There's more confidence in the Chancellor a few doors down.


Thinks Mr Hammond is the right man to steer the UK economy.


I know they call him, is it Spreadsheet


Which is not a bad idea for a Chancellor.


You actually want somebody who's good with numbers.


He's done a sensible Budget to start with,


with room to manoeuvre if


things keep going as they do to give tax cuts in the future.


More money for the NHS, that kind of thing, I'm


But he has to have his war chest for the Brexit,


and then who knows, we might get more money from that if we don't


I think there was a lot of pessimism after Brexit.


And I think there were a lot of things said that were


And actually as a country we've shown that it's not


I know we haven't reached the deal and we


haven't arrived there, but we're going into it in a very positive


way rather than, oh, you know, we're leaving, everything is going


No, it hasn't and it won't, because we're a great country.


Just a few streets away, Lynn Mitchell, a publican for 12


of a strain to manage the rising cost of being in business.


So we haven't really personally got any benefits


I can't see that he's done anything for us as business people.


You don't think it's a fair Budget for businesses?


And it won't just be me, it'll be everybody that


Because, you know, there's a lot of small businesses


out there that are trying to make a living, and all the time you try


to make a living, somebody is having a little dig at you,.


Yes, we work hard, everybody who's self-employed that I know,


they all work hard to make an average living.


And that is what it is, an average living.


And then the first time somebody's, you know,


business goes down and they say, right, they are on the goal.


But sometimes you're better off on the


Yes, you get people, they are on the dole


and they turn round and they get this benefit, that benefit, they are


You ask many self-employed people how many times


the year they go on holiday, not many.


While there is uncertainty ahead of Brexit, stability is key.


There are promises of growth, but what Philip Hammond's former


neighbours are wondering is how soon will they feel it.


Let's look at some of the other things in the Budget -


Our Policy Editor Chris Cook is with me.


We haven't talked much about social care. It feels like we have been


going round in circles on this front while. What we have today is ?1


billion bailout. We have efforts to reorganise the local NHS and local


governments, but fundamentally, you can do jazzy things with social care


in the medium term, and the Government is coming forward with


proposals for what it is going to do soon enough on this topic, and we


have had dozens of ideas on how to fund social care coming out over


decades. But it is actually quite a simple question in the short term.


In the short term it is a question of, you have this many old people,


they need this much care, and who is going to pay for it? It is too late


to ask them to save for it. Absolutely, you could in 20 years


ask people to put money away like a pension, but you can't do that now.


So another review at another bit of money. Another area that feels quite


radical, further education, vocational qualifications.


Vocational education is quite different social care. It is


actually very complicated as to why we are not good at it as a country,


big cultural and social reasons as to how we regulate the labour


market, but Philip Hammond announced today basically half ?1 billion of


funding for 16 to 18-year-olds to do technical qualifications. We


announce them on a 10-year lease I call and get rid of them, so this is


I have to say, I already feel like I have heard some of this before, but


there is money there. This is also coming as the Government is putting


through 3 million people into an apprenticeship over this Parliament,


and that is going to be quite radical. There is a big tax rise on


business coming in next month, the apprenticeship levy. We are going to


have a lot more emphasis on technical education in the next few


years. Businesses who have never had apprentices before are basically


going to have to pay that tax or lose it if they don't take on an


apprentice, so big things ahead for further education, and whether it


works or not, I am sceptical. Chris, thank you very much. The budget gags


were mostly at the expense of labour, and it wasn't a good day for


them as it came after Prime Minister's Questions.


But there is a pattern in politics recently,


in which the Conservatives mock Labour for wanting to borrow too


much, and then in power implement something closer to the Labour plan


And right now Labour has a fiscal credibility rule that would avoid


most of the painful cuts to come over the next few years.


I'm joined by Peter Dowd, the Shadow Secretary to the Treasury.


The Labour equivalent of David Gordon. -- David Gauke. Your fiscal


plan, you would still aim at a balanced, not a balanced budget but


a balanced everyday spending budget? Yes, we would. At its simplest, yes.


The golden rule, quite clear, that we would spend money, day-to-day


money, on day-to-day money, we wouldn't be borrowing. And I think


if you look at the figures today, it means you would probably have to


find something like up to ?10 billion, much less than the


Conservatives have to find that their plans, because they are more


ambitious, so if you have to find ?10 billion of extra spending cuts


or tax rises, what is Labour's big idea for making


The Government have made choices in relation to tax cuts, Corporation


Tax, bankers levy, in heritage stacks, corporate gains tax. That is


a choice we have made in that. We would not have made the same


choices. You put that back? They have made choices, and when we get


into a situation, we will make that decision. That is an example of


choices. You have got to find by ?8 billion to ?10 billion. That is one


of the ways of doing it. You want more spending from where we are now?


The other thing, it has to sort of, you know, the reset button in this


one is the whole question of productivity. Productivity in this


country, we are 36% less productive than the Germans, 20% less


productive than the French, nine 9% less productive than the Italians. I


have got productivity next on my list. You are not going to change


productivity in five years, that is a 30 year plan. Of course, but at


the end of the day, the Government have said they are going to get rid


of the deficit in five years, then it went to ten years, now it has


gone to 15 years. But what are you going to do? You are being very


clever here about not saying what you are going to do. With the


greatest respect, the Government had 15, they have had 15 years to get


rid of the deficit, for you to push us into, what are we going to do in


five years? It is your fiscal credibility plan, not mine. You said


you will balance the books in five years' time. I am not going to lay


it out in advance. They are examples that I have given you that Labour


would get into. OK, what is your productivity plan? The longer term


thing about getting the British nation being more productive.


Interestingly enough, the Government has a national investment plan of


?480 billion, almost ?500 billion. The point that you made before is


the opposite. When the Tories coming with a plan that is ?480 billion,


half of it paid for by the private sector, Labour come up with the same


plan and we get told that we are being irresponsible, how are we


going to pay for it? We would be doing in a way what the Tories are


doing, we will be investing. Right, Nics has been the controversial


issue of the day, National Insurance contributions going up for the


self-employed. It is progressive, isn't it? It is taking from the


lesser of, giving to them and taking from the rich. It may well be, but


there is sort of a contract here with the taxpayer. They said they


weren't going to raise National Insurance contributions, and they


broke the contract. The issue at the end of the day, there is a


difference between unilaterally breaking the contract and deciding


through a review process where you engage with people how that might


alter and change. The other thing is, it seems to me that they are


taxing people on low paid and not necessarily taxing the companies


themselves. I want to finish with a word about your reader. In the


Commons today, it did feel quite a lot of the time that ridicule was


kind of the mood of the occasion -- your leader. I just wonder what it


felt like to use it in there, with the other party laughing at your


party -- to you sitting there. In a sense laughing at the party because


it doesn't feel credible as an opposition. We have have a perfectly


sensible conversation. What outrages me is that they are all laughing


today, and that the same time they are increasing factors on people,


they are not sorting out the social care problem -- increasing taxes.


They aren't sorting out the skills problem or the NHS, and they can sit


there and laugh when that sort of situation faces the country, it's


absolutely disgraceful point Peter Dowd, thank you.


Let's have a dissection of the day with a large panel who are each


going to give us one paperweight from the Budget.


I'm with Rupert Harrison who is Portfolio Manager


of Multi-Asset Strategies at Black Rock Investments,


Marianna Mazucatto Professor in the Economics of Innovation


The Financial Times' Editor Lionel Barber,


co-founder of a Eurosceptic campaign group. Good evening, all. OK, you


have one takeaway each. Rupert, let's start with you was. If I'm


allowed to, I think Philip Hammond continued to get it spot-on, he is


in an incredibly difficult position. Your takeaway, come on! When it


comes to caution on public finances and investment in the long term, he


is making the right judgment. A lot of the focus on the front pages is


going to be this National Insurance rise, that is the risk he has taken.


I think it is a sensible change. You can defend the fact that the world


is changing, more and more people are choosing to be self-employed,


the margin between employment and self-employment is much less


well-defined than it used to be so it doesn't make sense to have


different rates. He has made it progressive, so I think you can


defend it. The one thing we can definitely take away, it is unlikely


we are facing a snap election. If you are planning a snap election,


you don't tend to do sensible but difficult tax changes. Is there


anybody here who wants to say, forgetting the manifesto breach, say


that this is the wrong thing to do? Or is it the right thing to do,


Marina? It depends how you do it. Companies pay 13.8%, you know, for


National Insurance for non-self-employed workers and the


self-employed workers would have been one way to do that as opposed


to hitting the workers themselves. And also, you know, we have the


lowest rate of capital gains, corporate income tax, when there is


no evidence whatsoever that those rates affect business investment,


they affect profits. Where is the FT on the National Insurance change? We


have come out in the economic principle of raising the Nic charge


because we do think, we buy the fairness argument. We also think, if


you look at the way that the labour market is changing, you can


understand it. But the politics is a different question. My one


takeaway... I haven't asked you your takeaway, I'm going to go to Ruth


first! We will get to all of you. My takeaway, basically the overall


Budget was right in its fiscal strategy. It was not a giveaway


Budget, it was a neutral Budget. I think to be cautious at this moment


is correct. My real takeaway is yet again these forecasting bodies have


got it wrong. I remember, I actually wrote something for the Financial


Times after the Autumn Statement saying that forecasters have been


too pessimistic about the reaction of the economy to the Brexit vote.


And so far, I'm right, but I maybe wrong further out. What is


interesting is that the OBR has actually obviously upgraded Isgrove


for 2017 from 1.4% to 2%. And they have downgraded it for the rest of


the period. That is perfectly valid. You know, as the recovery is getting


a little bit long in the truth, we have had this recovery since 2009,


unless there is a real spurt in productivity growth think the


economy will down, nothing to do with Brexit. The short-term forecast


bounces up and down. The medium-term forecast, we are going to be where


we were going to be, isn't that right? The forecast is steady as she


goes until 2020. Sticking to the judgment that there is a longer term


impact of Brexit, that is still there in the numbers, we might


disagree but the OBR sticking to that judgment. They have had to make


random assumptions about all of that. Marina, we have mentioned


Brexit as a takeaway. What is your takeaway? Well, first of all we


should be caring about the sources of growth. Whether growth goes up or


down by half a percentage point is less important than what is actually


driving it, and what continues to drive growth in the UK is


consumption. And that consumption, as your programme showed before,


what, you know, how the spending is being financed is through credit


cards, personal debt. So the ratio between personal, not public,


everybody talks about public debt, but the ratio between personal,


private debt and disposable income is back to record levels before the


crisis. The big question with Brexit is will it help or hurt that was


Mike and the investment, the investment that will fall by from


the private sector, when Brexit happens, it hasn't happened, by the


way, but when it happens, the fall in public investment that has been


coming from the European Union to the figure of between eight and 9


billion between 2007 to 2014 just coming from the research money that


now we are starting to gradually increase, you know, we need to


figure that out. The investment is your main thing, isn't it? The


recovery of the economy... The sources of growth are what matters,


it is not investment driven. Business is not investing enough,


and they will invest less after Brexit. We don't even hear the word


Brexit. You don't know that. Let me have one more bike on the


self-employed. Just say, the problem is that the Government hasn't really


reconciled, they haven't given a good account of how it is that they


are praising in effect the great British drops revolution, where you


have got 40% or more of the new jobs created since the global financial


crisis being self-employed jobs. If we are going to move, we are


threatening to talk about turning Britain into Singapore on the


Thames, it doesn't quite match. That is what we would like to see. Big


takeaway... I want you to respond to this one about investment. I will


let you have yours. I don't want to rush through. Do you agree that


investment is a problem, it is a Brexit effect was grown there are


other countries apart from European countries that are coming to Britain


and creating jobs, not least Japan, China and others. But, where Marina


is right is that there are some signs that, yes Mike household debt


is rising quite quickly, especially over the last 12 months. Whereas


business investment by contrast is sort of slowing down. And that's a


worry. That is the pessimist's Tate. If you look at unsecured consumer...


I am an optimist. There is data out there, you can look at it. You know


what, I look at it! And I'm going to tell you some data. On the unsecured


consumer credit is not back at the levels of 2008 yet. It is certainly


growing quite quickly, 10% year on year, and I accept the fact that


that is partly driving consumption growth, which is perhaps not all, it


is not the Holst Ory but it is part of the story. A lot of that is


because of what is happening in the car industry. If you look at total


consumer that including all of the secured debt, I don't regard that...


This is quite important, because we have changed the way that we buy


cars and we read them now instead of buying them, it counts as debt -- we


went them now. The assets look in good shape. This is unsustainable at


consumption, it can't go on forever but it can go on for quite a long


time. When you have real incomes that have not been increasing, you


have to take out that, just in order to stay put -- take out debt. Lionel


has been desperate to get his takeaway, what is it? The wisdom


that Chancellor Hammond showed last year in ditching George Osborne's


this goal frame, which was very smart politics, boxing the Labour


Party into the position where they look, you know, show your fiscal


responsibility, but not good economics, it didn't make any real


sense to aim for a surplus at the end of parliament. Now, having


ditched that coming he's got some room. So it is good economics, much


better economics, and that's why we are in a better position and why


will have ?26 billion by the end of the parliament as an insurance


policy. That is based on a lot of state spending cuts. Rupert there


with Lord Osborne, making those plans. Did you agree it was the


right thing? I think it was the right thing for full apparent to do.


I think it is the right thing for a country like the UK because we have


high levels of debt and a large banking system and we are dependent


on inflows of capital to sustain the way that we live, and therefore it


is complacent to say that we can just afford to get that debt down


very slowly. In normal times, you would want to be doing that a bit


more quickly, that is what running a surplus means. Right now, we are


facing a very uncertain time in the next two years. The lip am and was


right to push that we. We are sailing around with no physical


view, target or anchor at all. What should it be? Labour's policy... He


wants to achieve a surplus as soon as is, that is what everybody seems


to be contending with. He has gotten anchor, but it is not very tough. He


is talking about cyclically-adjusted and borrowing, 2% of GDP by 2020, I


have been pressing that all night. That is a very loose target. And of


course, because the OBR is forecasting it will only be 0.9% of


GDP, it gives him... None of this actually matters, there is no


empirical evidence. The debt to GDP ratio in the UK is not abnormally


high compared to advanced countries, what matters is what you are


investing in. The US after the prices in 2009 had a 10% deficit but


invested that in areas that today is producing growth. The difference is


what you are doing. We can grow at the same rate as the US will stop we


need to leave it there. We have got to go.


Banks, all, -- thank you, all. That's it for tonight,


on the day of a Budget speech heavy on gags and light on the traditional


rabbits out of hats. And it baffles millions,


this, you know. When you get the rabbit,


it does, anyway. hello. Springlike weather and


sunshine more widely spread across the UK tomorrow than today. There


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