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