17/11/2017 Newsnight

It's been a choppy couple

of weeks for the Government.

But can Philip Hammond put them

back on an even keel

and save his own skin too?

The Chancellor's got

a big job of work to do

with next week's Budget.

So, is he preparing something

special for that battered red box?

New details are emerging about

Philip Hammond's budget tonight -

I've been speaking to one

of his closest political friends,

who reveals the chancellor

is planning a modest loosening

of the taps.

But another tory has a warning

for him on housing:

If we do not do something about this

then we will be writing ourselves

out of the electoral script.

The Budget could see budging

on Universal Credit too.

Tonight we go to Newcastle

to see first hand some

of the problems solved and created

by the new system.

I hid in my bedroom for nearly to

macro weeks. I only went out of the

bedroom to go to the toilet. My

children went to stay with my

parents for a little while. Purely

because I didn't have the money to

feed them.

All of this makes next week a make

or break week in politics.

We'll discuss it all

with our panel of pundits.

Good evening.

The Budget is normally a big eagerly

awaited affair but it has almost got

lost in mountain of problems facing

Theresa May - from sexual scandals

to Boris Johnson's big gaffe,

to today's ticking off of the Prime

Minister.

Meanwhile, the Chancellor

is beavering away, trying to make

sure he avoids a repeat

of the humiliating U turn

after the March Budget

over national insurance.

But with fellow Cabinet members

including Michael Gove

and Amber Rudd breathing

down his neck, he'll also be

thinking about making a splash -

in a good way - if such

a thing is possible.

We'll be discussing all this

with our panel throughout

the programme but first,

our political editor, Nick Watt.

I have not got money to buy a house.

When do you reckon you will be able

to buy? About ten years. Do the

Tories expect our support in the

light of another 1% pay increase?

There is not a magic money tree we

can shake to provide for everything

people want.

There was no magic

money tree for the nation. Are the

Tories about to unveil a more

modest, magic money tap?

No, they don't have an overall

majority at this stage.

On that grim

night for the Conservatives, they

lost seats in their natural

territory. Anxious younger people

are at the heart of that story is

you people in their 20s, 30s and 40s

preferred Labour. It is Philip

Hammond's challenge in a spread it

to reset his party plasma relations

with those younger voters.

At the

June election, we lost, among all

age groups up to the age of 49. That

is a terrifying position for the

Conservative Party to be in. I do

think the party is very focused.

In

the feverish atmosphere at

Westminster there has been an

intense, internal debate about how

to pitch the budget. Should the

Chancellor be bold and allow

spending to flow or should it be a

case of steady as she goes with

spending restraint? I am told one

senior aide advise the Chancellor to

throw caution to the wind to make

sure he leaves a memorable legacy.

This could, after all, be your final

budget if Theresa May finally snaps

with you. Others say this most

cautious of politicians is not about

to change the habits of a lifetime.

I understand the budget will contain

both elements of that internal

Treasury debate. The Chancellor will

turn on the tap. There will be more

than a dribble but we should not

expect a gash. Every penny is

accounted for by the man known as

Spreadsheet Phil. No doubt Labour

will say it is all just an illusion.

One of the Chancellor's oldest

friends believe he will spend some

of his so-called headroom or war

chest, even though it is expected to

be below the 26 billion he

identified in March.

I think what

the Chancellor is saying is, it will

be silly to throw away all the good

work we have done in getting down

the deficit level about to turn the

corner on debt. Of course I am

listing in Mike Autumn Statement

there was some headroom. Will look

at other ways in which the headroom

can be used to attack the problem so

many people have spoken to me about.

I am convinced he will be looking at

some housing ideas. There are

creative ones about looking at loan

guarantees. Builders and things in

that sort of era. Also he knows that

we need to build more social housing

and he will be looking at ways to

encourage that.

The astonishing fact

is the difference in likelihood of

someone voting Conservative, whether

they have a mortgage, owned their

own home or are in private rented or

socially rented accommodation. The

difference is dramatic. I know every

single Conservative MP is very

focused on that fact and on the

reality which is that if we do not

do something about this over the

next three to four years before the

next election, we will be writing

ourselves out of the electoral

script.

We can expect a united

Cabinet front next week. Not since

the Blair- brambles has been such a

poisonous atmosphere ahead the

budget. One person told me Boris

Johnson and Michael Gove are leading

the internal charge against the

Chancellor, because they feared the

Treasury has grabbed hold of Brexit

policy. What detail have you been

hearing about the memorable legacy?

The keyword in that report is

headroom. When I was talking to

Stephen hammered, -- Hammond, he

kept repeating headroom. They say

this has ticked up in recent weeks.

He'll want to address the areas,

particularly health and housing

which caused the Tories such grief

in the general election. What is

interesting is the assumption had

been the headroom would be used

solely by the Chancellor to help him

navigate what he expects to be a

bumpy Brexit. Government sources are

saying, no, it is there to help you

when you have a slowing economy is

and that is what we have at the

moment.

Talking about loan

guarantees. All builders, it is not

exactly splashy stuff.

Remember,

with Philip Hammond, he has built

his entire career. He is not an

accountant but he behaves like one.

He is an incredibly cautious person.

He does know that when, as Nick

Bowles, we may have heard him we may

have not met every age group under

49 voted for the Labour majority and

not the Conservatives. Philip

Hammond understands that and we will

see the war chest being dipped into.

He still believes you have to be

cautious and he will be sticking by

the fiscal rules for a moment.

We

will be coming back to you later on

that next week.

Next week is going to be a busy one

for the nation's political pundits.

We have three of them here tonight

to give us a sense of

how they're feeling.

I'm joined by Rachel Shabi,

Ian Dale and Simon Jenkins.

On the question of whether Philip

Hammond will be safe or bold, will

it be maybe be his last budget

question what will he have to get

something big out there?

Every

Chancellor needs to have a legacy.

Something none of us can predict.

Certainly not an increase in

national insurance?

I wouldn't think

so. Expectations on housing had been

raised through the roof, namely by

his Cabinet colleague making the

speech yesterday. Whatever he

announces will not be enough people

like Nick Bowles who want to see

lots of progress on housing.

All

that talk on this intergenerational

fairness, something has to be taken

from the younger and given to the

older Tory voters.

It is a fallacy

to think you buy votes from young

people by appealing to their pocket.

The problem he has is Jeremy Corbyn

gave away the biggest election bribe

in history by offering half the age

cohort £50,000 for the university

education. You cannot beat that.

That was gigantic and irresponsible

but massive. I think that is what

moves them rather than housing.

With

it being neck and neck, you would

expect the polls to be better for

Labour. If there was a decent offer

on housing, maybe stamp duty, a

holiday for first-time buyers, it

might send a signal actually they

are looking after younger voters

rather than the wealthier, older

voters.

No, no. This will not cut

it. He cannot do it for that he

cannot do it politically because of

the divisions and chaos in the

Government. He cannot do because it

is not in his DNA, nor the

Government's DNA to try to

understand the economic crisis. They

cannot grasp the causes of that they

cannot grasp whether it is a

systemic crisis. They do not

understand the effect it is having

on people's lives and hardship it is

causing. How can they have any

solutions?

You have someone like

Sergei Javits saying we need extra

borrowing to build houses. -- Javid.

The housing is bigger, 200,000 but

what it needs to be is 400,000.

They're all sorts of creative

solutions but I'm not sure any of

the parties have the answer.

Can

Hammond deliver that, especially in

the fiscal rules?

Housing is a mess.

You do not build houses overnight.

Can affect the private rented

sector. Young people appreciate more

social housing. The real problem is

homelessness in cities. This

assumption that you can throw money

at young house-buyers and somehow

help them. All it does is increase

house prices.

Do you think Labour

has outflanked the Conservatives?

Are they offering to younger people

more than the question?

Every

student I have spoken to has said

they were bowled over. They were

offered £50,000.

That is serious

money. It is not. I am not

underplaying this. Housing is a

massive crisis. Student debt is a

huge issue. There is a bigger

picture here. That is about having a

vision for an economic crisis.

Let's

talk about that. The whole question

is, will this be the end of

austerity? The NHS needs to suck in

a lot more money now.

I don't think

they can do it. I don't think they

can handle it. They don't have the

kind of solutions they need for that

we are looking at productivity rates

which are flat-lining while people

are working longer hours for less

pay and working conditions with

living costs rising. The system is

failing. Tinkering around with

things like stamp duty will not

really cut it.

There is a big thing

that he has to go through the big

boost of spending on infrastructure.

They would say they are doing that

already. The building programme at

the moment is the biggest for many

years that we can go down the road

that John McDonnell wants to go down

and spend £70 million on all sorts

of things. We all want more money

for the health service and

education. The problem of Labour so

far if they have not explained how

they would pay for the massive

splurge of spending.

He does spend

it. Anyone can do that. The real

problem is the one that Nick

identified. He wants to appear

responsible without making a silly

mistake like over national

insurance. To do that, you need to

form a very fine judgment as to how

much a giveaway and how much you do

not. The politics is he has to

appear to be giving something away.

Posterity Fx everybody. -- posterity

affects everyone. Finding a way to

appeared to be a generous

Chancellor.

He is going to do

something bold. Presumably it is

something that Theresa May agrees

with.

We don't know. We in a vacuum

and do not know what is happening.

In the end, all politicians are

elected to government to decide how

to cut up the public spending cake.

In this budget most people are

expecting a lot of money for the

NHS. If he says we're going to put

in an extra 2 billion, Rachel were

saying that is not enough. We should

put 4 billion in. Whatever the

Chancellor is going to do he will be

criticised.

What I am saying is we

need to get beyond this thing that

there is only so much money. This is

out of kilter with what most

respected economists around the

world and even those famous

marketers at the IMF are saying, you

have to invest in an economy. That

is where you generate growth. That

is mindful that you should borrow

when there is low interest rates.

What would you like to see that

public requirement going into?

When

the Labour Party talked to

businesses and representatives about

this, they say, you are right, we do

need this investment. We need

infrastructure and skills.

If we

look at this as a very particular

Budget, happening at a time, I would

not say Brexit stasis, but Theresa

May has been chided by Donald Tusk,

and you have Phillip Hammond laying

out his stall but he does not know

what party it will be at or the end

journey?

He has to be a chance for

all time, he cannot pretend this is

my only Budget or this will come to

an end in one year. It is very

difficult but the problem with

journalists as we're in a state of

perpetual hysteria. I think we're

all quite calm! I have lost track

of, she survive... Until Christmas,

now. Prime Minister tend to survive

and chancellors as well. They tend

to not get on very well. This is

normal. Would anything break this

Christmas not until there is a

better alternative.

We are in a

situation where Phillip Hammond is

determinedly soft as a Brexiteer and

there is a difference of opinion as

how this is being handled and Brexit

is a huge focus, people don't know

what is happening but there is more

focused than the Budget?

I would

agree with a lot of what Simon said,

apart from the last bit, I don't

think he is safe, if she carries out

a major reshuffle in January or

February, she may be forced into a

reshuffle before then...

What do you

think the impact of Brexit is on the

Chancellor's thinking?

This Budget

is short-term because we don't know

exactly what the Brexit outcome will

be so it is very difficult for him

to plan. He has to keep back some

money in case we have no Deal, very

reluctantly. I think he is looking

to the short-term rally than

long-term on Wednesday.

Stay there.

We're going to Hugh Muir -- hear

more on Brexit.

Two interesting

developments, Donald Tusk has

essentially said to Theresa May, you

need to put more money on the table

within two weeks, there is already

20 billion euros, they want 60

billion, they want a bigger

indication and the significance of

the next two weeks is Donald Tusk

once that before the European

Council on the 14th of December,

where EU leaders might say, yes, we

can move onto the next stage and

talk about trade and transition.

David Davis was tickling that? He

did a speech in Berlin and he said,

we will be doing something in the

next few weeks. He did not want to

be specific and was clearly

indicating that Britain would like

to say it at the council and not

beforehand.

The Taoiseach has also

been pretty vocal today.

We offer a

car has said that Britain has to put

in writing that it will ensure there

is no hard border in Ireland and

that has to be done to ensure that

he will agree to move onto the next

age at the European Council.

Interestingly, no member state has a

veto over the Article 50 process.

But there are three areas, Northern

area -- Northern Ireland, citizens'

rights and money and it is Ireland's

moment in the sand and it is

difficult to see how Donald Tusk

could move on without the agreement

of Ireland.

One area where the Chancellor

is widely expected to make

an announcement in the Budget

is the rules for the Government's

flagship welfare programme,

Universal Credit.

Labour forced a vote yesterday

in the Commons on cutting

the initial waiting time

for Universal Credit

from six weeks to four.

It won, though Conservative MPs

abstained and the Government

has yet to respond.

Critics argue that the inequalities

and delays in the system have

created new hardships for people.

Newsnight filmmaker

Stuart Denman went to Newcastle,

one of the trial areas,

where he spoke to three people

who say it doesn't work for them.

He began his quest at a food bank.

13 weeks, it was.

It was eight weeks and then

it was another five weeks.

You just had to try to pay

what you needed to pay.

But you weren't paying

rent or council tax.

I'm getting my money every

month now, the same date.

It's just the amount you get.

It was bad enough

when I was on the...

It was £102, I think.

It was bad enough then

but now it is £72 a week.

You cannot do it, it's impossible.

It really is.

Ian has been on Universal Credit

for about six months.

He says he has not been under

pressure to look for work,

which he thinks is down

to poor health.

I have met you here at a food bank.

How often do you come here?

Once a week.

And what do you do for the rest

of the week for food?

I get food out of the bin now

and again, which I did

a couple of days ago.

Sandwiches.

How old are you, Ian?

54.

Did you imagine life

to be like this at 54?

Not as bad as it is, I don't think.

I knew without a job

it was going to be really,

really difficult but I didn't think

it was going to get

as difficult as it is.

It's getting out of hand now.

If you're not in a family

you may as well not exist.

If you can't buy your own house

you may as well not exist.

Ian later tells me he will be

receiving an additional allowance

for caring for a friend so he is now

more optimistic about getting

by on Universal Credit without work.

But what if Universal Credit

is actually putting

you off finding work?

I have been on the Universal Credit

system as a carer, which means

I don't have to actively seek work

at this point in time

because my daughter receives

a disability allowance.

I have received my

first payment in July.

It went as smoothly as it

could apart from the fact that

I didn't get the amount

I was expecting and also

I subsequently found out that,

despite keeping them informed,

I had a legacy debt that has accrued

by having claimed tax credits.

How much is that debt?

£2800.

In 2012, Lynne was made redundant

from a well-paid role

in the public sector.

She was able to find short-term

consultancy jobs but increasingly

had to depend on benefits to get by.

She sold her two-bedroom flat

to make ends meet and now

she and her two teenage daughters

live in privately

rented accommodation.

The option is to either go back

into well-paid work,

which isn't necessarily available,

or in terms of downsizing or trying

to manage within the benefits

system, then that is not going to be

possible under Universal Credit.

Lynne feels it would be too

complicated to accept ad-hoc

consultancy work while on Universal

Credit.

It's too unstable.

If you have high peak months,

like seasonal, or you get a contract

that is three months but you don't

work for two but you earn that

amount, you are going to be

in and out of the benefits system.

You can't wait six weeks every time.

I am an extremely resourceful person

and now I am in the position where,

through the austerity measures

that the government have implemented

and the system of support has

left me in this situation more

than I have left myself.

I would be better off

handing my taxi badge

in and going and signing on.

I would get more

money by not working.

Which I can't understand at all.

Robert is a self-employed

taxi driver.

When he applied for Universal

Credit, an appointment

was arranged for him to prove

he was self-employed.

But on the day of the interview

he was offered a fixed taxi fare

of £90, which he took instead.

The appointment was

eventually rescheduled

but he missed that one, too.

You missed two appointments?

Yeah.

But that was to take work?

Yeah.

Part of your claimant commitment

is you can't refuse paid work.

But you must attend all interviews.

How can you do both?

You're desperate for money.

That's the option you're

going to take every time.

Robert's payments started

eventually, which he combined

with his taxi earnings.

But in September he was thrown

by a much lower payment

than he had expected.

It tipped him over the edge.

Unable to pay the taxi company

he was working through,

they parted company.

Robert was suddenly unemployed.

I hid in my bedroom

for nearly two weeks.

And I only went out of the bedroom

to go to the toilet.

My children went to stay

with my parents for a little while.

Purely because I didn't

have the money to feed them.

Because they weren't there,

I got more depressed.

I didn't open any of my mail.

I wasn't answering my phone.

Adding to an already bad month,

rent arrears that predated his time

on Universal Credit

were about to become a problem.

He visited his GP one day.

When he returned home with a sick

note and antidepressants,

he found that the locks

had been changed.

I had been given seven days

to remove my possessions

and to leave the property.

And the seven days were up.

That's why they said

the bailiffs round and changed

the locks and everything.

But you didn't know that,

you hadn't been opening your mail?

No.

Robert discovered that September's

low payment was because of problems

with something called the minimum

income floor, which is an assumption

about a self-employed

person's monthly earnings.

As a primary carer of two children

under 16, Robert's calculation

should have been based on a 25 hour

working week, meaning

they would expect him to earn

about £800 in a normal month.

But instead, they had used a 35

hour week and assumed

he would earn more than £1000.

Because the error meant

they expected him to get more

in earnings, they paid him less

in Universal Credit.

They said, don't worry,

we will fix the mistake.

They put the wrong postcode

on the letter or something.

It cost me my livelihood.

Robert received a letter admitting

the mistake and his monthly

payment was adjusted.

But in reviewing his case,

they also calculated that

in the initial months,

he had actually been overpaid by...

£717.59.

And a request to make

an arrangement to pay it back.

It's one mistake after another.

Robert is now taxi driving again.

Unsurprisingly, he has no faith

in Universal Credit.

He takes particular issue

with the minimum income floor,

which doesn't recognise that sole

traders may end up earning less

than the national minimum wage

if they have a bad month.

If I don't make that

minimum income floor,

I don't get any extra money,

any help at all.

When Universal Credit

came to Newcastle, it

promised to bring fairness,

simplicity and an incentive to work.

And it has, for some.

But for others, it's yet to prove

that it has brought any

one of these things,

let alone all three.

Stuart Denman there.

We did ask the Department for Work

and Pensions to join us

on the programme tonight but no

minister was available.

In a statement, the department said

Universal Credit lay at the heart

of the Government's commitment

to help people improve their lives

and raise their incomes.

They said the vast majority

of claimants are paid in full

and on time and that support

is available for anyone

who needs extra help.

Well, Rachel, Ian and

Simon are still here.

Rachel, it is fair to say that the

government and the opposition

believe Universal Credit is the

right thing and is here to stay?

I

think Universal Credit should be

stopped until we get rid of this

government, frankly. They cannot

handle it. They are still defending

Universal Credit despite the fact

that everyone who has anything to do

with it, claimants, local

authorities, food banks, the church,

says it is plunging people into

poverty and debt.

If you talk to

Jeremy Corbyn and John McDonnell,

they think the principle is right to

incentivise people so the Phillip

Hammond does something in the Budget

about the delivery of that?

That

would be a good thing? Perhaps the

principle of simplifying it is a

good thing but I am not sure, that

might be an illusion. But in any

case, the government have had so

much evidence that it is not working

so we're left with two

possibilities, either they are

indifferent to the level of

suffering they are causing or just

clueless and I don't know what is

worse.

Is it fair to say it was

rolled out to some?

It is a disgrace

that there isn't a government

minister on the programme to defend

it and I will not on that role.

Whenever you introduce a complicated

system, even if you think you are

simplifying it, there will

inevitably be teething problems but

they have had time to understand

those problems and the six-week

period, everyone would agree, needs

to be shortened. I think they will

probably shorten that in the Budget

to five weeks and it should be four.

I don't agree with pausing this

because the film had three people...

We know that Eddie people...

It

still leaves 20? I'm not saying that

is not a bad thing and I have

conducted hours of phone-ins on the

subject and when you have three

people in a row crying down the

phone to you, you can be a hardened

Thatcherite and you will be affected

by that.

Just a second, will Phillip

Hammond address this on Wednesday?

Yes, I know he will. Whether he does

it as Ian suggests, I don't know. It

is incredible, people are in favour

of the principle. What is

extraordinary is this six-week delay

intended to get people used to being

paid in arrears as if they were then

work demonstrates such a failure of

the psychology of people in

difficulty.

Thank you.

That's all for this evening.

But before we go, have you ever

wondered what it's like to enter

Mars' atmosphere at twice the speed

of sound attached to a parachute?

Goodnight.

Slow motion, in video originally

shot at 1000 frames per second.

But played back here at 30 frames

per second, we see the initial

suspension lines pulling out

of the pack and taking the parachute

backwards, where it will ultimately

inflate in merely half a second.