27/10/2013 Sunday Politics East Midlands


27/10/2013

Andrew Neil and Marie Ashby with the latest political news, interviews and debate. With Lord Heseltine and shadow energy secretary Caroline Flint.


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Morning, folks. Welcome to the Sunday Politics. Hope you enjoyed

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the extra hour in bed, and that you've realised it's not 12:45. It's

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11:45! It's getting stormy outside. But they're already battening down

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the hatches at Number Ten because coalition splits are back, with

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bust-ups over free schools and power bills. We'll speak to the Lib Dems,

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and ask Labour who's conning whom over energy.

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EU leaders have been meeting in Brussels. But how's David Cameron

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getting on with that plan to change our relationship with Europe? We

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were there to ask him. Have we got any powers back yet? DS!

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Foreign companies own everything from our energy companies to our

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railways. Does it matter who And in the East Midlands, we hear

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from the jobless youngsters who say they've disappeared from the

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unemployment figures. And up for sale again ` what's the future for

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the East as many daily journeys made by bus

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than by tube, so why is the planned investment in buses not keeping

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pace? And with me, three journalists

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who've bravely agreed to hunker down in the studio while Britain braces

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itself for massive storm winds, tweeting their political forecasts

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with all the accuracy of Michael Fish on hurricane watch. Helen

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Lewis, Janan Ganesh and Nick Watt. Now, sometimes coalition splits are

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over-egged, or dare we say even occasionally stage-managed. But this

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week, we've seen what looks like the genuine article. It turns out Nick

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Clegg has his doubts about the coalition's flagship free schools

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policy. David Cameron doesn't much like the green levies on our energy

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bills championed by the Lib Dems. Neither of them seems to have

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bothered to tell the other that they had their doubts. Who better to

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discuss these flare-ups than Lib Dem Deputy Leader Simon Hughes? He joins

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me now. Welcome. Good morning. The Lib Dems spent three years of

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sticking up for the coalition when times were grim. Explain to me the

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logic of splitting from them when times look better. We will stick

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with it for five years. It is working arrangement, but not

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surprisingly, where there right areas on which we disagree over

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where to go next, we will stand up. It is going to be hard enough for

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the Lib Dems to get any credit for the recovery, what ever it is. It

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will be even harder if you seem to be semidetached and picky. The

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coalition has led on economic policy, some of which were entirely

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from our stable. The one you have heard about most often, a Lib Dem

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initiative, was to take people on blowing comes out of tax. The

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recovery would not have happened, there would not have been confidence

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in Britain, had there not been a coalition government with us in it,

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making sure the same policies produced fair outcomes. We are not

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going to leave the credit for any growth - and there has been very

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good news this week. We have played a part in that, and without us, it

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would not have happened. Does it not underline the trust problem you

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have? You promised to abolish tuition fees. You oppose nuclear

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power, now you are cheerleading the first multi-billion pounds

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investment in nuclear generation. You are dying out on your enthusiasm

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on green levies, and now they are up for renegotiation. Why should we

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trust a word you say? In relation to green levies, as you well know, just

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under 10% is to do with helping energy and helping people. Unless

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there is continuing investment in renewables, we will not have the

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British produced energy at cheaper cost to keep those bills down in the

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future. At cheaper cost? Explain that to me. Off-shore energy is

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twice the market rate. The costs of renewables will increasingly come

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down. We have fantastic capacity to produce the energy and deliver lots

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of jobs in the process. The parts of the energy bill that may be up for

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renegotiation seems to be the part where we subsidise to help either

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poor people pay less, or where we do other things. Too insulated the

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homes? Are you up to putting that to general taxation? Wouldn't that be

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progressive? I would. It would be progressive. I would like to do for

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energy bills what the Chancellor has done for road traffic users,

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drivers, which is too fuelled motor fuel -- to freeze new to fall. That

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would mean there would be an immediate relief this year, not

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waiting for the election. So there is a deal to be done there? Yes We

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understand we have to take the burden off the consumer, and also

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deal with the energy companies, who look as if they are not paying all

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the tax they should be, and the regulator, which doesn't regulate

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quickly enough to deal with the issues coming down the track. We can

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toughen the regulator, and I hope that the Chancellor, in the Autumn

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statement, was signalled that energy companies will not be allowed to get

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away with not paying the taxes they should. And this deal will allow

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energy prices to come down? Yes How could David Laws, one of your

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ministers, proudly defend the record of unqualified teachers working in

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free schools, and then stand side-by-side with Mr Clegg, as he

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says he is against them? David Laws was not proudly defending the fact

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that it is unqualified teachers He said that some of the new,

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unqualified teachers in free schools are doing a superb job. But you want

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to get rid of them? We want to make sure that everybody coming into a

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free school ends up being qualified. Ends up? Goes through a process that

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means they have qualifications. Just as we said very clearly at the last

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election that the manifesto curriculum in free schools should be

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the same as other schools. It looks like Mr Clegg is picking a fight

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just for the sake of it. Mr Clegg was taught by people who didn't have

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teaching qualifications in one of the greatest schools in the land, if

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not the world. It didn't seem to do him any harm. What is the problem?

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If you pay to go to a school, you know what you're getting. But that

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is what a free school is. No, you don't pay fees. A free school is

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parents taking the decisions, not you, the politicians. We believe

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they would expect to guarantee is, firstly that the minimum curriculum

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taught across the country is taught in the free schools, and secondly,

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that the teachers there are qualified. Someone who send their

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kids to private schools took a decision to take -- to send their

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children there, even if the teachers were unqualified, because they are

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experts in their field. Someone who send their kids to free schools is

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because -- is their decision, not yours. Because some of the free

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schools are new, and have never been there before, parents need a

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guarantee that there are some basics in place, whatever sort of school.

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So they need you to hold their hand? It is not about holding hands, it is

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about having a minimum guarantee. Our party made clear at our

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conference that this is a priority for us. Nick Clegg reflects the view

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of the party, and I believe it is an entirely rational thing to do. Nick

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Clegg complained that the Prime Minister gave him only 30 minutes

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notice on the Prime Minister Buzz 's U-turn on green levies. That is

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almost as little time as Nick Clegg gave the Prime Minister on his

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U-turn on free schools. Aren't you supposed to be partners? Green

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levies were under discussion in the ministerial group before Wednesday,

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because we identified this as an issue. We do that in a practical

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way. Sometimes there is only half an hour's notice. We had even less than

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half an hour this morning! Simon Hughes, thank you.

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So the price of energy is the big battle ground in politics at the

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moment. 72% of people say that high bills will influence the way they

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vote at the next election. Ed Miliband has promised a price freeze

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after the next election, but will the coalition turned the tables on

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Labour, with its proposal to roll back green levies. Caroline Flint

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joins us from Sheffield. It looks like the coalition will be able to

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take ?50 of energy bills, by removing green levies. It is quite

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clear that different parts of the government are running round waking

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up to the fact that the public feel that this government has not done

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enough to listen to their concerns. Last week, there was a classic case

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of the Prime Minister making up policy literally at the dispatch

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box. Let's see what they say in the autumn statement. The truth is,

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whatever the debate around green levies, and I have always said we

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should look at value for money at those green levies. Our argument is

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about acknowledging there is something wrong with the way the

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market works, and the way those companies are regulated. Behind our

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freeze for 20 months is a package of proposals to reform this market I

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understand that, but you cannot tell as the details about that. I can.

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You cannot give us the details about reforming the market. We are going

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to do three things, and I think I said this last time I was on the

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programme. First, we are going to separate out the generation side

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from the supply side within the big six. Secondly, we will have a energy

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pool, or power exchange, where all energy will have to be traded in

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that pool. Thirdly, we will establish a tougher regulator,

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because Ofgem is increasingly being seen as not doing the job right I

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notice that you didn't mention any reform of the current green and

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social taxes on the energy bill Is it Labour's policy to maintain the

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existing green levies? In 2011, the government chose to get rid of warm

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front, which was the publicly funded through tracks a scheme to support

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new installation. When they got rid of that, it was the first time we

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had a government since the 70s that didn't have such a policy. What is

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your policy? We voted against that because we believe it is wrong. We

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believe that the eco-scheme, a government intervention which is ?47

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of the ?112 on our bills each year, is expensive, bureaucratic and isn't

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going to the fuel poor. I am up for a debate on these issues. I am up

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for a discussion on what the government should do and what these

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energy companies should do. We cannot let Cameron all the energy

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companies off the hook from the way in which they organise their

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businesses, and expect us to pay ever increasing rises in our bills.

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There is ?112 of green levies on our bills at the moment. Did you vote

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against any of them? We didn't, but what I would say ease these were

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government imposed levies. When they got rid of the government funded

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programme, Warm Front, they introduced the eco-scheme. The

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eco-project is one of the ones where the energy companies are saying

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it's too bureaucratic, and it is proving more expensive than

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government estimates, apparently doubled the amount the government

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thought. These things are all worth looking at, but don't go to the

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heart of the issue. According to official figures, on current plans,

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which you support, which you voted for, households will be paying 1%

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more per unit of electricity by 2030. It puts your temporary freeze

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as just a blip. You support a 4 % rise in our bills. I support making

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sure we secure for the future access to energy that we can grow here in

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the UK, whether it is through nuclear, wind or solar, or other

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technologies yet to be developed. We should protect ourselves against

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energy costs we cannot control. The truth is, it is every fair for you

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to put that point across, and I accept that, but we need to hear the

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other side about the cost for bill payers if we didn't invest in new,

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indigenous sources of energy supply for the future, which, in the long

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run, will be cheaper and more secure, and create the jobs we

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need. I think it is important to have a debate about these issues,

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but they have to be seen in the right context. If we stay stuck in

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the past, we will pay more and we will not create jobs. How can you

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criticise the coalition's plans for a new nuclear station, when jeering

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13 years of a Labour government you did not invest in a single nuclear

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plant? You sold off all our nuclear technology to foreign companies

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Energy provision was put out to private hands and there has been no

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obstacle in British law against ownership outside the UK. Part of

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this is looking ahead. Because your previous track record is so bad

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What we did decide under the previous government, we came to the

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view, and there were discussions in our party about this, that we did

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need to support a nuclear future. At the time of that, David Cameron

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was one of those saying that nuclear power should be a last

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resort. And as you said, the Liberals did not support it. We

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stood up for that. We set in train the green light of 10 sites,

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including Hinkley Point, for nuclear development. I am glad to

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see that is making progress and we should make more progress over the

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years ahead. We took a tough decision when other governments had

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not done. You did not build a new nuclear station. When you get back

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into power, will you build HS2? That has not had a blank cheque

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from the Labour Party. I am in favour of good infrastructure. Are

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you in favour of?, answer the question? I have answered the

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question. It does not have a blank cheque. If the prices are too high,

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we will review the decision when we come back to vote on it. We will be

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looking at it closely. We have to look for value for money and how it

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benefits the country. Have you stocked up on jumpers this winter?

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I am perfectly all right with my clothing. What is important, it is

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ridiculous for the Government to suggest that the answer to the loss

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of trust in the energy companies is to put on another jumper.

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The coalition has taken a long time to come up with anything that can

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trump Ed Miliband's simple freezing energy prices, vote for us. Are

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they on the brink of doing so? I do not think so. They have had a

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problem that has dominated the debate, talking about GDP, the

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figures came out on Friday and said, well, and went back to talking

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about energy. My problem with what David Cameron proposes is he agrees

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with the analysis that the Big Six make too many profits. He wants to

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move the green levies into general taxation, so that he looks like he

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is protecting the profits of the energy companies. If the coalition

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can say they will take money off the bills, does that change the

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game? I do not think the Liberal Democrats are an obstacle to

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unwinding the green levies. I think Nick Clegg is open to doing a deal,

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but the real obstacle is the carbon reduction targets that we signed up

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to during the boom years. They were ambitious I thought at the time

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From that we have the taxes and clocking up of the supply-side of

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the economy. Unless he will revise that, and build from first

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principles a new strategy, he cannot do more than put a dent into

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green levies. He might say as I have got to ?50 now and if you

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voters in in an overall majority, I will look up what we have done in

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the better times and give you more. I am sure he will do that. It might

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be ?50 of the Bill, but it will be ?50 on your general taxation bill,

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which would be more progressive They will find it. We will never

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see it in general taxation. The problem for the Coalition on what

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Ed Miliband has done is that it is five weeks since he made that

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speech and it is all we are talking about. David Cameron spent those

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five weeks trying to work out whether Ed Miliband is a Marxist or

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whether he is connected to Middle Britain. That is why Ed Miliband

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set the agenda. The coalition are squabbling among themselves,

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looking petulant, on energy, and on schools. Nobody is taking notice of

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the fact the economy is under way, the recovery is under way. Ed

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Miliband has made the weather on this.

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It UK has a relaxed attitude about selling off assets based -- to

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companies based abroad. But this week we have seen the Swiss owner

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of one of Scotland's largest industrial sites, Grangemouth, come

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within a whisker of closing part of it down. So should we care whether

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British assets have foreign owners? Britain might be a nation of

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homeowners, but we appear to have lost our taste for owning some of

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our biggest businesses. These are among the crown jewels sold off in

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the past three decades to companies based abroad. Roughly half of

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Britain's essential services have overseas owners. The airport owner,

:20:39.:20:40.

British Airports Authority, is owned by a Spanish company.

:20:41.:20:43.

Britain's largest water company Thames, is owned by a consortium

:20:44.:20:46.

led by an Australian bank. Four out of six of Britain's biggest energy

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companies are owned by overseas giants, and one of these, EDF

:20:50.:20:52.

Energy, which is owned by the French state, is building Britain's

:20:53.:20:55.

first nuclear power plant in a generation, backed by Chinese

:20:56.:21:02.

investors. It's a similar story for train operator Arriva, bought by a

:21:03.:21:07.

company owned by the German state. So part of the railways privatised

:21:08.:21:10.

by the British government was effectively re-nationalised by the

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German government. But does it matter who owns these companies as

:21:20.:21:22.

long as the lights stay on, the trains run on time, and we can

:21:23.:21:27.

still eat Cadbury's Dairy Milk? We are joined by the general

:21:28.:21:32.

secretary of the RMT, Bob Crow, and by venture capitalist Julie Meyer.

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They go head to head. Have we seen the consequences of

:21:40.:21:46.

relying for essential services to be foreign-owned? Four of the Big

:21:47.:21:52.

Six energy companies, Grangemouth, owned by a tax exile in Switzerland.

:21:53.:21:59.

It is not good. I do not think there is a cause and effect

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relationship between foreign ownership and consumer prices. That

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is not the right comparison. We need to be concerned about

:22:09.:22:13.

businesses represented the future, businesses we are good at

:22:14.:22:16.

innovating for example in financial services and the UK has a history

:22:17.:22:22.

of building businesses, such as Monotypes. If we were not creating

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businesses here -- Monotise. Like so many businesses creating

:22:35.:22:40.

products and services and creating the shareholders. Should we allow

:22:41.:22:48.

hour essential services to be in foreign ownership? It was

:22:49.:22:52.

demonstrated this week at Grangemouth. If you do not own the

:22:53.:22:58.

industry, you do not own it. The MPs of this country and the

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politicians in Scotland have no say, they were consultants.

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Multinationals decide whether to shut a company down. If that had

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been Unite union, they are the ones who saved the jobs. They

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capitulated. They will come back, like they have for the past 150

:23:19.:23:23.

years, and capture again what they lost. If it had closed, they would

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have lost their jobs for ever. If the union had called the members up

:23:30.:23:33.

without a ballot for strike action, there would have been uproar. This

:23:34.:23:38.

person in Switzerland can decide to shut the entire industry down. The

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coalition, the Labour Party, as well, when Labour was in government,

:23:44.:23:49.

they played a role of allowing industries to go abroad, and it

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should be returned to public ownership. Nestor. It has

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demonstrated that the Net comes from new businesses. We must not

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be... When Daly motion was stopped by the French government to be sold,

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it was an arrow to the heart of French entrepreneurs. We must not

:24:21.:24:24.

create that culture in the UK. Every train running in France is

:24:25.:24:29.

built in France. 90% of the trains running in Germany are built in

:24:30.:24:36.

Germany. In Japan, it has to be built in that country, and now an

:24:37.:24:44.

energy company in France is reducing its nuclear capability in

:24:45.:24:48.

its own country and wants to make profits out of the British industry

:24:49.:24:52.

to put back into it state industry. That happened with the railway

:24:53.:24:56.

industry. They want to make money at the expense of their own state

:24:57.:25:02.

companies. We sold off energy production. How did we end up in a

:25:03.:25:09.

position where our nuclear capacity will be built by a company owned by

:25:10.:25:15.

a socialist date, France, and funded by a communist one, China,

:25:16.:25:24.

for vital infrastructure? I am not suggesting that is in the national

:25:25.:25:27.

interest. I am saying we can pick any one example and say it is a

:25:28.:25:33.

shame. The simple matter of the fact is the owners are having to

:25:34.:25:36.

make decisions. Not just Grangemouth, businesses are making

:25:37.:25:41.

decisions about what is the common good. Not just in the shareholders'

:25:42.:25:47.

interest. For employees, customers. What is in the common good when

:25:48.:25:52.

prices go up by 10% and the reason is that 20 years ago they shut

:25:53.:25:56.

every coal pit down in this country, the Germans kept theirs open and

:25:57.:26:01.

subsidised it and now we have the Germans doing away with nuclear

:26:02.:26:07.

power and they have coal. Under the Labour government, in 2008, the

:26:08.:26:14.

climate change Act was passed. Well before that, and you know yourself,

:26:15.:26:18.

they shut down the coal mines to smash the National Union of

:26:19.:26:22.

Mineworkers because they dared to stand up for people in their

:26:23.:26:28.

community. Even if we wanted to reopen the coalmines, it would be

:26:29.:26:32.

pointless. Under the 2008 Act, we are not meant to burn more coal

:26:33.:26:40.

The can, as if you spent some of the profits, you could have carbon

:26:41.:26:47.

catch up. That does not exist on a massive scale. You are arguing the

:26:48.:26:51.

case, Julie Meyer, for entrepreneurs to come to this

:26:52.:26:56.

country. Even Bob Crow is not against that. We are trying to

:26:57.:27:02.

argue, should essential services be in foreign hands? Not those in

:27:03.:27:10.

Silicon round about doing start ups. I am trying to draw a broader

:27:11.:27:15.

principle than just energy. Something like broadband services,

:27:16.:27:19.

also important to the functioning of the economy. I believe in the

:27:20.:27:26.

UK's ability to innovate. When we have businesses that play off

:27:27.:27:31.

broadband companies to get the best prices for consumers. These new

:27:32.:27:36.

businesses and business models are the best way. Not to control, but

:27:37.:27:43.

to influence. It will be a disaster. Prices will go up and up as a

:27:44.:27:48.

result. Nissan in Sunderland, a Japanese factory, some of the best

:27:49.:27:54.

cars and productivity. You want that to be nationalised and bring

:27:55.:27:57.

it down to the standard of British Leyland? It is not bring it down to

:27:58.:28:02.

the standard. The car manufacturing base in this country has been

:28:03.:28:07.

wrecked. We make more cars now for 20 years -- than in 20 years.

:28:08.:28:13.

Ford's Dagenham produced some of the best cars in the world. Did you

:28:14.:28:20.

buy one? I cannot drive. They moved their plants to other countries

:28:21.:28:27.

where it was cheaper labour. Would you nationalise Nissan? There

:28:28.:28:31.

should be one car industry that produces cars for people. This week

:28:32.:28:38.

the EU summit was about Angela Merkel's mobile phone being tapped,

:28:39.:28:45.

they call it a handy. We sent Adam to Brussels and told him to ignore

:28:46.:28:49.

the business about phone-tapping and investigate the Prime

:28:50.:28:51.

Minister's policy on Europe instead. I have come to my first EU summit to

:28:52.:29:08.

see how David Cameron is getting on with his strategy to claim power was

:29:09.:29:12.

back from Brussels. Got any powers back yet? Yes! Which ones? Sadly,

:29:13.:29:21.

his fellow leaders were not as forthcoming. Chancellor, are you

:29:22.:29:25.

going to give any powers back to Britain? Has David Cameron asked you

:29:26.:29:32.

for any powers back? The president of the commission just laughed, and

:29:33.:29:39.

listen to the Lithuanian President. How is David Cameron's renegotiation

:29:40.:29:50.

strategy going? What's that? He wants powers back for Britain. No

:29:51.:29:55.

one knows what powers David Cameron actually wants. Even our usual

:29:56.:29:59.

allies, like Sweden, are bit baffled. We actually don't know yet

:30:00.:30:07.

what is going through the UK membership. We will await the

:30:08.:30:14.

finalisation of that first. You should ask him, and then tell us!

:30:15.:30:20.

Here is someone who must know, the Dutch Prime Minister, he is doing

:30:21.:30:25.

what we are doing, carrying out a review of the EU powers, known as

:30:26.:30:30.

competencies in the jargon, before negotiating to get some back. Have

:30:31.:30:35.

you had any negotiations with David Cameron over what powers you can

:30:36.:30:39.

bring back from Brussels? That is not on the agenda of this summit.

:30:40.:30:46.

Have you talked to him about it This is not on the schedule for this

:30:47.:30:50.

summit. David Cameron's advises tummy it is

:30:51.:30:59.

because he is playing the long game. -- David Cameron's advisers tell me.

:31:00.:31:07.

At this summit, there was a task force discussing how to cut EU red

:31:08.:31:15.

tape. Just how long this game is was explained to me outside the summit,

:31:16.:31:19.

by the leader of the Conservatives in the European Parliament. I think

:31:20.:31:25.

the behind-the-scenes negotiations will start happening when the new

:31:26.:31:28.

commissioner is appointed later next year. I think the detailed

:31:29.:31:34.

negotiations will start to happen bubbly after the UK general

:31:35.:31:38.

election. That is when we will start getting all of the detail of the

:31:39.:31:43.

horse trading, and real, Lake night negotiations. Angela Merkel seems

:31:44.:31:50.

keen to rewrite the EU's main treaties to deal with changes in the

:31:51.:31:55.

Eurozone, and that is the mechanism David Cameron would use to

:31:56.:31:59.

renegotiate our membership. Everyone here says his relationship with the

:32:00.:32:03.

German Chancellor is strong. So after days in this building, here is

:32:04.:32:08.

how it looks. David Cameron has a mountain to climb. It is climbable,

:32:09.:32:13.

but he isn't even in the foothills yet. Has he even started packing his

:32:14.:32:19.

bags for the trip? Joining us now, a man who knows a

:32:20.:32:23.

thing or two about the difficulties Prime Minister 's face in Europe.

:32:24.:32:29.

Former Deputy Prime Minister, Michael Heseltine. We are nine

:32:30.:32:32.

months from David Cameron's defining speech on EU renegotiation. Can you

:32:33.:32:41.

think of one area of progress? I don't know. And you don't know. And

:32:42.:32:46.

that's a good thing. Why is it a good thing? Because the real

:32:47.:32:52.

progress goes on behind closed doors. And only the most naive,

:32:53.:33:03.

because the real progress goes on behind closed doors. Because, in

:33:04.:33:11.

this weary world, you and I, Andrew, know full well that the moment you

:33:12.:33:16.

say, I making progress, people say, where? And the machine goes to work

:33:17.:33:21.

to show that the progress isn't enough. So you are much better off

:33:22.:33:27.

making progress as best you can in the privacy of private diplomacy. It

:33:28.:33:37.

is a long journey ahead. In this long journey, do you have a clear

:33:38.:33:41.

sense of the destination? Do you have a clear sense of what powers Mr

:33:42.:33:47.

Cameron wants to negotiate? I have a clear sense of the destination,

:33:48.:33:52.

which is a victory for the campaign that he will win to stay inside the

:33:53.:33:58.

European community. That is the agenda, and I have total support for

:33:59.:34:06.

that. I understand that, but if he is incapable of getting any tangible

:34:07.:34:12.

sign of renegotiation, if he is able only to do what Wilson did in 1975,

:34:13.:34:18.

which was to get a couple of token changes to our membership status, he

:34:19.:34:23.

goes into that referendum without much to argue for. He has everything

:34:24.:34:29.

to argue for. He's got Britain's vital role as a major contributor to

:34:30.:34:37.

the community. He's got Britain's self interest as a major

:34:38.:34:43.

beneficiary, and Britain's vital role in the City of London. He's got

:34:44.:34:49.

argue for that now. He could have a argue for that now. He could have a

:34:50.:34:54.

referendum now. He doesn't want one now. I haven't any doubt that he

:34:55.:35:02.

will come back with something to talk about. But it may be slightly

:35:03.:35:11.

different to what his critics, the UK isolationist party people, want.

:35:12.:35:17.

He may, for example, have found that allies within the community want

:35:18.:35:23.

change as well, and he may secure changes in the way the community

:35:24.:35:29.

works, which would be a significant argument within the referendum

:35:30.:35:32.

campaign. Let me give you an example. I think it is a scandal

:35:33.:35:37.

that the European Commission don't secure the auditing of some of the

:35:38.:35:44.

accounts. Perhaps that could be on the agenda. He might find a lot of

:35:45.:35:49.

contributing countries, like Germany, like Colin and, would be

:35:50.:35:57.

very keen. -- like Holland. David vetoed the increase in the European

:35:58.:36:02.

budgets the other day, and he had a lot of allies. So working within

:36:03.:36:08.

Europe on the things that people paying the European bills want is

:36:09.:36:13.

fertile ground. Is John Major right to call for a windfall tax on the

:36:14.:36:20.

energy companies? John is a very cautious fellow. He doesn't say

:36:21.:36:24.

things without thinking them out. So I was surprised that he went for a

:36:25.:36:31.

windfall tax. First of all, it is retrospective, and secondly, it is

:36:32.:36:35.

difficult to predict what the consequences will be. I am, myself,

:36:36.:36:41.

more interested in the other part of his speech, which was talking about

:36:42.:36:44.

the need for the Conservative Party to seek a wider horizon, to

:36:45.:36:50.

recognise what is happening to the Conservative Party in the way in

:36:51.:36:54.

which its membership is shrinking into a southeastern enclave. Are you

:36:55.:37:04.

in favour of a windfall tax? I am not in favour of increasing any

:37:05.:37:15.

taxes. Do you share Iain Duncan Smith's point of view on welfare

:37:16.:37:22.

reform? I think Iain Duncan Smith is right. It is extremely difficult to

:37:23.:37:31.

do, but he is right to try. I think public opinion is behind him, but it

:37:32.:37:40.

isn't easy, because on the fringe of these issues there are genuine hard

:37:41.:37:45.

luck stories, and they are the ones that become the focus of attention

:37:46.:37:49.

the moment you introduce change. It requires a lot of political skill to

:37:50.:37:56.

negotiate your way through that. But isn't Iain Duncan Smith right to

:37:57.:38:01.

invoke the beverage principle, that you should be expected to make a

:38:02.:38:04.

contribution for the welfare you depend on? Yes, he is. I will let

:38:05.:38:11.

you get your Sunday lunch. Thanks for joining us.

:38:12.:38:16.

Coming up in just over 20 minutes, I will be looking

:38:17.:38:33.

In the East Midlands: No work, no training and no benefits ` the young

:38:34.:38:38.

people who say they're disappearing off the jobless figures too. We are

:38:39.:38:41.

not on any kind of database. And a survey of voters in the East

:38:42.:38:45.

Midlands says protect services for the elderly but services for the

:38:46.:38:47.

young can go. Council cuts, council cuts. Cuts

:38:48.:38:54.

from services for the young or the elderly, any opinions?

:38:55.:39:00.

Hello, I'm Marie Ashby. Here to add their expert insight, my guests this

:39:01.:39:03.

week are the Loughborough MP and newly`promoted Treasury Minister

:39:04.:39:05.

Nicky Morgan and Labour's Lilian Greenwood, the Nottingham South MP

:39:06.:39:08.

and Labour's spokesman for rail. Let us start with rail and something

:39:09.:39:17.

which concerns both of you. The Government is beginning the process

:39:18.:39:19.

of re`privatising the East Coast Mainline which runs through Newark

:39:20.:39:23.

and Grantham. It was taken over by the Government

:39:24.:39:26.

when National Express handed back the franchise because it could no

:39:27.:39:29.

longer afford it. Since then passenger numbers are up and it's

:39:30.:39:33.

paying back ?200 million this year to the Government. But there've also

:39:34.:39:36.

been problems with delays caused by bad weather and engineering work

:39:37.:39:38.

over`running. So, Nicky, with your new role in the

:39:39.:39:43.

Treasury, is this a bit of an embarrassment, the fact that it's

:39:44.:39:45.

running better as a state`owned operation than as a private one? I

:39:46.:39:52.

think it is encouraging that it is running well but be the government

:39:53.:39:57.

feels the private sector brings more expertise to running the railway

:39:58.:40:00.

lines. This is for the private sector to do. We are starting the

:40:01.:40:04.

process of looking for the right person to run it. If it is not

:40:05.:40:11.

broken? It is fine at the moment but the government is not there to run

:40:12.:40:15.

railway lines. There are many other railway lines being very well run by

:40:16.:40:19.

the private sector and East Coast mainline, we want them to join it.

:40:20.:40:24.

Surely, Lilian, this is a good time to privatise it? It is the wrong

:40:25.:40:33.

time. East Coast was taken over in 2009. Since then, it has had its

:40:34.:40:39.

best ever punctuality, its best ever customer satisfaction, it is paying

:40:40.:40:42.

more back to the Treasury. By the time it is re`franchise, it will

:40:43.:40:47.

have paid back almost ?1 billion and all of the profits, ?48 million,

:40:48.:40:53.

have been invested in the service. It is ideological. Really

:40:54.:40:57.

disappointing. I work with Nicky on getting improvements to rail lines,

:40:58.:41:03.

why don't they just do the same `` the sensible thing and concentrate

:41:04.:41:08.

on other franchises that have been delayed? Lilian makes some good

:41:09.:41:15.

points. We are delighted the service is being run so well. We think it it

:41:16.:41:19.

could be run even better in private hands. It is a question of what

:41:20.:41:27.

passengers want. They wanted to be well`run and on time and working for

:41:28.:41:34.

them. Passengers are at the heart of this. Would you renationalise the

:41:35.:41:38.

whole of the sector? We have said the East Coast should state in the

:41:39.:41:43.

public sector where it is doing a good job. It has had problems will

:41:44.:41:49.

stop there are problems with infrastructure. The money is going

:41:50.:41:53.

to go in to improve the rolling stock but the money is coming from

:41:54.:42:00.

the taxpayers `` it has had problems. Two people walked away

:42:01.:42:05.

from the franchise at huge cost to the government. It does not make

:42:06.:42:09.

sense to put it back out to the private sector while there are

:42:10.:42:12.

others to fix. Well, from earning money to saving

:42:13.:42:17.

it. As we've reported on this programme before, several of our

:42:18.:42:20.

councils have begun consulting with you to find out where they can make

:42:21.:42:24.

millions of pounds worth of cuts. And, the first to report back is

:42:25.:42:27.

Leicestershire County Council which carried out a survey of council tax

:42:28.:42:31.

payers in the county and there were some surprise results.

:42:32.:42:33.

According to the survey, the top candidates for cutting our street

:42:34.:42:35.

lighting, community grants, funding for agencies, travel to schools and

:42:36.:42:39.

grass cutting. The services people most wanted to see preserved work

:42:40.:42:44.

gritting, community services for older people, roads and paths,

:42:45.:42:50.

mental health services and help for physical and learning disabilities.

:42:51.:42:53.

Good news for the council perhaps was that 69% of people were prepared

:42:54.:43:00.

to see a rise in council tax but the bad news was that the areas

:43:01.:43:05.

identified for savings only account for ?32 0

:43:06.:43:05.

identified for savings only account for ?32 million of the Council's

:43:06.:43:08.

spending. Some interesting results there,

:43:09.:43:10.

including, it seems, permission to raise council tax. What does the

:43:11.:43:13.

council make of it? It is always very difficult to ask people to make

:43:14.:43:22.

decisions or to help make a decision over the substantial cuts because as

:43:23.:43:26.

you know we have got to make ?110 million savings over the next four

:43:27.:43:34.

years. What helps is not necessarily what you want to cut but what you

:43:35.:43:38.

want to protect. There are always going to be surprises but the real

:43:39.:43:43.

surprise to us was the respondents who said, over 60% of them, who said

:43:44.:43:50.

that they favoured a council tax increase.

:43:51.:43:52.

As a Leicestershire MP, you must take a close interest in this. Are

:43:53.:43:56.

surveys like this useful? Very useful . This has been the largest

:43:57.:44:05.

consultation. People are interested and prepared to share their views.

:44:06.:44:08.

It is a difficult time. We are asking councils to save money. It is

:44:09.:44:14.

right we should listen to the people who will benefit from the services

:44:15.:44:19.

and rely on them. The county council should listen. People are prepared

:44:20.:44:23.

to make some cuts but not necessarily to front line services.

:44:24.:44:27.

The choice people are being asked to make is impossible in the same way

:44:28.:44:31.

the choice councillors are being asked to make is impossible. These

:44:32.:44:35.

are government cuts that are being forced on us. What 0

:44:36.:44:36.

are government cuts that are being forced on us. What people don't see

:44:37.:44:39.

is the choice is the government is making and in lots of cases it is

:44:40.:44:43.

places like Nottingham which have got a very high level of deprivation

:44:44.:44:47.

who are having much larger cut than the better off parts of the country.

:44:48.:44:52.

That is not fair. The reason we're making these choices is because the

:44:53.:44:56.

last government carried on spending much more than it was earning four

:44:57.:45:00.

years. But you have been in power long enough now. This is systemic.

:45:01.:45:05.

The last government spent more than it earned for many years. You cannot

:45:06.:45:11.

do that at the county council level. This is about the choices you

:45:12.:45:19.

are making. That is why we are asking people what you think. 69% of

:45:20.:45:25.

people say they would rather pay more council tax than see services

:45:26.:45:30.

cut. They are trying to tell you something. It is very interesting.

:45:31.:45:34.

The Conservative group went into the last election and were elected again

:45:35.:45:39.

in May on the basis that they would put up council tax. We would much

:45:40.:45:42.

rather see people keep their own money and decide how to spend it.

:45:43.:45:46.

People are saying, we would be prepared to pay a bit more in order

:45:47.:45:50.

to save these particular services. They have also said... Grass

:45:51.:45:59.

cutting, obviously some people feel that as a service they could do

:46:00.:46:03.

without in order to protect things with mental health. But it will not

:46:04.:46:08.

save a lot of money. The other thing you have not covered is the way that

:46:09.:46:13.

people are saying, services could be run differently. We are going to see

:46:14.:46:18.

a lot more in Leicester City partnership working. We need to see

:46:19.:46:22.

health and social services system is working better together. Huge

:46:23.:46:25.

opportunities for doing things differently. That was picked up in

:46:26.:46:30.

the survey. We are all for things being run efficiently. Many councils

:46:31.:46:35.

have already pursued some of the `` lots of the opportunities for

:46:36.:46:41.

efficiency savings. Some councils are worried whether they can carry

:46:42.:46:47.

on with the statutory services, the things they are required by law to

:46:48.:46:52.

do. In my experience, people do one the grass cut but they are left with

:46:53.:46:56.

a choice of whether we look after older people or children in care or

:46:57.:47:03.

get our grass cut. Where do you think we are going to get the money

:47:04.:47:08.

from? Ed Balls wants to carry on borrowing. As we saw on Friday, we

:47:09.:47:11.

have growth returning to the economy which is a good thing and it means

:47:12.:47:16.

if we have more successful private sector businesses paying more taxes,

:47:17.:47:20.

there will be more money. We have had a lot of contraction. Where

:47:21.:47:21.

would you get the money 0 had a lot of contraction. Where

:47:22.:47:25.

would you get the money from? Where is the money going? The cuts are

:47:26.:47:29.

disproportionately falling on those places that can least afford to take

:47:30.:47:36.

the cuts. The question back to Nicky is not is the situation going to be

:47:37.:47:40.

difficult? Of course it is. It is the choice about where you put the

:47:41.:47:44.

money. Why are rich areas getting more money and be poor areas are

:47:45.:47:49.

getting hit? The point is that under the last government the shire

:47:50.:47:54.

counties lost out in terms of funding. This government is trying

:47:55.:47:58.

to rebalance that as well as protecting services.

:47:59.:48:08.

Just going back to that survey and the more eagle`eyed among you may

:48:09.:48:11.

have noticed a large vote for keeping services for older people,

:48:12.:48:14.

but a willingness to see services for young people cut. Not surprising

:48:15.:48:18.

perhaps when you hear that the over 55s accounted for 65% of respondents

:48:19.:48:21.

and people under 35 made up just 7.5%. So Des Coleman's been to

:48:22.:48:24.

Loughborough to find out what the young people of Leicestershire

:48:25.:48:26.

think. Council cuts. Cuts from services for the young or the

:48:27.:48:31.

elderly? Any opinions? Being epileptic, I need travel to school

:48:32.:48:35.

otherwise I cannot get him to school. I feel it is very unfair to

:48:36.:48:40.

cancel that sort of service. It is not fair because kids need a lot to

:48:41.:48:49.

learn so the future leaders... A lot of people like us, we are not

:48:50.:48:53.

earning but we have a lot of expenses now. Everything is being

:48:54.:48:57.

cut for us like University and stuff. Prices are going up. We are

:48:58.:49:05.

being affected by it all. I do not think they should cut children

:49:06.:49:09.

support services or free travel to school because the children have not

:49:10.:49:13.

done anything. They are going on about young families who cannot

:49:14.:49:16.

afford anything, why take stuff away from them? They need the support.

:49:17.:49:21.

Fair distribution between all of us. I think it is unfair how they are

:49:22.:49:25.

trying to cut hours when we are the future generation `` cut ours. They

:49:26.:49:38.

have not had to work to get their education.

:49:39.:49:41.

Quite a lot of the younger people there feeling hard done by,

:49:42.:49:43.

particularly when it comes to education. They feel they're being

:49:44.:49:51.

penalised. No decisions have been taken. This was a consultation. The

:49:52.:49:57.

youth Council and the youth panel have been involved in this. There

:49:58.:50:00.

were lots of other stakeholders as well. The Cabinet will make a

:50:01.:50:04.

decision. This is not the end. There will be an opportunity for young

:50:05.:50:09.

people if they feel they have not had a voice so far, they will have

:50:10.:50:12.

their voice. The county councils will be aware. If you talk to older

:50:13.:50:17.

residents in Loughborough, I am sure you would have got a different

:50:18.:50:21.

picture. Middle`aged people would young children, a different picture

:50:22.:50:26.

again. Everyone is very focused on what they know best. Use a prized?

:50:27.:50:34.

No, I was not. `` were you surprised? The economy growing is

:50:35.:50:39.

welcome but what you see in that film is that people are finding it

:50:40.:50:43.

difficult to get by. A real crisis in cost of living. Inevitably, they

:50:44.:50:47.

are feeling sore when people talk about taking with services that they

:50:48.:50:52.

rely on or asking them to pay more. Is it the fault of the young people

:50:53.:50:56.

for not getting more involved in politics? Are they to blame? There

:50:57.:51:02.

is a responsible itty on politicians to find ways to consult and engage

:51:03.:51:05.

with young people `` responsibility. We are going out and

:51:06.:51:11.

talking to communities and talking to people about what matters. You

:51:12.:51:16.

cannot expect people to come to you. Engaging young people is a big

:51:17.:51:21.

issue. This is their future. I think that two weeks ago I was at the

:51:22.:51:25.

youth Council in Loughborough and we had a good discussion there. It is

:51:26.:51:31.

up to politicians to engage. I think the county council will be very

:51:32.:51:35.

aware they need to have a cross`section. The other people you

:51:36.:51:38.

have not spoken about are the staff at the county council who also had

:51:39.:51:42.

input. Staying with the plight of young

:51:43.:51:45.

people, unemployment nationally is falling, but youth unemployment

:51:46.:51:48.

remains stubbornly high. It's a particular problem in the East

:51:49.:51:51.

Midlands where the number of NEETS, that's young people not in

:51:52.:51:53.

education, employment or training, is above the national average. Our

:51:54.:51:57.

political editor John Hess has been to see a pioneering scheme in

:51:58.:52:00.

Nottingham aiming to give young people hope. In this part of

:52:01.:52:07.

Nottingham, youth unemployment is a real problem. The number of people

:52:08.:52:11.

on jobseeker's allowance is double the national average. Even though

:52:12.:52:18.

statistics mask the reality. This is the reality for a group of NEETs.

:52:19.:52:28.

They volunteer to smarten up the pathways and gardens around

:52:29.:52:33.

Nottingham's estate. It keeps them off the streets. I have known a few

:52:34.:52:36.

of them since they will it also it has made it big difference for them.

:52:37.:52:43.

It is part of a community initiative with Nottingham City Council. This

:52:44.:52:46.

is about them building self worth in the community, giving them

:52:47.:52:49.

experience, working with professionals and it makes them want

:52:50.:52:54.

to go out and get work. Volunteering for this work has cost some of these

:52:55.:52:59.

lads their jobseeker's allowance because of tough new eligibility

:53:00.:53:03.

rules introduced a year ago on claiming the jobseeker's allowance.

:53:04.:53:07.

It is worth ?56 80 a week. When Jacob missed a Jobcentre interview

:53:08.:53:12.

because of a college appointment, he was sanctioned, lost his dole money

:53:13.:53:20.

and disappeared off the register. Does not fair. We are not even on

:53:21.:53:25.

the unemployed register. `` it is not fair. If you are not with the

:53:26.:53:32.

Jobcentre or if you have been sanctioned, you are not on the list.

:53:33.:53:38.

This man's jobseeker's allowance was withdrawn. How much do you rely on

:53:39.:53:44.

getting the jobseeker's allowance to keep going? I pay my mum some money

:53:45.:53:51.

and feed myself and travel to go and find a job. In the East Midlands,

:53:52.:54:01.

there are 96,000 NEETs. 18% of the region 16 to 24`year`olds are

:54:02.:54:07.

classified as NEET. The average for England is 15.5%. If finding work

:54:08.:54:11.

for young people on estates like this is tough, it is about to get

:54:12.:54:14.

tougher. Claiming jobseeker's allowance will mean more stick and

:54:15.:54:20.

carrots. We have brought renewed contract which gives us extra money

:54:21.:54:25.

to give more people below the age of 24 a real chance at apprenticeships.

:54:26.:54:31.

`` we have brought the youth contract. They cannot see the

:54:32.:54:36.

point. They do not think the Jobcentre does anything for them.

:54:37.:54:41.

That is the message going to Iain Duncan Smith next week and whether

:54:42.:54:44.

the sanctions policy is massaging the reality about rising youth

:54:45.:54:50.

unemployment. Taking that last point first. A lot of people feel they

:54:51.:54:54.

have dropped off the list. They do not appear in the official

:54:55.:54:58.

unemployment figures. Is that right? You only get sanctioned if

:54:59.:55:02.

you have turned down three reasonable job offers in a year.

:55:03.:55:10.

What opportunities had they been given? One wrist and a permit

:55:11.:55:16.

because of college. The whole point of jobseeker's allowance is that you

:55:17.:55:20.

are ready and willing to work. Many hard`working people in my

:55:21.:55:23.

constituency do not get a choice about whether they get up and go to

:55:24.:55:28.

work. They might not enjoy their job but they need the money. That is why

:55:29.:55:34.

you get jobseeker's allowance. Who is keeping track of the people who

:55:35.:55:39.

have dropped off the list? They are being scooped up. The government has

:55:40.:55:46.

given millions... Who does know? I do not think people fall off the

:55:47.:55:50.

list. The Department for Work and Pensions tells us they do not keep a

:55:51.:55:54.

record of how many people are sanctioned. No one does know how

:55:55.:55:57.

many people have fallen off the unemployment list. The figures for

:55:58.:56:00.

youth unemployment could be worse than we are told. At the general

:56:01.:56:12.

election, what I'm twice as many young people now. How do we know if

:56:13.:56:16.

no one is keeping track of this? We have set up this scheme to help

:56:17.:56:24.

people back into something so that not working and not being in

:56:25.:56:29.

education or training, it is not an option. We need them to make sure

:56:30.:56:32.

they have got proper of June to use, whether... They want to work? I

:56:33.:56:41.

think they do. People will say, they missed their appointment is, why

:56:42.:56:46.

should we feel sorry for them? Nicky's response was out of touch. I

:56:47.:56:50.

have met many people who tell me about their experience of trying to

:56:51.:56:55.

claim and being sanctioned for ridiculous things, very similar to

:56:56.:56:59.

the young man in the story. Someone had to go to college appointment

:57:00.:57:03.

which clashed with the Jobcentre appointment. They told them, I

:57:04.:57:06.

cannot go to the college appointment and they said, get an appointment

:57:07.:57:13.

card from the college and they did not accept it. A lot of people do

:57:14.:57:19.

not want to turn up. No doubt there are people who do not play the

:57:20.:57:22.

system properly but there are lots of people being sanctioned who are

:57:23.:57:26.

trying to do the right thing. That young man really wanted to get a

:57:27.:57:31.

job. We need proper action to get these young people into work. Do you

:57:32.:57:36.

have any sympathy for these young people? I have sympathy for the fact

:57:37.:57:40.

that they want to work. The real sympathy I have is that often they

:57:41.:57:43.

have been let down by the education system over many years. There was a

:57:44.:57:52.

scheme in Loughborough but a lot of the young people do not have basic

:57:53.:57:56.

skills like English and maths and employability skills. The counsellor

:57:57.:58:03.

in the clip talked about giving people skills. That is where the

:58:04.:58:08.

system has let them down. They need help. This week the government's own

:58:09.:58:13.

advisory body Social Mobility and Child Poverty Commission has said

:58:14.:58:16.

that your youth contract is not working. I think it has taken time

:58:17.:58:22.

and I think solving youth unemployment is not easy. Anyone who

:58:23.:58:26.

thinks it is easy... It is not just a question of finding a job, it is

:58:27.:58:30.

about building confidence, helping them to be good at interviews, basic

:58:31.:58:35.

things like turning up for work on time. Things that the rest of us

:58:36.:58:41.

take for granted but often people do not have those skills. Youth

:58:42.:58:45.

unemployment started rising under labour. It has gone up under this

:58:46.:58:50.

comment but they have not taken action. There are things that can be

:58:51.:58:57.

done `` under this government. The contracts are offered to big firms

:58:58.:59:02.

who put young people into a job for a short period of time and then they

:59:03.:59:06.

lose the job so the firms who are taking them on can do it over again

:59:07.:59:09.

and get the subsidy again. We should be looking at schemes like the one

:59:10.:59:14.

in the film and saying, what can we learn from that? The social mobility

:59:15.:59:19.

on child poverty commission suggested bringing in something like

:59:20.:59:24.

labour's work guarantee scheme. The point is about sustainable

:59:25.:59:29.

employment. The last government got people into work for a month or so

:59:30.:59:30.

and then they did not 0 people into work for a month or so

:59:31.:59:32.

and then they did not last in jobs. There is no point giving people an

:59:33.:59:37.

sustainable jobs. That is where the youth contract is having success.

:59:38.:59:44.

This is going on for a long time. No one is tracking whether they are

:59:45.:59:49.

permanent jobs. The clip was right about smaller schemes that are

:59:50.:59:52.

effective. They also have an important role to play in the

:59:53.:59:56.

system. We will have to leave it there.

:59:57.:00:00.

Time for a round`up of some of the other political stories in the East

:00:01.:00:03.

Midlands this week. Here's John with 60 Seconds.

:00:04.:00:07.

Conservatives and Liberal Democrats have celebrated a 10% drop in crime

:00:08.:00:13.

in the East Midlands. Labour's and the told a Westminster debate that

:00:14.:00:19.

cuts mean fewer people are arrested `` labour MP. The police cannot

:00:20.:00:23.

arrest because they have nowhere to put the drunks and the fighters on a

:00:24.:00:30.

Friday and Saturday night. A warning to motorists with new figures

:00:31.:00:33.

showing we have some of the most dangerous roads in the country.

:00:34.:00:36.

According to the road safety foundation, three of the top ten

:00:37.:00:40.

deadliest roads are in the Peak District. The A605 in

:00:41.:00:47.

Nottinghamshire is that number four. Going underground without leaving

:00:48.:00:54.

home, they scan of Nottingham's caves is under way. The project is

:00:55.:01:01.

funded by local authorities and the University of Nottingham. The

:01:02.:01:08.

remarkable images are online. Who would have thought all of that is

:01:09.:01:12.

underground in Nottingham? That's the Sunday Politics in the

:01:13.:01:15.

East Midlands. Thanks to Nicky Morgan and Lilian Greenwood for

:01:16.:01:16.

being our guests. free school area for into that

:01:17.:01:31.

Is Labour about to drop its support category. Thank you.

:01:32.:01:31.

Is Labour about to drop its support for High Speed 2, a rail line the

:01:32.:01:36.

party approved while in government? for High Speed 2, a rail line the

:01:37.:01:47.

these green shoots? These are all questions for The Week Ahead.

:01:48.:01:59.

So, HS2. Miss Flint wouldn't answer the question. She's in northern MP

:02:00.:02:03.

too. Ed Balls is comparing it to the Millennium Dome.

:02:04.:02:09.

too. Ed Balls is comparing it to the minute's silence for HS2? It will

:02:10.:02:13.

not be quite as crude as that. They will not stand up and say, we

:02:14.:02:18.

not be quite as crude as that. They senior Labour person said to me it

:02:19.:02:19.

would be a bit senior Labour person said to me it

:02:20.:02:21.

that Gordon Brown and Ed Balls set for the euro back in 97. They will

:02:22.:02:27.

be chucking lots of questions into the air, and the questions will

:02:28.:02:31.

create doubt, and will create the grounds for Labour to say, at some

:02:32.:02:38.

point, we think there is a much much better way of spending the money. It

:02:39.:02:43.

isn't ?42 billion, because that includes a contingency. Let's see

:02:44.:02:49.

what Peter Mandelson had to say about HS2. He was in the government

:02:50.:02:57.

when Labour supported it. Frankly, there was too much of the argument

:02:58.:03:01.

that if everyone else has got a high-speed train, we should have won

:03:02.:03:08.

too. Regardless of need, regardless of cost, and regardless of

:03:09.:03:13.

alternatives. As a party, to be frank, we didn't feel like being

:03:14.:03:19.

trumped by the zeal of the then opposition's support for the

:03:20.:03:25.

high-speed train. We wanted, if anything, to upstage them. So they

:03:26.:03:30.

didn't really need it, and we're only talking about ?50 billion. Why

:03:31.:03:37.

would you take a decision involving ?50 billion in a serious way? For

:03:38.:03:42.

David Cameron, if it becomes clear Labour is against it, he cannot

:03:43.:03:47.

proceed. He indicated last week that he wouldn't proceed if the certainty

:03:48.:03:52.

wasn't there. For Labour, HS2 is really a debate about the deficit by

:03:53.:03:56.

proxy. They think that if you don't go ahead with HS2, that releases

:03:57.:04:01.

tens of billions of pounds to spend on other things, such as public

:04:02.:04:05.

services, without going into boring. I don't think that works because

:04:06.:04:28.

there was a difference between cancelling something that already

:04:29.:04:30.

exists to pay for something else, and cancelling something that does

:04:31.:04:32.

not yet exist and will be paid for over decades to pay for something

:04:33.:04:35.

here and now. Can Labour do this? I know that the line will be, we are

:04:36.:04:38.

not going to build this railway because we are going to build

:04:39.:04:40.

200,000 houses a year. Can they do this without political cost? I think

:04:41.:04:43.

there will be political costs, but they will play this card of we have

:04:44.:04:47.

changed our mind. I think Cameron's line has been very clever, saying we

:04:48.:04:53.

cannot do it without labour. You can put it in two ways. Sorry, we cannot

:04:54.:04:58.

go ahead with it, but Labour has ruined your chance of prosperity, or

:04:59.:05:02.

they can tie themselves to it, and then Labour cannot attack it on

:05:03.:05:08.

great grounds when costs do spire. You can write Labour's script right

:05:09.:05:14.

now. They can say, if we were in charge, the financial management

:05:15.:05:22.

would be much better. This raises some really important questions for

:05:23.:05:27.

the government. They have utterly failed to make the case for HS2

:05:28.:05:33.

There is a real case to make. Between London and Birmingham it is

:05:34.:05:37.

about capacity not speed. North of Birmingham, it is about

:05:38.:05:42.

connectivity. It is a simple case to make, but it is only in the last

:05:43.:05:45.

month that they have been making that case. It shows really terrible

:05:46.:05:49.

complacency in the coalition that they haven't done that. We'll HS2

:05:50.:05:57.

happen or not? I think it will. For the reasons that Nick outlined,

:05:58.:06:01.

there is not of a constituency for it amongst Northern areas. -- there

:06:02.:06:10.

is enough of a constituency for it. There is private investment as well.

:06:11.:06:17.

It isn't like Heathrow. I say no, because I think Labour will drop

:06:18.:06:23.

their support for it. Caroline Flint said she was in favour of the

:06:24.:06:27.

concept of trains generally, but will it go further than that? It is

:06:28.:06:32.

difficult to see how it will go ahead if Labour will not support it

:06:33.:06:38.

after setting five tests that it clearly will not meet. Some will

:06:39.:06:45.

breathe a sigh of relief. Some will say, even in the 20th century, we

:06:46.:06:50.

cannot build a proper rail network. The economy was another big story of

:06:51.:06:56.

the week. We had those GDP figures. There is a video the Tories are

:06:57.:07:01.

releasing. The world premiere is going to be here. Where's the red

:07:02.:07:05.

carpet? It gives an indication of how the Tories will hand Mr Miliband

:07:06.:07:09.

and labour in the run-up to the election. Let's have a look at it.

:07:10.:07:43.

These graphics are even worse than the ones we use on our show! How on

:07:44.:07:49.

earth would you expect that to go viral? It did have a strange feel

:07:50.:07:58.

about it. It doesn't understand the Internet at all. Who is going to

:07:59.:08:02.

read those little screens between it? Put a dog in it! However,

:08:03.:08:14.

putting that aside, I have no idea that that is going to go viral. The

:08:15.:08:20.

Tories are now operating - and I say Tories rather than the coalition -

:08:21.:08:26.

on the assumption that the economy is improving and will continue to

:08:27.:08:30.

improve, and that that will become more obvious as 2014 goes on. We

:08:31.:08:36.

just saw their how they will fight the campaign. Yes, and at the

:08:37.:08:42.

crucial moment, you will reach the point where wages. To rise at a

:08:43.:08:47.

faster pace than inflation, and then people will start to, in the words

:08:48.:08:51.

of Harold Macmillan, feel that they have never had it so good. That is

:08:52.:08:56.

the key moment. If the economy is growing, there is a rule of thumb

:08:57.:09:05.

that the government should get a benefit. But it doesn't always work

:09:06.:09:08.

like that. The fundamental point here is that Ed Miliband has had a

:09:09.:09:11.

great month. He has totally set the agenda. He has set the agenda with

:09:12.:09:17.

something - freezing energy prices - that may not work. That video shows

:09:18.:09:21.

that the Conservatives want to get the debate back to the

:09:22.:09:25.

fundamentals. That this is a party that told us for three years that

:09:26.:09:32.

this coalition was telling us to -- was taking us to hell on a handcart.

:09:33.:09:37.

That doesn't seem to have happened. The energy price was a very clever

:09:38.:09:44.

thing, at the party conference season, which now seems years ago.

:09:45.:09:49.

They saw that the recovery was going to happen, so they changed the

:09:50.:09:55.

debate to living standards. Some economists are now privately

:09:56.:10:00.

expecting growth to be 3% next year, which was inconceivable for five

:10:01.:10:04.

months ago. If growth is 3% next year, living standards will start to

:10:05.:10:07.

rise again. Where does Labour go then? I would go further, and say

:10:08.:10:13.

that even though Ed Miliband has made a small political victory on

:10:14.:10:18.

living standards, it hasn't registered in the polls. Those polls

:10:19.:10:25.

have been contracted since April -- have been contracting since April.

:10:26.:10:28.

That macro economic story matters more than the issue of living

:10:29.:10:34.

standards. The interesting thing about the recovery is it confounds

:10:35.:10:37.

everybody. No one was predicting, not the Treasury, not the media not

:10:38.:10:43.

the IMF, not the academics, and the only people I can think of... I fit

:10:44.:10:51.

-- I thought they knew everything! The only people I know who did are

:10:52.:10:56.

one adviser who is very close to George Osborne, and the clever hedge

:10:57.:10:59.

fund is who were buying British equities back in January. Because

:11:00.:11:05.

the Treasury's record is so appalling, no one believe them, but

:11:06.:11:09.

they were saying around February, March this year, that by the end of

:11:10.:11:14.

the summer, the recovery would be gathering momentum. For once, they

:11:15.:11:22.

turned out to be right! They said that the economy would be going gang

:11:23.:11:26.

bust is! Where did the new Tory voters come from? I agree, if the

:11:27.:11:33.

economic recovery continues, the coalition will be stronger. But

:11:34.:11:42.

where will they get new voters from? For people who sign up to help to

:11:43.:11:47.

buy, they will be locked into nice mortgages at a low interest rate,

:11:48.:11:51.

and just as you go into a general election, if you are getting 3%

:11:52.:11:57.

growth and unemployment is down the Bank of England will have to review

:11:58.:11:59.

their interest rates. People who are getting nice interest rates now may

:12:00.:12:04.

find that it is not like that in a few months time. The point John

:12:05.:12:11.

Major was making implicitly was that Mrs Thatcher could speak to people

:12:12.:12:15.

on low incomes. John Major could not speak to them -- John Major could

:12:16.:12:20.

speak to them. But this coalition cannot speak to them. This idea

:12:21.:12:25.

about the reshuffle was that David Cameron wanted more Northern voices,

:12:26.:12:32.

more women, to make it look like it was not a party of seven men. When

:12:33.:12:38.

David Cameron became leader, John Major said, I do not speak very

:12:39.:12:42.

often, but when I do, I will help you, because I think you are good

:12:43.:12:47.

thing and I do not want to be like Margaret Thatcher. But that speech

:12:48.:12:51.

was clearly a lament for the party he believed that David Cameron was

:12:52.:12:56.

going to lead and create, but that isn't happening. And energy prices

:12:57.:13:02.

continue into this coming week. We have the companies going before a

:13:03.:13:06.

select committee. My information is they are sending along the secondary

:13:07.:13:11.

division, not the boss. How can they get along -- get away with that I

:13:12.:13:16.

got the letter through from British Gas this week explaining why my

:13:17.:13:21.

bills are going up, and at no point since this became a story have any

:13:22.:13:24.

of the big companies handled it well. I will have to leave it there.

:13:25.:13:30.

Make sure you pay your bill! That's it for today. The Daily Politics is

:13:31.:13:37.

back on BBC Two tomorrow. I will be back here on BBC One next Sunday.

:13:38.:13:43.

Remember, if it's Sunday, it is The Sunday Politics.

:13:44.:13:51.

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