19/11/2017 Sunday Politics London

Morning everyone, and welcome

to the Sunday Politics.

I'm Sarah Smith.

And this is your guide

to all the big stories that

are shaping politics this weekend,

and a few of the smaller ones too.

Philip Hammond is getting ready

to deliver his latest Budget

on Wednesday and he's not short

of advice - to spend more,

show restraint, even

to stop being an Eyore -

but can he change the direction

of the country and his government?

Conservative Party darling

Jacob Rees-Mogg has

some advice of his own.

He thinks the Chancellor

is being far too gloomy about Brexit

- he joins me live to explain why.

The former Leave campaign leader,

Gisela Stuart, will be here debating

with pro-EU campaigner

Alastair Campbell, after taking

a trip to her native Germany

to speak to businesses

about Brexit.

And, as we wait to find out what's

on the menu for this week's budget,

we're in a diner off

the A1 in Peterborough,

finding out who people most trust

with the economy -

Philip Hammond or John McDonnell?

In London - a tale of community,

housing and football.

Why full-time might

soon be called on

Dulwich Hamlet Football Club.

All that coming up in the programme.

And with me for for all of it,

three journalists who've promised

not to show off like Michael Gove

by using any long economicky words -

although I'm not sure they really

know that many anyway -

it's Tom Newton Dunn,

Gaby Hinsliff and Iain Martin.

Let's take a look at the big

political stories making the news

this Sunday morning,

and as you might expect there's

plenty of speculation

about what might or not might be

in Philip Hammond's Budget.

The Chancellor is promising a big

investment in new technology,

including driverless cars -

which could be on the road by 2021.

He's been interviewed

in the Sunday Times,

where he talks about plans to reach

the target of building

300,000 homes every year,

or the equivalent of a city

the size of Leeds.

That paper speculates that he's

attempting to turn from "fiscal

Phil" into "hopeful Hammond"

as he tries to set out

a vision for the country,

not just a list of numbers.

The Sunday Telegraph thinks that

Mr Hammond is planning to offer

a pay rise to nurses as part

of a bid to take on Labour.

But that hasn't impressed

Shadow Chancellor John McDonnell.

He's spoken to a number of papers

and is calling for an emergency

budget to invest in public services

and help struggling households.

So that's a taste of what you might

hear on Wednesday and Mr Hammond

and Mr McDonnell have both been

appearing this morning

on the Andrew Marr Show.

I think Britain has a very

bright future ahead of it,

and we have to embrace

the opportunities that

a post-Brexit world will offer.

They will be opportunities that

are based on huge change,

huge technological evolution.

It's not always going to be easy,

but the British people have shown

time and time again that we're up

for these challenges.

For many people out there,

this is a depression.

We've had people whose wages

have been cut by 10%.

Nurses, for example.

We've had people who are now...

1.25 million food parcels handed out

in the sixth richest

country in the world.

That's what I call a recession

for large numbers of people.

We will be talking about Labour and

their economic policies in a moment,

but let's start with what we might

expect from the budget. We will talk

to our panel of political observers.

Philip Hammond is under pressure to

set out a bold vision and reset the

government's programme. Can we

expect that?

No, we can't. We have

heard enough from the Chancellor

across various broadcast and his

article in the Sunday Times. I think

we will not be getting a bold

budget. His precise words short... A

short time ago were a balanced

budget. Some Tory hearts will think.

They desperately want something to

go out and shout about, something to

capture people's imagination, and do

big and bold things, like how on

earth are they going to build those

new 300,000 houses a year? There are

good reasons why he has chosen what

appears to be a pretty staid,

Conservative budget, and that is

that they are probably unable to get

anything bold through Parliament.

His capital is so low among Tory

MPs. If you have a minority

government, it is tricky.

We have

seen ministers on programmes like

this in the last few weeks putting

in the bids for what they would like

spending on, whether it be payment

for nurses or parliament. Would he

struggled to get something radical

through the Commons?

Big ideas cost

money. That's the problem. Bold

ideas are controversial. In some

ways, Tory MPs are asking their

Chancellor to do the impossible.

Government is already doing

something big and bold, which is

Brexit. That has implications for

how much money is available, how

many risks you want to take with

everything else. What is crucial is

that he demonstrates a reputation

for competence. The reputation that

the Conservative government has for

economic competence, that many

people prefer them to Labour on the

issue of economic competence. The

worst thing he could do is come up

with a big, bold idea that

unravelled quickly. What they

absolutely don't want is to come up

with an exciting idea that falls

apart three days after the budget.

He is under pressure from

Brexiteers, who are suspicious of

him. Does he have to offer them

something?

Part of his problem is he

has to offer so many different

people different things. This is

Philip Hammond trying to be and

dynamic.

It is hard to tell

sometimes.

At least in theoretical

terms. His longer-term difficulty is

that, if you look at the economic

cycle, we are getting to a point

where we are probably overdue, if

you put Brexit to one side, overdue

some kind of correction or downturn,

if you look what has happened to

asset prices globally. What will be

worrying for the Treasury is, just

as everyone is saying we should turn

on the taps and build this or that,

we might be at the top of a cycle,

and the Treasury will want to lose

something in the armoury in terms of

probably growing the deficit if

there are economic difficulties in

the next two years, and then there

is Brexit as well.

It sounds

impossible.

I think so. Talking to

his friends and colleagues over the

last few days, he had to make a

call, which was precisely how much

can I get away with, with my

political capital being as low as it

is, with the mixed problems he had

at the last budget, and a lot of the

party disliking his approach to

Brexit. He is damned if he is,

damned if he doesn't. Universal

Credit, we are expecting a reduction

in the time it takes to wait,

business rates, affected by high

inflation... I think we will see a

problem fixing budget which will

probably do quite a lot of important

spadework in many areas.

We will

pick up on some of this later in the

programme.

Let's speak now to the Conservative

MP Jacob Rees-Mogg, this week

he helpfully launched an alternative

"budget for Brexit" and advised

the Chancellor to be less gloomy

about the consequences

of leaving the EU.

Thank you for joining us. Your

alternative budget is pretty

radical. Almost half corporation

tax, Cap Stamp duty to help the

London market. It seems you are

advocating the opposite from what we

will hear from your Chancellor on

Wednesday.

There are two parts to

the proposals I suggested. One is

that we should show that after we

have left the European Union, the UK

is open to the rest of the world. It

is about opening up to the rest of

the world. Secondly, looking at the

modelling that has been done by the

Treasury and some other forecasters,

which has been so comprehensively

wrong. The forecasts made about what

would happen after Brexit have

turned out to be hopelessly false.

The team at Cardiff University have

done some modelling based on the

classical economic principles and

what happens if you move to free

trade that would be very positive

for the economy.

You are predicting

a Brexit dividend of £135 billion,

which sounds fantastic. Why are you

right, and everybody else, including

the Bank of England and the

Institute for Fiscal Studies, why

are they all wrong?

It depends on

the type of modelling. The modelling

that have been done by the Treasury

have been based on gravity models,

which work on the basis of the

nearness of the market and the size

of the economy you are trading with.

These have been wrong in the past.

They predicted that if we joined the

euro, trade would grow by 300%. That

was then revised down to 200%, but

it is fantasyland. The model I am

working on, by Sir Patrick Minford,

who has a record of getting these

things right. He was right about the

exchange rate mechanism, right about

the euro.

Being right in the past

doesn't mean you are right about the

future. Why do you think the

Treasury will not pick up the same

numbers, if this is so obvious to

you?

I think the Treasury was

humiliated by the errors in its

forecast prior to Brexit, and is

trying to defend its position. The

short-term economic consequences of

a vote to leave was one of the most

dishonest documents to come out of

the Treasury, purely a piece of

political propaganda. They are

wounded by that and sticking to the

same script, rather than looking at

other forecasts and other experts.

You think the governor of the Bank

of England is an enemy of Brexit,

and it sounds like you think the

Treasury is opposed to it. As the

Chancellor fallen under their spell

as well, and been persuaded to be an

enemy of Brexit?

I have admiration

the Chancellor, but George Osborne,

his predecessor, was the architect

of Project Fear. He was too close to

the Bank of England and lost his

independence. That is what needs to

change. It is an opportunity in the

budget for Philip Hammond to show he

is putting aside the Treasury's

mistakes in the past. It is very

encouraging what he is saying this

morning, about a more positive

approach to Brexit.

Lord Lawson has

accused Philip Hammond of being very

close to sabotage on Brexit. He says

we need a can-do man at the Treasury

and not a prophet of doom.

I think

that Philip Hammond is an

exceptionally intelligent man, a

very thoughtful man. It is not a bad

thing to have a Chancellor who is

serious minded and steady, rather

than one who is a showman and uses

the Exchequer to interfere in

absolutely everything.

I have a lot

of confidence in the Chancellor.

When you launched your budget for

Brexit, you said the government has

to deliver the £350 million for the

NHS that was delivered during the

referendum, even though you didn't

think that promise should have been

made. Is that something they now

need to deliver wrong?

It is. This

only happens once we have left.

Politicians have to recognise that

voters don't look at the small print

of electoral policies. If you put

£350 million on the side of a bus

and say it may be available for the

NHS, it is reasonable for people to

think that is a promise. Brexit was

won by the Leave campaign, so it it

is important that they deliver on

that promise. Politicians must keep

faith with voters and deliver on

implied promises, as well as ones

that are set out in detail.

The

Cabinet will move on to talk about

the Brexit bill this week, and we

understand they may need to come up

with more money to satisfy EU

demands. The more money spent on

that is less money available for

things like spending on the NHS. Are

you worried about the size of the

exit bill?

You have your finger on

the important point. The government

will have to choose whether to give

lots of money to the European Union,

or whether to spend money on UK

public services, and that will be

part of the negotiation. On all

these issues, it comes down to

choice is the government makes. I

would encourage the government to

choose our own domestic public

services rather than expensive

schemes in continent or Europe.

Why

are you advocating that the

government should spend up to £2.5

billion on a no deal scenario?

It is important that we are ready to

leave in the event of no deal. If we

left with no deal we would on

current figures still be saving the

remains of 18 billion so we would be

saving 15 and a half billion against

paying for the financial framework.

To show we're ready on day one would

be money well spent and most would

be needed any way. We need to have

new customs arrangements in place

even if it is not for a no deal

situation.

There are suggestions

that the Government might back down

on the idea of putting the time and

date of leaving the EU on the face

of the bill. Would you be Exxon

certained if that was -- concerned

if that was remove prd the bill?

It

is in Article 50, unless Article 50

is extended by the Council of Europe

we leave on 20th March 2019 and it

makes accepts that should be the

same in -- sense that should be in

same in domestic law. But that is a

secondary concern from my point of

view. It is important that we leave

on that date.

Stay there if you

would.

We're joined in the studio

by the former minister

Stephen Hammond.

He's no relation to the Chancellor,

but he is a member

of the Treasury Select Committee

and he's one of the Tory MPs named

as "Brexit mutineers"

by the Daily Telegraph

this week - lucky him.

I'm assured you're no relation to

the Chancellor. Let's just pick up

on what Jacob Rees Mogg was saying.

How important is it to you as a

rebel that the Government does put

the date on.

I agree with Jacob it

is in the Article 50 process, the

key reason it is important is the

negotiations look like they're going

to be tricky and longer than we

expected and it may well be that we

are still negotiating up until March

2019. We could have a short couple

of weeks period of extension. Why do

harm to the economy by falling out

on a precise time? If those

negotiations need to be extended.

They won't go on for more than a

couple of weeks, because there will

be elections in Europe in June 2019

and there is no chance of a new

commission or Parliament dealing

with this. Giving it flexibility and

with this flexibility the government

said it wants flexibility in

negotiations, why give all the

advantage to the other side? Part of

that was evidenced yesterday by

somebody suggesting they will ask

for the Margaret Thatcher rebate to

be suspended. That is as a result of

putting the date on the bill.

You

did not agree with the Brexit

committee and think it is important

that we set the date and time?

I

think it is perfectly reasonable to

set the date and time and I think

these negotiations fill the time

available. The United States and

Australia agreed a free trade deal

between April 2003 and February

2004. These things don't need to be

interm Knabl if both sides want to

agree. I think the British

electorate would be very concerned

if nearly three years after the vote

to leave, we still hadn't left. I

think most people expected that we

would have left by now. The

negotiations realistically to get

through the approval of the European

Parliament and so on need to be

completed by at the end of next

year, going up to the last minute I

don't think is real is tick.

To move

on to talk about a trade deal and

getting that done, the EU need to

agree to move on and we need to

settle the divorce, cabinet are

going to be talking about the amount

that needs to be spent on that,

Stephen what manned, are you happy

for the Government to offer more?

I

hope that the Government will stick

to the Florence speech in terms of

ensuring that we fulfil our

liabilities and obligations. I'm not

clear exactly whether that is 20

billion or 40 billion and I'm not

sure the government is. If part of

the divorce bill is then some

settlement for getting the trade

deal, we will need to examine that

carefully.

Jacob Rees Mogg, is this

that might spark another war in the

party if the cabinet suggest they're

prepared to pay more?

I think we

need to go back to what you said,

that the - the EU said they want us

to settle the money first. The

Government doesn't need to follow

that. They need our money. If we

don't pay any money for the final 21

months of the framework, the EU has

about 20 billion pounds gap in its

finances and it has no legal

requirement to borrow. So it

insolvents or the Germans and the

others pay more. So our position on

money is very strong and we

shouldn't fall into the trap of

thinking just because Mr Barnier

said it it is as if he has received

tablets of stone like Moses, he has

not.

There is a sense that the

Government feels a mo generous offer

would set a good tone, the kind of

approach that Jacob Rees Mogg

suggests would not make for smooth

relations.

It probably wouldn't. But

we have to be clear what we are

paying for and what we are getting.

No one is suggesting we should hand

over money without proper scrutiny.

It may be appropriate to put money

to facilitate international trade to

secure jobs. We have to be careful

about the analysis about what the

scale and size of Brexit dividend is

and the size of payments will be.

You mustn't confuse gross and net

and there is disagreement about some

of the numbers.

On that, Jacob Rees

Mogg in his budget for Brexit

suggests in five years time we would

have a 135 billion Brexit bonus. Do

you think it is real is tick.

He is

using some analysis that has some

flaws. It is predicting a price drop

in the United Kingdom of 10%. Tariff

drops will only be 3 or 4%. It is

predicting huge productivity gains,

the likes of which we have not seen

in 20 years. Thirdly, despite his

view on modellers there is evidence

that they weren't and if you go into

the detail of the analysis, some of

the data is 14 years out of date.

Jacob Rees Mogg, you're being

hopelessly optimistic?

I don't think

that right. I think the fall in

prices comes because you make the

economy more competitive and you

take away tariffs which reduces the

price of food by 20%. That is a big

reduction. Bear in mind that the

biggest tariffs hit food, clothing

and foot wear that, harm the poorest

in society the most. The gains from

productivity come from is in

additional tariffs. Leading to other

saving and further investment I

think the modelling done by the

professor is as good as modelling

can be. That doesn't mean it is

infallible. The failure of gravity

model is well known.

Michael Gove

was accused of auditioning for the

job of Chancellor by using long

words. Do you know any good long

economic words?

I don't think that

we want to get into this type of

business actually. I think all

Conservatives and Steven and I very

much agree on this, want to show as

united a front as we can manage.

There are differences on some

aspects of policy, but in terms of

individuals we want to stand

together and support the best

interests of the government.

Thank

you.

Brexit Secretary David Davis

was in Berlin this week trying

to win the support of business

leaders there for a comprehensive

free trade deal with the EU.

He warned them against putting

'politics above prosperity'

and reportedly got a bit

of a frosty reception.

Well, the former Labour MP

Gisela Stuart was one of the leaders

of the Vote Leave referendum

campaign.

We travelled with Gisela to Germany

to meet the business leaders

she says will help secure a good

trade deal for the UK.

Here's her film.

I was born and brought up

in this part of Germany,

and although I've lived in the UK

for the past 40 years,

and represented the constituency

of Birmingham and Edgbaston for 20

years, my family still live here,

and I've kept many links.

I was chair of Vote Leave,

and together with only a handful

of other Labour MPs,

we campaigned to leave

the European Union because we

thought the country would be

better off outside.

It's hard to remember now, but back

in the 1970s, when we joined

the European Economic Community,

people thought that by joining

the club we would see the kind

of economic miracle Germany

experienced in the '70s back home.

The "Deutsche Wirtschaftswunder"

would come to Britain.

But, of course, it didn't.

Within a few short years

of the devastation of World War II,

Germany had emerged as

the largest economy in Europe.

Germany's extraordinary

success is down to

the pragmatism of its business.

German Mittelstand is family

dominated, forward-thinking,

long-term thinking, reliability,

are very important values.

Changing moods on a political

landscape and changing frameworks

are toxic for our way of doing

business, and we want

that to go away.

German business is not given

to making big political statements

out of step with government policy,

but talk to those in decision-making

positions, and it is clear

that they want to secure a good deal

with the United Kingdom.

BMW employs almost 90,000

people here in Germany,

and exports just under

1 million cars annually.

The UK is a vital market.

What we are really seeking right now

is more clarity, more certainty,

because in our cycle of investment,

cycle of development,

it's about a seven-year or so period

that we look at,

but we are now, of course, starting

to think about what comes next,

and what we need to see now

is what is going to be

the trading relationship,

how are the logistics going to look,

what is going to be

the requirements for people

moving across the continent?

Because all of these things

are important to us today.

And, by the way, they will be just

as important tomorrow.

Berlin is well aware that

if the European Commission

is allowed to put up trade barriers

against Britain, it will be

German business, German consumers

and German employees

who will suffer.

TRANSLATION:

I think it's very

important that we complete

the first phase successfully.

The first phase of the negotiations,

which looks at the financial

consequences of Great Britain

leaving the EU.

And then it's not a question

of punishment payments.

It's about when you are part

of a multilayer, contractual

obligation and you want to leave

that, then of course it takes

a whole lot of obligations

which you have to deal with,

so both sides are satisfied and can

live with the consequences.

It isn't everyone's interests

for the UK to part on good terms.

Of course there was going to be

upset when the UK voted to leave,

but creating uncertainty over

the terms of UK's exit will simply

have a disruptive effect

on exports to UK markets.

Far better to have a sensible,

amicable negotiation that results

both sides being able to trade

together and work

together post-Brexit.

Markus Krall is managing

director of Goetzpartners,

and heads the Financial

Institution Industry Group.

Is it true to say that,

if we negotiate Brexit well,

then a good Brexit can actually

strengthen the United Kingdom,

the European Union and Germany?

It's absolutely true.

I think that this

is about two things.

One, about proving that

free trade is possible

between a European Union that is

smaller and a former member country.

If you don't prove that free

trade is possible there,

then the question becomes,

what is Europe standing for?

Number two is, I also

believe the free trade,

free market and democratic and less

bureaucratic approach that Britain

has chosen as the path

into the future is a role

model for Europe.

The time has come both

for the United Kingdom

and for the EU to be more clear

about what kind of

deal we can achieve.

Both sides need to be bold.

As long as we remain open to free

trade and sensible co-operation,

we can arrive at something that

will benefit both sides.

But one thing's obvious -

if we are an open and free trading

economy, we've got one big

cheerleader on our side,

and that is German business.

That was Gisela Stuart

setting out her case

and we'll be hearing

from the opposite side

of the argument in the coming weeks.

Gisela Stuart joins us in the studio

now, as does Alastair Campbell.

He used to work for Tony Blair

in Number 10, set up

the New European Newspaper

to campaign against Brexit,

and is so pro-European that at this

year's Labour conference

he was heard playing Ode

to Joy on the bagpipes.

Welcome both of you.

We will start with your point in the

film, that you think the German

business once the EU to offer the UK

a generous deal because it is in

their interests, yet the president

of the German equivalent of the CBI

said that defending the single

market must be the priority for the

EU, and another says that the

cohesion of the remaining member

states remains the highest priority.

The president of the CBI just after

the referendum said that it would be

in nobody 's interest to introduce

tariffs and trade barriers. On the

UK side, I don't think there's a

full understanding that economic

interests are incredibly important,

that they are trying to cover

economic interests on the cohesion

of the 27. I think different

economic interests will raise the

head of different countries. The

German auto industry is as important

as the financial sector is here. The

banking crisis is far from over, but

the big riffs which were going on is

that the E U is losing its second

biggest net contributor. Countries

like Germany want a deal with the UK

that is a free open market. There

are other tensions in the EU that

wants to become more protectionist,

and that is a bad thing.

Looking at

the film there with the Jacob

Rees-Mogg interview. No matter what

side of leave you are, it is

delusional and all driven by wishful

thinking. You could find a

businessman who says Brexit will be

good for Germany. The vast bulk of

British businesses think this is a

disaster, as do the vast bulk of

European businesses. One of the

delusions on which they ran their

campaign is the idea that they need

us more than we need them. That is

not true.

Be you self about £80

billion more in goods and services

into the UK than we do to them, and

Germany has one of the biggest

deficits. It is in their interest.

Of course it is, but it is a myth

that they need us more than we need

them. The damage that will be done

to us, even with a good deal. Let's

be frank, where these negotiations

are, Theresa May is either going to

end up with a bad deal and dumber or

no Deal. A bad deal is bad, and a no

deal is a catastrophe.

You are

setting up ideas that which were not

there to begin with and knocking

them down. Delusional.

35 billion,

the Brexit bonus.

If we had a

referendum, it was a democratic

decision. I know you don't like it

and that a lot of business would

have preferred to stay with the

status quo. We have had the

referendum. Undermining political

institutions is in no one's

interests. It is functioning

democracies which lead to economic

stability.

Theresa May fought an

election Inc on a hard Brexit that

was rejected.

As we heard from BMW,

there is uncertainty for business.

There will be elections, European

elections, in 2019. There will be a

change of the Commission and the

parliament. We have a narrow window

to implement the mandate for the

referendum which Parliament voted

for. So rather than you undermining

this country, why don't you work

together to get the best deal?

Because we totally disagree.

You

don't want a good deal?

I'm in

favour of a good deal, and I could

give them some advice as to how they

get a good deal. First, you have a

cabinet that has an agreed strategy.

18 months in, they don't have that.

I am not undermining a deal. I am

continuing to pose questions about

what they are trying to do and how

they are trying to do it. This is

democracy. Democracy is the ability

for Parliament, which is not doing

its job properly, and the public, to

keep scrutinising, and if they want

to change their mind, having the

right to do that.

You were trying to

encourage the Taoiseach yesterday to

play hardball with the UK.

I am on

the side of the UK, and I am worried

that if we go down the path that we

are being taken down, and Theresa

May and Boris Johnson and the rest

of them, this shambolic path, we are

going to do fundamental, lasting

damage to the country we love. I

don't care about the Civil Aviation

Authority. I care about Britain. --

I don't care about the European

Union. If every lorry going into the

UK today was stopped for just two

minutes, we would create an instant

17 mile traffic jam. These people

just don't care...

I am not these

people! Let us not conflate... You

either decide that you are

implementing a democratic decision

of a referendum that was called and

over 17 million voted.

You will not

stop me debating it. Just as Nigel

Farage...

Stop talking about Nigel

Farrell Raj. Vote Leave was not

Nigel Farage. There is no desire in

Germany to punish the United

Kingdom.

They are behaving

reasonably.

There is a battle of

protectionism and free market going

on. If we implement this properly,

give businesses the kind of

incentives they want, we can get a

good deal. So you want a bad deal?

You are driven by wishful thinking.

Gisela Stuart, you are saying that

business will intervene to prevent

things like tariffs being put in

place? They are leaving it a bit

late to put pressure on.

You will

find that business is laying out the

kind of things they need to get

those deals. I can find as much

fault with the speed of the

progress, but what I really do

resent is that you are actually

encouraging other countries to

undermine...

Know I am not! I spoke

out in support of the Irish

Taoiseach because I spent a lot of

time with Tony Blair and his team on

the Good Friday Agreement. The

people who are driving this hard

Brexit without thinking it through,

still no answer on how you do Brexit

in our island without a hard border.

I think the Irish Taoiseach is right

to call out the government on the

incompetence and the fact they have

not thought it through.

You accept

the result of the referendum and the

fact that we will be leaving the EU?

I accept the result of the

referendum, but I do not accept that

the country will definitely leave,

because the country is entitled to

change its mind. As the chaos and

costs mount, the public is entitled

to change its mind and will change

its mind.

There is no evidence at

the moment.

Come out with me!

Allow

me to finish the sentence. There is

a changing of mind happening, a

crystallisation. Unlike you, I have

fought five elections and I have won

five elections. I have probably

spoken to more people like you.

You

may do, I'm just saying, come out on

the road with me...

40% of the

population in the middle just want

us to get on with it. What that film

showed is that if you want to make

it a self-fulfilling prophecy that

it's a disaster, which I don't. I

want to implement a deal that is

good for British jobs. The rest of

the world is changing in terms of

technology. Currently, Germany

hasn't even got a government, and

nobody is laughing about that.

And

they are stable without a

government!

Let's leave it there.

It's coming up to 11.40,

you're watching the Sunday Politics.

Coming up on the programme,

we'll be looking at the latest

opinion polls and we'll bring

you the results of our moodbox

asking whether Phllip Hammond

or John McDonnell should be running

the economy.

First though, its time for

the Sunday Politics where you are.

Hello and welcome to the London part

of the show, I'm Norman Smith.

Joining me for the duration -

Siobhain McDonagh, Labour MP

for Mitcham and Morden

and Nickie Aiken, the Conservative

Leader of Westminster Council.

I want to start first with,

what else, but Brexit.

This week Lord Mandelson a leading

'Remainer' gave a speech

at the Centre for London on London's

role in the UK, and what Brexit

might mean for the capital.

BBC London's Political Editor Tim

Donovan caught up with him

there and began by asking the former

EU Commissioner why people like him

say London's global status is under

threat from Brexit.

The reason why we are a global city,

a global hub, is not simply

because this is a magnificent city,

with, you know, a wonderful history

and amenities and museums

and infrastructure and transport

and places to live.

It's not just because of that.

People come to London

so that they can, through London,

access the whole of the European

500-million-strong single market.

Once we remove ourselves from that,

we become less relevant to those

international businesses

and investors who will find other

places to locate within Europe

in that single market.

But isn't that exaggerated?

Such is the strength of London

and its financial sector,

our former EU partners

are going to be desperate

for a deal with us.

We're going to get the equivalence.

We're going to be able to continue

to export our services.

Interested in making

a deal with us, yes.

Desperate, no.

They have other places

to go, other fish to fry.

So what we've got to understand

is that it is we who have

unilaterally torn up this contract

between ourselves and

the European Union.

We are now going to them and saying,

look, we've decided

to cancel our membership,

leave your club, but would you mind

very much if we dipped in and out

as we wish and go round the back,

enter through the door,

and use your facilities

without paying a membership

subscription and without

accepting your rules?

They're not going to accept that.

Will you accept that your gloom

is focused on the short-term,

but actually there are a lot

of people out there who say,

long-term, the City of London,

this city, will be OK,

because it will be negotiate and it

will find new markets?

Can I just say two things to you?

The City of London, important

as it is, important as financial

services and financial markets are,

is not the whole of London.

It's very important to London

but it's not the whole of London.

There are many other

ways in which people

make their living in London,

a lot of which are in businesses

which are European-facing and depend

on open and free trade

with the rest of Europe.

Secondly, nobody is saying

that the City of London

is going to collapse.

Of course it isn't

going to collapse.

What is going to happen, though,

is it is going to become

smaller in its reach,

the amount of business that comes

here, and if we get the Brexit

final agreement wrong,

what we will see next year

is the trickle of people leaving

London will in subsequent years

become a flood.

Lord Mandelson warning of the

Brexiters flood. Let me put it to

you that this is Project Fear mark

to?

I do not recognise the picture

that Lord Mandelson is painting.

London is booming. I've never seen

so many tourists. We've got to stop

this fear all the time. We have got

to look at this. We are going to

leave the European Union and we have

to get on with it.

Anecdotally,

there seem to be loads of stories of

French schools where lots of

children are going back.

Anecdotally, there doesn't seem to

be movement by EU nationals back to

their home countries.

I've been

clear that we have to look after EU

nationals. The... Last week I

announced a package of services that

will help EU nationals understand

their rights and allow them to stay.

I see them as Westminster citizens

and not EU nationals, and I want

them to stay.

This week we saw the

ONS coming out with statistics

saying that overall the number of EU

nationals in the UK had reached an

all-time high, so maybe this talk of

a Brexit Exodus, it is all just a

myth.

In the last fortnight I have

had three different local businesses

telling me that they cannot recruit,

they cannot recruit trained joiners

or skilled staff who need good hand

to eye coordination, or cleaners to

clean hotels even when they are

full. You do not want to cause

unnecessary fear, that it would be

an irresponsible person who didn't

say that there could be huge

problems for London, and when London

is unsuccessful, the rest of the

country suffers.

But this may be a

short time thing, and London is a

major global city that, down the

line, will thrive what ever.

But in

the short term we have to live.

People who don't earn much need a

home. People need hospitals, social

services, transport. Life doesn't

stand still while London re-regulate

itself.

Let's move on.

Dulwich Hamlet Football Club is one

of the capital's best

loved smaller teams.

Semi-professional and non-League,

they often manage to get more

supporters through the gate

than professional sides.

But the future of the club is now

in doubt, after a row

between the local council

and the owners of the stadium

who want to redevelop the site.

Is this another example of London's

local, organic culture

being crushed by redevelopment?

Andrew Cryan has more.

A wet Tuesday night in Dulwich -

welcome to one of the best-supported

non-league teams in the world.

It is a hipster club isn't it, No 1.

But it's a hipster club that has

a visible left of centre agenda.

It is a very unusual

and interesting place

in the encroaching

modernisation of London.

This is a Tuesday night

fixture, we have got 1,200

people to a non-league ground.

The future of Dulwich

Hamlet might now

be in doubt, because of a row

between the people who own this site

and the local council.

The stadium, Champion

Hill, isn't owned by

Dulwich Hamlet Football Club,

but by Meadow Residential - an

American-backed property developer,

who want to build homes and a new

stadium on the land.

In meantime, they have

helped fund the running of

a club to the tune of £170,000

a year, but Meadow have clashed with

the local authority.

Southwark say they are not

happy with the plans

for a number of reasons,

including a

lack of affordable housing.

Meadow, well, they have

said that the whole

site is no longer financially viable

and have pulled all their

funding for Dulwich

Hamlet Football Club.

As a result, the club don't know how

they're going to pay the

players or perhaps even

continue as a club.

It's quite serious when you set your

budget, or your budget was

set for you, you have signed

players, they're under contract,

they have got to be paid

in accordance with that contract.

Put your money into the box

to help Dulwich pay wages.

If Meadow want to go out

of their way to make the club

die, that's on their head.

They came here with

a lot of promises what

they were going to do,

through for no fault of the club's,

but their own, they haven't

met those promises.

Criticism of the developer has come

from the very top of

London politics.

It is the glue if you like that

binds that community together

and I think the developer needs to

recognise what local residents want,

but what is is possible and it is

possible for the developer to deal

with the council that

means we have a thriving

non-league football club,

we have a genuinely affordable

homes, but also a development

that brings profits -

not unreasonably - to the developer.

Southwark Council have also

come in for criticism.

The plan was going to

work like this - in

the corner you can see

where the stadium currently is.

That was going to be flattened

and housing built on

their instead.

The AstroTurf here was going

to be transformed into a

state-of-the-art stadium.

The new home of Dulwich Hamlet.

But is in land is actually owned

by Southwark, who have leased it

to the club for years,

but just a couple of weeks ago

the council announced they

were taking the land back.

No land, means no new stadium.

The whole deal fell apart.

The problem here is a problem

that's common not just to

football, but to everybody

in London, or anybody

in cities all over

the

world, the issue here is simply,

like most problems in the world,

to do with land prices.

You have a football

club that is a notably

community football club sitting

on a piece of land which is worth

far more than what the football club

brings into it as a business.

But, for now, the future

of Dulwich Hamlet

is not in the hands

of club, but the council

and the property developer.

I'm joined by Peter John,

Leader of Southwark Council

and by Andrew McDaniel,

a partner at the developers

Meadow Residential.

Surely it hasn't been impossible to

reach an agreement' you want houses

built, you want to build houses, why

can't you agree. What is your bottom

line that stops you saying to the

developers, get on wit. What is the

problem?

I have been a councillor in

this area for 15 years now and

throughout that time green dale, the

bit of land, has been important and

under the control of football club

and has not been maintained by them.

We have been clear that green space

should come back for local people to

council and you build whatever you

want on your site, but you have to

present, preserve and protect the

club.

Andrew, what is your bottom

line, what you have to have to go

ahead with building the homes.

We

want to build enough hopes for

Londoners.

What is stopping you?

Finding a suitable development plan

with the council.

In the men time --

meantime isn't it fair to say you're

using the club to put a bit of

pressure and squeeze on council,

saying, look if you do not give the

football club gets it?

It is unfair.

The history is we came into the

development three and a half years

ago, the club was already in

financial distress and we have been

their benefactor, trying to find a

solution that saves the club and

provides housing for Londoners.

Unfortunately, we haven't been able

to find a proposal that we both

agree on.

It is extraordinary for a

developer to pick up the tab for a

football club, they are already

going out of their way to support

the community, why can't you cut

them a bit more slack?

The

difficulty, the cutting the slack

means invading open land that is the

valuable green space. I think the

problem here was that the developer

bought this piece of land ant

assumption they would be able to

build on open land, without checking

us with. When they came to see us

three and a half years ago, I said,

no, you cannot. We have been clear.

Where you are now, is lose, lose.

You can have homes, not as many

homes.

Who will build it.

If not

Meadow somebody else. We will build

council housing there. Happily.

Somebody wells can do that.

We own

the land and we won't be selling the

land. We came to deliver housing.

How are you going to get another

developer in, they own the land.

If

they want to sit on the land and not

develop it, and not deliver the

housing that, is up to them. I don't

think it does the communities or the

club favours.

Can I make a point,

because I didn't come to fight, our

proposal did not involve invading

open land, we were replacing a pitch

with a pitch. The word invading is a

tough word to swallow. Matters of

density are probably judged by

independent party, I agree with the

mayor, who has already written to us

supporting the levels of density we

need. I would point out that

Southwark's design review panel

agrees with our levels of density.

Is part of issue that Southwark has

been wrapped over the knuckles for

not building affordable housing and

now you want to show you're serious?

No, we get affordable housing out of

most developments and we require 35%

and that has not been present in the

proposals. The scheme wanted to go

on to open land and there were

unacceptable elements. And we want

to see the club...

You have

experience, you're the mediator,

step in, this happened with

Wimbledon?

Yes Wimbledon football

club in the 80s, Sam Hamman owned

Wimbledon on Plough Lane and evicted

the club and they ended up QPR and

went to Milton Keynes and we lost

supporters.

What was the effect on

the community?

It was devastating,

my dad is passed now, but he was a

season ticket holder and itself put

him off football, he thought those

involved were not about the game,

they were about money and

development and that simply

supporters were a front for all

that.

On that point, do you have any

sense of your corporate

responsibility in terms of local

community, here you have a thriving

very distinctive club, which you are

in effect going to pull the plug on?

Absolutely, that is why we held the

club together for three and a half

years. It is not my desire to see it

close. We do not own it. And we have

tried to do and will continue to do

as much as we can to keep it alive.

The problem is this, there is no

land in London.

Yes but I have

sympathy with Peter, we have to

protect our communities, there is

nothing worse in London than having

you know communities that don't live

side by side. That is what is

important about Westminster and we

have got to have mixed

neighbourhoods, rich and poor and

everything in between living

together. If it is down to one club,

we have to save the club.

I couldn't

agree any more.

I'm with Peter on

this one.

I too respect the

community, I'm a Londoner.

We may

not get agreement on the

development, can you offer any

assurances to the club that it will

be kept going one way or the other?

As a council we are behind the club

and want to see it prosper.

Could

you fund it.

We will to what is

necessary.

I have no problem with

funding the club, the only thing I

need is a viable business plan so I

can find the funds to provide that

support.

This some way to go I fear.

Thank you very much.

On Wednesday the Chancellor

Philip Hammond will be

announcing his budget -

which the Mayor of London

has called the "most

important for a generation".

Everything from housing

to social care, and policing

to children's services,

are competing for

the Treasury's money -

and all the while an uncertain

Brexit looms.

Here's Tanjil Rasheed on what

the Budget might mean for London.

The Chancellor is in a difficult

position when it comes

to this week's budget.

He favours caution and living

within our means, but pressure

is mounting on him to increase

spending on public services.

Those run by local authorities

are feeling the pinch especially.

London councils have announced

that they will have experienced

a 63% funding reduction by the end

of this decade.

That's hitting services

like adult social care hard.

Boroughs in the capital are spending

£300 million less on that

than they were in 2010,

even as the ageing

population swells.

They say, by 2020, local authorities

in the capital will have a funding

shortfall of £1.5 billion a year.

So is there a way of getting

council finances on

a more sustainable footing?

That's what many are hoping

will be announced on Wednesday.

Meanwhile, the Mayor of London

has safety on his mind.

We need to make sure the police get

the funding settlement

they need to keep us safe.

We are a city that's

a target to terrorists,

but also we've seen knife crime,

gun crime, acid attacks on the rise.

The government has got to reverse

previous announcements to cut monies

and invest in our police.

And then, of course,

there's housing.

We're calling on the Chancellor

to try and solve one of the biggest

problems facing London,

which is the housing crisis -

the fact that we need to build

lots more homes.

We think councils

could do a lot more.

They have borrowing

limits which are capped.

We believe those caps should be

raised, because London businesses

now, it's one of their biggest

problems - retaining

staff, recruiting staff -

and key to doing that is about

having the right houses,

the right homes for their staff.

So it would seem, then,

that the Chancellor has

London's fate in his hands.

So I mean we have had plenty of

hints from the Prime Minister about

housing being the big announcement.

But you get the sense we have been

here so many times, I have heard

successive Prime Ministers and

Chancellors talking about tackling

housing and we never really do it.

And it has been no tinkering around

the edges, we are in a crisis, we

have 124,000 children in temporary

accommodation, families taken away

and housed in other parts of

country. There is a cost and we

either build the houses or pay the

costs.

How quickly can you do that,

it take time, getting planning

permission, I is a slow process.

I

think it will take time to solve it,

could we get at it? Yes. If the

government required all the money

from the right to buy sales go into

building properties and councils and

the mayor and all public bodies, the

NHS were required to look at their

sites for housing, we could turn

this around and can I talk about

prefabs?

This is a particularly

London problem, because obviously

London is a dense city and prices

are through the roof, other parts of

UK have problems, but we have real

problems in London?

We have an acute

crisis in London and there are

things we can do, no tinkering, it

is a crisis and needs major

measures. One of the big things...

Does there need to be a special deal

for London?

That would be helpful,

but what the local authorities in

London need is the borrow cap lifted

on our housing revenue account. If

we could do that, we would have 96

million available, that is 200

homes. I could do it like that.

Is

the other option to get on the Green

Belt, there isn't the space, so bite

the bullet, we have got to build

somewhere and it is easier to build

there.

There is enough brownfield

sites vase scant and we have to look

at NHS properties and local

authority properties first. There

will be probably be some Green Belt

issue, but there is enough

brownfield sites to lack at first.

Everyone is angry at the baby

boomers, they are in big houses and

are going nowhere.

I think you're

right, they bought paid for houses

when times were tough. So that is

not necessary think solution. One

which to get people to think about

moving would be pi building more

places and building smaller units

that are homes for people who are

retired. We behind Europe or America

in looking at what older people

actually want. Because the only way

they're going to leave is if they

can get something that is more

attractive than they're living in.

We have more people in Westminster

moving in who are retired, they're

staying in big homes in the home

counties and moving.

Damian Green

talked about the rebirth of council

housing, really?

Westminster has to major

regeneration projects in India and

others Central London, which is

going to be affordable. We are going

to deliver about 1800 new homes in

the centre of Westminster ourselves,

and ensure that property developers

are going to deliver affordable

homes as well.

I would ban the word

affordable in housing, because it

does not mean affordable. Affordable

in government speak means 80% of

market value. If you need to spend

£2000 on rent in London, 80% of that

is not very affordable. We need to

build homes that people can go to

work and pay their rent, and it's

going to be difficult.

That also

means the ability for people to buy

their own homes, because that is the

great British way, and there has to

be new ways for young people, under

40, to buy a house in Central

London.

Thank you.

That's all we have time for.

My thanks to Siobhan and to Nickie

and with that it's back to Sarah.

Philip Hammond will deliver his

Budget on Wednesday -

he's moved it to the Autumn

if you remember - and he'll be

hoping it can help re-define

the Government in the eyes

of the public.

But when it comes to

the economy, do people trust

the Conservatives, or Labour?

Here's Ellie Price

with the moodbox.

MUSIC: The Road to Nowhere

by Talking Heads.

All eyes will be on the Chancellor

this week as we find out

what he has been cooking

up in his Budget.

So we have pulled off the A1

near Peterborough to ask people here

who they trust with the economy -

is it the Chancellor,

Philip Hammond, or is it

Labour's John McDonnell?

No 7.

Which one's Tory?

I voted Conservative

for the last two

elections, don't feel very confident

now, so I'm going to swap.

If I said to you which

of these characters

would you trust with the economy,

what would you say?

The one who's currently

running it, because they

seem to be bringing

the deficit down.

Labour.

Why?

Because I'm an NHS worker.

For me, it's just about

spending, public spending.

Labour always overspend.

John McDonnell, I think

capitalism as we know it is tanked

and I think we need

a radical re-think.

Broken his egg, who do you trust

more on the economy?

No one.

Why?

Because they never come up trumps

with anything that they

reckon they're going to do.

If I had to make you

choose one of them?

The man that's there, Hammond.

I wouldn't trust

Philip Hammond with a

bag of marbles or a plastic ball!

Hello, Bob.

Oh, hello.

Who do you trust

more on the economy?

Oh, the Conservatives.

Do you?

Why's that?

I just think they're better

for the small businessman.

We need a Maggie or

a Winston Churchill,

somebody in there with

balls to say, right,

that's the direction

we are

going in, that's what

we are going to do.

I've got balls!

What are you doing?

Putting balls in holes

by the look of it!

I suppose the lesser of the two

evils is anything but Tory,

but I say that without a great

deal of conviction.

Having grown up in the '70s

with all the rubbish on the

streets, the strikes, the unions.

Re-nationalisation and they're

going to spend a lot of money

and increase taxes and it will pull

the country down.

I've seen an awful loft of all-day

breakfasts today, but it

is clearing up time here

at the diner and time

to reveal the Moodbox.

Take it away, Tim.

As you can say it was

a close-run thing, but

like any fiscally responsible

Chancellor, I've done my maths and

counted and Philip Hammond got six

more votes than John McDonnell.

Oh, chip, thank you very much!

That was Ellie and the entirely

unscientific Moodbox,

at the Stibbington diner near

Peterborough.

But for a slightly more scientific

understanding of how the public view

the parties on this and other

issues, let's have a look

at some recent polling.

Here's where the Conservatives

and Labour stood on the economy back

when the Prime Minister called

the snap election in April,

when the Conservatives had a big

lead, as they did in many

other areas.

The most recent poll by the same

company reckoned Labour had narrowed

the gap significantly,

as they have in other areas,

although they're still 10 points

behind the Tories on this issue.

And there was another survey much

discussed at Westminster this week,

showing that while the gap

between Theresa May

and Jeremy Corbyn has narrowed

drastically since that pre-election

period, Mrs May is,

despite her many problems,

still pretty much level-pegging

in polling terms or

even slightly ahead.

And when it comes to how

people intend to vote

while the Tories are behind,

there's no sign of a

big Labour lead yet.

Tony Blair thinks that,

given the current "mess"

inside the Government,

Jeremy Corbyn's party should be

10 or 15 points ahead.

Well, many in Labour will find it

easy to dismiss both Tony Blair

and the opinion polls, as they both

called the last election entirely

wrong, so what if anything do

these polls tell us?

Let's turn to our expert panel.

Labour are now eight points on the

economy, according to a poll. Why is

there a gap between Labour and the

Tories?

There seems to be a

deep-seated reservation in the minds

of many voters. They look at Jeremy

Corbyn and John McDonnell and

imagine them in charge of the

country, the finances, national

security, and think... It is

unfashionable to point out in many

circles that Labour did not win the

last election, and it didn't win it

for that kind of reason. Jeremy

Corbyn is very good at attracting

and inspiring young people and

people who had not voted before. We

underestimated his capacity to do

that. But he wasn't great at turning

Tories to Labour, or sealing off

those final reservations. The

government have had a shambolic few

weeks. We are tripping over

resigning a cabinet ministers. They

weeks. We are tripping over

are fighting like ferrets. A lot of

people are having a really tough

time and looking at the government

to help them, and are unimpressed

with what they see. But there seems

to be a final fence that Corbyn does

not seem to be able to get over.

Isn't Tony Blair right, that Labour

should be 15 or 20 points ahead?

I

think he's completely wrong, and is

revealing he is out of date. I think

Labour are in a really good

position. If you look at what they

have achieved in the last year,

going into Christmas 2016, Corbyn

had just managed to avoid, had to

re-fight Labour leadership contest.

They were 20 points behind. Theresa

May was at the top of her game.

Through the general election and

beyond it, they have continued to

build their movement. They are very

effective on social media. I think

they are in a strong position, and

they need about 60 seats to win the

next general election. They will

probably start with 25 of those. The

fact that they are closing the gap

on the economy suggests that a lot

of voters are now giving them a

chance or a hearing, which they

certainly were not getting a year

ago. I think they have done very

well.

Can they be confident with a

slim lead against the government?

I

am slightly more with Tony Blair

than with Iain. This goes back to

that very general election result. A

huge turnout for Labour for Jeremy

Corbyn. If you asked that same 40%

of people today, do you want Jeremy

Corbyn to be Prime Minister? Where

you really voting for Jeremy Corbyn

to lead the British governmentanswer

is no, because Theresa May still,

despite the fact she is presiding

over a shambolic cabinet, she has

the most support for Prime Minister.

The last general election may have

just been a giant by-election,

because everyone was so short that

Theresa May would get in.

The

Chancellor Philip Hammond gave

Labour a bit of a gift, when he

said, there were not any unemployed

people in Britain. A slip of the

tongue. Was that damaging?

You have

to look at the context he was saying

it in, which will not be the context

of the Facebook meme you will get

shortly. He was asked about future

unemployment, and he was saying that

when technological advances came,

unemployment didn't materialise.

They would not be able to use that

against him so easily if it didn't

have something that people think

about the Conservative government,

which is that they are out of touch,

they have no idea about some people,

that they refuse to see what they

have done. People have that idea

about the Conservatives, so to drop

a bit of a clanger in that regard...

The budget is on Wednesday, and also

this week, the Brexit committee will

be meeting. What will they be

talking about and why does it

matter?

What Stephen Hammond said to

you a few moments ago was

fascinating. Tomorrow is going to be

the big meeting. It is the

negotiations committee. Nine or so

ministers have recently been

included in that, like Michael Gove.

They are going to be talking about

the money, precisely how much they

offer in two weeks' time to meet

this deadline in the December

council for phase two. Michael Gove

and Boris Johnson want to add in

conditions. They want to say, we

will give you this as long as we get

that. What was fascinating with

Stephen Hammond just now was that he

revealed that it wasn't just the

Brexiteers in Cabinet who want a

more precise definition of what we

are going for, it is the remainers

as well.

In the heart of the

government, David Davis is trying to

keep the bill as low as possible,

possibly around 30%. The divorce

Bill and future liabilities. Some in

the civil service have suggested

that it has to be 40 or above. What

it reveals to me is really, it's

another function of Britain not

really having a proper Prime

Minister. In normal circumstances,

of course the Cabinet is divided. A

strong leader would say, right, this

is what is happening. This is where

we are going. We will call it 35 or

40 billion. We will save to the

European Union, there is the check,

but it will not have a signature on

it until we are satisfied with the

next

stage. The government is hampered by

the lack of a strong personality who