0:01:21 > 0:01:24Here in the North-East and Cumbria: The Government has called for a
0:01:24 > 0:01:34freeze on council tax, so why will some people be facing bigger bills
0:01:34 > 0:01:34
0:01:34 > 0:29:45Apology for the loss of subtitles for 1690 seconds
0:29:45 > 0:29:51A warm welcome to Sunday Politics and the North-East and Cumbria. You
0:29:51 > 0:29:55look vaguely familiar. Coming up a little later: will you be paying
0:29:55 > 0:29:57more council tax this year? Ministers say bills should be
0:29:58 > 0:30:01frozen, but not all our local authorities are prepared to toe the
0:30:01 > 0:30:05line. We will try to find out why later. With me here in the studio
0:30:05 > 0:30:07to chew over that and the rest of the week's events are my guests,
0:30:07 > 0:30:11the Newcastle MP Nick Brown, and Stockton's James Wharton. Welcome
0:30:11 > 0:30:14to you both. I hope you like the stylish new surroundings.
0:30:14 > 0:30:17Now, we start with a question - should council workers, nurses and
0:30:17 > 0:30:21teachers be paid more or less depending on where they live? The
0:30:21 > 0:30:24Government has set up a review to look at just that issue. But trade
0:30:24 > 0:30:27unions and many Labour MPs have promised to fight any move to end
0:30:27 > 0:30:30national pay bargaining. They say the result would inevitably lead to
0:30:30 > 0:30:34cuts in public sector wages here in the North-East and Cumbria, where
0:30:34 > 0:30:37the cost of living is lower. I will be getting reaction from the TUC in
0:30:37 > 0:30:43a moment. First though, let's hear from the North East Chamber of
0:30:43 > 0:30:48Commerce which can see potential benefits in the idea.
0:30:48 > 0:30:51I know of one business that was paying somebody not a great wage -
0:30:51 > 0:30:55in the late 20s, for doing a very similar job, but actually they
0:30:55 > 0:30:59found the public sector were paying in the high twenties. At that level,
0:30:59 > 0:31:02that is a significant differential, and it is such a major cost. We
0:31:03 > 0:31:06look at all of our costs. It is different when you're competing for
0:31:06 > 0:31:11your products on the global stage, and competing for your wages on a
0:31:11 > 0:31:14regional stage. In some cases, we are competing directly with the
0:31:14 > 0:31:18public sector, and it is proving really difficult to attract quality
0:31:18 > 0:31:22staff. We know that cost of living in the north-east is 9% lower than
0:31:22 > 0:31:26it is across the average of the UK. That means it is probably 15% or
0:31:26 > 0:31:30more lower than it is living in central London. There has always
0:31:30 > 0:31:34been a waiting for central London, but not necessarily for across the
0:31:34 > 0:31:39rest of the UK. The private sector has acknowledge that because that
0:31:39 > 0:31:43is why it often takes advantage of the ability of a real -- really
0:31:43 > 0:31:47skilled work force, that they can get at a rate that allows them to
0:31:47 > 0:31:49compete globally. It will certainly be worth the Government looking at
0:31:49 > 0:31:52the value of dinner to cross the public sector as well.
0:31:52 > 0:31:55The North-East Chamber of Commerce there. Well, I suspect the unions
0:31:55 > 0:32:02don't share that view. With me is Neil Foster, policy and campaigns
0:32:02 > 0:32:06officer at the Northern TUC. It is pretty well if -- established
0:32:06 > 0:32:09that the cost of living is lower here, so wouldn't it be fairer to
0:32:09 > 0:32:13pay public sector workers in the South more than up here? We believe
0:32:13 > 0:32:17that we need to look for like-for- like comparisons, and it is not to
0:32:17 > 0:32:21make a comparison between public and private sector jobs, but to
0:32:21 > 0:32:24look at real jobs that are doing the same jobs with the same skills
0:32:24 > 0:32:28and experience. We think it is not fair that in one area they should
0:32:28 > 0:32:32be paid more than here in the north-east. We do think that it
0:32:32 > 0:32:35would have a negative effect on our region. It would be the motivating
0:32:35 > 0:32:43for many public sector workers to see colics miles away down the road
0:32:43 > 0:32:46being paid more. -- colleagues. Could you not what is your benefit?
0:32:46 > 0:32:50If you paid public sector workers less, then when the cuts come in
0:32:50 > 0:32:54you don't have to make as many redundant. Unfortunately it would
0:32:54 > 0:32:59work like that. But that's what happens in the pub -- private
0:32:59 > 0:33:04sector, isn't it? The private sector often has a national pay
0:33:04 > 0:33:07bargaining as well where it has got large sites across the country -
0:33:07 > 0:33:14they do it because they know that to have local pay bargaining is
0:33:14 > 0:33:18costly and complex. So, we believe that maintaining national pay
0:33:18 > 0:33:21bargaining is fair, but it was also a good for our region because it
0:33:21 > 0:33:25means we have more money to flush around which also benefits the
0:33:25 > 0:33:30private sector. If you take �500 million away from the region's pay
0:33:30 > 0:33:34packets, that would be devastating for north-eastern retailers. We had
0:33:34 > 0:33:37an argument that private sectors can't recruit and that is holding
0:33:38 > 0:33:40back their expansion. There has never been more unemployment in the
0:33:40 > 0:33:45north-east than in the last decade, so it means that private sector can
0:33:45 > 0:33:52recruit from more people than ever before. Using 2000 public sector
0:33:52 > 0:33:59workers as a result of cuts every month. -- we are losing. Somehow,
0:33:59 > 0:34:04social workers and paramedics who are paid �2,000 less is not an
0:34:04 > 0:34:10argument that holds. Backley. Let's put it to our MPs. James Wharton,
0:34:10 > 0:34:12is this a good idea? Can you explain why it is? The key point is
0:34:12 > 0:34:15that there are arguments on both sides, which is why what the
0:34:15 > 0:34:20Government is doing is reviewing this. They have said they want to
0:34:20 > 0:34:23have an independent review to get the idea about the impact of the
0:34:23 > 0:34:26positives and negatives before going forward. We need to ensure
0:34:26 > 0:34:32that if there are positive that we find weights do realise those and
0:34:32 > 0:34:34enjoy the benefits, but negatives are taken into account. What is
0:34:35 > 0:34:39your gut instinct at the moment? The government is saying this is
0:34:39 > 0:34:42not about saving money but about boosting the economy. As Neil
0:34:42 > 0:34:45Foster says, you are cutting incomes. The argument is it that if
0:34:45 > 0:34:49you are a young people in a region where public sector pay is
0:34:49 > 0:34:51significantly higher than private sector pay, when you're looking for
0:34:51 > 0:34:56employment, you would be more likely to look at public sector
0:34:56 > 0:34:58jobs, which makes sense, but can damage the private sector because
0:34:58 > 0:35:01you are in sent advising people not to work in the private sector but
0:35:01 > 0:35:04in the public sector. At the same time, that also means there is a
0:35:04 > 0:35:08lot of money being spent in the economy which might not otherwise
0:35:08 > 0:35:11be there. The Government is looking into it, and that is the
0:35:11 > 0:35:19appropriate thing to do. We do want to rush into a decision that could
0:35:19 > 0:35:25have a major impact on people's lives. Nick Brown, labour induced
0:35:25 > 0:35:31this idea when they were in offers. This is destructive nonsense. It is
0:35:31 > 0:35:37not a good idea for our region. The key argument that is advanced for
0:35:37 > 0:35:41it is that public sector wage rates somehow stop people working in the
0:35:41 > 0:35:47private sector. Let me say this directly to James Ramsbottom - if
0:35:47 > 0:35:51he gives me the anonymous example he was quitting, I will arrange for
0:35:51 > 0:35:56the Department of work and pensions do send a large number of
0:35:56 > 0:36:00applicants for that job. Our problem is not having jobs that
0:36:00 > 0:36:06employers cannot fail, the problem in our region is steadily rising
0:36:06 > 0:36:09unemployment. But there is a., isn't there? If you lower wage
0:36:09 > 0:36:15rates generally, then there is a possibility that more private
0:36:16 > 0:36:19sector employers - a might even make sense to move jobs out of
0:36:19 > 0:36:23London to the north-east. We are trying to drive up standards of
0:36:23 > 0:36:26living in our region. We want to be more prosperous and have the
0:36:26 > 0:36:32standard of living that people in London and the south-east enjoy.
0:36:32 > 0:36:37Cutting people's wages will not achieve that. Do we? I think we do.
0:36:37 > 0:36:41Actually, they have a lot higher living costs. When people move up
0:36:41 > 0:36:44here for a better standard of living... It is true that if you
0:36:44 > 0:36:47are on a decent salary you can have a better standard of living here in
0:36:47 > 0:36:51the north-east of England. It is a great place to live, but cutting
0:36:51 > 0:36:54wages will not make it better. It seems completely unfair that people
0:36:54 > 0:36:59should be paid a different rate for doing the same job just because
0:36:59 > 0:37:02they live in different parts of the country. It is important to said
0:37:02 > 0:37:08that nobody is talking about cutting people's wages. That is
0:37:08 > 0:37:12quite emotive and dangers will stop we are having a review into it. In
0:37:13 > 0:37:16certain areas, this was introduced by the previous government. This
0:37:16 > 0:37:19government has said that we should look at the impact this has had or
0:37:19 > 0:37:24could have, have a thorough investigation into what that could
0:37:24 > 0:37:30mean, before we take it any further. But the suspicion of public sector
0:37:30 > 0:37:35workers is that this is about cutting pay, isn't it? This is the
0:37:35 > 0:37:38next big thing. It is important to tackle but because that is not what
0:37:38 > 0:37:42has been announced. What has been announced is a review into a
0:37:42 > 0:37:45process that was started under the last Labour government. This
0:37:45 > 0:37:49government have said wait a minute, let's have a look and understand
0:37:49 > 0:37:54what this means, what the impact is. As we have had already, there are
0:37:54 > 0:37:57strong arguments on both sides. now, thank you.
0:37:57 > 0:38:00Now, the Government wants to see council tax frozen, and it is
0:38:00 > 0:38:02offering a cash reward to local authorities which agree to do just
0:38:02 > 0:38:05that. Yet, a survey by Sunday Politics suggests several councils
0:38:05 > 0:38:09in the North are preparing to ignore that request and put bills
0:38:09 > 0:38:15up. If they don't, they say they would just have to fill a funding
0:38:15 > 0:38:19black hole in the future. Here's our Cumbria reporter Emily Unia.
0:38:19 > 0:38:22And balancing the household budgets. This working mother of three is
0:38:22 > 0:38:28tackling the January bills, and the possibility that council tax might
0:38:28 > 0:38:32not go up this April is a welcome prospect. I think it is fantastic.
0:38:32 > 0:38:36Our bills are all going up. The gas, electricity - everything is going
0:38:36 > 0:38:40up, and not just in small amounts, it is going up in large amounts.
0:38:40 > 0:38:44Salaries are not necessarily keeping pace with that. We have got
0:38:44 > 0:38:48a larger outgoings, income not necessarily matching our outgoings.
0:38:48 > 0:38:52If the council tax, which is one huge bill each month, can be frozen,
0:38:52 > 0:38:58then that is great. And this is where some of her council tax is
0:38:58 > 0:39:01spent. The spark is run by Carlisle City Council. The decision to
0:39:01 > 0:39:04freeze council tax again this year means they qualify for a government
0:39:04 > 0:39:09grant. We feel it is important in the economic climate that at
0:39:09 > 0:39:11residents are facing that we don't burden them unnecessarily with
0:39:12 > 0:39:15council tax. Carlisle City Council will be freezing the council tax
0:39:15 > 0:39:18for our residents and we are pleased that we can work with the
0:39:18 > 0:39:21governed in doing that. We would have been looking to do that anyway.
0:39:21 > 0:39:25So, how many of our local authorities will follow this
0:39:25 > 0:39:29example? Sunday Politics had discovered that, although none have
0:39:29 > 0:39:36yet voted on a final budget, 10 said they are planning to freeze
0:39:36 > 0:39:41council tax. 10 are not decided, but for will definitely go up. That
0:39:41 > 0:39:45is Middlesbrough, Darlington, Stockton and Redcar and Cleveland.
0:39:45 > 0:39:49The problem facing councils it's the cash reward beget for freezing
0:39:49 > 0:39:56the tax only lasts one year, which means that next year, they either
0:39:56 > 0:39:59have to raise council tax by even more, or make deeper cuts. If it
0:39:59 > 0:40:03were to take it we would have to produce more jobs, cut frontline
0:40:03 > 0:40:07services, and fingers crossed we have still got our 13 libraries
0:40:07 > 0:40:15open. If we were to take this, this one of Grant, then we would be
0:40:15 > 0:40:18looking at reducing our services, closing libraries. It would be
0:40:18 > 0:40:22those will to facilities that get close. No council is proposing a
0:40:22 > 0:40:26rise of more than 3.5%. Any increase above that figure would
0:40:26 > 0:40:31trigger a local referendum on the issue. But why not give councils
0:40:31 > 0:40:35the freedom to choose what they think is best for local services?
0:40:35 > 0:40:38We believe in localism - a combination of local
0:40:38 > 0:40:41representatives, elections and the involvement of local people in
0:40:41 > 0:40:44those decisions. Where councils want to make substantial increases
0:40:44 > 0:40:49in council tax it is vital that they get the endorsement of local
0:40:49 > 0:40:53people. How they do that is through a local referendum. For Nicola, a
0:40:53 > 0:40:57council tax freeze would ease the pressure on household finances. But,
0:40:57 > 0:41:00for those lung -- running local government, it is more of a gamble
0:41:00 > 0:41:04with no guarantee that government grants will continue into future
0:41:04 > 0:41:14years, those that don't increase the tax now, could be left with a
0:41:14 > 0:41:14
0:41:14 > 0:41:18gap in funding in future. Nick Brown, let's congratulate Eric
0:41:18 > 0:41:21Pickles on helping councils like Newcastle, for instance, which will
0:41:21 > 0:41:25raise the council tax. Yes, and that is a brave decision for them
0:41:25 > 0:41:31to make. I support them in the decision they have made. But Eric
0:41:31 > 0:41:36Pickles is not helping as much as you seem to imply. Your programme
0:41:36 > 0:41:39drew this out rather well. There was a 2.5% support payment for the
0:41:39 > 0:41:43coming financial year, just as there was for this year. And then
0:41:43 > 0:41:48it comes to an end, so the council will either have to make further
0:41:48 > 0:41:51expenditure reductions or cover up the money that they have lost by
0:41:51 > 0:41:57putting the council tax up just to stand still. Then presumably, there
0:41:57 > 0:42:01would be need for a further increase to cover increased costs.
0:42:01 > 0:42:06So they are in a difficult position indeed. I don't envy the
0:42:06 > 0:42:10councillors with their problems. I think in Newcastle they have done
0:42:10 > 0:42:15the right thing. The citizens we represent are under incredible
0:42:15 > 0:42:21pressure and just cannot afford to have any of their bills put up.
0:42:21 > 0:42:24it sounds as if they will lose services eventually. They are
0:42:24 > 0:42:27losing services now. That is the effect of what the Government is
0:42:27 > 0:42:31doing. Can you have any sympathy with that point of view of councils
0:42:31 > 0:42:35who feel they have to look a little longer term than this one you offer.
0:42:35 > 0:42:39Very little because the whole point of the policy was that we wanted to
0:42:39 > 0:42:42freeze council tax for two years. Last year it was done with a long-
0:42:42 > 0:42:45running grant, and this year it is proposed to be done with a grant
0:42:45 > 0:42:50that comes in next year and pays for that council tax freeze that
0:42:50 > 0:42:53year. In a Teesside alone that is worth �5 million. If councils
0:42:53 > 0:42:58refuse this they are turning down that government grant, and they are
0:42:58 > 0:43:02then taking that money out of people's pockets. It is avoidable.
0:43:02 > 0:43:05What you make of the argument by one council who says this is not a
0:43:05 > 0:43:10great deal because we get the money this year, but next to be have got
0:43:10 > 0:43:14to find something to cut or put council tax up. It is a shop-soiled
0:43:14 > 0:43:19offer - it is not as good as the of the last year. I don't think it is
0:43:19 > 0:43:22a bad off at all. The offer would allow a council to Friis council
0:43:22 > 0:43:26tax this year without being any worse off. They may have to put it
0:43:26 > 0:43:31up the year after but it would be going up anyway. The point is, if
0:43:31 > 0:43:34this was introduced... They are introducing a Finance Act which
0:43:34 > 0:43:40limits the amount that councils can put up council tax up without
0:43:40 > 0:43:46holding a referendum. If you want to put council tax up, let people
0:43:46 > 0:43:52make a choice. Which council would be mad enough to put up by more
0:43:52 > 0:43:56than three and a half %? I would love to have a referendum, but I
0:43:56 > 0:43:59would not be put in council tax up at all. I would be taking the Friis
0:43:59 > 0:44:03and helping people in the area that I represented to get through a
0:44:03 > 0:44:06difficult economic times. The economy is tough. This is a measure
0:44:06 > 0:44:10that will help people to meet their household bills at the time that
0:44:10 > 0:44:16they most needed. But the issue here is that by withdrawing the
0:44:16 > 0:44:20grant at the end of the financial year, the council - any local
0:44:20 > 0:44:24authority will have to put council tax up by about 3% just to
0:44:24 > 0:44:27standstill. If they go beyond 3.5% they will have to hold a referendum
0:44:27 > 0:44:31under the terms of the new bill that has just been introduced in
0:44:31 > 0:44:35the Commons in order to get support for that. That is a terrible
0:44:35 > 0:44:39position to be in. It isn't, for one year we will pay the council
0:44:39 > 0:44:42tax increase for you - central government will pay it so that
0:44:42 > 0:44:45local people don't have to. And next year that increase comes in,
0:44:45 > 0:44:49but then everyone is better off because for one year they had a
0:44:49 > 0:44:58Friis. If it is a high increase, have a referendum. What a people
0:44:58 > 0:45:01scared of, give them the choice? There is not a lot of fat to cut
0:45:02 > 0:45:05out of council budgets, given all the pressures they have been under.
0:45:05 > 0:45:08You are now effectively saying to local authorities that there are
0:45:08 > 0:45:17some things they are going to have to stop doing. The victims of this
0:45:17 > 0:45:23are going to be people that are being looked after - the elderly,
0:45:24 > 0:45:27the people in care, and the vulnerable people. More from my
0:45:27 > 0:45:29guests in a minute. First, Mark Denten has our regular round-up of
0:45:29 > 0:45:39the political week here in the North-East and Cumbria, and he
0:45:39 > 0:45:40
0:45:40 > 0:45:43doesn't believe in hanging around. He has done it in 60 seconds!
0:45:43 > 0:45:48Seven Labour MPs have met to discuss their campaign to save
0:45:48 > 0:45:52Durham Tees Valley airport. It has been put up for sale and MPs are
0:45:52 > 0:45:56determined to keep it open. In Cumbria, the county council has
0:45:56 > 0:46:00revealed plans to shut six and recycling centres, including this
0:46:00 > 0:46:05one, and replace them with a mobile service. It says the plans could
0:46:05 > 0:46:08save �2 million. Plenty of entertainment but few ball skills -
0:46:08 > 0:46:12Richard Branson arrived in Newcastle to launch his new banking
0:46:12 > 0:46:17empire following the Government's sale of Northern Rock to Virgin
0:46:17 > 0:46:21Money. I thought I would come in and see if you were managing all
0:46:21 > 0:46:25right. A more low-key welcome for the Bishop of Durham who took his
0:46:25 > 0:46:31seat in House of Lords for the first time on Thursday. And finally,
0:46:31 > 0:46:35Frank Cook - the MP for Stockton North - has died. Expert on defence
0:46:35 > 0:46:45issues, he also had one of the more colourful backgrounds in Parliament
0:46:45 > 0:46:46
0:46:46 > 0:46:52when he worked as a Butlins Redcoat. Best will to our MPs again. James
0:46:52 > 0:46:55Wharton, you and other Teesside MPs met to discuss the future of the
0:46:56 > 0:46:59airport. Is there any hope? company that owns it believes that
0:46:59 > 0:47:03a buyer can be found. It has got a strong offer and we will have to
0:47:03 > 0:47:07wait to see what happens. So far, the right messages are coming out
0:47:07 > 0:47:13and everyone is working together to deliver a future for this important
0:47:13 > 0:47:17infrastructure. One colleague said making a case for government
0:47:17 > 0:47:21assistance this week. Is that realistic? It is early days. It has
0:47:21 > 0:47:24just been put up for sale, we are waiting to see if there buyer comes
0:47:24 > 0:47:27forward. If there are no buyers by the end of January we will look at
0:47:27 > 0:47:30how the new round of bidding will be taken forward. I don't know what
0:47:30 > 0:47:34sort of government assistance that would be looking for, and I suspect
0:47:34 > 0:47:38it is not likely to be forthcoming if they wanted to be nationalised
0:47:38 > 0:47:43or something like that. A future for the airport, yes, government
0:47:43 > 0:47:47assistance - it would depend what was asked for. Nick Brown,
0:47:47 > 0:47:51Newcastle has seen a drop in passenger numbers, too. Is there
0:47:51 > 0:47:55room for two airports in the north- east? Yes, there is. When I was the
0:47:55 > 0:47:59regional minister I spent a lot of time on the Teesside airport issue
0:47:59 > 0:48:04and in particular on trying to secure a landing slots at Heathrow
0:48:04 > 0:48:07for domestic flights, rather than see every vacant black and --
0:48:07 > 0:48:12landing slots at Heathrow before what is the most profitable, which
0:48:12 > 0:48:16is for long-haul flights. If there is anything I could do to support
0:48:16 > 0:48:20James in his campaign to find a future for the Teesside airport and
0:48:20 > 0:48:23I am more than willing to do it. Northern Rock - it was great to see
0:48:23 > 0:48:28staff and customers enthused by Richard Branson this week. I think
0:48:28 > 0:48:33we should all get behind the new owner and make things work for him.
0:48:33 > 0:48:38He is an important corporate citizen in our region. People have
0:48:38 > 0:48:41been saying it was sold too soon and for too little money. I have
0:48:41 > 0:48:45been to record and what I have said and I have actually written asking
0:48:45 > 0:48:52for a meeting because I could not get to the event on Monday. I would
0:48:52 > 0:48:54like to see what we can do to take the project forward, and also to
0:48:55 > 0:49:03support the Northern Rock Foundation, which is still in
0:49:03 > 0:49:07existence. It is a shame in some ways. A buyer came forward, which
0:49:07 > 0:49:12is probably going to deliver a secure future for it. There is a
0:49:12 > 0:49:15place for corporate its, but in this case, we are in agreement.
0:49:15 > 0:49:18have to leave it there. Thank you. And that's about all from us.
0:49:18 > 0:49:22Remember, my blog is chock full of nutritious new year goodness,
0:49:22 > 0:49:25including more on the regional pay idea. Do take a look and maybe send
0:49:25 > 0:49:28me a comment about the new show. You can do something similar and
0:49:28 > 0:49:31follow me day and night on Twitter. We are back next Sunday when Hexham