15/01/2012 Sunday Politics North East and Cumbria


15/01/2012

Andrew Neil and Richard Moss with the latest political news and debate including a live interview with Education Secretary, Michael Gove MP.


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Transcript


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Here in the North-East and Cumbria: The Government has called for a

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freeze on council tax, so why will some people be facing bigger bills

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Apology for the loss of subtitles for 1690 seconds

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A warm welcome to Sunday Politics and the North-East and Cumbria. You

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look vaguely familiar. Coming up a little later: will you be paying

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more council tax this year? Ministers say bills should be

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frozen, but not all our local authorities are prepared to toe the

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line. We will try to find out why later. With me here in the studio

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to chew over that and the rest of the week's events are my guests,

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the Newcastle MP Nick Brown, and Stockton's James Wharton. Welcome

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to you both. I hope you like the stylish new surroundings.

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Now, we start with a question - should council workers, nurses and

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teachers be paid more or less depending on where they live? The

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Government has set up a review to look at just that issue. But trade

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unions and many Labour MPs have promised to fight any move to end

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national pay bargaining. They say the result would inevitably lead to

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cuts in public sector wages here in the North-East and Cumbria, where

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the cost of living is lower. I will be getting reaction from the TUC in

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a moment. First though, let's hear from the North East Chamber of

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Commerce which can see potential benefits in the idea.

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I know of one business that was paying somebody not a great wage -

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in the late 20s, for doing a very similar job, but actually they

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found the public sector were paying in the high twenties. At that level,

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that is a significant differential, and it is such a major cost. We

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look at all of our costs. It is different when you're competing for

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your products on the global stage, and competing for your wages on a

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regional stage. In some cases, we are competing directly with the

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public sector, and it is proving really difficult to attract quality

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staff. We know that cost of living in the north-east is 9% lower than

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it is across the average of the UK. That means it is probably 15% or

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more lower than it is living in central London. There has always

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been a waiting for central London, but not necessarily for across the

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rest of the UK. The private sector has acknowledge that because that

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is why it often takes advantage of the ability of a real -- really

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skilled work force, that they can get at a rate that allows them to

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compete globally. It will certainly be worth the Government looking at

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the value of dinner to cross the public sector as well.

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The North-East Chamber of Commerce there. Well, I suspect the unions

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don't share that view. With me is Neil Foster, policy and campaigns

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officer at the Northern TUC. It is pretty well if -- established

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that the cost of living is lower here, so wouldn't it be fairer to

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pay public sector workers in the South more than up here? We believe

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that we need to look for like-for- like comparisons, and it is not to

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make a comparison between public and private sector jobs, but to

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look at real jobs that are doing the same jobs with the same skills

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and experience. We think it is not fair that in one area they should

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be paid more than here in the north-east. We do think that it

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would have a negative effect on our region. It would be the motivating

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for many public sector workers to see colics miles away down the road

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being paid more. -- colleagues. Could you not what is your benefit?

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If you paid public sector workers less, then when the cuts come in

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you don't have to make as many redundant. Unfortunately it would

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work like that. But that's what happens in the pub -- private

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sector, isn't it? The private sector often has a national pay

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bargaining as well where it has got large sites across the country -

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they do it because they know that to have local pay bargaining is

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costly and complex. So, we believe that maintaining national pay

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bargaining is fair, but it was also a good for our region because it

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means we have more money to flush around which also benefits the

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private sector. If you take �500 million away from the region's pay

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packets, that would be devastating for north-eastern retailers. We had

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an argument that private sectors can't recruit and that is holding

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back their expansion. There has never been more unemployment in the

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north-east than in the last decade, so it means that private sector can

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recruit from more people than ever before. Using 2000 public sector

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workers as a result of cuts every month. -- we are losing. Somehow,

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social workers and paramedics who are paid �2,000 less is not an

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argument that holds. Backley. Let's put it to our MPs. James Wharton,

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is this a good idea? Can you explain why it is? The key point is

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that there are arguments on both sides, which is why what the

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Government is doing is reviewing this. They have said they want to

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have an independent review to get the idea about the impact of the

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positives and negatives before going forward. We need to ensure

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that if there are positive that we find weights do realise those and

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enjoy the benefits, but negatives are taken into account. What is

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your gut instinct at the moment? The government is saying this is

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not about saving money but about boosting the economy. As Neil

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Foster says, you are cutting incomes. The argument is it that if

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you are a young people in a region where public sector pay is

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significantly higher than private sector pay, when you're looking for

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employment, you would be more likely to look at public sector

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jobs, which makes sense, but can damage the private sector because

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you are in sent advising people not to work in the private sector but

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in the public sector. At the same time, that also means there is a

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lot of money being spent in the economy which might not otherwise

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be there. The Government is looking into it, and that is the

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appropriate thing to do. We do want to rush into a decision that could

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have a major impact on people's lives. Nick Brown, labour induced

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this idea when they were in offers. This is destructive nonsense. It is

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not a good idea for our region. The key argument that is advanced for

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it is that public sector wage rates somehow stop people working in the

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private sector. Let me say this directly to James Ramsbottom - if

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he gives me the anonymous example he was quitting, I will arrange for

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the Department of work and pensions do send a large number of

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applicants for that job. Our problem is not having jobs that

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employers cannot fail, the problem in our region is steadily rising

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unemployment. But there is a., isn't there? If you lower wage

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rates generally, then there is a possibility that more private

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sector employers - a might even make sense to move jobs out of

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London to the north-east. We are trying to drive up standards of

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living in our region. We want to be more prosperous and have the

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standard of living that people in London and the south-east enjoy.

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Cutting people's wages will not achieve that. Do we? I think we do.

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Actually, they have a lot higher living costs. When people move up

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here for a better standard of living... It is true that if you

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are on a decent salary you can have a better standard of living here in

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the north-east of England. It is a great place to live, but cutting

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wages will not make it better. It seems completely unfair that people

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should be paid a different rate for doing the same job just because

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they live in different parts of the country. It is important to said

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that nobody is talking about cutting people's wages. That is

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quite emotive and dangers will stop we are having a review into it. In

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certain areas, this was introduced by the previous government. This

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government has said that we should look at the impact this has had or

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could have, have a thorough investigation into what that could

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mean, before we take it any further. But the suspicion of public sector

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workers is that this is about cutting pay, isn't it? This is the

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next big thing. It is important to tackle but because that is not what

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has been announced. What has been announced is a review into a

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process that was started under the last Labour government. This

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government have said wait a minute, let's have a look and understand

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what this means, what the impact is. As we have had already, there are

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strong arguments on both sides. now, thank you.

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Now, the Government wants to see council tax frozen, and it is

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offering a cash reward to local authorities which agree to do just

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that. Yet, a survey by Sunday Politics suggests several councils

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in the North are preparing to ignore that request and put bills

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up. If they don't, they say they would just have to fill a funding

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black hole in the future. Here's our Cumbria reporter Emily Unia.

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And balancing the household budgets. This working mother of three is

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tackling the January bills, and the possibility that council tax might

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not go up this April is a welcome prospect. I think it is fantastic.

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Our bills are all going up. The gas, electricity - everything is going

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up, and not just in small amounts, it is going up in large amounts.

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Salaries are not necessarily keeping pace with that. We have got

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a larger outgoings, income not necessarily matching our outgoings.

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If the council tax, which is one huge bill each month, can be frozen,

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then that is great. And this is where some of her council tax is

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spent. The spark is run by Carlisle City Council. The decision to

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freeze council tax again this year means they qualify for a government

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grant. We feel it is important in the economic climate that at

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residents are facing that we don't burden them unnecessarily with

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council tax. Carlisle City Council will be freezing the council tax

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for our residents and we are pleased that we can work with the

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governed in doing that. We would have been looking to do that anyway.

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So, how many of our local authorities will follow this

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example? Sunday Politics had discovered that, although none have

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yet voted on a final budget, 10 said they are planning to freeze

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council tax. 10 are not decided, but for will definitely go up. That

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is Middlesbrough, Darlington, Stockton and Redcar and Cleveland.

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The problem facing councils it's the cash reward beget for freezing

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the tax only lasts one year, which means that next year, they either

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have to raise council tax by even more, or make deeper cuts. If it

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were to take it we would have to produce more jobs, cut frontline

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services, and fingers crossed we have still got our 13 libraries

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open. If we were to take this, this one of Grant, then we would be

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looking at reducing our services, closing libraries. It would be

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those will to facilities that get close. No council is proposing a

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rise of more than 3.5%. Any increase above that figure would

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trigger a local referendum on the issue. But why not give councils

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the freedom to choose what they think is best for local services?

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We believe in localism - a combination of local

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representatives, elections and the involvement of local people in

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those decisions. Where councils want to make substantial increases

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in council tax it is vital that they get the endorsement of local

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people. How they do that is through a local referendum. For Nicola, a

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council tax freeze would ease the pressure on household finances. But,

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for those lung -- running local government, it is more of a gamble

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with no guarantee that government grants will continue into future

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years, those that don't increase the tax now, could be left with a

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gap in funding in future. Nick Brown, let's congratulate Eric

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Pickles on helping councils like Newcastle, for instance, which will

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raise the council tax. Yes, and that is a brave decision for them

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to make. I support them in the decision they have made. But Eric

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Pickles is not helping as much as you seem to imply. Your programme

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drew this out rather well. There was a 2.5% support payment for the

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coming financial year, just as there was for this year. And then

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it comes to an end, so the council will either have to make further

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expenditure reductions or cover up the money that they have lost by

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putting the council tax up just to stand still. Then presumably, there

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would be need for a further increase to cover increased costs.

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So they are in a difficult position indeed. I don't envy the

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councillors with their problems. I think in Newcastle they have done

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the right thing. The citizens we represent are under incredible

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pressure and just cannot afford to have any of their bills put up.

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it sounds as if they will lose services eventually. They are

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losing services now. That is the effect of what the Government is

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doing. Can you have any sympathy with that point of view of councils

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who feel they have to look a little longer term than this one you offer.

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Very little because the whole point of the policy was that we wanted to

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freeze council tax for two years. Last year it was done with a long-

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running grant, and this year it is proposed to be done with a grant

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that comes in next year and pays for that council tax freeze that

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year. In a Teesside alone that is worth �5 million. If councils

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refuse this they are turning down that government grant, and they are

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then taking that money out of people's pockets. It is avoidable.

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What you make of the argument by one council who says this is not a

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great deal because we get the money this year, but next to be have got

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to find something to cut or put council tax up. It is a shop-soiled

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offer - it is not as good as the of the last year. I don't think it is

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a bad off at all. The offer would allow a council to Friis council

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tax this year without being any worse off. They may have to put it

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up the year after but it would be going up anyway. The point is, if

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this was introduced... They are introducing a Finance Act which

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limits the amount that councils can put up council tax up without

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holding a referendum. If you want to put council tax up, let people

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make a choice. Which council would be mad enough to put up by more

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than three and a half %? I would love to have a referendum, but I

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would not be put in council tax up at all. I would be taking the Friis

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and helping people in the area that I represented to get through a

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difficult economic times. The economy is tough. This is a measure

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that will help people to meet their household bills at the time that

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they most needed. But the issue here is that by withdrawing the

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grant at the end of the financial year, the council - any local

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authority will have to put council tax up by about 3% just to

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standstill. If they go beyond 3.5% they will have to hold a referendum

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under the terms of the new bill that has just been introduced in

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the Commons in order to get support for that. That is a terrible

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position to be in. It isn't, for one year we will pay the council

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tax increase for you - central government will pay it so that

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local people don't have to. And next year that increase comes in,

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but then everyone is better off because for one year they had a

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Friis. If it is a high increase, have a referendum. What a people

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scared of, give them the choice? There is not a lot of fat to cut

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out of council budgets, given all the pressures they have been under.

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You are now effectively saying to local authorities that there are

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some things they are going to have to stop doing. The victims of this

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are going to be people that are being looked after - the elderly,

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the people in care, and the vulnerable people. More from my

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guests in a minute. First, Mark Denten has our regular round-up of

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the political week here in the North-East and Cumbria, and he

0:45:290:45:39
0:45:390:45:40

doesn't believe in hanging around. He has done it in 60 seconds!

0:45:400:45:43

Seven Labour MPs have met to discuss their campaign to save

0:45:430:45:48

Durham Tees Valley airport. It has been put up for sale and MPs are

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determined to keep it open. In Cumbria, the county council has

0:45:520:45:56

revealed plans to shut six and recycling centres, including this

0:45:560:46:00

one, and replace them with a mobile service. It says the plans could

0:46:000:46:05

save �2 million. Plenty of entertainment but few ball skills -

0:46:050:46:08

Richard Branson arrived in Newcastle to launch his new banking

0:46:080:46:12

empire following the Government's sale of Northern Rock to Virgin

0:46:120:46:17

Money. I thought I would come in and see if you were managing all

0:46:170:46:21

right. A more low-key welcome for the Bishop of Durham who took his

0:46:210:46:25

seat in House of Lords for the first time on Thursday. And finally,

0:46:250:46:31

Frank Cook - the MP for Stockton North - has died. Expert on defence

0:46:310:46:35

issues, he also had one of the more colourful backgrounds in Parliament

0:46:350:46:45
0:46:450:46:46

when he worked as a Butlins Redcoat. Best will to our MPs again. James

0:46:460:46:52

Wharton, you and other Teesside MPs met to discuss the future of the

0:46:520:46:55

airport. Is there any hope? company that owns it believes that

0:46:560:46:59

a buyer can be found. It has got a strong offer and we will have to

0:46:590:47:03

wait to see what happens. So far, the right messages are coming out

0:47:030:47:07

and everyone is working together to deliver a future for this important

0:47:070:47:13

infrastructure. One colleague said making a case for government

0:47:130:47:17

assistance this week. Is that realistic? It is early days. It has

0:47:170:47:21

just been put up for sale, we are waiting to see if there buyer comes

0:47:210:47:24

forward. If there are no buyers by the end of January we will look at

0:47:240:47:27

how the new round of bidding will be taken forward. I don't know what

0:47:270:47:30

sort of government assistance that would be looking for, and I suspect

0:47:300:47:34

it is not likely to be forthcoming if they wanted to be nationalised

0:47:340:47:38

or something like that. A future for the airport, yes, government

0:47:380:47:43

assistance - it would depend what was asked for. Nick Brown,

0:47:430:47:47

Newcastle has seen a drop in passenger numbers, too. Is there

0:47:470:47:51

room for two airports in the north- east? Yes, there is. When I was the

0:47:510:47:55

regional minister I spent a lot of time on the Teesside airport issue

0:47:550:47:59

and in particular on trying to secure a landing slots at Heathrow

0:47:590:48:04

for domestic flights, rather than see every vacant black and --

0:48:040:48:07

landing slots at Heathrow before what is the most profitable, which

0:48:070:48:12

is for long-haul flights. If there is anything I could do to support

0:48:120:48:16

James in his campaign to find a future for the Teesside airport and

0:48:160:48:20

I am more than willing to do it. Northern Rock - it was great to see

0:48:200:48:23

staff and customers enthused by Richard Branson this week. I think

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we should all get behind the new owner and make things work for him.

0:48:280:48:33

He is an important corporate citizen in our region. People have

0:48:330:48:38

been saying it was sold too soon and for too little money. I have

0:48:380:48:41

been to record and what I have said and I have actually written asking

0:48:410:48:45

for a meeting because I could not get to the event on Monday. I would

0:48:450:48:52

like to see what we can do to take the project forward, and also to

0:48:520:48:54

support the Northern Rock Foundation, which is still in

0:48:550:49:03

existence. It is a shame in some ways. A buyer came forward, which

0:49:030:49:07

is probably going to deliver a secure future for it. There is a

0:49:070:49:12

place for corporate its, but in this case, we are in agreement.

0:49:120:49:15

have to leave it there. Thank you. And that's about all from us.

0:49:150:49:18

Remember, my blog is chock full of nutritious new year goodness,

0:49:180:49:22

including more on the regional pay idea. Do take a look and maybe send

0:49:220:49:25

me a comment about the new show. You can do something similar and

0:49:250:49:28

follow me day and night on Twitter. We are back next Sunday when Hexham

0:49:280:49:31

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