:00:36. > :00:40.Morning, folks. Welcome to the Sunday Politics. Hope you enjoyed
:00:41. > :00:42.the extra hour in bed, and that you've realised it's not 12:45. It's
:00:43. > :00:47.11:45! It's getting stormy outside. you've realised it's not 12:45. It's
:00:48. > :00:48.But they're already battening down the hatches at Number Ten because
:00:49. > :00:51.coalition splits are back, with the hatches at Number Ten because
:00:52. > :00:56.bust-ups over free schools and power bills. We'll speak to the Lib Dems,
:00:57. > :01:00.and ask Labour who's conning whom over energy.
:01:01. > :01:01.EU leaders have been meeting in Brussels. But how's David Cameron
:01:02. > :01:05.getting on with that plan to change Brussels. But how's David Cameron
:01:06. > :01:16.our relationship with Europe? We were there to ask him. Have we got
:01:17. > :01:19.any powers back yet? DS! Foreign companies own everything
:01:20. > :01:20.from our energy companies to our railways. Does it
:01:21. > :01:30.And in our region: It could cost ?50 Look North And
:01:31. > :01:32.And in our region: It could cost ?50 million but well high`speed rail
:01:33. > :01:36.And in our region: It could cost ?50 as many daily journeys made by bus
:01:37. > :01:43.than by tube, so why is the planned investment in buses not keeping
:01:44. > :01:46.pace? And with me, three journalists
:01:47. > :01:49.who've bravely agreed to hunker down in the studio while Britain braces
:01:50. > :01:51.itself for massive storm winds, tweeting their political forecasts
:01:52. > :01:59.with all the accuracy of Michael Fish on hurricane watch. Helen
:02:00. > :02:02.Lewis, Janan Ganesh and Nick Watt. Now, sometimes coalition splits are
:02:03. > :02:06.over-egged, or dare we say even occasionally stage-managed. But this
:02:07. > :02:10.week, we've seen what looks like the genuine article. It turns out Nick
:02:11. > :02:13.Clegg has his doubts about the coalition's flagship free schools
:02:14. > :02:17.policy. David Cameron doesn't much like the green levies on our energy
:02:18. > :02:20.bills championed by the Lib Dems. Neither of them seems to have
:02:21. > :02:24.bothered to tell the other that they had their doubts. Who better to
:02:25. > :02:34.discuss these flare-ups than Lib Dem Deputy Leader Simon Hughes? He joins
:02:35. > :02:39.me now. Welcome. Good morning. The Lib Dems spent three years of
:02:40. > :02:42.sticking up for the coalition when times were grim. Explain to me the
:02:43. > :02:48.logic of splitting from them when times look better. We will stick
:02:49. > :02:52.with it for five years. It is working arrangement, but not
:02:53. > :02:56.surprisingly, where there right areas on which we disagree over
:02:57. > :03:01.where to go next, we will stand up. It is going to be hard enough for
:03:02. > :03:06.the Lib Dems to get any credit for the recovery, what ever it is. It
:03:07. > :03:10.will be even harder if you seem to be semidetached and picky. The
:03:11. > :03:15.coalition has led on economic policy, some of which were entirely
:03:16. > :03:20.from our stable. The one you have heard about most often, a Lib Dem
:03:21. > :03:24.initiative, was to take people on blowing comes out of tax. The
:03:25. > :03:28.recovery would not have happened, there would not have been confidence
:03:29. > :03:34.in Britain, had there not been a coalition government with us in it,
:03:35. > :03:38.making sure the same policies produced fair outcomes. We are not
:03:39. > :03:42.going to leave the credit for any growth - and there has been very
:03:43. > :03:47.good news this week. We have played a part in that, and without us, it
:03:48. > :03:51.would not have happened. Does it not underline the trust problem you
:03:52. > :03:57.have? You promised to abolish tuition fees. You oppose nuclear
:03:58. > :04:03.power, now you are cheerleading the first multi-billion pounds
:04:04. > :04:07.investment in nuclear generation. You are dying out on your enthusiasm
:04:08. > :04:12.on green levies, and now they are up for renegotiation. Why should we
:04:13. > :04:20.trust a word you say? In relation to green levies, as you well know, just
:04:21. > :04:27.under 10% is to do with helping energy and helping people. Unless
:04:28. > :04:31.there is continuing investment in renewables, we will not have the
:04:32. > :04:36.British produced energy at cheaper cost to keep those bills down in the
:04:37. > :04:46.future. At cheaper cost? Explain that to me. Off-shore energy is
:04:47. > :04:50.twice the market rate. The costs of renewables will increasingly come
:04:51. > :04:55.down. We have fantastic capacity to produce the energy and deliver lots
:04:56. > :04:59.of jobs in the process. The parts of the energy bill that may be up for
:05:00. > :05:03.renegotiation seems to be the part where we subsidise to help either
:05:04. > :05:11.poor people pay less, or where we do other things. Too insulated the
:05:12. > :05:16.homes? Are you up to putting that to general taxation? Wouldn't that be
:05:17. > :05:20.progressive? I would. It would be progressive. I would like to do for
:05:21. > :05:24.energy bills what the Chancellor has done for road traffic users,
:05:25. > :05:30.drivers, which is too fuelled motor fuel -- to freeze new to fall. That
:05:31. > :05:34.would mean there would be an immediate relief this year, not
:05:35. > :05:39.waiting for the election. So there is a deal to be done there? Yes We
:05:40. > :05:43.understand we have to take the burden off the consumer, and also
:05:44. > :05:48.deal with the energy companies, who look as if they are not paying all
:05:49. > :05:51.the tax they should be, and the regulator, which doesn't regulate
:05:52. > :05:56.quickly enough to deal with the issues coming down the track. We can
:05:57. > :05:59.toughen the regulator, and I hope that the Chancellor, in the Autumn
:06:00. > :06:03.statement, was signalled that energy companies will not be allowed to get
:06:04. > :06:11.away with not paying the taxes they should. And this deal will allow
:06:12. > :06:15.energy prices to come down? Yes How could David Laws, one of your
:06:16. > :06:21.ministers, proudly defend the record of unqualified teachers working in
:06:22. > :06:25.free schools, and then stand side-by-side with Mr Clegg, as he
:06:26. > :06:30.says he is against them? David Laws was not proudly defending the fact
:06:31. > :06:34.that it is unqualified teachers He said that some of the new,
:06:35. > :06:41.unqualified teachers in free schools are doing a superb job. But you want
:06:42. > :06:45.to get rid of them? We want to make sure that everybody coming into a
:06:46. > :06:51.free school ends up being qualified. Ends up? Goes through a process that
:06:52. > :06:55.means they have qualifications. Just as we said very clearly at the last
:06:56. > :07:01.election that the manifesto curriculum in free schools should be
:07:02. > :07:07.the same as other schools. It looks like Mr Clegg is picking a fight
:07:08. > :07:11.just for the sake of it. Mr Clegg was taught by people who didn't have
:07:12. > :07:15.teaching qualifications in one of the greatest schools in the land, if
:07:16. > :07:21.not the world. It didn't seem to do him any harm. What is the problem?
:07:22. > :07:27.If you pay to go to a school, you know what you're getting. But that
:07:28. > :07:32.is what a free school is. No, you don't pay fees. A free school is
:07:33. > :07:36.parents taking the decisions, not you, the politicians. We believe
:07:37. > :07:40.they would expect to guarantee is, firstly that the minimum curriculum
:07:41. > :07:44.taught across the country is taught in the free schools, and secondly,
:07:45. > :07:47.that the teachers there are qualified. Someone who send their
:07:48. > :07:54.kids to private schools took a decision to take -- to send their
:07:55. > :07:59.children there, even if the teachers were unqualified, because they are
:08:00. > :08:06.experts in their field. Someone who send their kids to free schools is
:08:07. > :08:11.because -- is their decision, not yours. Because some of the free
:08:12. > :08:14.schools are new, and have never been there before, parents need a
:08:15. > :08:21.guarantee that there are some basics in place, whatever sort of school.
:08:22. > :08:26.So they need you to hold their hand? It is not about holding hands, it is
:08:27. > :08:30.about having a minimum guarantee. Our party made clear at our
:08:31. > :08:35.conference that this is a priority for us. Nick Clegg reflects the view
:08:36. > :08:38.of the party, and I believe it is an entirely rational thing to do. Nick
:08:39. > :08:45.Clegg complained that the Prime Minister gave him only 30 minutes
:08:46. > :08:51.notice on the Prime Minister Buzz 's U-turn on green levies. That is
:08:52. > :08:55.almost as little time as Nick Clegg gave the Prime Minister on his
:08:56. > :09:03.U-turn on free schools. Aren't you supposed to be partners? Green
:09:04. > :09:06.levies were under discussion in the ministerial group before Wednesday,
:09:07. > :09:10.because we identified this as an issue. We do that in a practical
:09:11. > :09:18.way. Sometimes there is only half an hour's notice. We had even less than
:09:19. > :09:23.half an hour this morning! Simon Hughes, thank you.
:09:24. > :09:29.So the price of energy is the big battle ground in politics at the
:09:30. > :09:33.moment. 72% of people say that high bills will influence the way they
:09:34. > :09:37.vote at the next election. Ed Miliband has promised a price freeze
:09:38. > :09:44.after the next election, but will the coalition turned the tables on
:09:45. > :09:52.Labour, with its proposal to roll back green levies. Caroline Flint
:09:53. > :09:59.joins us from Sheffield. It looks like the coalition will be able to
:10:00. > :10:04.take ?50 of energy bills, by removing green levies. It is quite
:10:05. > :10:07.clear that different parts of the government are running round waking
:10:08. > :10:11.up to the fact that the public feel that this government has not done
:10:12. > :10:15.enough to listen to their concerns. Last week, there was a classic case
:10:16. > :10:20.of the Prime Minister making up policy literally at the dispatch
:10:21. > :10:23.box. Let's see what they say in the autumn statement. The truth is,
:10:24. > :10:28.whatever the debate around green levies, and I have always said we
:10:29. > :10:46.should look at value for money at those green levies. Our argument is
:10:47. > :10:49.about acknowledging there is something wrong with the way the
:10:50. > :10:51.market works, and the way those companies are regulated. Behind our
:10:52. > :10:54.freeze for 20 months is a package of proposals to reform this market I
:10:55. > :10:57.understand that, but you cannot tell as the details about that. I can.
:10:58. > :10:59.You cannot give us the details about reforming the market. We are going
:11:00. > :11:04.to do three things, and I think I said this last time I was on the
:11:05. > :11:06.programme. First, we are going to separate out the generation side
:11:07. > :11:15.from the supply side within the big six. Secondly, we will have a energy
:11:16. > :11:20.pool, or power exchange, where all energy will have to be traded in
:11:21. > :11:22.that pool. Thirdly, we will establish a tougher regulator,
:11:23. > :11:29.because Ofgem is increasingly being seen as not doing the job right I
:11:30. > :11:33.notice that you didn't mention any reform of the current green and
:11:34. > :11:40.social taxes on the energy bill Is it Labour's policy to maintain the
:11:41. > :11:44.existing green levies? In 2011, the government chose to get rid of warm
:11:45. > :11:49.front, which was the publicly funded through tracks a scheme to support
:11:50. > :11:54.new installation. When they got rid of that, it was the first time we
:11:55. > :12:00.had a government since the 70s that didn't have such a policy. What is
:12:01. > :12:04.your policy? We voted against that because we believe it is wrong. We
:12:05. > :12:14.believe that the eco-scheme, a government intervention which is ?47
:12:15. > :12:17.of the ?112 on our bills each year, is expensive, bureaucratic and isn't
:12:18. > :12:21.going to the fuel poor. I am up for a debate on these issues. I am up
:12:22. > :12:25.for a discussion on what the government should do and what these
:12:26. > :12:29.energy companies should do. We cannot let Cameron all the energy
:12:30. > :12:33.companies off the hook from the way in which they organise their
:12:34. > :12:39.businesses, and expect us to pay ever increasing rises in our bills.
:12:40. > :12:44.There is ?112 of green levies on our bills at the moment. Did you vote
:12:45. > :12:51.against any of them? We didn't, but what I would say ease these were
:12:52. > :12:55.government imposed levies. When they got rid of the government funded
:12:56. > :13:05.programme, Warm Front, they introduced the eco-scheme. The
:13:06. > :13:09.eco-project is one of the ones where the energy companies are saying
:13:10. > :13:13.it's too bureaucratic, and it is proving more expensive than
:13:14. > :13:16.government estimates, apparently doubled the amount the government
:13:17. > :13:23.thought. These things are all worth looking at, but don't go to the
:13:24. > :13:31.heart of the issue. According to official figures, on current plans,
:13:32. > :13:36.which you support, which you voted for, households will be paying 1%
:13:37. > :13:48.more per unit of electricity by 2030. It puts your temporary freeze
:13:49. > :13:53.as just a blip. You support a 4 % rise in our bills. I support making
:13:54. > :13:57.sure we secure for the future access to energy that we can grow here in
:13:58. > :14:03.the UK, whether it is through nuclear, wind or solar, or other
:14:04. > :14:09.technologies yet to be developed. We should protect ourselves against
:14:10. > :14:15.energy costs we cannot control. The truth is, it is every fair for you
:14:16. > :14:19.to put that point across, and I accept that, but we need to hear the
:14:20. > :14:23.other side about the cost for bill payers if we didn't invest in new,
:14:24. > :14:27.indigenous sources of energy supply for the future, which, in the long
:14:28. > :14:32.run, will be cheaper and more secure, and create the jobs we
:14:33. > :14:36.need. I think it is important to have a debate about these issues,
:14:37. > :14:41.but they have to be seen in the right context. If we stay stuck in
:14:42. > :14:47.the past, we will pay more and we will not create jobs. How can you
:14:48. > :14:52.criticise the coalition's plans for a new nuclear station, when jeering
:14:53. > :14:57.13 years of a Labour government you did not invest in a single nuclear
:14:58. > :15:07.plant? You sold off all our nuclear technology to foreign companies
:15:08. > :15:14.Energy provision was put out to private hands and there has been no
:15:15. > :15:25.obstacle in British law against ownership outside the UK. Part of
:15:26. > :15:30.this is looking ahead. Because your previous track record is so bad
:15:31. > :15:34.What we did decide under the previous government, we came to the
:15:35. > :15:41.view, and there were discussions in our party about this, that we did
:15:42. > :15:45.need to support a nuclear future. At the time of that, David Cameron
:15:46. > :15:50.was one of those saying that nuclear power should be a last
:15:51. > :15:54.resort. And as you said, the Liberals did not support it. We
:15:55. > :15:59.stood up for that. We set in train the green light of 10 sites,
:16:00. > :16:03.including Hinkley Point, for nuclear development. I am glad to
:16:04. > :16:08.see that is making progress and we should make more progress over the
:16:09. > :16:14.years ahead. We took a tough decision when other governments had
:16:15. > :16:23.not done. You did not build a new nuclear station. When you get back
:16:24. > :16:29.into power, will you build HS2? That has not had a blank cheque
:16:30. > :16:34.from the Labour Party. I am in favour of good infrastructure. Are
:16:35. > :16:40.you in favour of?, answer the question? I have answered the
:16:41. > :16:45.question. It does not have a blank cheque. If the prices are too high,
:16:46. > :16:50.we will review the decision when we come back to vote on it. We will be
:16:51. > :16:55.looking at it closely. We have to look for value for money and how it
:16:56. > :17:02.benefits the country. Have you stocked up on jumpers this winter?
:17:03. > :17:07.I am perfectly all right with my clothing. What is important, it is
:17:08. > :17:11.ridiculous for the Government to suggest that the answer to the loss
:17:12. > :17:21.of trust in the energy companies is to put on another jumper.
:17:22. > :17:27.The coalition has taken a long time to come up with anything that can
:17:28. > :17:33.trump Ed Miliband's simple freezing energy prices, vote for us. Are
:17:34. > :17:36.they on the brink of doing so? I do not think so. They have had a
:17:37. > :17:42.problem that has dominated the debate, talking about GDP, the
:17:43. > :17:48.figures came out on Friday and said, well, and went back to talking
:17:49. > :17:53.about energy. My problem with what David Cameron proposes is he agrees
:17:54. > :17:58.with the analysis that the Big Six make too many profits. He wants to
:17:59. > :18:02.move the green levies into general taxation, so that he looks like he
:18:03. > :18:08.is protecting the profits of the energy companies. If the coalition
:18:09. > :18:14.can say they will take money off the bills, does that change the
:18:15. > :18:19.game? I do not think the Liberal Democrats are an obstacle to
:18:20. > :18:26.unwinding the green levies. I think Nick Clegg is open to doing a deal,
:18:27. > :18:30.but the real obstacle is the carbon reduction targets that we signed up
:18:31. > :18:35.to during the boom years. They were ambitious I thought at the time
:18:36. > :18:40.From that we have the taxes and clocking up of the supply-side of
:18:41. > :18:43.the economy. Unless he will revise that, and build from first
:18:44. > :18:49.principles a new strategy, he cannot do more than put a dent into
:18:50. > :18:55.green levies. He might say as I have got to ?50 now and if you
:18:56. > :18:59.voters in in an overall majority, I will look up what we have done in
:19:00. > :19:05.the better times and give you more. I am sure he will do that. It might
:19:06. > :19:09.be ?50 of the Bill, but it will be ?50 on your general taxation bill,
:19:10. > :19:17.which would be more progressive They will find it. We will never
:19:18. > :19:23.see it in general taxation. The problem for the Coalition on what
:19:24. > :19:26.Ed Miliband has done is that it is five weeks since he made that
:19:27. > :19:30.speech and it is all we are talking about. David Cameron spent those
:19:31. > :19:33.five weeks trying to work out whether Ed Miliband is a Marxist or
:19:34. > :19:38.whether he is connected to Middle Britain. That is why Ed Miliband
:19:39. > :19:44.set the agenda. The coalition are squabbling among themselves,
:19:45. > :19:50.looking petulant, on energy, and on schools. Nobody is taking notice of
:19:51. > :19:56.the fact the economy is under way, the recovery is under way. Ed
:19:57. > :20:02.Miliband has made the weather on this.
:20:03. > :20:12.It UK has a relaxed attitude about selling off assets based -- to
:20:13. > :20:15.companies based abroad. But this week we have seen the Swiss owner
:20:16. > :20:18.of one of Scotland's largest industrial sites, Grangemouth, come
:20:19. > :20:21.within a whisker of closing part of it down. So should we care whether
:20:22. > :20:23.British assets have foreign owners? Britain might be a nation of
:20:24. > :20:28.homeowners, but we appear to have lost our taste for owning some of
:20:29. > :20:31.our biggest businesses. These are among the crown jewels sold off in
:20:32. > :20:38.the past three decades to companies based abroad. Roughly half of
:20:39. > :20:41.Britain's essential services have overseas owners. The airport owner,
:20:42. > :20:43.British Airports Authority, is owned by a Spanish company.
:20:44. > :20:47.Britain's largest water company Thames, is owned by a consortium
:20:48. > :20:50.led by an Australian bank. Four out of six of Britain's biggest energy
:20:51. > :20:52.companies are owned by overseas giants, and one of these, EDF
:20:53. > :20:55.Energy, which is owned by the French state, is building Britain's
:20:56. > :21:03.first nuclear power plant in a generation, backed by Chinese
:21:04. > :21:08.investors. It's a similar story for train operator Arriva, bought by a
:21:09. > :21:10.company owned by the German state. So part of the railways privatised
:21:11. > :21:19.by the British government was effectively re-nationalised by the
:21:20. > :21:22.German government. But does it matter who owns these companies as
:21:23. > :21:28.long as the lights stay on, the trains run on time, and we can
:21:29. > :21:32.still eat Cadbury's Dairy Milk? We are joined by the general
:21:33. > :21:39.secretary of the RMT, Bob Crow, and by venture capitalist Julie Meyer.
:21:40. > :21:46.They go head to head. Have we seen the consequences of
:21:47. > :21:53.relying for essential services to be foreign-owned? Four of the Big
:21:54. > :21:59.Six energy companies, Grangemouth, owned by a tax exile in Switzerland.
:22:00. > :22:04.It is not good. I do not think there is a cause and effect
:22:05. > :22:08.relationship between foreign ownership and consumer prices. That
:22:09. > :22:13.is not the right comparison. We need to be concerned about
:22:14. > :22:16.businesses represented the future, businesses we are good at
:22:17. > :22:23.innovating for example in financial services and the UK has a history
:22:24. > :22:34.of building businesses, such as Monotypes. If we were not creating
:22:35. > :22:40.businesses here -- Monotise. Like so many businesses creating
:22:41. > :22:48.products and services and creating the shareholders. Should we allow
:22:49. > :22:53.hour essential services to be in foreign ownership? It was
:22:54. > :22:58.demonstrated this week at Grangemouth. If you do not own the
:22:59. > :23:03.industry, you do not own it. The MPs of this country and the
:23:04. > :23:06.politicians in Scotland have no say, they were consultants.
:23:07. > :23:13.Multinationals decide whether to shut a company down. If that had
:23:14. > :23:19.been Unite union, they are the ones who saved the jobs. They
:23:20. > :23:23.capitulated. They will come back, like they have for the past 150
:23:24. > :23:29.years, and capture again what they lost. If it had closed, they would
:23:30. > :23:33.have lost their jobs for ever. If the union had called the members up
:23:34. > :23:38.without a ballot for strike action, there would have been uproar. This
:23:39. > :23:43.person in Switzerland can decide to shut the entire industry down. The
:23:44. > :23:49.coalition, the Labour Party, as well, when Labour was in government,
:23:50. > :23:53.they played a role of allowing industries to go abroad, and it
:23:54. > :24:05.should be returned to public ownership. Nestor. It has
:24:06. > :24:14.demonstrated that the Net comes from new businesses. We must not
:24:15. > :24:20.be... When Daly motion was stopped by the French government to be sold,
:24:21. > :24:25.it was an arrow to the heart of French entrepreneurs. We must not
:24:26. > :24:29.create that culture in the UK. Every train running in France is
:24:30. > :24:36.built in France. 90% of the trains running in Germany are built in
:24:37. > :24:44.Germany. In Japan, it has to be built in that country, and now an
:24:45. > :24:48.energy company in France is reducing its nuclear capability in
:24:49. > :24:52.its own country and wants to make profits out of the British industry
:24:53. > :24:56.to put back into it state industry. That happened with the railway
:24:57. > :25:02.industry. They want to make money at the expense of their own state
:25:03. > :25:10.companies. We sold off energy production. How did we end up in a
:25:11. > :25:15.position where our nuclear capacity will be built by a company owned by
:25:16. > :25:24.a socialist date, France, and funded by a communist one, China,
:25:25. > :25:27.for vital infrastructure? I am not suggesting that is in the national
:25:28. > :25:33.interest. I am saying we can pick any one example and say it is a
:25:34. > :25:36.shame. The simple matter of the fact is the owners are having to
:25:37. > :25:41.make decisions. Not just Grangemouth, businesses are making
:25:42. > :25:48.decisions about what is the common good. Not just in the shareholders'
:25:49. > :25:52.interest. For employees, customers. What is in the common good when
:25:53. > :25:56.prices go up by 10% and the reason is that 20 years ago they shut
:25:57. > :26:01.every coal pit down in this country, the Germans kept theirs open and
:26:02. > :26:07.subsidised it and now we have the Germans doing away with nuclear
:26:08. > :26:14.power and they have coal. Under the Labour government, in 2008, the
:26:15. > :26:19.climate change Act was passed. Well before that, and you know yourself,
:26:20. > :26:23.they shut down the coal mines to smash the National Union of
:26:24. > :26:28.Mineworkers because they dared to stand up for people in their
:26:29. > :26:32.community. Even if we wanted to reopen the coalmines, it would be
:26:33. > :26:40.pointless. Under the 2008 Act, we are not meant to burn more coal
:26:41. > :26:47.The can, as if you spent some of the profits, you could have carbon
:26:48. > :26:51.catch up. That does not exist on a massive scale. You are arguing the
:26:52. > :26:57.case, Julie Meyer, for entrepreneurs to come to this
:26:58. > :27:02.country. Even Bob Crow is not against that. We are trying to
:27:03. > :27:10.argue, should essential services be in foreign hands? Not those in
:27:11. > :27:16.Silicon round about doing start ups. I am trying to draw a broader
:27:17. > :27:19.principle than just energy. Something like broadband services,
:27:20. > :27:27.also important to the functioning of the economy. I believe in the
:27:28. > :27:31.UK's ability to innovate. When we have businesses that play off
:27:32. > :27:36.broadband companies to get the best prices for consumers. These new
:27:37. > :27:43.businesses and business models are the best way. Not to control, but
:27:44. > :27:49.to influence. It will be a disaster. Prices will go up and up as a
:27:50. > :27:54.result. Nissan in Sunderland, a Japanese factory, some of the best
:27:55. > :27:57.cars and productivity. You want that to be nationalised and bring
:27:58. > :28:02.it down to the standard of British Leyland? It is not bring it down to
:28:03. > :28:07.the standard. The car manufacturing base in this country has been
:28:08. > :28:13.wrecked. We make more cars now for 20 years -- than in 20 years.
:28:14. > :28:21.Ford's Dagenham produced some of the best cars in the world. Did you
:28:22. > :28:27.buy one? I cannot drive. They moved their plants to other countries
:28:28. > :28:32.where it was cheaper labour. Would you nationalise Nissan? There
:28:33. > :28:39.should be one car industry that produces cars for people. This week
:28:40. > :28:45.the EU summit was about Angela Merkel's mobile phone being tapped,
:28:46. > :28:49.they call it a handy. We sent Adam to Brussels and told him to ignore
:28:50. > :28:52.the business about phone-tapping and investigate the Prime
:28:53. > :29:08.Minister's policy on Europe instead. I have come to my first EU summit to
:29:09. > :29:12.see how David Cameron is getting on with his strategy to claim power was
:29:13. > :29:21.back from Brussels. Got any powers back yet? Yes! Which ones? Sadly,
:29:22. > :29:26.his fellow leaders were not as forthcoming. Chancellor, are you
:29:27. > :29:33.going to give any powers back to Britain? Has David Cameron asked you
:29:34. > :29:39.for any powers back? The president of the commission just laughed, and
:29:40. > :29:50.listen to the Lithuanian President. How is David Cameron's renegotiation
:29:51. > :29:55.strategy going? What's that? He wants powers back for Britain. No
:29:56. > :30:00.one knows what powers David Cameron actually wants. Even our usual
:30:01. > :30:07.allies, like Sweden, are bit baffled. We actually don't know yet
:30:08. > :30:14.what is going through the UK membership. We will await the
:30:15. > :30:20.finalisation of that first. You should ask him, and then tell us!
:30:21. > :30:25.Here is someone who must know, the Dutch Prime Minister, he is doing
:30:26. > :30:30.what we are doing, carrying out a review of the EU powers, known as
:30:31. > :30:35.competencies in the jargon, before negotiating to get some back. Have
:30:36. > :30:40.you had any negotiations with David Cameron over what powers you can
:30:41. > :30:46.bring back from Brussels? That is not on the agenda of this summit.
:30:47. > :30:50.Have you talked to him about it This is not on the schedule for this
:30:51. > :30:59.summit. David Cameron's advises tummy it is
:31:00. > :31:08.because he is playing the long game. -- David Cameron's advisers tell me.
:31:09. > :31:15.At this summit, there was a task force discussing how to cut EU red
:31:16. > :31:20.tape. Just how long this game is was explained to me outside the summit,
:31:21. > :31:25.by the leader of the Conservatives in the European Parliament. I think
:31:26. > :31:28.the behind-the-scenes negotiations will start happening when the new
:31:29. > :31:34.commissioner is appointed later next year. I think the detailed
:31:35. > :31:38.negotiations will start to happen bubbly after the UK general
:31:39. > :31:43.election. That is when we will start getting all of the detail of the
:31:44. > :31:50.horse trading, and real, Lake night negotiations. Angela Merkel seems
:31:51. > :31:55.keen to rewrite the EU's main treaties to deal with changes in the
:31:56. > :31:59.Eurozone, and that is the mechanism David Cameron would use to
:32:00. > :32:03.renegotiate our membership. Everyone here says his relationship with the
:32:04. > :32:08.German Chancellor is strong. So after days in this building, here is
:32:09. > :32:14.how it looks. David Cameron has a mountain to climb. It is climbable,
:32:15. > :32:19.but he isn't even in the foothills yet. Has he even started packing his
:32:20. > :32:24.bags for the trip? Joining us now, a man who knows a
:32:25. > :32:29.thing or two about the difficulties Prime Minister 's face in Europe.
:32:30. > :32:33.Former Deputy Prime Minister, Michael Heseltine. We are nine
:32:34. > :32:41.months from David Cameron's defining speech on EU renegotiation. Can you
:32:42. > :32:46.think of one area of progress? I don't know. And you don't know. And
:32:47. > :32:52.that's a good thing. Why is it a good thing? Because the real
:32:53. > :33:03.progress goes on behind closed doors. And only the most naive,
:33:04. > :33:11.because the real progress goes on behind closed doors. Because, in
:33:12. > :33:16.this weary world, you and I, Andrew, know full well that the moment you
:33:17. > :33:21.say, I making progress, people say, where? And the machine goes to work
:33:22. > :33:28.to show that the progress isn't enough. So you are much better off
:33:29. > :33:37.making progress as best you can in the privacy of private diplomacy. It
:33:38. > :33:41.is a long journey ahead. In this long journey, do you have a clear
:33:42. > :33:48.sense of the destination? Do you have a clear sense of what powers Mr
:33:49. > :33:52.Cameron wants to negotiate? I have a clear sense of the destination,
:33:53. > :33:58.which is a victory for the campaign that he will win to stay inside the
:33:59. > :34:07.European community. That is the agenda, and I have total support for
:34:08. > :34:12.that. I understand that, but if he is incapable of getting any tangible
:34:13. > :34:18.sign of renegotiation, if he is able only to do what Wilson did in 1 75,
:34:19. > :34:23.which was to get a couple of token changes to our membership status, he
:34:24. > :34:29.goes into that referendum without much to argue for. He has everything
:34:30. > :34:37.to argue for. He's got Britain's vital role as a major contributor to
:34:38. > :34:43.the community. He's got Britain s self interest as a major
:34:44. > :34:49.beneficiary, and Britain's vital role in the City of London. He's got
:34:50. > :34:55.everything to argue for. He could argue for that now. He could have a
:34:56. > :35:02.referendum now. He doesn't want one now. I haven't any doubt that he
:35:03. > :35:11.will come back with something to talk about. But it may be slightly
:35:12. > :35:17.different to what his critics, the UK isolationist party people, want.
:35:18. > :35:23.He may, for example, have found that allies within the community want
:35:24. > :35:29.change as well, and he may secure changes in the way the community
:35:30. > :35:32.works, which would be a significant argument within the referendum
:35:33. > :35:37.campaign. Let me give you an example. I think it is a scandal
:35:38. > :35:44.that the European Commission don't secure the auditing of some of the
:35:45. > :35:49.accounts. Perhaps that could be on the agenda. He might find a lot of
:35:50. > :35:51.contributing countries, like Germany, like Colin and, would be
:35:52. > :35:59.very keen. -- like Holland. David Germany, like Colin and, would be
:36:00. > :36:07.vetoed the increase in the European budgets the other day, and he had a
:36:08. > :36:12.lot of allies. So working within Europe on the things that people
:36:13. > :36:16.paying the European bills want is fertile ground. Is John Major right
:36:17. > :36:22.to call for a windfall tax on the energy companies? John is a very
:36:23. > :36:28.cautious fellow. He doesn't say things without thinking them out. So
:36:29. > :36:34.I was surprised that he went for a windfall tax. First of all, it is
:36:35. > :36:39.retrospective, and secondly, it is difficult to predict what the
:36:40. > :36:43.consequences will be. I am, myself, more interested in the other part of
:36:44. > :36:49.his speech, which was talking about the need for the Conservative Party
:36:50. > :36:53.to seek a wider horizon, to recognise what is happening to the
:36:54. > :37:01.Conservative Party in the way in which its membership is shrinking
:37:02. > :37:05.into a southeastern enclave. Are you in favour of a windfall tax? I am
:37:06. > :37:17.not in favour of increasing any taxes. Do you share Iain Duncan
:37:18. > :37:27.Smith's point of view on welfare reform? I think Iain Duncan Smith is
:37:28. > :37:33.right. It is extremely difficult to do, but he is right to try. I think
:37:34. > :37:43.public opinion is behind him, but it isn't easy, because on the fringe of
:37:44. > :37:48.these issues there are genuine hard luck stories, and they are the ones
:37:49. > :37:53.that become the focus of attention the moment you introduce change It
:37:54. > :37:59.requires a lot of political skill to negotiate your way through that But
:38:00. > :38:04.isn't Iain Duncan Smith right to invoke the beverage principle, that
:38:05. > :38:10.you should be expected to make a contribution for the welfare you
:38:11. > :38:14.depend on? Yes, he is. I will let you get your Sunday lunch. Thanks
:38:15. > :38:16.for joining us. Coming up in just over 20 minutes, I
:38:17. > :38:45.will In Welcome to the programme here.
:38:46. > :38:52.Coming up: The Derby but should we get more of a say in the running of
:38:53. > :38:58.her clubs? We have a lifelong Newcastle fan and a Labour MP with
:38:59. > :39:05.us who joins us in the studio. Also a Conservative candidate for buried.
:39:06. > :39:09.Let us start by talking rail. The government has taken the first step
:39:10. > :39:14.towards free privatising the East Coast mainline. It has been in
:39:15. > :39:21.public hands for the last four years. Presumably you think this is
:39:22. > :39:30.a very bad idea? It is a very bad idea. The profits made by the East
:39:31. > :39:36.Coast mainline have been an excess of ?800 million since they have been
:39:37. > :39:41.in the hand `` hands of the public. That is a fantastic amount of money.
:39:42. > :39:47.Why should be looking to get that type of profit to private industry?
:39:48. > :39:52.Should we not be looking at investing, as a government, into the
:39:53. > :39:59.East Coast Main line and maximising that profit. At the same time the
:40:00. > :40:05.East Coast mainline have invested into the infrastructure so it is a
:40:06. > :40:11.good deal for everyone. Why should we privatise it? It is like selling
:40:12. > :40:18.the family silver. Get me one good reason why it should be handed back
:40:19. > :40:24.to public hands? `` private hands. We want a strong support of private
:40:25. > :40:33.investment. We want to put it back with good operators. We have to make
:40:34. > :40:38.sure that what the customers need on the East Coast is provided, we need
:40:39. > :40:43.long`term capital investment and I think private investment is always
:40:44. > :40:49.the way forward. Now we have a dispute over whether to press ahead
:40:50. > :40:53.with a ?50 million high`speed railway from London to Manchester.
:40:54. > :41:01.It has been said it will boost economy even for areas in Cumbria
:41:02. > :41:08.that are not on the route. Others say it will suck the lifeblood out
:41:09. > :41:17.of the deal system and leads to longer journey times. Some say it
:41:18. > :41:27.will impact on transport spending in the region. It is a disaster. Other
:41:28. > :41:33.projects will have to be forgotten about if this goes ahead. We
:41:34. > :41:42.contacted MPs right across the North East and Cumbria to find out how
:41:43. > :41:47.they felt. 43% of MPs remain in favour of high`speed rail but one
:41:48. > :41:56.third are against, the rest declined to say. We asked about the top
:41:57. > :42:07.transport priorities. Half said better bus links, improvements to be
:42:08. > :42:12.one and a 66 were mentioned. We'll all parts of our region benefit
:42:13. > :42:17.economically? This is one company that is keen, it provides parts and
:42:18. > :42:21.equipment for the real industry and it plans to bid for this. It
:42:22. > :42:32.believes benefits could go much wider. It is definitely the way
:42:33. > :42:37.forward. We need spending on infrastructure. For a long time
:42:38. > :42:42.beware of the poor man of Europe when it came to deal. The French
:42:43. > :42:50.have hired high`speed rail for a long time and so have the Japanese.
:42:51. > :43:00.`` we where the poor man of Europe. It has got to be done. Many feel
:43:01. > :43:08.high`speed rail will have no impact on productivity in the region. They
:43:09. > :43:16.will come up the motorway and over to Scotland or even towards Penrith.
:43:17. > :43:19.If we play the road network or was mainline or cross`country services,
:43:20. > :43:33.infrastructure spend is vital and we could spread it out and do you not
:43:34. > :43:37.more good. `` do you not more good. Some say we should spread it around
:43:38. > :43:45.rather than spending all that money on one project? Investment in the
:43:46. > :43:49.north`east has been severely lacking for decades. I hope the Chancellor
:43:50. > :43:56.will now understand this is a key economic value. In terms of real
:43:57. > :44:00.infrastructure there is a need to improve capacity across the country.
:44:01. > :44:04.I was disappointed when the legislation came through at the
:44:05. > :44:10.second phase which comes up to the northern part of the UK has not been
:44:11. > :44:16.set out. It is key for us that it comes across to the east coast and
:44:17. > :44:20.up into Scotland. I think the government has not done a good job
:44:21. > :44:25.of explaining just how important the increased capacity is to make sure
:44:26. > :44:32.that we get the real infrastructure. You cannot see that we want
:44:33. > :44:39.structural investment in roads and other real services and also see you
:44:40. > :44:43.want HS two. I think it is a perfectly reasonable amount of
:44:44. > :44:47.money. You are looking at a couple of billion every year. 50 billion
:44:48. > :44:56.for other projects, so I do not think it is one or the other. It is
:44:57. > :45:03.a long`term project. North`east companies stand to benefit from
:45:04. > :45:12.this, economists say the Bijan will benefit from it, it is a no`brainer?
:45:13. > :45:22.I am not sure I can agree. `` the region will benefit. It is ?20 more
:45:23. > :45:30.in the south than it is in the north`east, the spending. In the
:45:31. > :45:38.south it is 200 and ?700 per head compared by ?5 here in the
:45:39. > :45:44.north`east. It is outrageous. Of the suggestions are that it will bring
:45:45. > :45:52.economic benefit, RU saying we should ditch it? I am not seeing
:45:53. > :46:05.ditch it but things like dealing of the A1, the metro, there are other
:46:06. > :46:15.projects which would benefit us because it gives access. The problem
:46:16. > :46:21.is that the East Coast mainline is filling up. You might be able to get
:46:22. > :46:26.to Newcastle but you will have a very slow journey to London. I know
:46:27. > :46:33.that from experience, I travel from Newcastle station to London most
:46:34. > :46:44.Mondays. The regional infrastructure programmes which are short already
:46:45. > :46:50.need work. But would this help? The people in this region have the right
:46:51. > :46:55.to ask if this is value for money. ?50 billion, is it right to spend
:46:56. > :47:03.that kind of finance to get from London to Birmingham? Why are we not
:47:04. > :47:06.included in that? What about a fear allocation to deliver things in this
:47:07. > :47:15.region so that people can benefit economically. The reality is that
:47:16. > :47:20.the places that will benefit most are Birmingham, Leeds and
:47:21. > :47:25.Manchester, not Newcastle. Without a doubt but it is the government
:47:26. > :47:27.appreciating that there needs to be investment in infrastructure across
:47:28. > :47:34.the country, not just the South West. A huge amount has been sucked
:47:35. > :47:42.into the south`east over the past few years. We need to see a broad
:47:43. > :47:47.investment in rail and roads. You might not need me to tell you that
:47:48. > :47:54.it is Derby weekend. The rivalry will be intense with no love lost on
:47:55. > :48:03.either side. One thing the sense of supporters will actually agree on is
:48:04. > :48:13.the chance for supporters on both sides to get more oversea in what
:48:14. > :48:18.those on. It is what happens of the pitch that is really interesting
:48:19. > :48:29.here. Fans really happier say. Della macro fans can turn up, they can
:48:30. > :48:34.vote on everything. If they are not doing a very good job and someone
:48:35. > :48:43.comes in the can vote you out. It is as easy as that. Here dealers rather
:48:44. > :48:51.different mood, there have been a series of protests from Newcastle
:48:52. > :48:57.United fans against the club owner. The board have never really taken
:48:58. > :49:03.the support seriously and sought to develop it. It is almost as if the
:49:04. > :49:13.fans have supported the club despite what is going on at board level. Say
:49:14. > :49:16.it is a wonderful city. Recently the club have been disengaged from the
:49:17. > :49:26.people who are putting money into the club. I think it would make a
:49:27. > :49:36.big difference and stop the clock making disastrous decisions. `` the
:49:37. > :49:40.club. The government said it wanted to give fans a bigger say in the
:49:41. > :49:46.running of football clubs but we have heard that idea has since been
:49:47. > :49:58.shelved, there not enough time in Parliament schedule. People over
:49:59. > :50:05.there want action. A conference at Newcastle University business
:50:06. > :50:11.School. It is just an fear to raise expectations, to go with what
:50:12. > :50:20.appears to be a populist idea and then for someone to say we do not
:50:21. > :50:28.have time. It is just not high enough on the agenda. It is
:50:29. > :50:33.different in Germany. These fans have something to cheer them up,
:50:34. > :50:37.they have a big say on the running of the club, there is a national ban
:50:38. > :50:47.on anyone owning more than half a football club. We, the members, the
:50:48. > :50:52.club belongs to us. At the EGM we can change the club statute. If you
:50:53. > :50:57.are a member of the club you QB club belongs to you. You are not just a
:50:58. > :51:05.fan. It is our club, not something we just support. The players show
:51:06. > :51:11.the skills but it is the fans who call the shots. It is simply the way
:51:12. > :51:21.English football works these days, tackling it could be a challenge.
:51:22. > :51:27.With me now is a lecturer of finance from the University business School.
:51:28. > :51:34.How realistic is it to think that this German fan model could work in
:51:35. > :51:38.Newcastle, Sutherland or Carlisle? It is interesting to look at how the
:51:39. > :51:45.models have evolved over time, the German model has been built on a
:51:46. > :51:51.history of fans being involved in the club structure. In the UK we
:51:52. > :51:54.have a more industrial background where there was typically a singular
:51:55. > :52:01.owner so football has evolved as being a business over at time.
:52:02. > :52:10.Politicians fall over themselves to say be like this idea but there's a
:52:11. > :52:15.beer the downside? It is to do with commercial brands, if you look at
:52:16. > :52:20.Manchester United and Chelsea which have domestic and international fan
:52:21. > :52:26.bases. If you have the tradition to fan base controlled membership
:52:27. > :52:35.structure the problem is the sustainability of the financial side
:52:36. > :52:41.of the UK clubs even higher wages. Perhaps they're not surprising the
:52:42. > :52:46.government has gone cold on this? The government, in terms of trying
:52:47. > :52:50.to be involved, it is difficult, particularly given the stands of
:52:51. > :52:57.fief up on the reluctance for the government to get involved. I think
:52:58. > :53:01.the government's involvement is something that is crucial but needs
:53:02. > :53:06.to be done through the associations themselves. The Premier league is
:53:07. > :53:14.the envy of Europe, why change anything? That is the argument. The
:53:15. > :53:19.UK have traditionally done very well in terms of domestic and European
:53:20. > :53:30.competitions. The German models have been successful, and the Spanish and
:53:31. > :53:37.other countries. This idea sounds great of course but what difference
:53:38. > :53:41.will it make to these clubs? The government promised supporters they
:53:42. > :53:45.would legislate to make sure there was more engagement with supporters
:53:46. > :53:51.in the clubs. They should look at that again and get the commitment to
:53:52. > :53:56.support. In Newcastle 52,000 supporters attend every game. I am
:53:57. > :54:04.not sure it is good enough to see just one person on the board.
:54:05. > :54:12.Generations of families have been going and they should have a say.
:54:13. > :54:26.With the have any more say effing big businesses should anyone who
:54:27. > :54:30.shops in Tesco beyond the board? Why shouldn't these people who spend
:54:31. > :54:37.hard earned money to watch the team through bad times and good not happy
:54:38. > :54:43.voice in how it is run? It would benefit the clubs if the sat back
:54:44. > :54:49.and listened to deal people in the real world. There is populist
:54:50. > :54:58.posturing by the government but it has been ditched now, why is that? I
:54:59. > :55:04.am not as added a football fan as Ian, but my mother`in`law is. They
:55:05. > :55:10.are enormous huge profit`making businesses. The fact that they were
:55:11. > :55:17.once local football teams seems to have been largely lost. If there is
:55:18. > :55:20.a way to get them a better relationship that gives them a
:55:21. > :55:26.practical consideration with the fan base, I think the football
:55:27. > :55:31.Association and the clubs themselves can take that decision. There does
:55:32. > :55:37.not need to be drive to encourage, if they are genuinely concerned, by
:55:38. > :55:46.the members, the people who turn out every Saturday whatever the weather.
:55:47. > :55:53.Are you saying get some shoppers on board for supermarkets? YouTube
:55:54. > :55:58.Tesco's as an example, I have the Tesco Clubcard, if they choose
:55:59. > :56:03.things I do not like I would take my business elsewhere. Football is a
:56:04. > :56:09.monstrous business but if you are a fan are you going to stop supporting
:56:10. > :56:13.them? The reality is that there needs to be a better relationship
:56:14. > :56:18.between the directors of an individual football club to build a
:56:19. > :56:22.stronger grouping. You see it in the smaller clubs more effectively than
:56:23. > :56:35.the big ones. Newcastle fans could stay a way. But when it comes to it,
:56:36. > :56:40.they do not. Fans at Newcastle, like teams up and down the country, have
:56:41. > :56:46.a strong allegiance. Not the type of allegiance you might have at Tesco.
:56:47. > :56:54.That is a ridiculous analogy! They are dyed in the will supporters, it
:56:55. > :56:57.is what they live and breed for. The directors and owners of the club
:56:58. > :57:06.should just listen to what these people have got to see. `` say. If
:57:07. > :57:17.you listen to them, they might get more success. There are not many
:57:18. > :57:26.issues that unite country sport enthusiasts. They have all joined up
:57:27. > :57:32.to stop them campaigning. Now if the rest of the political news in 62nd
:57:33. > :57:36.seed as our reporter. Tyne and we are fired and rescue services to
:57:37. > :57:45.consult on plans to cut firefighter posts and close existing firefighter
:57:46. > :57:50.stations. This new nation 's depot has been earmarked for closure in
:57:51. > :57:56.Cumbria. Some jobs might still go but the site should remain open.
:57:57. > :58:02.There are concerns about the government's new lobbying bill. The
:58:03. > :58:09.big lobbyists working for energy firms and drinks companies would be
:58:10. > :58:18.unaffected but some people's work would be hit. The private lobbying
:58:19. > :58:23.group will still go on. And in Newcastle beer was history with a
:58:24. > :58:30.minister in a committee of the French parliament. They were
:58:31. > :58:38.discussing ways to tackle youth unemployment. Now let's look in a
:58:39. > :58:44.bit more detail at the first of those stories. The lobbying bill,
:58:45. > :58:50.some have accused them of overreaction, what do you think? I
:58:51. > :58:57.have had more correspondence on this bill than any other issue in the
:58:58. > :59:02.last 8.5 years. It is not correspondence from raving militants
:59:03. > :59:06.who want a revolution, it is from local and national charities,
:59:07. > :59:17.campaign groups. They are concerns are that they are being stopped from
:59:18. > :59:24.using the boys to change policies at the national level. It is the run`up
:59:25. > :59:28.to the national election that they have to get in there and get
:59:29. > :59:35.commitment from the party they believe will be in government after
:59:36. > :59:38.the election. This is a gagging law there to prevent local people from
:59:39. > :59:46.holding to account the government for the decisions it has made. The
:59:47. > :59:49.government says they are starting out with good intentions but have
:59:50. > :59:59.they turned this into a dog 's breakfast? It seems to me to be
:00:00. > :00:06.quite confused bit of legislation. You need to be the assurances for
:00:07. > :00:11.the average charity. Part of the purpose of the bill is to enforce
:00:12. > :00:15.the union structures to make a clean record of their membership so there
:00:16. > :00:23.is a much clearer source of information on that side of things.
:00:24. > :00:31.They are bashing the unions? Absolutely not, transparency is the
:00:32. > :00:37.key, where there's money going and how is it being spent? Whether it is
:00:38. > :00:45.a big charity or a union. Trade unions should be accountable. We
:00:46. > :00:51.should see where they are influencing your party leader for
:00:52. > :00:55.example? You can have a look at every evening which has come from a
:00:56. > :00:58.trade union and look down the financial line to see where it has
:00:59. > :01:04.come from, the lollipop ladies, dinner ladies, you can hardly say
:01:05. > :01:09.that its financing of the parties which come from lobbyists and big
:01:10. > :01:17.business. That is it from us. Next Sunday we will be supporting the
:01:18. > :01:19.funding policy. That is on health spending. For
:01:20. > :01:31.free school area for into that category. Thank you.
:01:32. > :01:32.Is Labour about to drop its support category. Thank you.
:01:33. > :01:36.Is Labour about to drop its support for High Speed 2, a rail line the
:01:37. > :01:47.party approved while in government? for High Speed 2, a rail line the
:01:48. > :01:59.these green shoots? These are all questions for The Week Ahead.
:02:00. > :02:04.So, HS2. Miss Flint wouldn't answer the question. She's in northern MP
:02:05. > :02:09.too. Ed Balls is comparing it to the Millennium Dome.
:02:10. > :02:14.too. Ed Balls is comparing it to the minute's silence for HS2? It will
:02:15. > :02:19.not be quite as crude as that. They will not stand up and say, we
:02:20. > :02:19.not be quite as crude as that. They senior Labour person said to me it
:02:20. > :02:22.would be a bit senior Labour person said to me it
:02:23. > :02:28.that Gordon Brown and Ed Balls set for the euro back in 97. They will
:02:29. > :02:32.be chucking lots of questions into the air, and the questions will
:02:33. > :02:38.create doubt, and will create the grounds for Labour to say, at some
:02:39. > :02:43.point, we think there is a much much better way of spending the money. It
:02:44. > :02:50.isn't ?42 billion, because that includes a contingency. Let's see
:02:51. > :02:57.what Peter Mandelson had to say about HS2. He was in the government
:02:58. > :03:01.when Labour supported it. Frankly, there was too much of the argument
:03:02. > :03:08.that if everyone else has got a high-speed train, we should have won
:03:09. > :03:14.too. Regardless of need, regardless of cost, and regardless of
:03:15. > :03:19.alternatives. As a party, to be frank, we didn't feel like being
:03:20. > :03:26.trumped by the zeal of the then opposition's support for the
:03:27. > :03:30.high-speed train. We wanted, if anything, to upstage them. So they
:03:31. > :03:38.didn't really need it, and we're only talking about ?50 billion. Why
:03:39. > :03:42.would you take a decision involving ?50 billion in a serious way? For
:03:43. > :03:48.David Cameron, if it becomes clear Labour is against it, he cannot
:03:49. > :03:52.proceed. He indicated last week that he wouldn't proceed if the certainty
:03:53. > :03:56.wasn't there. For Labour, HS2 is really a debate about the deficit by
:03:57. > :04:01.proxy. They think that if you don't go ahead with HS2, that releases
:04:02. > :04:06.tens of billions of pounds to spend on other things, such as public
:04:07. > :04:28.services, without going into boring. I don't think that works because
:04:29. > :04:30.there was a difference between cancelling something that already
:04:31. > :04:32.exists to pay for something else, and cancelling something that does
:04:33. > :04:35.not yet exist and will be paid for over decades to pay for something
:04:36. > :04:38.here and now. Can Labour do this? I know that the line will be, we are
:04:39. > :04:41.not going to build this railway because we are going to build
:04:42. > :04:43.200,000 houses a year. Can they do this without political cost? I think
:04:44. > :04:48.there will be political costs, but they will play this card of we have
:04:49. > :04:53.changed our mind. I think Cameron's line has been very clever, saying we
:04:54. > :04:58.cannot do it without labour. You can put it in two ways. Sorry, we cannot
:04:59. > :05:02.go ahead with it, but Labour has ruined your chance of prosperity, or
:05:03. > :05:09.they can tie themselves to it, and then Labour cannot attack it on
:05:10. > :05:14.great grounds when costs do spire. You can write Labour's script right
:05:15. > :05:22.now. They can say, if we were in charge, the financial management
:05:23. > :05:27.would be much better. This raises some really important questions for
:05:28. > :05:33.the government. They have utterly failed to make the case for HS2
:05:34. > :05:37.There is a real case to make. Between London and Birmingham it is
:05:38. > :05:42.about capacity not speed. North of Birmingham, it is about
:05:43. > :05:46.connectivity. It is a simple case to make, but it is only in the last
:05:47. > :05:49.month that they have been making that case. It shows really terrible
:05:50. > :05:57.complacency in the coalition that they haven't done that. We'll HS2
:05:58. > :06:01.happen or not? I think it will. For the reasons that Nick outlined,
:06:02. > :06:10.there is not of a constituency for it amongst Northern areas. -- there
:06:11. > :06:17.is enough of a constituency for it. There is private investment as well.
:06:18. > :06:24.It isn't like Heathrow. I say no, because I think Labour will drop
:06:25. > :06:27.their support for it. Caroline Flint said she was in favour of the
:06:28. > :06:32.concept of trains generally, but will it go further than that? It is
:06:33. > :06:38.difficult to see how it will go ahead if Labour will not support it
:06:39. > :06:46.after setting five tests that it clearly will not meet. Some will
:06:47. > :06:51.breathe a sigh of relief. Some will say, even in the 20th century, we
:06:52. > :06:56.cannot build a proper rail network. The economy was another big story of
:06:57. > :07:01.the week. We had those GDP figures. There is a video the Tories are
:07:02. > :07:05.releasing. The world premiere is going to be here. Where's the red
:07:06. > :07:10.carpet? It gives an indication of how the Tories will hand Mr Miliband
:07:11. > :07:43.and labour in the run-up to the election. Let's have a look at it.
:07:44. > :07:49.These graphics are even worse than the ones we use on our show! How on
:07:50. > :07:58.earth would you expect that to go viral? It did have a strange feel
:07:59. > :08:03.about it. It doesn't understand the Internet at all. Who is going to
:08:04. > :08:14.read those little screens between it? Put a dog in it! However,
:08:15. > :08:20.putting that aside, I have no idea that that is going to go viral. The
:08:21. > :08:26.Tories are now operating - and I say Tories rather than the coalition -
:08:27. > :08:30.on the assumption that the economy is improving and will continue to
:08:31. > :08:36.improve, and that that will become more obvious as 2014 goes on. We
:08:37. > :08:42.just saw their how they will fight the campaign. Yes, and at the
:08:43. > :08:47.crucial moment, you will reach the point where wages. To rise at a
:08:48. > :08:51.faster pace than inflation, and then people will start to, in the words
:08:52. > :08:57.of Harold Macmillan, feel that they have never had it so good. That is
:08:58. > :09:05.the key moment. If the economy is growing, there is a rule of thumb
:09:06. > :09:08.that the government should get a benefit. But it doesn't always work
:09:09. > :09:11.like that. The fundamental point here is that Ed Miliband has had a
:09:12. > :09:17.great month. He has totally set the agenda. He has set the agenda with
:09:18. > :09:22.something - freezing energy prices - that may not work. That video shows
:09:23. > :09:25.that the Conservatives want to get the debate back to the
:09:26. > :09:33.fundamentals. That this is a party that told us for three years that
:09:34. > :09:37.this coalition was telling us to -- was taking us to hell on a handcart.
:09:38. > :09:45.That doesn't seem to have happened. The energy price was a very clever
:09:46. > :09:49.thing, at the party conference season, which now seems years ago.
:09:50. > :09:56.They saw that the recovery was going to happen, so they changed the
:09:57. > :10:00.debate to living standards. Some economists are now privately
:10:01. > :10:05.expecting growth to be 3% next year, which was inconceivable for five
:10:06. > :10:07.months ago. If growth is 3% next year, living standards will start to
:10:08. > :10:14.rise again. Where does Labour go then? I would go further, and say
:10:15. > :10:18.that even though Ed Miliband has made a small political victory on
:10:19. > :10:25.living standards, it hasn't registered in the polls. Those polls
:10:26. > :10:29.have been contracted since April -- have been contracting since April.
:10:30. > :10:34.That macro economic story matters more than the issue of living
:10:35. > :10:38.standards. The interesting thing about the recovery is it confounds
:10:39. > :10:44.everybody. No one was predicting, not the Treasury, not the media not
:10:45. > :10:51.the IMF, not the academics, and the only people I can think of... I fit
:10:52. > :10:57.-- I thought they knew everything! The only people I know who did are
:10:58. > :11:00.one adviser who is very close to George Osborne, and the clever hedge
:11:01. > :11:05.fund is who were buying British equities back in January. Because
:11:06. > :11:09.the Treasury's record is so appalling, no one believe them, but
:11:10. > :11:14.they were saying around February, March this year, that by the end of
:11:15. > :11:23.the summer, the recovery would be gathering momentum. For once, they
:11:24. > :11:26.turned out to be right! They said that the economy would be going gang
:11:27. > :11:33.bust is! Where did the new Tory voters come from? I agree, if the
:11:34. > :11:42.economic recovery continues, the coalition will be stronger. But
:11:43. > :11:47.where will they get new voters from? For people who sign up to help to
:11:48. > :11:51.buy, they will be locked into nice mortgages at a low interest rate,
:11:52. > :11:57.and just as you go into a general election, if you are getting 3%
:11:58. > :12:00.growth and unemployment is down the Bank of England will have to review
:12:01. > :12:04.their interest rates. People who are getting nice interest rates now may
:12:05. > :12:11.find that it is not like that in a few months time. The point John
:12:12. > :12:16.Major was making implicitly was that Mrs Thatcher could speak to people
:12:17. > :12:21.on low incomes. John Major could not speak to them -- John Major could
:12:22. > :12:25.speak to them. But this coalition cannot speak to them. This idea
:12:26. > :12:33.about the reshuffle was that David Cameron wanted more Northern voices,
:12:34. > :12:38.more women, to make it look like it was not a party of seven men. When
:12:39. > :12:43.David Cameron became leader, John Major said, I do not speak very
:12:44. > :12:47.often, but when I do, I will help you, because I think you are good
:12:48. > :12:52.thing and I do not want to be like Margaret Thatcher. But that speech
:12:53. > :12:56.was clearly a lament for the party he believed that David Cameron was
:12:57. > :13:02.going to lead and create, but that isn't happening. And energy prices
:13:03. > :13:07.continue into this coming week. We have the companies going before a
:13:08. > :13:11.select committee. My information is they are sending along the secondary
:13:12. > :13:16.division, not the boss. How can they get along -- get away with that I
:13:17. > :13:21.got the letter through from British Gas this week explaining why my
:13:22. > :13:25.bills are going up, and at no point since this became a story have any
:13:26. > :13:30.of the big companies handled it well. I will have to leave it there.
:13:31. > :13:37.Make sure you pay your bill! That's it for today. The Daily Politics is
:13:38. > :13:44.back on BBC Two tomorrow. I will be back here on BBC One next Sunday.
:13:45. > :13:51.Remember, if it's Sunday, it is The Sunday Politics.