:00:37. > :00:44.Morning folks. Welcome to the Sunday Politics. George Osborne's fifth
:00:45. > :00:47.Budget will offer more tax relief for the lower paid but not for
:00:48. > :00:49.middle income earners being thrust into the 40p tax bracket. That's our
:00:50. > :00:52.Ed Balls says millions of people top story.
:00:53. > :00:55.Ed Balls says millions of people aren't feeling any benefit from the
:00:56. > :00:56.recovery. We'll discuss the economy with big political beasts from
:00:57. > :01:04.Labour, the Conservatives, and the with big political beasts from
:01:05. > :01:07.Lib Dems. Now that Ed Miliband has effectively ruled out an in/out EU
:01:08. > :01:08.referendum, how does UKIP deal with Tory claims that a vote for UKIP
:01:09. > :01:15.In the North East and Cumbrha. means no chance
:01:16. > :01:19.In the North East and Cumbrha. Labour and the unions changds are
:01:20. > :01:21.coming but are members convhnced? And tackling youth unemploylent `
:01:22. > :01:23.the County Durham scheme getting young people
:01:24. > :01:24.of cycling. The three areas of London getting a cash boost to try
:01:25. > :01:36.something different. And with me as always our top
:01:37. > :01:39.political panel - Nick Watt, Helen Lewis and Janan Ganesh. They'll be
:01:40. > :01:43.tweeting their thoughts using the hashtag #bbcsp throughout the
:01:44. > :01:46.programme. So, just three months after his last major financial
:01:47. > :01:52.statement, George Osborne will be at the despatch box again on Wednesday,
:01:53. > :01:54.delivering his 2014 Budget. The Chancellor has already previewed his
:01:55. > :02:05.own speech, pledging to build what he calls a "resilient economy". The
:02:06. > :02:09.message I will give in the Budget is the economic plan is working but the
:02:10. > :02:12.job is far from done. We need to build resilient economy which means
:02:13. > :02:16.addressing the long-term weaknesses in Britain that we don't export
:02:17. > :02:20.enough, invest enough, build enough, make enough. Those are the things I
:02:21. > :02:24.will address because we want Britain to earn its way in the world. George
:02:25. > :02:27.Osborne's opposite number, Ed Balls, has also been talking ahead of the
:02:28. > :02:30.Budget. He says not everyone is feeling the benefit of the economic
:02:31. > :02:36.recovery, and again attacked the Government's decision to reduce the
:02:37. > :02:40.top rate of tax from 50 to 45%. George Osborne is only ever tough
:02:41. > :02:43.when he's having a go at the week and the voiceless. Labour is willing
:02:44. > :02:47.to face up to people on the highest incomes and say, I'm sorry,
:02:48. > :02:53.justifying a big tax cut at this time is not fair. We will take away
:02:54. > :02:57.the winter allowance from the richer pensioners, and I think that's the
:02:58. > :03:03.right thing to do. George Osborne might agree, but he's not allowed to
:03:04. > :03:06.say so. That was the Chancellor and the shadow chancellor. Janan, it
:03:07. > :03:10.seems like we are in a race against time. No one argues that the
:03:11. > :03:14.recovery is not under way, in fact it looks quite strong after a long
:03:15. > :03:19.wait, but will it feed through to the living standards of ordinary
:03:20. > :03:24.people in time for the May election? They only have 14 months to do it.
:03:25. > :03:28.The big economic variable is business investment. Even during the
:03:29. > :03:32.downturn, businesses hoarded a lot of cash. The question is, are they
:03:33. > :03:37.confident enough to release that into investment and wages? Taking on
:03:38. > :03:40.new people, giving them higher pay settlements. That could make the
:03:41. > :03:46.difference and the country will feel more prosperous and this time next
:03:47. > :03:50.year. But come to think of it, it strikes me, that how anticipated it
:03:51. > :03:53.is, it's the least talked about Budget for many years. I think that
:03:54. > :03:58.is because the economy has settled down a bit, but also because people
:03:59. > :04:02.have got used to the idea that there is no such thing as a giveaway.
:04:03. > :04:07.Anything that is a tax cut will be taken away as a tax rise or spending
:04:08. > :04:10.cut. That's true during the good times but during fiscal
:04:11. > :04:17.consolidation, it's avoidable. - unavoidable. There is a plus and
:04:18. > :04:21.minus for the Conservatives here. 49% of people think the government
:04:22. > :04:23.is on roughly the right course, but only 16% think that their financial
:04:24. > :04:29.circumstances will improve this year. It will be a tough one for the
:04:30. > :04:35.Labour Party to respond to. I agree with Janan. Everyone seems bored
:04:36. > :04:40.with the run-up to the Budget. The front page of the Sunday Times was
:04:41. > :04:45.about fox hunting, the front page of the Sunday Telegraph was about EU
:04:46. > :04:50.renegotiation. Maybe we are saying this because there have not been
:04:51. > :04:55.many leaks. We have got used to them, and most of the George Osborne
:04:56. > :04:59.chat on Twitter was about how long his tie was. Freakishly long. I
:05:00. > :05:06.wouldn't dare to speculate why. Anything we should read into that? I
:05:07. > :05:13.don't know. For a long while there was no recovery, then it was it is a
:05:14. > :05:16.weak recovery, and now, all right, it's strong but not reaching
:05:17. > :05:22.everyone in the country. That is where we are in the debate. That's
:05:23. > :05:28.right, and the Conservative MPs are so anxious and they are making
:05:29. > :05:32.George Osborne announcing the rays in the personal allowance will go
:05:33. > :05:40.up, saying it might go up to 10 750 from next year, and Conservative MPs
:05:41. > :05:44.say that that's OK but we need to think about the middle voters.
:05:45. > :05:47.People are saying the economy is recovering but no one is feeling it
:05:48. > :05:51.in their pocket. These are people snagged in at a 40p tax rate. The
:05:52. > :05:56.Tories are saying these are our people and we have to get to them.
:05:57. > :06:02.He has given the Lib Dems more than they could have hoped for on raising
:06:03. > :06:06.the threshold. Why is he not saying we have done a bit for you, now we
:06:07. > :06:13.have to look after our people and get some of these people out of that
:06:14. > :06:15.40% bracket? Partly because the Lib Dems have asked for it so
:06:16. > :06:19.insistently behind-the-scenes. Somebody from the Treasury this week
:06:20. > :06:22.told me that these debates behind the scenes between the Lib Dems and
:06:23. > :06:27.Tories are incredibly tenacious and get more so every year. The Lib Dems
:06:28. > :06:32.have been insistent about going further on the threshold. The second
:06:33. > :06:37.reason is that the Tories think the issue can work for them in the next
:06:38. > :06:41.election. They can take the credit. If they enthusiastically going to
:06:42. > :06:45.?12,000 and make it a manifesto pledge, they can claim ownership of
:06:46. > :06:50.the policy. The Liberal Democrats want to take it to 12,500, which
:06:51. > :06:54.means you are getting into minimum wage territory. It's incredibly
:06:55. > :07:00.expensive and the Tories are saying that maybe you would be looking at
:07:01. > :07:04.the 40p rate. The Tories have played as well. There have been authorised
:07:05. > :07:07.briefings about the 40p rate, and Cameron and Osborne have said that
:07:08. > :07:10.their priority was helping the lowest paid which is a useful
:07:11. > :07:16.statement to make and it appeals to the UKIP voters who are the
:07:17. > :07:20.blue-collar workers. And we are right, the economy will determine
:07:21. > :07:24.the next election? You assume so. It was ever that is. It didn't in 992
:07:25. > :07:34.or 1987. It did in 1992. Ed Miliband's announcement last week
:07:35. > :07:37.that a Labour government would not hold a referendum on Europe unless
:07:38. > :07:39.there's another transfer of powers from Britain to Brussels has
:07:40. > :07:44.certainly clarified matters. UKIP say it just shows the mainstream
:07:45. > :07:47.parties can't be trusted. The Conservatives think it means UKIP
:07:48. > :07:50.voters might now flock back to them as the only realistic chance of
:07:51. > :07:54.securing a referendum. Giles Dilnot reports.
:07:55. > :07:58.When it comes to Europe and Britain's relation to it, the
:07:59. > :08:02.question is whether the answer is answered by a question. To be in or
:08:03. > :08:05.not to be in, that is the question, and our politicians have seemed less
:08:06. > :08:09.interested in question itself but whether they want to let us answer
:08:10. > :08:21.it. Labour clarified their position last week. There will be no transfer
:08:22. > :08:24.of powers without an in out referendum, without a clear choice
:08:25. > :08:30.as to whether Britain will stay in the EU. That seems yes to a
:08:31. > :08:33.referendum, but hold on. I believe it is unlikely that this lock will
:08:34. > :08:37.be used in the next Parliament. So that's a no. The Conservatives say
:08:38. > :08:47.yes to asking, in 2017, if re-elected, but haven't always. In
:08:48. > :08:49.2011, 81 Tory MPs defied the PM by voting for a referendum on EU
:08:50. > :08:53.membership: the largest rebellion against a Tory prime minister over
:08:54. > :09:03.Europe. Prompted by a petition from over 100,000 members of the public.
:09:04. > :09:05.The wrong question at the wrong time said the Foreign Secretary of a
:09:06. > :09:08.coalition Government including selfie-conciously-pro European Lib
:09:09. > :09:11.Dems, who had a referendum pledge in their 2010 manifesto, but only in
:09:12. > :09:14.certain circumstances. So we have the newspapers, and the public
:09:15. > :09:17.meeting leaflets. UKIP have always wanted the question put regardless.
:09:18. > :09:25.But Labour's new position may change things and The Conservatives think
:09:26. > :09:31.so. I think it does, because, you know, we are saying very clearly,
:09:32. > :09:36.like UKIP, we want a referendum but only a Conservative government can
:09:37. > :09:41.deliver it because most suffer largest would say it is possible in
:09:42. > :09:50.the first past the post system to have a UKIP government --
:09:51. > :09:57.sophologists. And then it's easy for as to say that if a UKIP vote lets
:09:58. > :10:03.in a Conservative government, then they won't hold a referendum. UKIP
:10:04. > :10:07.seem undaunted by the clarifications of the other parties, campaigning
:10:08. > :10:10.like the rest but with a "tell it how it is, just saying what you re
:10:11. > :10:16.thinking, we aren't like them" attitude. They seem more worried
:10:17. > :10:21.about us and what we want, and I don't see that in the other parties.
:10:22. > :10:27.In parts of the UK, like South Essex, it's a message they think is
:10:28. > :10:31.working. They are taking the voters for granted again and people have
:10:32. > :10:38.had enough. People are angry, they see people saying they will get a
:10:39. > :10:43.vote on the European Union, but then it just comes down the road. They
:10:44. > :10:48.were quick to capitalise on the announcements, saying only the
:10:49. > :10:54.Conservatives will give you say so does it change things? Not really.
:10:55. > :10:58.We have been talking about a referendum and having a debate on
:10:59. > :11:02.the European Union for years, and the other parties are playing catch
:11:03. > :11:06.up. They have a trust issue. Nobody trusts them on the European Union
:11:07. > :11:09.and that is why people come to us. Who the average UKIP voter is, or
:11:10. > :11:12.how they voted before is complicated, and what dent they
:11:13. > :11:14.might make on Conservative and Labour votes in 2015 is trickier
:11:15. > :11:23.still, but someone's been crunching the numbers anyway. We reckon it is
:11:24. > :11:26.between 25 and 30% of the electorate broadly share the UKIP motivation,
:11:27. > :11:30.so to top out at that level would be difficult. That's an awful lot of
:11:31. > :11:35.voters, but it's not the majority, and this is the reason why the main
:11:36. > :11:38.parties can't afford to just openly appealed to the UKIP electorate too
:11:39. > :11:43.hard because the elections are won and lost amongst the other 70%, the
:11:44. > :11:49.middle-class, the graduate, the younger, ethnic minorities. An
:11:50. > :11:52.appeal to the values of UKIP voters will alienate some of the other
:11:53. > :11:56.groups, and they are arguably more significant in winning the election.
:11:57. > :11:59.Whatever, the numbers UKIPers seem doggedly determined to dig away at
:12:00. > :12:02.any support the other parties have previously enjoyed.
:12:03. > :12:05.Giles Dilnot reporting. UKIP's leader, Nigel Farage, joins me now
:12:06. > :12:22.for the Sunday Interview. Nigel Farage, welcome back. Good
:12:23. > :12:25.morning. So the Labour Party has shot a fox. If Ed Miliband is the
:12:26. > :12:29.next by Minister, there will not be a referendum customer there's a long
:12:30. > :12:33.way between now and the next election, and Conservative party
:12:34. > :12:36.jobs and changes. We had a cast iron guarantee of a referendum from
:12:37. > :12:40.camera, then he three line whip people to vote against it, and now
:12:41. > :12:44.they are for it. What the Labour Party has done is open up a huge
:12:45. > :12:47.blank to us, and that is what we will go for in the European
:12:48. > :12:51.elections this coming year in May. I think there is a very strong chance
:12:52. > :12:55.that Labour will match the Conservative pledge by the next
:12:56. > :13:00.general election. There may be, but at the moment he has ruled it out,
:13:01. > :13:03.and if he does not change his mind and goes into the election with the
:13:04. > :13:10.policy as it is, the only chance of a referendum is a Tory government.
:13:11. > :13:14.If you think the Tories will form a majority, which I think is unlikely.
:13:15. > :13:17.Remember, two thirds of our voters would never vote Conservative
:13:18. > :13:22.anyway. There is still this line of questioning that assumes UKIP voters
:13:23. > :13:25.are middle-class Tories. We have some voters like that, but most of
:13:26. > :13:31.them are coming to us from Labour, some from the Lib Dems and a lot of
:13:32. > :13:37.nonvoters. But it come the election you failed to change Mr Miliband's
:13:38. > :13:40.line, I repeat, the only chance of a referendum, if you want a
:13:41. > :13:44.referendum, if that is what matters, and the polls suggest it doesn't
:13:45. > :13:47.matter to that many people, but if that is what matters, the only way
:13:48. > :13:52.you can get one is to vote Conservative. No, because you have a
:13:53. > :13:56.situation in key marginals, especially where all three parties
:13:57. > :14:00.are getting a good share, where we will see, and this depends a lot on
:14:01. > :14:07.the local elections and the European elections, there are target
:14:08. > :14:10.constituencies where UKIP has a reasonably good chance of winning a
:14:11. > :14:17.seat, and that will change the agenda. Every vote for UKIP makes a
:14:18. > :14:20.Tory government less likely. Arab voters are not Tory. Only a third of
:14:21. > :14:27.the UKIP boat comes from the Conservative party -- our voters are
:14:28. > :14:31.not Tory. -- the UKIP vote. It was mentioned earlier, about blue-collar
:14:32. > :14:33.voters. We pick up far more Labour Party and nonvoters than
:14:34. > :14:37.conservatives. On the balance of what the effect of the UKIP boat
:14:38. > :14:41.is, the Tories should worry about us, they should worry about the fact
:14:42. > :14:46.they have lost faith with their own electorate. Even if there is a
:14:47. > :14:49.minority Ed Miliband government it means no referendum. Labour and the
:14:50. > :14:54.Liberal Democrats are now at one on the matter. The next election is in
:14:55. > :14:58.a few weeks time, the European elections. What happens in those
:14:59. > :15:02.elections will likely change the party stands and position on a
:15:03. > :15:06.referendum. The fact that Ed Miliband has said this means, for
:15:07. > :15:10.us, our big target on the 22nd of May will be the Labour voters in the
:15:11. > :15:14.Midlands and northern cities, and if we do hammer into that boat and we
:15:15. > :15:23.are able to beat Labour on the day, there's a good chance of their
:15:24. > :15:31.policy changing. One poll this morning suggests Labour is close to
:15:32. > :15:38.you at 28, the Conservatives down at 21, the Lib Dems down at eight. You
:15:39. > :15:41.are taking votes from the Conservatives and the Liberal
:15:42. > :15:49.Democrats. We are certainly taking votes from the Lib Dems but that is
:15:50. > :15:54.comparing the poll with one year ago when I don't think most people knew
:15:55. > :15:59.what the question really was. You seem to be in an impossible position
:16:00. > :16:04.because the better you do in a general election, the less chance
:16:05. > :16:10.there will be a referendum by 2 20. No, look at the numbers. Only a
:16:11. > :16:16.third of our voters are Conservatives. When we have polled
:16:17. > :16:20.voters that have come to us, we asked them if there was no UKIP
:16:21. > :16:25.candidate who would you vote for, less than one in five said
:16:26. > :16:30.Conservative. Less than one in five UKIP voters would be tempted to vote
:16:31. > :16:35.Conservative under any circumstances so the arithmetic does not suggest
:16:36. > :16:39.we are the Conservative problem it suggests we are hurting all of the
:16:40. > :16:44.parties and the reason the Tories are in trouble is because they have
:16:45. > :16:50.lost their traditional base. Why do you think Nick Clegg is debating
:16:51. > :16:59.Europe? I think they are in trouble, at 8% they could be wiped
:17:00. > :17:04.out, they could go from 12 to nothing and I think it is a chance
:17:05. > :17:10.for Nick Clegg to raise their profile. They are fringe party with
:17:11. > :17:15.respect to this contest so I see why he wants to do it. One of our big
:17:16. > :17:19.criticisms is that we have not been able to have a full debate on
:17:20. > :17:24.national television on the alternatives of the European Union
:17:25. > :17:37.so I am looking forward to it. How are you preparing? I think you can
:17:38. > :17:43.be over scripted with these things. Are you not doing mock debates? No,
:17:44. > :17:48.I am checking my facts and figures and making sure that I can show the
:17:49. > :17:54.British people that in terms of jobs, we would be far better off not
:17:55. > :17:58.being within the European Union not being within its rule book, not
:17:59. > :18:04.suffering from some of the green taxes they are putting on the
:18:05. > :18:10.manufacturing industry. The idea that 3 million jobs are at risk I
:18:11. > :18:16.want to show why that is nonsense. Who do you think is playing you in
:18:17. > :18:23.their mock debates? They probably went to the pub and found someone!
:18:24. > :18:27.We will see. You have promised to do whatever it takes to fund your
:18:28. > :18:34.European election campaign, how much has been given so far? Just give it
:18:35. > :18:40.a few weeks and you will see what Paul is planning to do. He has made
:18:41. > :18:49.a substantial investment in the campaign already. How much? I'm not
:18:50. > :18:53.answering that for now. We are well on our way to a properly funded
:18:54. > :19:00.campaign and our big target will be the big cities and the working vote
:19:01. > :19:03.in those communities. Your deputy chairman Neil Hamilton is another
:19:04. > :19:09.former Tory, he says so far we haven't seen the colour of his
:19:10. > :19:15.money. Exactly two weeks ago, and things have changed since then. Mr
:19:16. > :19:25.Sykes has written a cheque since then? Yes. This morning's papers
:19:26. > :19:32.saying you will be asking MEPs to contribute ?50,000 each, is that
:19:33. > :19:39.true? Over the next five years, yes. Not for the European campaign. So
:19:40. > :19:44.lack of money will not be an excuse. We will have a properly funded
:19:45. > :19:48.campaign. How we raise the kind of money needed to fund the general
:19:49. > :19:59.election afterwards is another question. What is UKIP's policy on
:20:00. > :20:04.paying family members? We don't encourage it and I didn't employ any
:20:05. > :20:10.family member for years. My wife ended up doing the job and paid for
:20:11. > :20:17.the first seven years of my job She is paid now? Until May, then she
:20:18. > :20:25.comes off the payroll am which leaves me with a huge problem. In
:20:26. > :20:31.2004 you said, UKIP MEPs will not employ wives and there will be no
:20:32. > :20:35.exceptions. An exception was made because I became leader of the
:20:36. > :20:39.National party as well as a leader of the group in European
:20:40. > :20:43.Parliament. Things do change in life, and you can criticise me for
:20:44. > :20:49.whatever you like, but I cannot be criticised for not having a big
:20:50. > :20:58.enough workload. No, but you didn't employ your wife when you had told
:20:59. > :21:01.others not to do it your party. Nobody else in my party has a big
:21:02. > :21:06.job in Europe and the UK. We made the exception for this because of
:21:07. > :21:11.very unusual circumstances. It also looks like there was a monetary
:21:12. > :21:18.calculation. Listen to this clip from a BBC documentary in 2000. It
:21:19. > :21:24.is a good job. I worked it out because so much of what you get is
:21:25. > :21:27.after tax that if you used the secretarial allowances to pay your
:21:28. > :21:35.wife on top of the other games you can play, I reckon this job in
:21:36. > :21:38.Stirling term is over a quarter of ?1 million a year. That is what you
:21:39. > :21:45.would need to earn working for Goldman Sachs or someone like that.
:21:46. > :21:48.I agree with that. More importantly the way you really make money in the
:21:49. > :21:53.European Parliament is being their five days a week, because you sign
:21:54. > :21:59.in every day, you get 300 euros every day, and that is how people
:22:00. > :22:04.maxed out. The criticism of me is that I am not there enough so
:22:05. > :22:08.whatever good or bad I have done in the European Parliament, financial
:22:09. > :22:12.gain has not been one of the benefits. There have been
:22:13. > :22:18.allegations of you also employing a former mistress on the same European
:22:19. > :22:23.Parliamentary allowance, you deny that? I am very upset with the BBC
:22:24. > :22:28.coverage of this. The ten o'clock news run this as a story without
:22:29. > :22:32.explaining that that allegation was made using Parliamentary privilege
:22:33. > :22:40.by somebody on bail facing serious fraud charges. I thought that was
:22:41. > :22:48.pretty poor. You have a chance to do that and you deny you have employed
:22:49. > :22:52.a former mistress? Yes, but if you look at many of the things said over
:22:53. > :22:56.the last week, I think it is becoming pretty clear to voters that
:22:57. > :23:03.the establishment are becoming terrified of UKIP and they will use
:23:04. > :23:10.anything they can find to do us down in public. Is an MEP employs his
:23:11. > :23:16.wife and his former mistress, that would be resigning matter, wouldn't
:23:17. > :23:20.it? Yes, particularly if the assumption was that money was being
:23:21. > :23:27.taped for work but was not being done. Who do you think is behind
:23:28. > :23:33.these stories? It is all about negative, it is all about attacks,
:23:34. > :23:37.but I don't think it is actually going to work because so much of
:23:38. > :23:42.what has been said in the last week is nonsense. A reputable daily
:23:43. > :23:47.newspaper said I shouldn't be trusted because I had stored six
:23:48. > :23:51.times for the Conservative party, I have never even stored in a local
:23:52. > :23:56.council election. I think if you keep kicking an underdog, it will
:23:57. > :24:07.make the British people rally around us. Is it the Conservatives? Yes,
:24:08. > :24:12.and the idea that all of our voters are retired colonels is simply not
:24:13. > :24:22.true. We get some voters from the Labour side as well. Would you
:24:23. > :24:27.consider standing in a Labour seat if you are so sure you are getting
:24:28. > :24:36.Labour votes? Yes, but the key for UKIP is that it has to be marginal.
:24:37. > :24:43.Just for your own future, if you fail to win a single soul -- single
:24:44. > :24:48.seat in the general election, if Ed Miliband fails to win an outright
:24:49. > :24:53.majority, will you stand down as UKIP leader? I would think within
:24:54. > :24:58.about 12 hours, yes. I will have failed, I got into politics not
:24:59. > :25:04.because I wanted a career in politics, far from it. I did it
:25:05. > :25:07.because I don't think this European entanglement is right for our
:25:08. > :25:12.country. I think a lot of people have woken up to the idea we have
:25:13. > :25:19.lost control of our borders and now is the moment for UKIP to achieve
:25:20. > :25:24.what it set out to do. Will UKIP continue without you if you stand
:25:25. > :25:34.down? Of course it will. I know that everyone says it is a one-man band
:25:35. > :25:36.but it is far from that. We have had some painful moments, getting rid of
:25:37. > :25:40.old UKIP, new UKIP is more professional, less angry and it is
:25:41. > :25:46.going places. Nigel Farage, thank you for being with us.
:25:47. > :25:49.So, what else should we be looking out for in Wednesday's Budget
:25:50. > :25:51.statement? We've compiled a Sunday Politics guide to the Chancellor's
:25:52. > :25:54.likely announcements. Eyes down everyone, it's time for a
:25:55. > :25:58.bit of budget bingo. Let's see what we will get from the man who lives
:25:59. > :26:01.at legs 11. Despite some good news on the economy, George Osborne says
:26:02. > :26:05.that this will be a Budget of hard truths with more pain ahead in order
:26:06. > :26:07.to get the public finances back under control. But many in the
:26:08. > :26:10.Conservative party, including the former chancellor Norman Lamont
:26:11. > :26:13.want Mr Osborne to help the middle classes by doing something about the
:26:14. > :26:20.4.4 million people who fall into the 40% bracket. Around one million more
:26:21. > :26:23.people pay tax at that rate compared to 2010 because the higher tax
:26:24. > :26:28.threshold hasn't increased in line with inflation. Mr Osborne has
:26:29. > :26:32.indicated he might tackle the issue in the next Conservative manifesto,
:26:33. > :26:37.but for now he is focused on helping the low paid. It's likely we will
:26:38. > :26:43.see another increase in the amount you can earn before being taxed
:26:44. > :26:46.perhaps up another ?500 to ?10, 00. The Chancellor is going to flesh out
:26:47. > :26:49.the details of a tax break for childcare payments, and there could
:26:50. > :27:06.be cries of 'house' with the promise of more help for the building
:27:07. > :27:10.industry. The Help To Buy scheme will be extended to 2020 and there
:27:11. > :27:13.could be the go-ahead for the first Garden City in 40 years. Finally,
:27:14. > :27:15.bingo regulars could be celebrating a full house with a possible cut in
:27:16. > :27:18.bingo tax. And I've been joined in the studio
:27:19. > :27:20.by the former Conservative chancellor Norman Lamont, in Salford
:27:21. > :27:23.by the former Labour Cabinet minister Hazel Blears, and in
:27:24. > :27:26.Aberdeen by the Lib Dem deputy leader, Malcolm Bruce. Let me come
:27:27. > :27:33.to Norman Lamont first, you and another former Tory Chancellor,
:27:34. > :27:43.Nigel Lawson, have called in the fall in the threshold for the rate
:27:44. > :27:48.at which the 40p clicks in. I would have preferred an adjustment in the
:27:49. > :27:53.Budget but I agree with what you are saying, it sounds like the
:27:54. > :27:58.Chancellor will not do that. My main point is that you cannot go on
:27:59. > :28:01.forever and forever increasing the personal allowance and not
:28:02. > :28:07.increasing the 40% tax threshold because you are driving more and
:28:08. > :28:10.more people into that band. It is an expensive policy because in order to
:28:11. > :28:16.keep the number of people not paying tax constant, you have to keep
:28:17. > :28:23.adjusting it each year. When this was introduced by Nigel Lawson, it
:28:24. > :28:30.applied to one in 20 people, the 40% rate, it now applies to one in six
:28:31. > :28:34.people. By next year, there will be 6 million people paying base. Why do
:28:35. > :28:40.you think your Tory colleagues seem happy to go along with the Lib Dems
:28:41. > :28:54.and target whatever money there is for tax cuts rather -- on the lower
:28:55. > :29:00.paid rather than the middle incomes? They are not helping the lowest
:29:01. > :29:03.paid. If you wanted to really help the lowest paid people you would
:29:04. > :29:10.raise the threshold for national insurance contributions, which is
:29:11. > :29:19.around ?6,000. Is it the Lib Dems stopping any rise in the 40p
:29:20. > :29:25.threshold? We are concentrating on raising the lower threshold because
:29:26. > :29:31.we believe that is the way to help those on lower incomes. Whilst they
:29:32. > :29:34.haven't benefited as much as the lower paid they have participated
:29:35. > :29:39.and I think people understand right now, if you were going to prioritise
:29:40. > :29:44.the high earners, when we are still trying to help those on lower and
:29:45. > :29:48.middle incomes who haven't enjoyed great pay increases but have got the
:29:49. > :29:53.benefit of these tax increases, that is why we would like to do it for
:29:54. > :29:59.the minimum wage level. But the poorest will not benefit at all The
:30:00. > :30:05.poorest 16% already don't pay tax. Why don't you increase the threshold
:30:06. > :30:13.at which National Insurance starts? You only have two earned ?5,500
:30:14. > :30:18.before you start to pay it. You ve got to remember that the raising of
:30:19. > :30:23.the threshold to ?10,000 or more was something the Tories said we could
:30:24. > :30:30.not afford. Why are you continuing to do it? If you want to help the
:30:31. > :30:36.working poor, the way would be to take the lowest out of national
:30:37. > :30:40.insurance. The view we take is they are benefiting, and have benefited
:30:41. > :30:45.from, the raising of the tax threshold. You now have to earn
:30:46. > :30:50.?10,000, we hope eventually 12, 00, and that means only people on very
:30:51. > :30:53.low wages. If you opt out of national insurance, you're saying to
:30:54. > :30:59.people that you make no contribution to the welfare system, so there is a
:31:00. > :31:04.general principle that people should participate and paying, and also
:31:05. > :31:07.claim when they need something out. We thought raising the threshold was
:31:08. > :31:10.simple and effective at a time of economic austerity and the right way
:31:11. > :31:17.to deliver a helpful support to welcoming people. -- working people.
:31:18. > :31:21.With the Labour Party continue to raise the threshold, or do they
:31:22. > :31:27.think there is a case that there are too many people being dragged into
:31:28. > :31:30.the 40p tax bracket? If Norman Lamont thinks this is the right time
:31:31. > :31:34.to benefit people who are reasonably well off rather than those who are
:31:35. > :31:38.struggling to make ends meet, then genuinely, I say it respectfully, I
:31:39. > :31:42.don't think he's living in the world the rest of us are. Most working
:31:43. > :31:46.people have seen their wages effectively reduced by about ?1 00
:31:47. > :31:53.because they have been frozen, so the right thing is to help people on
:31:54. > :31:56.modest incomes. I also understand that if the 40% threshold went up,
:31:57. > :32:01.the people who would benefit the most, as ever, are the people who
:32:02. > :32:05.are really well off, not the people in the middle. The Conservatives
:32:06. > :32:10.have already reduced the 50p tax on people over ?150,000 a year, and we
:32:11. > :32:14.have to concentrate on the people going out to work, doing their best
:32:15. > :32:17.to bring their children up and have a decent life and need a bit of
:32:18. > :32:21.help. I think raising the threshold is a good thing. We would bring back
:32:22. > :32:28.the 10p tax, which we should never have abolished, and do things with
:32:29. > :32:31.regard to childcare. At the moment, childcare costs the average family
:32:32. > :32:35.as much as their mortgage, for goodness sake. We would give 25
:32:36. > :32:38.hours free childcare for youngsters over three and four years old. That
:32:39. > :32:46.would be a massive boost the working families. We are talking about
:32:47. > :32:50.nurses, tube drivers, warrant officers in the army. There are many
:32:51. > :32:55.people who are not well off but have been squeezed in the way everybody
:32:56. > :32:59.has been squeezed and they are finding it continuing. I am stunned
:33:00. > :33:02.by Malcolm's argument where everybody should pay something so
:33:03. > :33:05.you should not take people out of national insurance, but the
:33:06. > :33:11.principle doesn't apply to income tax. You can stand that argument on
:33:12. > :33:14.its head and apply it to income tax. Most people don't see a difference
:33:15. > :33:19.between income tax and national insurance, it's the same thing to
:33:20. > :33:22.most people. It is true that it isn't really an insurance fund and
:33:23. > :33:28.there is an argument from merging both of them. But we have
:33:29. > :33:34.concentrated on a simple tax proposition. Norman is ignoring the
:33:35. > :33:38.fact the people on the 40% rate have benefited by the raising of the
:33:39. > :33:41.personal allowance. To say they have been squeezed is unfair. The
:33:42. > :33:47.calculation is that an ordinary taxpayer will be ?700 better off at
:33:48. > :33:51.the current threshold, and about ?500 better off at the higher rate.
:33:52. > :33:56.It is misleading to say the better off we'll be paying more. I agree
:33:57. > :33:59.with Hazel, if you go to the 40 rate, it's the higher earners who
:34:00. > :34:04.benefit the most, and we won't do that when the economy is not where
:34:05. > :34:07.it was before the crash. How much will the lower paid be better off if
:34:08. > :34:14.you reintroduce the 10p rate? will the lower paid be better off if
:34:15. > :34:20.Significantly better off. I don t have the figure myself, but they'd
:34:21. > :34:23.be significantly better off and the Budget should be a mixture of
:34:24. > :34:27.measures to help people who work hard. That is why I think the
:34:28. > :34:30.childcare issue has to be addressed. ?100 a week of the people
:34:31. > :34:35.with childcare payments. It is a massive issue. We want the job is
:34:36. > :34:39.with childcare payments. It is a guaranteed to get young people back
:34:40. > :34:41.discussion about that, and we have discussion about that, and we have
:34:42. > :34:45.nearly 1 million people who have been out of work for six months or
:34:46. > :34:53.more, and as a country we need to do something to help that. 350,000
:34:54. > :34:55.full-time students, so it is a misleading figure. It is not a
:34:56. > :35:02.million including full-time students. All parties do this. It
:35:03. > :35:05.sounds to me, Malcolm Bruce, you have more in common with the Labour
:35:06. > :35:09.Party than you do with the Conservatives. You want an annual
:35:10. > :35:13.levy on houses over ?2 million, so does Labour. A lot of your members
:35:14. > :35:15.want to scrap the so-called bedroom tax and so does labour. You think
:35:16. > :35:20.want to scrap the so-called bedroom every teacher should have a teaching
:35:21. > :35:24.qualification, and so does Labour. Your policy on the EU referendum is
:35:25. > :35:30.the same. Let me go on. And you want to scrap the winter fuel allowance
:35:31. > :35:33.for wealthy pensioners. We want to make sure we get the public finances
:35:34. > :35:34.in order and we have grave reservations about the Labour Party
:35:35. > :35:44.promises. But they followed your reservations about the Labour Party
:35:45. > :35:48.spending plans in the first year. The point we are making is we can
:35:49. > :35:51.make a fairer society and stronger economy if you keep the public
:35:52. > :35:55.finances moving towards balance We don't think the Labour Party will
:35:56. > :35:58.take a stand that track. It is interesting that the Labour Party
:35:59. > :36:04.want to introduce the 10p rate that Gordon Brown abolished. We consider
:36:05. > :36:11.that before we can -- committed to the 0% rate -- we considered that.
:36:12. > :36:16.It makes a complicated system difficult and we think it's better
:36:17. > :36:20.doing it that way. As a fiscal conservative, why are you talking
:36:21. > :36:23.about any tax cuts when the deficit is over ?100 billion, and
:36:24. > :36:28.effectively, anything you propose today can only be financed by more
:36:29. > :36:33.borrowing. I totally agree with you. I said that this week. I thought the
:36:34. > :36:37.main thing is to get the deficit main thing is to get the deficit
:36:38. > :36:40.down. My argument is is that you have an adjustment in tax rates it
:36:41. > :36:45.should be shared between the allowances and the higher rate, but
:36:46. > :36:51.I don't think that the progress on the deficit is something we can give
:36:52. > :36:58.up on. This is still a very long way to go. We're only halfway through.
:36:59. > :37:01.Hazel, does it make sense to borrow for tax cuts? I am reluctant to do
:37:02. > :37:08.this, but I agree with both Norman and Malcolm. Malcolm Bruce wants to
:37:09. > :37:12.borrow for tax cuts. We absolutely need to get the deficit down and get
:37:13. > :37:16.finances on a strong footing. But we also have to think about having some
:37:17. > :37:21.spending in the system that in the longer run saves us money. We all
:37:22. > :37:25.know we need to build new homes I don't think it's necessarily the
:37:26. > :37:30.right priority to give people in London mortgage relief in terms of
:37:31. > :37:34.?600,000. We have to get the balance right. Sometimes it is right to
:37:35. > :37:40.spend to save. I'm afraid we have run out of time. There will be
:37:41. > :37:43.plenty more discussion in the lead up to the Budget on Wednesday.
:37:44. > :37:45.It's just gone 11:35am. You're watching the Sunday Politics. We say
:37:46. > :37:49.goodbye to viewers in Scotland who watching the Sunday Politics. We say
:37:50. > :37:52.leave us now for Sunday Politics Scotland. Coming up here in 20
:37:53. > :38:02.minutes, Frances O'Grady, the General Secretary of the TUC, joins
:38:03. > :38:08.Hello and a very warm welcole to the bit of Sunday Politics lovingly made
:38:09. > :38:11.right here in Cumbria and the North East. This week the region still has
:38:12. > :38:15.some of the highest youth unemployment figures in Britain
:38:16. > :38:18.We're hearing from the County Durham factory now totally devoted to
:38:19. > :38:23.getting young people back to work and asking if it could offer the
:38:24. > :38:27.answer. And Labour had its regional conference this weekend as the party
:38:28. > :38:30.shakes up its union links. But are Labour's rank and file convhnced?
:38:31. > :38:33.With me to chew all that ovdr, the Labour MP for Sedgefield, Phil
:38:34. > :38:37.Wilson and the Conservative group leader in Northumberland, Pdter
:38:38. > :38:40.Jackson. Welcome to you both. But first tributes have been paid to
:38:41. > :38:43.the veteran left winger, former Cabinet minister, and polithcal
:38:44. > :38:48.legend, Tony Benn, who died at the end of last week, aged 88. The
:38:49. > :38:52.former MP was a regular Spe`ker at the Durham Miners' Gala and in 006
:38:53. > :38:57.he spoke of the changes he'd seen at the event.
:38:58. > :39:02.When I first came 44 years `go there were 126 pits in the Durham
:39:03. > :39:07.coalfield. Now, of course, they ve closed all the pits. But thd
:39:08. > :39:13.traditions go on. You see the whole of human life, you see kids playing,
:39:14. > :39:20.you see disabled miners. It an amazing event. For me, when I come,
:39:21. > :39:23.it recharges my batteries. H love it.
:39:24. > :39:26.Tony Benn speaking eight ye`rs ago. Phil Wilson, people have talked
:39:27. > :39:30.about their respect, even their love for Tony Benn. Let's face it when
:39:31. > :39:34.the Labour Party was not thd one you or your predecessor, his Labour
:39:35. > :39:36.Party, sorry was not one yot or your predecessor, Tony Blair,
:39:37. > :39:40.particularly wanted. In fact, both of you tried to move the party away
:39:41. > :39:46.from that. How should we thhnk of him? He was a man who had rdally
:39:47. > :39:51.deep convictions. He saw hilself as a traditional socialist. He saw
:39:52. > :39:55.himself as a man of principle and I don't think you can take th`t away
:39:56. > :39:59.from him. You don't necessarily have to agree with him to accept that.
:40:00. > :40:03.When you look back at his hhstory, I think he first got elected hn 1 50.
:40:04. > :40:07.He was involved in politics for over 50 years. I remember the first time
:40:08. > :40:13.I ever saw him at a Durham Liners Gala, back in the 1970s. Yot listen
:40:14. > :40:16.to what he had to say and hd always had something interesting to say. He
:40:17. > :40:20.always said it in a very interesting way as well. He was a towerhng
:40:21. > :40:23.figure in the Labour movement. That doesn't mean to say you havd to
:40:24. > :40:27.agree with everything he sahd but you can't take it away from him that
:40:28. > :40:29.he was a towering figure in the Labour movement.
:40:30. > :40:32.Peter Jackson, quite few Conservatives have talked about
:40:33. > :40:36.their respect for Tony Benn, even though they were political opponents
:40:37. > :40:40.of his. Why do you think th`t is? I think it's because he was a man of
:40:41. > :40:43.ideas and politics is all about ideas and whether they challenge the
:40:44. > :40:50.way that you think at the moment, or not. It all adds to it. Most
:40:51. > :40:56.politicians tend to follow the crowd too much these days, I feel. They
:40:57. > :41:03.don't bring in ideas from the outside. That's why we respdct him.
:41:04. > :41:07.He wasn't afraid to stand up for what he thought. Can Labour learn
:41:08. > :41:11.anything from that, then? In some ways you can see him as a political
:41:12. > :41:14.failure but could they learn anything from his connection with
:41:15. > :41:18.the public, I suppose? I thhnk what he reminds me of, as well, hs what
:41:19. > :41:21.John Prescott once said abott traditional principles in a modern
:41:22. > :41:24.setting. I think what Tony Benn offered was those tradition`l
:41:25. > :41:30.principles and what we had to do was provide him with a modern sdtting,
:41:31. > :41:34.which I don't think perhaps he did. But what Tony Blair did and Gordon
:41:35. > :41:36.Brown did and everybody elsd was create that environment that we did
:41:37. > :41:40.have a modern setting for traditional principles. OK, we'll
:41:41. > :41:43.have to leave it there. Now it's one of the region's biggest
:41:44. > :41:47.economic challenges ahead of this week's Budget. How do we get young
:41:48. > :41:50.people off the dole and into work? The North East has the highdst youth
:41:51. > :41:54.unemployment figures outsidd London with a quarter of 16 to 24`xear`olds
:41:55. > :41:57.in the region out of work. While the Coalition has its Work Programme and
:41:58. > :42:01.Labour its Jobs Guarantee, one County Durham charity reckons it's
:42:02. > :42:07.found a great way to get yotng people into work.
:42:08. > :42:13.Meet Bill Marley. For 30 ye`rs he has worked in manufacturing. This
:42:14. > :42:16.factory is a little different. He bought these premises in Peterlee to
:42:17. > :42:19.fulfil a mission. After spending time working with deprived xoung
:42:20. > :42:23.people, he realised he wantdd to spend the rest of his working life
:42:24. > :42:28.helping others get a job. I saw so many people on Jobcentre Plts that
:42:29. > :42:33.had thrown the towel in, basically. They were stuck in the benefits
:42:34. > :42:37.system. Unable to get out. They didn't have the confidence
:42:38. > :42:42.themselves. I wanted to show these youngsters, and their parents, that
:42:43. > :42:45.there is another life out there But the Employability Trust is not a
:42:46. > :42:49.fantasy workplace. The young people work on contracts for the lhkes of
:42:50. > :42:53.B and WH Smith for a minilum of eight weeks. Many do it voltntarily
:42:54. > :42:59.and no pay. Knowing they ard getting invaluable experience. I don't want
:43:00. > :43:04.to sit back and be on benefhts. I do actually want to get out thdre, get
:43:05. > :43:09.a job. I need something to do each day. Everyone needs experience but
:43:10. > :43:17.how do you get experience? There is no where to get it from. Th`t's what
:43:18. > :43:21.this place offers. They havd the experience to go to other places and
:43:22. > :43:25.get a job. I was applying for about 20 jobs each day and getting
:43:26. > :43:31.nowhere. When the Jobcentre sent us here, I was over the moon. H was
:43:32. > :43:42.going somewhere in my life. It is delivering. After 20 people sent
:43:43. > :43:47.from the Jobcentre so far, 07 have found full`time work. Melissa is one
:43:48. > :43:51.success stories. She has moved on from the factory to a placelent at
:43:52. > :44:02.this electronics firm, her life transformed.
:44:03. > :44:09.I don't want to ever go on the dole. I want to always be in work. To be
:44:10. > :44:14.able to have the money in mx pocket and not have to rely on othdr people
:44:15. > :44:18.to give us money, or rely on me mam to provide for us. I can brhng the
:44:19. > :44:22.money in myself and do what I want with my money and not have to ask
:44:23. > :44:25.other people for it. Obviously I'm getting through my driving lessons,
:44:26. > :44:28.my driving test and getting myself a car. I've got the freedom now. This
:44:29. > :44:32.is not a government funded project. It's not part of any scheme. In fact
:44:33. > :44:34.it's different from the initiative the Coalition and Labour have
:44:35. > :44:38.designed. Under the governmdnt existing youth contract, employees
:44:39. > :44:39.are offered up to ?2,275 to take on young person that has been on the
:44:40. > :45:01.dole more than six months. They have never been into a factory.
:45:02. > :45:15.Industry the giving these gtys for free. However, more than 50,000
:45:16. > :45:24.under 25 is still the polithcians should take a Well with me hs Bill
:45:25. > :45:27.Marley, the man who set up that charity in Peterlee.
:45:28. > :45:31.We hear a lot about people choosing to stay on benefits but you seem to
:45:32. > :45:34.have found a group of peopld who want to get off them. Why do think
:45:35. > :45:38.your approach is distinctivd, perhaps from what might be on offer
:45:39. > :45:41.elsewhere? My approach at the Employability Trust, people who are
:45:42. > :45:45.working with me, volunteered to come to work with me. No one has forced
:45:46. > :45:48.them. They want a job. They want to take every advantage of comhng to
:45:49. > :45:52.the Employability Trust. Will that give them the experience? It has. It
:45:53. > :45:55.has demonstrated that we can give them the opportunity, open the doors
:45:56. > :46:01.in industry because they have come through our doors over the last
:46:02. > :46:05.eight weeks. If I was taking a devil's advocate view, you `re
:46:06. > :46:10.working, as you say, with pdople who are keen. The challenge, I suppose,
:46:11. > :46:14.is those people who are not that keen. What can you do for them?
:46:15. > :46:19.You're right, the challenge is to understand, you would have two pots
:46:20. > :46:23.of individuals. One, the guxs who come to us who are motivated and
:46:24. > :46:30.want to change their lives, the others who are not motivated. We
:46:31. > :46:34.need to understand. They nedd to understand the world of work. One of
:46:35. > :46:37.the advantages if they come to work. This is why we buy into indtstry.
:46:38. > :46:40.The general managers, the supervisors, the apprentices, even
:46:41. > :46:47.the shop floor get those involved in selling the place of work and what
:46:48. > :46:51.the benefits are. The type of cars that they will be able to afford,
:46:52. > :46:56.the holidays they can go on to. They don't know because unfortun`tely in
:46:57. > :47:02.my area, a generation of parents who have never ever worked. Who is
:47:03. > :47:05.telling these youngsters? It is our job. You clearly don't belidve the
:47:06. > :47:09.answer is just to send people to work? No, certainly not. As I said
:47:10. > :47:13.on the clip, a recipe for dhsaster. If you imagine those individuals
:47:14. > :47:20.going in on the first day, ht very frightening to the individu`ls. One
:47:21. > :47:24.of the young guys at the Employability Trust, his synergy is,
:47:25. > :47:31.it's like going into a swimling pool and jumping in the deep end. The
:47:32. > :47:35.Employability Trust, we takd you into the shallow end then btild the
:47:36. > :47:39.confidence up, allow you a period of time to swim to the deep end. Thank
:47:40. > :47:42.you very much. Peter Jackson, one in four xoung
:47:43. > :47:48.people in the north`east on the dole. You need as many ideas as you
:47:49. > :47:52.can get. I gather that Bill Marley did go and see a minister. He didn't
:47:53. > :47:57.get that much buy`in from it? We will have to do something about
:47:58. > :48:01.that. At first I must say this is a shining light to all of us `nd a
:48:02. > :48:05.wake`up call about what can be done to help young people. I think we
:48:06. > :48:07.have to recognise there has been a fall in long`term youth unelployment
:48:08. > :48:13.in the north`east. Some 3,000 people in the last three years. Thdre has
:48:14. > :48:18.been some success countrywide. Not enough success? No, it is a very
:48:19. > :48:20.serious problem. We are doing three things in particular as a
:48:21. > :48:24.Conservative government at the moment. The first thing is the
:48:25. > :48:28.apprenticeship scheme is behng rolled out and we have twicd as many
:48:29. > :48:35.apprenticeships in this country as we had three years ago. In fact 1.5
:48:36. > :48:44.million people, young peopld... I will have to hurry you. We're
:48:45. > :48:47.talking about the youth contract already which is to subsidise.. It
:48:48. > :48:52.has missed its target? It is having some success. The third thing is the
:48:53. > :48:56.work programme. The young pdople who are unemployed for more than nine
:48:57. > :48:58.months into the work progralme and they get individual things from
:48:59. > :49:04.charities and private organisations, to get them hnto
:49:05. > :49:07.work. The concern here is your jobs guarantee will land employers with a
:49:08. > :49:11.whole bunch of people who don't really want to be there. Thdy are
:49:12. > :49:14.under threat of benefit sanction. That is not a solution to youth
:49:15. > :49:18.unemployment, is it? The nulber of young people that have been out of
:49:19. > :49:21.work 12 months has doubled from 2010, from 20,000 to 50,000 now I
:49:22. > :49:25.think what Bill's organisathon is doing is highly commendable but that
:49:26. > :49:30.is a lot of people we have to get back into work. I think there
:49:31. > :49:35.probably will have to be an element of compulsion. Bill has alrdady said
:49:36. > :49:43.the people who come to him `re the people who want work. Our elployees
:49:44. > :49:46.really going to want to takd on people who are only there under
:49:47. > :49:51.sufferance? Probably it's something that we have to work on. We realised
:49:52. > :49:55.this. You are making this jobs guarantee, you haven't got `n
:49:56. > :49:58.employer signed up? At the loment we haven't. What we're doing at the
:49:59. > :50:02.moment is setting up a commhssion of businesses to look at how wd will
:50:03. > :50:06.implement this in 12 months time. It will be over the lifetime, the
:50:07. > :50:10.lifetime of a Parliament. Wd have already got a scheme set up under
:50:11. > :50:14.the Welsh assembly which is a Labour run assembly which ensures 80% of
:50:15. > :50:20.the people who go on to the scheme end up with job. It has a lot going
:50:21. > :50:24.for it. It is something that is working in Wales. It's got private
:50:25. > :50:30.sector employers involved. H'm sure we can do it nationally arotnd the
:50:31. > :50:34.UK. What young people to sax, they're guaranteed eight six month
:50:35. > :50:41.job with an 80% chance of a job that is better than what yot are
:50:42. > :50:47.offering? It is not `` it is another promise, they're not saying whether
:50:48. > :50:51.is coming from. I Inc the rdcord of the last Labour government was
:50:52. > :50:54.continually rising youth employment and we are tackling that as a
:50:55. > :51:00.Conservative government with a small degree of success but we ard putting
:51:01. > :51:05.a lot of effort in. The mondy question is what people havd
:51:06. > :51:10.raised? The bankers bonus and tax relief on pensions for highdr tax
:51:11. > :51:14.payers. What we are seeing hs the money from those two sources will go
:51:15. > :51:20.on this scheme and nothing dlse As far as people saying about the last
:51:21. > :51:26.Labour government, in 1997 there were 60,000 apprenticeships, by the
:51:27. > :51:31.time we left there was 250,000. The ones you mention, the vast lajority
:51:32. > :51:36.of people over 25. I think xou have to go along way before you can much
:51:37. > :51:40.what the liver `` what the Labour government did. You cannot `rgue
:51:41. > :51:46.Jones boom long`term youth `nd employment increased. Bill Laley,
:51:47. > :51:54.are you convinced by what you have heard? Not a great deal of response
:51:55. > :51:59.from a minister? Unfortunatdly not. We plod up on. We will get there
:52:00. > :52:04.with or without support. It would make your job a lot easier? It
:52:05. > :52:07.certainly would. Thank you very much.
:52:08. > :52:10.Now delegates gathered for Labour's regional conference in Newton
:52:11. > :52:13.Aycliffe this weekend, with plenty to chat about over coffee, or even
:52:14. > :52:16.the beer and sandwiches if they re old school. This month partx members
:52:17. > :52:19.across the country voted for a shake`up in Labour's union links,
:52:20. > :52:25.something Ed Miliband calls the biggest change in his party for over
:52:26. > :52:29.100 years. Feature Labour ldaders will be chosen by one member, one
:52:30. > :52:33.vote. Scrapping a system whdre one third of the leadership votd.
:52:34. > :52:38.Rank`and`file trade unions hs will not automatically come Labotr
:52:39. > :52:41.members they will have to opt in to pay if you can feed and become an
:52:42. > :52:47.affiliated supporter. There will be new spending limit. Designed to spot
:52:48. > :52:52.some outspending others to win nominations. Those changes come at a
:52:53. > :52:59.time of falling Labour membdrship. The party has lost 5000 members over
:53:00. > :53:02.the last four years. They vhsited links go back to the part is very
:53:03. > :53:04.beginning. We bid to beat three members in the region with different
:53:05. > :53:25.views on those changes. My name is Martin Wright. I'm 4 ,
:53:26. > :53:29.been a member of the Labour Party for probably about ten years. I live
:53:30. > :53:34.in Gateshead. I'm a member of the Unite union. My feeling is kind of
:53:35. > :53:37.mixed emotions, to be honest. I worry that the timing is potentially
:53:38. > :53:42.dangerous and that's just lhke a personal view, I think. We `re just
:53:43. > :53:48.over a year out from the General Election. But I do feel that
:53:49. > :53:50.something has to change. I've described in the past the
:53:51. > :53:53.relationship between the unhon movement and the party as bding like
:53:54. > :53:59.parent and child relationshhp because the Labour Party was born
:54:00. > :54:03.out of the trade union movelent It's like the child has grown up and
:54:04. > :54:08.left home and is no longer listening to the parents. I don't think it'll
:54:09. > :54:09.ever break, as in sever. I don't think we'll ever get divorcdd in
:54:10. > :54:18.that respect. I'm Rachel Wright, I'm 32 and I live
:54:19. > :54:22.in Newcastle. I've been a mdmber of the party on and off for about 4
:54:23. > :54:27.years and I'm a member of the GMB union. I think any political party
:54:28. > :54:32.to survive needs to reform. It needs to move with the times and with the
:54:33. > :54:35.population. They are planning on capping the amount that can be spent
:54:36. > :54:40.on somebody's selection process and also the time it takes to do the
:54:41. > :54:44.selection. At the moment I think because there is no cap on ht,
:54:45. > :54:49.somebody with personal funds can outspend somebody else and H think
:54:50. > :54:53.that would probably put people off. It would certainly put myself off if
:54:54. > :54:57.I got to the point where I decided I maybe wanted to run. I just wouldn't
:54:58. > :55:00.have the money to compete whth somebody and putting a reasonable
:55:01. > :55:04.cap on it actually opens up the selection process to people who at
:55:05. > :55:09.the moment feel that they c`n't enter because of financial reasons.
:55:10. > :55:17.I'm Daniel Maguire. I'm 33. I live in Newcastle`upon`Tyne. I'vd been a
:55:18. > :55:21.member of the Labour for about 8 years. I'm also a member of Unite.
:55:22. > :55:23.The difficulty is these reforms have gone through. Although they've been
:55:24. > :55:27.watered down from what was originally proposed is they open the
:55:28. > :55:30.door to a move towards breaking the link, the collective link bdtween
:55:31. > :55:35.the trade unions and the Labour Party. That would really concern me
:55:36. > :55:41.because the Labour Party is the trade unions. The two are
:55:42. > :55:44.inseparable. I'm not one of these people that threatens to resign when
:55:45. > :55:50.policy doesn't go the way that I want it to. But if the fund`mental
:55:51. > :55:54.structure of the party, the fundamental nature of what we are
:55:55. > :55:58.changes. Ie the link with the trade unions goes, then we are no longer
:55:59. > :55:59.the Labour Party. It would be very difficult for me to continud as a
:56:00. > :56:16.member of that party. You help draw up these changes. Was
:56:17. > :56:21.there anything that needed fixing. At think what these proposals and
:56:22. > :56:25.these reforms have done is `ctually maintained the link with thd trade
:56:26. > :56:29.unions but also ensured that the link is no longer just with the
:56:30. > :56:32.trade union but the trade unionists. It allows us to track more
:56:33. > :56:40.individual trade unionists hnto the Labour party `` attract. We haven't
:56:41. > :56:46.just done that, we've also opened it up as far as the leadership contest
:56:47. > :56:52.is concerned, to registered supporters. It is a broad`b`sed
:56:53. > :56:55.party we will achieve over the next few years. It will not happdn
:56:56. > :57:00.overnight. David Phillips and Christopher Kelly who did the
:57:01. > :57:06.independent reports of the opting in scheme will take five years to
:57:07. > :57:11.implement. It is broadening the relationship we have. The fhrst time
:57:12. > :57:16.we have those things with trade unionists. I guess you will be
:57:17. > :57:23.cynical. Your membership is not booming? This is recognising the
:57:24. > :57:33.problem of over Dominus of the unions in the Labour Party. `` over
:57:34. > :57:40.dominance. Some unions response `` sponsor a lot of MPs. Critics would
:57:41. > :57:46.say we know with unions are coming from, we do not know where the big
:57:47. > :57:51.business dinners come from? The Conservative party has a widespread
:57:52. > :58:00.of donors. We do not go to one or two, there are thousands. The
:58:01. > :58:07.affiliation fees is made up of 3 levy made from millions of working
:58:08. > :58:12.the ball. 36 funding of the Tory party comes from a handful of large
:58:13. > :58:20.donors who are special access to the prime minister. The reason these
:58:21. > :58:28.have got through it was not that consensus. The biggest nations we
:58:29. > :58:31.get from the Labour Party is from its membership and not necessarily
:58:32. > :58:36.the trade unions. What thesd proposals have done, and thdse
:58:37. > :58:40.reforms, has opened up over party. It is now one member, one vote to
:58:41. > :58:44.elect the leader of the Labour Party. It has affected the way that
:58:45. > :58:50.the relationship with the trade unions will be going on. Thd link
:58:51. > :58:54.will still be there. Peter Jackson, just to show the
:58:55. > :59:01.Labour Party is more democr`tic than the Conservatives? It is ond member,
:59:02. > :59:07.one vote in the Conservativd party for the leadership. I think
:59:08. > :59:13.membership in all parties is a problem because people generally...
:59:14. > :59:19.Apart from the UK Independence party? We're finding more informal
:59:20. > :59:22.support. Now it's been quite a week, a gaggle
:59:23. > :59:26.of senior politicians visithng us and one of our most high profile
:59:27. > :59:29.politicians celebrating his 250th birthday, sort of. Here's M`rk
:59:30. > :59:38.Denten, forever 21, with a look back at the week in 60 seconds.
:59:39. > :59:51.MPs paid tribute to Bob Crow last year, died suddenly. Dave Anderson
:59:52. > :59:59.said it is a sad loss. He w`s blunt, he was forthright, he had vhews He
:00:00. > :00:06.was a caring guy. Nick Clegg was at Nissan aiming to attract 9000 new
:00:07. > :00:12.jobs. Ministers announced ?00.6 million for Northumberland's schools
:00:13. > :00:18.at no extra Cass for Middlesbrough. `` cash. To reason it waded into the
:00:19. > :00:25.Scottish independence debatd. We are definitely better together. People
:00:26. > :00:30.who live here will know how they find find easy to move across the
:00:31. > :00:36.board into Scotland. If Scotland became separate that would be an
:00:37. > :00:44.international border. And the milestone... Happy birthday. And
:00:45. > :00:47.that's all from me for now. Remember you can keep up`to`date with the
:00:48. > :00:51.helter skelter world of polhtics by following me on Twitter. And take a
:00:52. > :00:52.look at my blog for more on youth unemployment. For now though it s
:00:53. > :01:00.back to Andrew for the rest of the industrial action is a sign of
:01:01. > :01:10.failure marked success. -- not success. Andrew, back to
:01:11. > :01:15.Has George Osborne got a rabbit in his Budget hat? Will the Chancellor
:01:16. > :01:16.find a way to help the squeezed middle? And how do Labour respond?
:01:17. > :01:28.All questions for The Week Ahead. And joining Helen, Janan and Nick to
:01:29. > :01:30.discuss the budget is the general secretary of the Trades Union
:01:31. > :01:35.Congress Frances O'Grady. Welcome back to the programme. I know the
:01:36. > :01:39.TUC has a submission, but if you could pick one thing that you wanted
:01:40. > :01:45.the Chancellor to do above all, what would it be? We want a budget for
:01:46. > :01:49.working people, which means we have to crack the long-term problem of
:01:50. > :01:57.investment in the British economy. Certainly I would like the
:01:58. > :02:00.Chancellor to merit that title they want of the new workers party, and
:02:01. > :02:09.take action on living standards but if they're going to do that it's got
:02:10. > :02:14.to be about unlocking investment. In the period where the economy has
:02:15. > :02:17.been flat-lining there has been little business investment, but
:02:18. > :02:23.there are signs towards the end of last year that it is beginning to
:02:24. > :02:26.pick up. But a long way to go. The problem is we have key industries
:02:27. > :02:32.like construction and manufacturing that are still smaller than they
:02:33. > :02:35.were before the recession. The government itself, of course, has
:02:36. > :02:41.slashed its own capital investment budget by half. There is plenty of
:02:42. > :02:45.good and important work that needs to be done from building houses to
:02:46. > :02:50.improving the transport system, to improving our schools. And the
:02:51. > :02:55.government really needs to pick up that shovel and start investing in
:02:56. > :02:59.our economy to get the decent jobs we need, the pay increases we need,
:03:00. > :03:08.and that in itself will help stimulate demand. It was Alistair
:03:09. > :03:10.Darling who cut in 2011, and it s interesting that Ed Balls in his
:03:11. > :03:15.plans for the next parliament would run a current budget surplus by the
:03:16. > :03:18.end of the parliament as opposed to George Osborne who would have an
:03:19. > :03:23.overall budget surplus. That gives Ed Balls or -- more wriggle room to
:03:24. > :03:27.do what you talk about, but he is reticent to talk about it. He does
:03:28. > :03:30.not want to say that he has an opportunity to spend on investment
:03:31. > :03:32.because he fears if he says it he will be attacked by the
:03:33. > :03:40.Conservatives for being irresponsible. Why is business doing
:03:41. > :03:43.this? The recession was deeper than any since the war and the recovery
:03:44. > :03:49.was slower than almost any since the war. The lag, the time it takes to
:03:50. > :03:56.get over that is longer than anyone expected. I read the same evidence
:03:57. > :03:58.as you towards the end of last year pointing to money being released,
:03:59. > :04:03.and it depends what it is released on, whether it is capital investment
:04:04. > :04:07.or bringing in people on higher wages. The one surprise in the
:04:08. > :04:12.downturn is how well the employment figures have done, but they have not
:04:13. > :04:15.invested in new capacity and they are sitting on a lot of dosh. I
:04:16. > :04:22.looked at one set of figures that said if you took the biggest company
:04:23. > :04:25.in Britain, they have about 715 billion pounds in corporate treasury
:04:26. > :04:32.-- the biggest companies. I think it's reduced a little but they are
:04:33. > :04:36.sitting on a mountain in dash of skills. Yes, but they're not
:04:37. > :04:40.investing in skills, wages, or sustainable jobs. The new jobs we
:04:41. > :04:47.have seen created since 2010, the vast majority of them have been in
:04:48. > :04:51.low paid industries, and they are often zero hours, or insecure, or
:04:52. > :04:56.part-time. So it's not delivering a recovery for ordinary working
:04:57. > :04:59.people. Government ministers, as you know when you lobby them, they are
:05:00. > :05:05.anxious to make out that they know the job is not done and the recovery
:05:06. > :05:10.has just begun, but the one bit they are privately proud of, although
:05:11. > :05:14.they can't explain it, is how many private-sector jobs have been
:05:15. > :05:17.created. A lot of unions have done sensible deals with employers to
:05:18. > :05:23.protect jobs through this period, but it's not sustainable. The
:05:24. > :05:28.average worker in Britain today is now ?2000 a year worse off in real
:05:29. > :05:36.terms than they were. On a pay against price comparison? It doesn't
:05:37. > :05:45.take into account tax cuts. The raising of the personal allowance is
:05:46. > :05:48.far outweighed by the raising VAT. Does the raising of the threshold
:05:49. > :05:51.which the Lib Dems are proud of and the Tories are trying to trade
:05:52. > :05:57.credit for, does it matter to your members? -- take credit for. It
:05:58. > :06:02.matters that it is eclipsed by the cuts in benefits and know what is
:06:03. > :06:06.conned any more. We're going to hear a lot about the raising of the
:06:07. > :06:11.allowance, but as long as the real value of work, tax credits, things
:06:12. > :06:14.like that, people won't feel it in their pocket, and they will find it
:06:15. > :06:18.harder and harder to look after their family. When you look at the
:06:19. > :06:22.other things that could take over from consumer spending which has
:06:23. > :06:25.driven the recovery, held by house price rising in the south, it is
:06:26. > :06:28.exports and business investment and you look at the state of the
:06:29. > :06:34.Eurozone and the emerging markets which are now in trouble, and the
:06:35. > :06:38.winter seems to have derailed the US recovery. It won't be exports.
:06:39. > :06:46.Indeed, the Obie Eich does not think that will contribute to growth until
:06:47. > :06:52.2015 -- OBI. So the figures we should be looking at our business
:06:53. > :06:56.investment. And also the deficit. The deficit is 111 billion, and that
:06:57. > :07:01.is a problem, because we are not at the end of the cutting process,
:07:02. > :07:05.there are huge cuts to be made. I understand we are only a third of
:07:06. > :07:09.the way through. That will definitely affect business
:07:10. > :07:13.confidence. It is clear that the strategy has failed. Borrowing has
:07:14. > :07:17.gone up and it's not delivered improved living standards and better
:07:18. > :07:22.quality jobs, so cutting out of the recession is not going to work. The
:07:23. > :07:28.structural budget deficit was going to be eliminated three weeks today
:07:29. > :07:34.under the original plan. They missed target after target. Every economist
:07:35. > :07:37.has their own definition of that. I think Mark Carney is right when he
:07:38. > :07:41.says that fundamentally the economy is unbalanced and it is not
:07:42. > :07:49.sustainable, growth is not sustainable. But if it clicked on,
:07:50. > :07:52.it would be more balanced. It is not just north and south and
:07:53. > :07:58.manufacturing a way out with services, but it is also between the
:07:59. > :08:01.rich and everybody else. What do you make of the fact that there will
:08:02. > :08:07.effectively be another freezing public sector pay, or at least no
:08:08. > :08:14.more than 1%? Not even that for nurses and health workers. But they
:08:15. > :08:18.will get 3% progression pay. 70 of nurses will not get any pay rise at
:08:19. > :08:24.all. They get no progression pay at all. I think this is smack in the
:08:25. > :08:28.mouth. Smack in the mouth to dedicated health care workers who
:08:29. > :08:34.will feel very, very discontented about the decision. Danny
:08:35. > :08:38.Alexander, I saw him appealing to health workers do not move to strike
:08:39. > :08:45.ballots and said they should talk to their department. But about what? Is
:08:46. > :08:50.that real pay cut has been imposed, what are workers left with? So do
:08:51. > :08:57.you expect as a result of yet more tough controls on public sector pay
:08:58. > :09:01.that unrest is inevitable? I know some unions will be consulting with
:09:02. > :09:06.their members, but ultimately it's always members who decide what to
:09:07. > :09:11.do. It does seem to me insulting not to at least be honest and say that
:09:12. > :09:18.we are cutting real pay of nurses, health care workers, on the back of
:09:19. > :09:24.a ?3 billion reorganisation of the NHS that nobody wanted and nobody
:09:25. > :09:29.voted for. Their long-term changes taking place here that almost talks
:09:30. > :09:38.about -- there are long-term changes. It is how lower percentage
:09:39. > :09:40.wages have become of GDP on how big the percentage of profits is. It
:09:41. > :09:46.seems to me there is a strong case for some kind of realignment there.
:09:47. > :09:50.The biggest event of my life, in this world, is the entry of a couple
:09:51. > :09:54.of billion more people into the labour supply. At the end of the
:09:55. > :09:59.Cold War, India and China plugged into the global economy. If there is
:10:00. > :10:01.a greater supply of that factor of production, logically you conclude
:10:02. > :10:06.that wages will fall or stagnate and that has been the story in this
:10:07. > :10:09.country and America and large parts of Western Europe in the last
:10:10. > :10:14.generation. What is not possible is for governments to do much about
:10:15. > :10:16.it. They can ameliorate it at the margins, but the idea that the
:10:17. > :10:20.government controls living standards, which has become popular
:10:21. > :10:25.over the last six months, and the Labour Party have in establishing
:10:26. > :10:30.that, and I don't think it's true. George Osborne's options are
:10:31. > :10:35.astonishingly limited compared to public expectations. If wages have
:10:36. > :10:40.reached a modern record low as percentage of GDP, who is going to
:10:41. > :10:47.champion the wage earner? We have lost Bob Crow, Tony Benn passed
:10:48. > :10:51.away, so who is the champion? The trade union movement is the champion
:10:52. > :10:57.of ordinary workers. We need those larger-than-life figures that we
:10:58. > :11:01.will mess. Have you got them yet? We have a generation of workers coming
:11:02. > :11:05.through. One thing about the loss of Bob Crow is that the whole union
:11:06. > :11:09.movement has responded strongly to that, and we want to say that we are
:11:10. > :11:14.strong and united and here to stand up for working people and we will
:11:15. > :11:18.fight as hard as Bob Crow did. Whoever replaces Bob Crow or Tony
:11:19. > :11:22.Benn, we can be sure they will not come from Eton because they all have
:11:23. > :11:25.jobs in the government. I want to put up on the screen what even
:11:26. > :11:35.Michael Gove was saying about this coterie of Old Etonian 's.
:11:36. > :11:44.He's right, is he not? He's absolutely right. We have the idea
:11:45. > :11:50.of the manifesto being written by five people from Eton and one from
:11:51. > :11:54.Saint Pauls. A remarkable example of social mobility that George Osborne,
:11:55. > :11:59.who had the disadvantage of going to Saint Pauls has made it into that
:12:00. > :12:04.inner circle. Here is the question, what is Michael Gove up to? If you
:12:05. > :12:08.saw the response from George Osborne, there was no slap down and
:12:09. > :12:11.they know this is an area they are weak on an David Cameron will not
:12:12. > :12:16.comment on it. If this had been a Labour shadow minister making a
:12:17. > :12:20.similarly disloyal statement, they might have been shot at dawn. But
:12:21. > :12:25.there is a real tolerance from Michael Gove to go freelance which
:12:26. > :12:27.comes from George Osborne. It's about highlighting educational
:12:28. > :12:31.reforms that he wants to turn every school in to eat and so it won't
:12:32. > :12:35.happen in the future. But it's also pointing out who did not go to Eton
:12:36. > :12:39.school and who would be the best candidate to replace David Cameron
:12:40. > :12:42.as leader, George Osborne, and who did go to Eton school, Boris
:12:43. > :12:50.Johnson. Michael Gove is on manoeuvres to destroy Boris
:12:51. > :12:55.Johnson's chances of being leader. It's a good job they don't have an
:12:56. > :12:59.election to worry about. Hold on. I think they are out of touch with
:13:00. > :13:04.businesses as well as working people. You ask about who is talking
:13:05. > :13:06.about wage earners. Businesses are. They are worried that unless living
:13:07. > :13:12.standards rise again there will be nobody there to buy anything. We are
:13:13. > :13:18.running out of time, but the TUC, are enthusiastic about HS2? We
:13:19. > :13:22.supported. We think it's the kind of infrastructure project that we need
:13:23. > :13:27.to invest in long-term. He could, if we get it right, rebalance north and
:13:28. > :13:34.south and create good jobs along the way -- it could. Thank you very much
:13:35. > :13:37.tool. I have to say that every week -- thank you very much to you all.
:13:38. > :13:41.That's all for today. I'll be back next Sunday at 11am, and Jo Coburn
:13:42. > :13:46.will be on BBC Two tomorrow at midday with the Daily Politics.
:13:47. > :13:49.Remember if it's Sunday, it's the Sunday Politics.