Sarah Smith and Richard Moss are joined by Conservative MPs Jacob Rees-Mogg and Stephen Hammond, plus former spin doctor Alastair Campbell and former Labour MP Gisela Stuart.
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Morning everyone, and welcome
to the Sunday Politics.
I'm Sarah Smith.
And this is your guide
to all the big stories that
are shaping politics this weekend,
and a few of the smaller ones too.
Philip Hammond is getting ready
to deliver his latest Budget
on Wednesday and he's not short
of advice - to spend more,
show restraint, even
to stop being an Eyore -
but can he change the direction
of the country and his government?
Conservative Party darling
Jacob Rees-Mogg has
some advice of his own.
He thinks the Chancellor
is being far too gloomy about Brexit
- he joins me live to explain why.
The former Leave campaign leader,
Gisela Stuart, will be here debating
with pro-EU campaigner
Alastair Campbell, after taking
a trip to her native Germany
to speak to businesses
And, as we wait to find out what's
on the menu for this week's budget,
we're in a diner off
the A1 in Peterborough,
finding out who people most trust
with the economy -
Philip Hammond or John McDonnell?
Here, new Metro trains
or cash for schools -
what might the budget provide
for the North?
And the North East
councils which want to
deliver lower gas and electricity
bills in their areas.
All that coming up in the programme.
And with me for for all of it,
three journalists who've promised
not to show off like Michael Gove
by using any long economicky words -
although I'm not sure they really
know that many anyway -
it's Tom Newton Dunn,
Gaby Hinsliff and Iain Martin.
Let's take a look at the big
political stories making the news
this Sunday morning,
and as you might expect there's
plenty of speculation
about what might or not might be
in Philip Hammond's Budget.
The Chancellor is promising a big
investment in new technology,
including driverless cars -
which could be on the road by 2021.
He's been interviewed
in the Sunday Times,
where he talks about plans to reach
the target of building
300,000 homes every year,
or the equivalent of a city
the size of Leeds.
That paper speculates that he's
attempting to turn from "fiscal
Phil" into "hopeful Hammond"
as he tries to set out
a vision for the country,
not just a list of numbers.
The Sunday Telegraph thinks that
Mr Hammond is planning to offer
a pay rise to nurses as part
of a bid to take on Labour.
But that hasn't impressed
Shadow Chancellor John McDonnell.
He's spoken to a number of papers
and is calling for an emergency
budget to invest in public services
and help struggling households.
So that's a taste of what you might
hear on Wednesday and Mr Hammond
and Mr McDonnell have both been
appearing this morning
on the Andrew Marr Show.
I think Britain has a very
bright future ahead of it,
and we have to embrace
the opportunities that
a post-Brexit world will offer.
They will be opportunities that
are based on huge change,
huge technological evolution.
It's not always going to be easy,
but the British people have shown
time and time again that we're up
for these challenges.
For many people out there,
this is a depression.
We've had people whose wages
have been cut by 10%.
Nurses, for example.
We've had people who are now...
1.25 million food parcels handed out
in the sixth richest
country in the world.
That's what I call a recession
for large numbers of people.
We will be talking about Labour and
their economic policies in a moment,
but let's start with what we might
expect from the budget. We will talk
to our panel of political observers.
Philip Hammond is under pressure to
set out a bold vision and reset the
government's programme. Can we
No, we can't. We have
heard enough from the Chancellor
across various broadcast and his
article in the Sunday Times. I think
we will not be getting a bold
budget. His precise words short... A
short time ago were a balanced
budget. Some Tory hearts will think.
They desperately want something to
go out and shout about, something to
capture people's imagination, and do
big and bold things, like how on
earth are they going to build those
new 300,000 houses a year? There are
good reasons why he has chosen what
appears to be a pretty staid,
Conservative budget, and that is
that they are probably unable to get
anything bold through Parliament.
His capital is so low among Tory
MPs. If you have a minority
government, it is tricky.
seen ministers on programmes like
this in the last few weeks putting
in the bids for what they would like
spending on, whether it be payment
for nurses or parliament. Would he
struggled to get something radical
through the Commons?
Big ideas cost
money. That's the problem. Bold
ideas are controversial. In some
ways, Tory MPs are asking their
Chancellor to do the impossible.
Government is already doing
something big and bold, which is
Brexit. That has implications for
how much money is available, how
many risks you want to take with
everything else. What is crucial is
that he demonstrates a reputation
for competence. The reputation that
the Conservative government has for
economic competence, that many
people prefer them to Labour on the
issue of economic competence. The
worst thing he could do is come up
with a big, bold idea that
unravelled quickly. What they
absolutely don't want is to come up
with an exciting idea that falls
apart three days after the budget.
He is under pressure from
Brexiteers, who are suspicious of
him. Does he have to offer them
Part of his problem is he
has to offer so many different
people different things. This is
Philip Hammond trying to be and
It is hard to tell
At least in theoretical
terms. His longer-term difficulty is
that, if you look at the economic
cycle, we are getting to a point
where we are probably overdue, if
you put Brexit to one side, overdue
some kind of correction or downturn,
if you look what has happened to
asset prices globally. What will be
worrying for the Treasury is, just
as everyone is saying we should turn
on the taps and build this or that,
we might be at the top of a cycle,
and the Treasury will want to lose
something in the armoury in terms of
probably growing the deficit if
there are economic difficulties in
the next two years, and then there
is Brexit as well.
I think so. Talking to
his friends and colleagues over the
last few days, he had to make a
call, which was precisely how much
can I get away with, with my
political capital being as low as it
is, with the mixed problems he had
at the last budget, and a lot of the
party disliking his approach to
Brexit. He is damned if he is,
damned if he doesn't. Universal
Credit, we are expecting a reduction
in the time it takes to wait,
business rates, affected by high
inflation... I think we will see a
problem fixing budget which will
probably do quite a lot of important
spadework in many areas.
pick up on some of this later in the
Let's speak now to the Conservative
MP Jacob Rees-Mogg, this week
he helpfully launched an alternative
"budget for Brexit" and advised
the Chancellor to be less gloomy
about the consequences
of leaving the EU.
Thank you for joining us. Your
alternative budget is pretty
radical. Almost half corporation
tax, Cap Stamp duty to help the
London market. It seems you are
advocating the opposite from what we
will hear from your Chancellor on
There are two parts to
the proposals I suggested. One is
that we should show that after we
have left the European Union, the UK
is open to the rest of the world. It
is about opening up to the rest of
the world. Secondly, looking at the
modelling that has been done by the
Treasury and some other forecasters,
which has been so comprehensively
wrong. The forecasts made about what
would happen after Brexit have
turned out to be hopelessly false.
The team at Cardiff University have
done some modelling based on the
classical economic principles and
what happens if you move to free
trade that would be very positive
for the economy.
You are predicting
a Brexit dividend of £135 billion,
which sounds fantastic. Why are you
right, and everybody else, including
the Bank of England and the
Institute for Fiscal Studies, why
are they all wrong?
It depends on
the type of modelling. The modelling
that have been done by the Treasury
have been based on gravity models,
which work on the basis of the
nearness of the market and the size
of the economy you are trading with.
These have been wrong in the past.
They predicted that if we joined the
euro, trade would grow by 300%. That
was then revised down to 200%, but
it is fantasyland. The model I am
working on, by Sir Patrick Minford,
who has a record of getting these
things right. He was right about the
exchange rate mechanism, right about
Being right in the past
doesn't mean you are right about the
future. Why do you think the
Treasury will not pick up the same
numbers, if this is so obvious to
I think the Treasury was
humiliated by the errors in its
forecast prior to Brexit, and is
trying to defend its position. The
short-term economic consequences of
a vote to leave was one of the most
dishonest documents to come out of
the Treasury, purely a piece of
political propaganda. They are
wounded by that and sticking to the
same script, rather than looking at
other forecasts and other experts.
You think the governor of the Bank
of England is an enemy of Brexit,
and it sounds like you think the
Treasury is opposed to it. As the
Chancellor fallen under their spell
as well, and been persuaded to be an
enemy of Brexit?
I have admiration
the Chancellor, but George Osborne,
his predecessor, was the architect
of Project Fear. He was too close to
the Bank of England and lost his
independence. That is what needs to
change. It is an opportunity in the
budget for Philip Hammond to show he
is putting aside the Treasury's
mistakes in the past. It is very
encouraging what he is saying this
morning, about a more positive
approach to Brexit.
Lord Lawson has
accused Philip Hammond of being very
close to sabotage on Brexit. He says
we need a can-do man at the Treasury
and not a prophet of doom.
that Philip Hammond is an
exceptionally intelligent man, a
very thoughtful man. It is not a bad
thing to have a Chancellor who is
serious minded and steady, rather
than one who is a showman and uses
the Exchequer to interfere in
I have a lot
of confidence in the Chancellor.
When you launched your budget for
Brexit, you said the government has
to deliver the £350 million for the
NHS that was delivered during the
referendum, even though you didn't
think that promise should have been
made. Is that something they now
need to deliver wrong?
It is. This
only happens once we have left.
Politicians have to recognise that
voters don't look at the small print
of electoral policies. If you put
£350 million on the side of a bus
and say it may be available for the
NHS, it is reasonable for people to
think that is a promise. Brexit was
won by the Leave campaign, so it it
is important that they deliver on
that promise. Politicians must keep
faith with voters and deliver on
implied promises, as well as ones
that are set out in detail.
Cabinet will move on to talk about
the Brexit bill this week, and we
understand they may need to come up
with more money to satisfy EU
demands. The more money spent on
that is less money available for
things like spending on the NHS. Are
you worried about the size of the
You have your finger on
the important point. The government
will have to choose whether to give
lots of money to the European Union,
or whether to spend money on UK
public services, and that will be
part of the negotiation. On all
these issues, it comes down to
choice is the government makes. I
would encourage the government to
choose our own domestic public
services rather than expensive
schemes in continent or Europe.
are you advocating that the
government should spend up to £2.5
billion on a no deal scenario?
It is important that we are ready to
leave in the event of no deal. If we
left with no deal we would on
current figures still be saving the
remains of 18 billion so we would be
saving 15 and a half billion against
paying for the financial framework.
To show we're ready on day one would
be money well spent and most would
be needed any way. We need to have
new customs arrangements in place
even if it is not for a no deal
There are suggestions
that the Government might back down
on the idea of putting the time and
date of leaving the EU on the face
of the bill. Would you be Exxon
certained if that was -- concerned
if that was remove prd the bill?
is in Article 50, unless Article 50
is extended by the Council of Europe
we leave on 20th March 2019 and it
makes accepts that should be the
same in -- sense that should be in
same in domestic law. But that is a
secondary concern from my point of
view. It is important that we leave
on that date.
Stay there if you
We're joined in the studio
by the former minister
He's no relation to the Chancellor,
but he is a member
of the Treasury Select Committee
and he's one of the Tory MPs named
as "Brexit mutineers"
by the Daily Telegraph
this week - lucky him.
I'm assured you're no relation to
the Chancellor. Let's just pick up
on what Jacob Rees Mogg was saying.
How important is it to you as a
rebel that the Government does put
the date on.
I agree with Jacob it
is in the Article 50 process, the
key reason it is important is the
negotiations look like they're going
to be tricky and longer than we
expected and it may well be that we
are still negotiating up until March
2019. We could have a short couple
of weeks period of extension. Why do
harm to the economy by falling out
on a precise time? If those
negotiations need to be extended.
They won't go on for more than a
couple of weeks, because there will
be elections in Europe in June 2019
and there is no chance of a new
commission or Parliament dealing
with this. Giving it flexibility and
with this flexibility the government
said it wants flexibility in
negotiations, why give all the
advantage to the other side? Part of
that was evidenced yesterday by
somebody suggesting they will ask
for the Margaret Thatcher rebate to
be suspended. That is as a result of
putting the date on the bill.
did not agree with the Brexit
committee and think it is important
that we set the date and time?
think it is perfectly reasonable to
set the date and time and I think
these negotiations fill the time
available. The United States and
Australia agreed a free trade deal
between April 2003 and February
2004. These things don't need to be
interm Knabl if both sides want to
agree. I think the British
electorate would be very concerned
if nearly three years after the vote
to leave, we still hadn't left. I
think most people expected that we
would have left by now. The
negotiations realistically to get
through the approval of the European
Parliament and so on need to be
completed by at the end of next
year, going up to the last minute I
don't think is real is tick.
on to talk about a trade deal and
getting that done, the EU need to
agree to move on and we need to
settle the divorce, cabinet are
going to be talking about the amount
that needs to be spent on that,
Stephen what manned, are you happy
for the Government to offer more?
hope that the Government will stick
to the Florence speech in terms of
ensuring that we fulfil our
liabilities and obligations. I'm not
clear exactly whether that is 20
billion or 40 billion and I'm not
sure the government is. If part of
the divorce bill is then some
settlement for getting the trade
deal, we will need to examine that
Jacob Rees Mogg, is this
that might spark another war in the
party if the cabinet suggest they're
prepared to pay more?
I think we
need to go back to what you said,
that the - the EU said they want us
to settle the money first. The
Government doesn't need to follow
that. They need our money. If we
don't pay any money for the final 21
months of the framework, the EU has
about 20 billion pounds gap in its
finances and it has no legal
requirement to borrow. So it
insolvents or the Germans and the
others pay more. So our position on
money is very strong and we
shouldn't fall into the trap of
thinking just because Mr Barnier
said it it is as if he has received
tablets of stone like Moses, he has
There is a sense that the
Government feels a mo generous offer
would set a good tone, the kind of
approach that Jacob Rees Mogg
suggests would not make for smooth
It probably wouldn't. But
we have to be clear what we are
paying for and what we are getting.
No one is suggesting we should hand
over money without proper scrutiny.
It may be appropriate to put money
to facilitate international trade to
secure jobs. We have to be careful
about the analysis about what the
scale and size of Brexit dividend is
and the size of payments will be.
You mustn't confuse gross and net
and there is disagreement about some
of the numbers.
On that, Jacob Rees
Mogg in his budget for Brexit
suggests in five years time we would
have a 135 billion Brexit bonus. Do
you think it is real is tick.
using some analysis that has some
flaws. It is predicting a price drop
in the United Kingdom of 10%. Tariff
drops will only be 3 or 4%. It is
predicting huge productivity gains,
the likes of which we have not seen
in 20 years. Thirdly, despite his
view on modellers there is evidence
that they weren't and if you go into
the detail of the analysis, some of
the data is 14 years out of date.
Jacob Rees Mogg, you're being
I don't think
that right. I think the fall in
prices comes because you make the
economy more competitive and you
take away tariffs which reduces the
price of food by 20%. That is a big
reduction. Bear in mind that the
biggest tariffs hit food, clothing
and foot wear that, harm the poorest
in society the most. The gains from
productivity come from is in
additional tariffs. Leading to other
saving and further investment I
think the modelling done by the
professor is as good as modelling
can be. That doesn't mean it is
infallible. The failure of gravity
model is well known.
was accused of auditioning for the
job of Chancellor by using long
words. Do you know any good long
I don't think that
we want to get into this type of
business actually. I think all
Conservatives and Steven and I very
much agree on this, want to show as
united a front as we can manage.
There are differences on some
aspects of policy, but in terms of
individuals we want to stand
together and support the best
interests of the government.
Brexit Secretary David Davis
was in Berlin this week trying
to win the support of business
leaders there for a comprehensive
free trade deal with the EU.
He warned them against putting
'politics above prosperity'
and reportedly got a bit
of a frosty reception.
Well, the former Labour MP
Gisela Stuart was one of the leaders
of the Vote Leave referendum
We travelled with Gisela to Germany
to meet the business leaders
she says will help secure a good
trade deal for the UK.
Here's her film.
I was born and brought up
in this part of Germany,
and although I've lived in the UK
for the past 40 years,
and represented the constituency
of Birmingham and Edgbaston for 20
years, my family still live here,
and I've kept many links.
I was chair of Vote Leave,
and together with only a handful
of other Labour MPs,
we campaigned to leave
the European Union because we
thought the country would be
better off outside.
It's hard to remember now, but back
in the 1970s, when we joined
the European Economic Community,
people thought that by joining
the club we would see the kind
of economic miracle Germany
experienced in the '70s back home.
The "Deutsche Wirtschaftswunder"
would come to Britain.
But, of course, it didn't.
Within a few short years
of the devastation of World War II,
Germany had emerged as
the largest economy in Europe.
success is down to
the pragmatism of its business.
German Mittelstand is family
long-term thinking, reliability,
are very important values.
Changing moods on a political
landscape and changing frameworks
are toxic for our way of doing
business, and we want
that to go away.
German business is not given
to making big political statements
out of step with government policy,
but talk to those in decision-making
positions, and it is clear
that they want to secure a good deal
with the United Kingdom.
BMW employs almost 90,000
people here in Germany,
and exports just under
1 million cars annually.
The UK is a vital market.
What we are really seeking right now
is more clarity, more certainty,
because in our cycle of investment,
cycle of development,
it's about a seven-year or so period
that we look at,
but we are now, of course, starting
to think about what comes next,
and what we need to see now
is what is going to be
the trading relationship,
how are the logistics going to look,
what is going to be
the requirements for people
moving across the continent?
Because all of these things
are important to us today.
And, by the way, they will be just
as important tomorrow.
Berlin is well aware that
if the European Commission
is allowed to put up trade barriers
against Britain, it will be
German business, German consumers
and German employees
who will suffer.
I think it's very
important that we complete
the first phase successfully.
The first phase of the negotiations,
which looks at the financial
consequences of Great Britain
leaving the EU.
And then it's not a question
of punishment payments.
It's about when you are part
of a multilayer, contractual
obligation and you want to leave
that, then of course it takes
a whole lot of obligations
which you have to deal with,
so both sides are satisfied and can
live with the consequences.
It isn't everyone's interests
for the UK to part on good terms.
Of course there was going to be
upset when the UK voted to leave,
but creating uncertainty over
the terms of UK's exit will simply
have a disruptive effect
on exports to UK markets.
Far better to have a sensible,
amicable negotiation that results
both sides being able to trade
together and work
Markus Krall is managing
director of Goetzpartners,
and heads the Financial
Institution Industry Group.
Is it true to say that,
if we negotiate Brexit well,
then a good Brexit can actually
strengthen the United Kingdom,
the European Union and Germany?
It's absolutely true.
I think that this
is about two things.
One, about proving that
free trade is possible
between a European Union that is
smaller and a former member country.
If you don't prove that free
trade is possible there,
then the question becomes,
what is Europe standing for?
Number two is, I also
believe the free trade,
free market and democratic and less
bureaucratic approach that Britain
has chosen as the path
into the future is a role
model for Europe.
The time has come both
for the United Kingdom
and for the EU to be more clear
about what kind of
deal we can achieve.
Both sides need to be bold.
As long as we remain open to free
trade and sensible co-operation,
we can arrive at something that
will benefit both sides.
But one thing's obvious -
if we are an open and free trading
economy, we've got one big
cheerleader on our side,
and that is German business.
That was Gisela Stuart
setting out her case
and we'll be hearing
from the opposite side
of the argument in the coming weeks.
Gisela Stuart joins us in the studio
now, as does Alastair Campbell.
He used to work for Tony Blair
in Number 10, set up
the New European Newspaper
to campaign against Brexit,
and is so pro-European that at this
year's Labour conference
he was heard playing Ode
to Joy on the bagpipes.
Welcome both of you.
We will start with your point in the
film, that you think the German
business once the EU to offer the UK
a generous deal because it is in
their interests, yet the president
of the German equivalent of the CBI
said that defending the single
market must be the priority for the
EU, and another says that the
cohesion of the remaining member
states remains the highest priority.
The president of the CBI just after
the referendum said that it would be
in nobody 's interest to introduce
tariffs and trade barriers. On the
UK side, I don't think there's a
full understanding that economic
interests are incredibly important,
that they are trying to cover
economic interests on the cohesion
of the 27. I think different
economic interests will raise the
head of different countries. The
German auto industry is as important
as the financial sector is here. The
banking crisis is far from over, but
the big riffs which were going on is
that the E U is losing its second
biggest net contributor. Countries
like Germany want a deal with the UK
that is a free open market. There
are other tensions in the EU that
wants to become more protectionist,
and that is a bad thing.
the film there with the Jacob
Rees-Mogg interview. No matter what
side of leave you are, it is
delusional and all driven by wishful
thinking. You could find a
businessman who says Brexit will be
good for Germany. The vast bulk of
British businesses think this is a
disaster, as do the vast bulk of
European businesses. One of the
delusions on which they ran their
campaign is the idea that they need
us more than we need them. That is
Be you self about £80
billion more in goods and services
into the UK than we do to them, and
Germany has one of the biggest
deficits. It is in their interest.
Of course it is, but it is a myth
that they need us more than we need
them. The damage that will be done
to us, even with a good deal. Let's
be frank, where these negotiations
are, Theresa May is either going to
end up with a bad deal and dumber or
no Deal. A bad deal is bad, and a no
deal is a catastrophe.
setting up ideas that which were not
there to begin with and knocking
them down. Delusional.
the Brexit bonus.
If we had a
referendum, it was a democratic
decision. I know you don't like it
and that a lot of business would
have preferred to stay with the
status quo. We have had the
referendum. Undermining political
institutions is in no one's
interests. It is functioning
democracies which lead to economic
Theresa May fought an
election Inc on a hard Brexit that
As we heard from BMW,
there is uncertainty for business.
There will be elections, European
elections, in 2019. There will be a
change of the Commission and the
parliament. We have a narrow window
to implement the mandate for the
referendum which Parliament voted
for. So rather than you undermining
this country, why don't you work
together to get the best deal?
Because we totally disagree.
don't want a good deal?
favour of a good deal, and I could
give them some advice as to how they
get a good deal. First, you have a
cabinet that has an agreed strategy.
18 months in, they don't have that.
I am not undermining a deal. I am
continuing to pose questions about
what they are trying to do and how
they are trying to do it. This is
democracy. Democracy is the ability
for Parliament, which is not doing
its job properly, and the public, to
keep scrutinising, and if they want
to change their mind, having the
right to do that.
You were trying to
encourage the Taoiseach yesterday to
play hardball with the UK.
I am on
the side of the UK, and I am worried
that if we go down the path that we
are being taken down, and Theresa
May and Boris Johnson and the rest
of them, this shambolic path, we are
going to do fundamental, lasting
damage to the country we love. I
don't care about the Civil Aviation
Authority. I care about Britain. --
I don't care about the European
Union. If every lorry going into the
UK today was stopped for just two
minutes, we would create an instant
17 mile traffic jam. These people
just don't care...
I am not these
people! Let us not conflate... You
either decide that you are
implementing a democratic decision
of a referendum that was called and
over 17 million voted.
You will not
stop me debating it. Just as Nigel
Stop talking about Nigel
Farrell Raj. Vote Leave was not
Nigel Farage. There is no desire in
Germany to punish the United
They are behaving
There is a battle of
protectionism and free market going
on. If we implement this properly,
give businesses the kind of
incentives they want, we can get a
good deal. So you want a bad deal?
You are driven by wishful thinking.
Gisela Stuart, you are saying that
business will intervene to prevent
things like tariffs being put in
place? They are leaving it a bit
late to put pressure on.
find that business is laying out the
kind of things they need to get
those deals. I can find as much
fault with the speed of the
progress, but what I really do
resent is that you are actually
encouraging other countries to
Know I am not! I spoke
out in support of the Irish
Taoiseach because I spent a lot of
time with Tony Blair and his team on
the Good Friday Agreement. The
people who are driving this hard
Brexit without thinking it through,
still no answer on how you do Brexit
in our island without a hard border.
I think the Irish Taoiseach is right
to call out the government on the
incompetence and the fact they have
not thought it through.
the result of the referendum and the
fact that we will be leaving the EU?
I accept the result of the
referendum, but I do not accept that
the country will definitely leave,
because the country is entitled to
change its mind. As the chaos and
costs mount, the public is entitled
to change its mind and will change
There is no evidence at
Come out with me!
me to finish the sentence. There is
a changing of mind happening, a
crystallisation. Unlike you, I have
fought five elections and I have won
five elections. I have probably
spoken to more people like you.
may do, I'm just saying, come out on
the road with me...
40% of the
population in the middle just want
us to get on with it. What that film
showed is that if you want to make
it a self-fulfilling prophecy that
it's a disaster, which I don't. I
want to implement a deal that is
good for British jobs. The rest of
the world is changing in terms of
technology. Currently, Germany
hasn't even got a government, and
nobody is laughing about that.
they are stable without a
Let's leave it there.
It's coming up to 11.40,
you're watching the Sunday Politics.
Coming up on the programme,
we'll be looking at the latest
opinion polls and we'll bring
you the results of our moodbox
asking whether Phllip Hammond
or John McDonnell should be running
And a warm welcome to your
local politics show.
Now, it's nice and cosy
in the studio, but over the course
of this weekend and the last week
or two the cold winter weather
has started to bite.
As it does, we report
on the North East councils looking
to get into the energy business.
Could it be a way to deliver
lower gas and electric
bills for customers?
Well, talking about that
and all the week's political news
in the region, except perhaps
the misuse of sausage rolls
by certain unnamed bakeries,
the Conservative MP for Scarborough
and Whitby Robert Goodwill,
who is an education minister
as well, and the MP for Wansbeck
and Labour Party
chairman, Ian Lavery.
Welcome to you both.
But first, Teesside MPs this week
wrote to the Chancellor calling
upon him to address what they see
as a crisis in funding
for Cleveland Police.
The previous day, headteachers went
to Downing street to demand more
money for the region's schools.
And the Federation of
Small Businesses were next,
they want a cut in business rates
and action on broadband.
And then there's the little matter
of the £430 million required
for new trains on the Tyne &
Wear Metro, backed this
week by none other than
the former Chancellor
- remember him?
- George Osborne.
Well, when it comes to next
Wednesday's budget it seems
there are no shortage of ways
for Philip Hammond
to splash the cash.
Robert, would you accept that this
budget is make or break
for the Northern Powerhouse?
Well, we've seen tremendous
investment coming into the North -
when I was a roads minister we had
money going to the A1,
money on the Western bypass,
money at the end of the Tyne Tunnel,
so we have seen investment
in the north, and indeed
with the ending of the Crossrail
project we will see the rebalancing
I think of investment much more
between the north and south.
But be in no doubt, it's very
important we continue
to invest in rail and roads,
because it's only with good
infrastructure that we can actually
develop the economy up here.
And businesses would agree with you,
and some of them might take issue
with the idea that it's not that
there's no investment,
that it's tremendous
investment that we've seen -
the problem is with the Northern
you've raised expectations to such
high levels on this idea,
and the perception amongst small
businesses, even allies
like George Osborne,
is that as yet the Government hasn't
delivered the big project that
would back up the
rhetoric with money.
Well, as I said we have a £44
billion roads investment strategy,
much of which is going to the north.
In my own area we've a project
in the pipeline for the A64,
connecting the East Coast to the A1.
Would you accept though that it's
not been good enough so far
to convince the doubters?
Well, I think what you need to look
at is across the board -
the money's gone into Manchester,
gone into Leeds.
We're looking at a high-speed three
across the Pennines,
and of course Anne-Marie Trevelyan,
my colleague in Northumberland
is very keen to see money
going into the A1, so it'll be
interesting to see what money
is there for projects like that.
Ian Lavery, when it comes
to helping us in the north,
what should be the number one
priority in the budget?
public sector pay,
investment in our
hospitals - what is it?
All of those things.
But one thing's absolutely certain,
is that the North doesn't end
at Manchester, Leeds or Liverpool.
Between those areas
and the Scottish Borders,
where we live and we see on a daily
basis they complete
lack of investment...
-- the complete lack of investment.
-- the complete lack of investment.
You mentioned rhetoric -
plenty of rhetoric,
not enough finances,
not enough investment
in all the things that you mention.
What we would like to
see from the budget,
which would help the north-east,
we need to look at Universal
Credit, we need a post
on Universal Credit...
We need to look at infrastructure
programmes and investment
in the local economies,
when it look at the public sector
how we can rid ourselves of that pay
and also invest monies
in the public sector fully.
And to be honest with you I expected
you to say that all of those
were a priority, and that's
the problem, isn't it?
If you are going to meet
all the promises that Labour makes
on all these issues,
there are very few that really
believe you can do that,
as John McDonnell seemed to suggest
this week by just taxing a few
businesses and the wealthy.
You are going to have to ask
all people to pay more tax,
and shouldn't you be
honest about that?
I think we are honest. At the
election you will recall that we
were the only party, the Labour
Party, who produced a great book
along with the manifesto...
Theresa May said it was incredible
you could fund that.
But we were
quite clear, crystal clear, because
it is important that we are upfront
with the electorate, on how we fund
what we want.
Robert, this week
there have been new powers added --
handed to this transport body. With
the radical idea be to hand all the
money and all the power for Northern
transport to those who know it best?
We had a referendum about whether we
should have a regional level of
Government, and I think people want
You didn't worry
about bureaucracy when it came to
mayors in separate -- certain parts
of the country!
We have MPs in
certain parts of the North of
England... We are getting
substantial investment in the North.
Look at the money that has been
going in on the western relief road.
Let's look at the Tyne & Wear Metro.
Would it be acceptable for the
Chancellor to say I'm not going to
give you the money directly, you've
got to do it from -- through a
When I first went
to the Department for Transport we
looked at finance through the public
sector, and we decided for some of
the big road projects for the
Government to borrow money more
cheaply from the private sector. We
need to make sure we don't max out
on our credit card Bill like the
last Labour Government did. Trains
are generally owned by the rolling
stock companies that leads them out,
so the principle there is a
different one to having a PFI such
as the one we have for schools.
personally think we should be
looking at the correct investment,
not just in the Tyne & Wear Metro
but also the line in Northumberland,
we should never forget
Northumberland, and that money
should be coming from central
government to invest in that
infrastructure, to connect time in
the north to the city regions.
the cold weather is upon us, and the
difficulties faced by many try to
pay their fuel bills. 152,000
households in the north-east are
affected by fuel poverty. People who
spent more than 10% of their income
on gas or electricity.
The Government says the market is
broken, and it has promised to cap
bills on the most expensive tariffs,
an idea initially proposed by
Labour. Could there be another
solution to the problem of those
rising bills, in the shape of local
councils setting up their own energy
It is not just shop prices putting
people under pressure in Newcastle.
Businesses and the public are
feeling the strain from rising
energy bills. The owner of this
newly opened restaurant says the
cost of illiteracy is crippling.
They put their prices up 11% last
time, and inflation's going up to
2%. So they are making 9% of people
who haven't got the money, who are
struggling. And they are making
With two small children,
Colin and Vicky have to keep their
Energy prices are going
up all the time. It is not just a
struggle for myself but the public,
I can never
understand the bills that they give
you, and all the units and this
price Purvis... It is all a bit
complicated. I can see why old
people wouldn't understand it.
campaigners say they can see why
some families are pushed to the
We see 15% of older couples
and young people having to choose
whether to feed themselves and their
families and having to have the
electricity on. This is just the
start of the winter, so the problem
is only going to get worse.
this part of the answer? A council
run power station close to the banks
of the Tyne.
Basically we've got two
identical power engines. It's
basically a very large 20 cylinder
engine running on natural gas.
plant supplies electricity and heat
to public buildings in Gateshead and
from next year, hundreds of homes.
Backers say the result is cheaper
and greener energy.
getting a lower carbon, lower cost
source of energy. We discovered
their energy compared to the market
rate, and the comfort is coming from
a lower carbon source.
Are you having trouble finding the
right tariff for you? Don't worry,
Nottingham, help is here!
councils have gone further,
launching not-for-profit energy
suppliers that serve whole cities.
Nottingham's Robin Hood energy was
We are not about setting aside money
to pay dividends to shareholders or
two massive director -- directors'
salaries or bonuses, we are about
setting aside any profit to bring
back down the price.
A number of
councils are considering following
suit, but this is potentially a
gamble with taxpayers' money, and
for customers it won't always be the
cheapest option. Here at University
-- at the Newcastle University,
experts point out the pitfalls.
Although these schemes look
promising, they face a lot of
serious challenges, so it is a
highly competitive market, there are
technical risks about how to
maintain the infrastructure itself
and make sure it is reliable and
Do you like the idea of a
council owned energy supplier?
not sure, but if it was a cheaper
option is to be something to look
Not the council in the area I
live in, thank you.
You don't think
they are up to running the energy
Not particularly, I
sometimes wonder why they are --
whether they can run the city.
still not quite clear the local
approach will work.
An endless supply of energy I
gather. Is this something councils
should be dabbling in when they have
to concentrate on many other things
with limited resources?
I think it's
a great idea, it is visionary, it is
happening in other countries across
Europe, it is happening in America,
cities in America, looking at
producing their own electricity, and
it can only mean a good thing if
indeed the people in the region
themselves actually receive cheaper
energy. There is legislation placed
at the sports -- time, which
prevents local municipal owned
energy companies from providing
cheap energy, cheaper energy than
what is available on the grid. And
if this is to be successful, we have
got to help that it will be cheaper
for those in the region, moving
people out of fuel poverty, so if we
cannot get cheaper energy, then what
is the point?
Robert, would it be more effective
to see councils given this chance to
do this, rather than these caps
being proposed by all of you?
have protections for people on low
incomes, a discount worth -- Ford to
people... And of course we have the
winter payments. But the problem is
not with suppliers, we have 60
supplies at the moment, up from 13
in 2010, the problem is that 60% of
consumers particularly older people
are on a standard variable tariff,
and the Bill that is coming before
Parliament for us to consider is
that -- for those people to have
that tariff respected, a
people right now choosing as we
heard between heating and eating.
When is this cap going to appear? At
the moment, there are 60% of people
paying more than they should, so the
And the market's has
proven that there are people who
will not shop around.
When is that
cap would happen? The legislation
will be in Parliament by the end of
the year, meaning that Ofgem will
set that level at a fair level, to
prevent the situation where loyal
customers, those who do not
understand the market or have access
to the Internet, can get the best
A lot of suppliers out there...
was classed as a Marxist policy by
the Conservatives when it was first
mentioned by Ed Miliband, and now...
Isn't the answer more competition?
The answer is not more competition,
the answer is to make sure, and what
the Labour Party says... The Labour
Party is quite clear, we would take
back into public ownership the
energy companies. You can only
control what you earn. Not what
we've -- we've got 30,000 people
dying every year because of the lack
of heat in their properties.
cost you £30 billion to £40 billion
to nationalise the national Grid.
think saving 30,000 pupils's
people's lives should be top of the
agenda. What about those 30,000
For many -- there's no doubt
what issue has been keeping MPs busy
this week, but we like to discover
what else has been going on in the
world of politics, other than you
Unemployment in the north-east
fell in the three
months to September by 6,000.
There was also a slight
drop in Cumbria.
The Bishop of Durham, the Right
Reverend Paul Butler, says he's
heard heartbreaking stories about
how Universal Credit is devastating
the lives of claimants.
He was speaking in the Lords.
A debate is to be held
over the plight of WASPI
women, who are fighting changes
to the state pension age.
Stockton North MP Alex
Cunningham urged the
Hexham's Guy Opperman,
to engage with the women.
It won't go away, so why
doesn't the Minister engage
with the campaigners
to find a solution?
The Government has already
£1.1 billion, in 2011.
Newcastle councillors will decide
this week whether to hand
over the city's parks
to a charitable trust.
And finally, the National
Lottery's awarded Redcar
and Cleveland Council nearly £70,000
for a project about the history of
the iron and steel industry.
While £4,500 will go
towards exploring the
history of pigeon
fancying in Skinningrove.
Now, I do want to discuss one
other issue that I think
has come up in the Commons this
week, and which will no doubt come
up next week, which
is Universal Credit.
Robert Goodwill, there is growing
pressure from the Bishop of Durham
even within your own party to give
ground on this. A listening
Government should be able --
prepared to move on this issue.
About 8% of claimants are on
Universal Credit at the moment, that
is going to extent a 10% in January.
And yes, there are emergency
payments people can take to tide
them through, and that 50% of
claimants... I think the Government
will look at it, and certainly we
are getting feedback, but what is
fundamentally the case is that
Universal Credit is helping people
get on to work, but under the old
system people did not want to work
more than 16 hours, for every £1
they lost they earned 96p. Universal
Credit is getting people into work,
but in the initial period we have to
get them the work they need.
Government does tackle this, will
that be enough, particularly as to
how they dealt with that help line
that was costing them money?
Government who proposes a policy
that is going to push more people
into poverty, including hundreds of
thousands of more children, should
really, seriously, look at
themselves. If I put in a claim for
Universal Credit today, then I would
not receive a payment until after
the New Year. I think the issue is,
Richard, will they tackle it? There
must be pressure put on the
Government to ensure that people
have got bread on the table for
their kids, they have, at this
particular point in the year, it
isn't Christmas. Any Government
pushing people into poverty should
look themselves seriously in the
We're going to have to move
on. The Prime Minister says she
wants to see many more new homes
built over the next decade, but how
many should there be in the
north-east and Cumbria? Our local
councillors have their view, with
plans for more than 180,000, but
that was before a new consultation
which appears to put the brakes on
some of those ambitions. It says
house-building should be
concentrated on where an affluent
population is expected to grow, so
that means fewer new homes in places
like Sunderland, Middlesbrough and
According to the Government, the
formula will mean the right homes in
the right places. The context
calculation drawn up in offices in
Whitehall is based on the idea that
more homes should be built in areas
where house prices are high.
more homes should be built in areas
where house prices are high. Where
prices are cheaper, the opposite may
be the case. Most places in the
north-east, Cumbria and North
Yorkshire, would see few homes built
under the scheme. In total,
Yorkshire, would see few homes built
under the scheme. In total, 30,000
fewer of the next decade.
Critics say both the data on which
the calculations are based on the
idea itself are deeply flawed.
Housing growth is a vital component
of our investment programme, without
it we do not attract the investment
or get those jobs. We may have to
temper what we would want to do. I
don't think we would be willing to
do that, I am not willing and the
Mayor is not willing. I think we
would have to work harder to attract
that investment, we would have
people who might go elsewhere when
they could live here and work in the
time. That has a knock on effect of
our investment programme, our
strategy. And I think ultimately it
means we have a Government that says
places like Middlesbrough and up in
the north are not necessarily worth
living or working in.
all the talk from your party about
building new homes, it is ironic
that the formula could see fewer new
homes being built in the North?
House-building is at more than
double the level it was under the
last Labour Government in 2009, but
people want to buy homes, where they
will not -- where they want to live
and work. The measure the Government
has introduced focused -- focuses on
the area people cannot afford to buy
homes, but where jobs might be. So
you can't force people to live where
they don't want to live.
to the formula, Scarborough should
be building over 6000 fewer homes
council wants them to build.
Presumably if you like the former
lady would support that?
comes down to it, we have plenty of
land allocated in the country to
build on, and the house-builders are
building houses and people are
buying those houses, we have seen
massive investment going into my own
area, in the Whitby area...
Avery, this is just great --
realistic. -- knavery. -- Ian
Lavery, isn't it? House prices are
much higher in the South...
consequences of this new criteria
will mean less homes in the north
again. Total inequality between the
north and the South, and why this
new criteria of affordability is
being introduced is beyond me. What
the consequences mean that there
will be less house-building in areas
like mine where new houses are
But there is no point
in unrealistic targets in areas that
are losing population.
proportionate investment in the
north-east the same as we get in
other -- any other place in the
south-east for example, we talk
about Universal Credit, investment
in the regions... The sad and the
Another bizarre aspect is
that Sajid Javid criticises the
council for not having a plan,
Conservatives wanted to cut the
house-building targets so --.
a change of control in
Northumberland County Council.
According to Sajid Javid, you got it
Borough Council were one of the
first to come up with a plan. We've
seen housing being built in numbers,
large and people moving in.
nine years to come forward with a
core strategy. It was introduced in
February of this year, and within
days of the Conservatives taking
control of Northumbria County
Council, they withdrew the core
strategy against legal opinion, and
they have been severely admonished
by their own sector...
What is going
on?! Much more on what this means
for Cumbria and the north-east in
next week's show. Follow me on
Philip Hammond will deliver his
Budget on Wednesday -
he's moved it to the Autumn
if you remember - and he'll be
hoping it can help re-define
the Government in the eyes
of the public.
But when it comes to
the economy, do people trust
the Conservatives, or Labour?
Here's Ellie Price
with the moodbox.
MUSIC: The Road to Nowhere
by Talking Heads.
All eyes will be on the Chancellor
this week as we find out
what he has been cooking
up in his Budget.
So we have pulled off the A1
near Peterborough to ask people here
who they trust with the economy -
is it the Chancellor,
Philip Hammond, or is it
Labour's John McDonnell?
Which one's Tory?
I voted Conservative
for the last two
elections, don't feel very confident
now, so I'm going to swap.
If I said to you which
of these characters
would you trust with the economy,
what would you say?
The one who's currently
running it, because they
seem to be bringing
the deficit down.
Because I'm an NHS worker.
For me, it's just about
spending, public spending.
Labour always overspend.
John McDonnell, I think
capitalism as we know it is tanked
and I think we need
a radical re-think.
Broken his egg, who do you trust
more on the economy?
Because they never come up trumps
with anything that they
reckon they're going to do.
If I had to make you
choose one of them?
The man that's there, Hammond.
I wouldn't trust
Philip Hammond with a
bag of marbles or a plastic ball!
Who do you trust
more on the economy?
Oh, the Conservatives.
I just think they're better
for the small businessman.
We need a Maggie or
a Winston Churchill,
somebody in there with
balls to say, right,
that's the direction
going in, that's what
we are going to do.
I've got balls!
What are you doing?
Putting balls in holes
by the look of it!
I suppose the lesser of the two
evils is anything but Tory,
but I say that without a great
deal of conviction.
Having grown up in the '70s
with all the rubbish on the
streets, the strikes, the unions.
Re-nationalisation and they're
going to spend a lot of money
and increase taxes and it will pull
the country down.
I've seen an awful loft of all-day
breakfasts today, but it
is clearing up time here
at the diner and time
to reveal the Moodbox.
Take it away, Tim.
As you can say it was
a close-run thing, but
like any fiscally responsible
Chancellor, I've done my maths and
counted and Philip Hammond got six
more votes than John McDonnell.
Oh, chip, thank you very much!
That was Ellie and the entirely
at the Stibbington diner near
But for a slightly more scientific
understanding of how the public view
the parties on this and other
issues, let's have a look
at some recent polling.
Here's where the Conservatives
and Labour stood on the economy back
when the Prime Minister called
the snap election in April,
when the Conservatives had a big
lead, as they did in many
The most recent poll by the same
company reckoned Labour had narrowed
the gap significantly,
as they have in other areas,
although they're still 10 points
behind the Tories on this issue.
And there was another survey much
discussed at Westminster this week,
showing that while the gap
between Theresa May
and Jeremy Corbyn has narrowed
drastically since that pre-election
period, Mrs May is,
despite her many problems,
still pretty much level-pegging
in polling terms or
even slightly ahead.
And when it comes to how
people intend to vote
while the Tories are behind,
there's no sign of a
big Labour lead yet.
Tony Blair thinks that,
given the current "mess"
inside the Government,
Jeremy Corbyn's party should be
10 or 15 points ahead.
Well, many in Labour will find it
easy to dismiss both Tony Blair
and the opinion polls, as they both
called the last election entirely
wrong, so what if anything do
these polls tell us?
Let's turn to our expert panel.
Labour are now eight points on the
economy, according to a poll. Why is
there a gap between Labour and the
There seems to be a
deep-seated reservation in the minds
of many voters. They look at Jeremy
Corbyn and John McDonnell and
imagine them in charge of the
country, the finances, national
security, and think... It is
unfashionable to point out in many
circles that Labour did not win the
last election, and it didn't win it
for that kind of reason. Jeremy
Corbyn is very good at attracting
and inspiring young people and
people who had not voted before. We
underestimated his capacity to do
that. But he wasn't great at turning
Tories to Labour, or sealing off
those final reservations. The
government have had a shambolic few
weeks. We are tripping over
resigning a cabinet ministers. They
are fighting like ferrets. A lot of
people are having a really tough
time and looking at the government
to help them, and are unimpressed
with what they see. But there seems
to be a final fence that Corbyn does
not seem to be able to get over.
Isn't Tony Blair right, that Labour
should be 15 or 20 points ahead?
think he's completely wrong, and is
revealing he is out of date. I think
Labour are in a really good
position. If you look at what they
have achieved in the last year,
going into Christmas 2016, Corbyn
had just managed to avoid, had to
re-fight Labour leadership contest.
They were 20 points behind. Theresa
May was at the top of her game.
Through the general election and
beyond it, they have continued to
build their movement. They are very
effective on social media. I think
they are in a strong position, and
they need about 60 seats to win the
next general election. They will
probably start with 25 of those. The
fact that they are closing the gap
on the economy suggests that a lot
of voters are now giving them a
chance or a hearing, which they
certainly were not getting a year
ago. I think they have done very
Can they be confident with a
slim lead against the government?
am slightly more with Tony Blair
than with Iain. This goes back to
that very general election result. A
huge turnout for Labour for Jeremy
Corbyn. If you asked that same 40%
of people today, do you want Jeremy
Corbyn to be Prime Minister? Where
you really voting for Jeremy Corbyn
to lead the British governmentanswer
is no, because Theresa May still,
despite the fact she is presiding
over a shambolic cabinet, she has
the most support for Prime Minister.
The last general election may have
just been a giant by-election,
because everyone was so short that
Theresa May would get in.
Chancellor Philip Hammond gave
Labour a bit of a gift, when he
said, there were not any unemployed
people in Britain. A slip of the
tongue. Was that damaging?
to look at the context he was saying
it in, which will not be the context
of the Facebook meme you will get
shortly. He was asked about future
unemployment, and he was saying that
when technological advances came,
unemployment didn't materialise.
They would not be able to use that
against him so easily if it didn't
have something that people think
about the Conservative government,
which is that they are out of touch,
they have no idea about some people,
that they refuse to see what they
have done. People have that idea
about the Conservatives, so to drop
a bit of a clanger in that regard...
The budget is on Wednesday, and also
this week, the Brexit committee will
be meeting. What will they be
talking about and why does it
What Stephen Hammond said to
you a few moments ago was
fascinating. Tomorrow is going to be
the big meeting. It is the
negotiations committee. Nine or so
ministers have recently been
included in that, like Michael Gove.
They are going to be talking about
the money, precisely how much they
offer in two weeks' time to meet
this deadline in the December
council for phase two. Michael Gove
and Boris Johnson want to add in
conditions. They want to say, we
will give you this as long as we get
that. What was fascinating with
Stephen Hammond just now was that he
revealed that it wasn't just the
Brexiteers in Cabinet who want a
more precise definition of what we
are going for, it is the remainers
In the heart of the
government, David Davis is trying to
keep the bill as low as possible,
possibly around 30%. The divorce
Bill and future liabilities. Some in
the civil service have suggested
that it has to be 40 or above. What
it reveals to me is really, it's
another function of Britain not
really having a proper Prime
Minister. In normal circumstances,
of course the Cabinet is divided. A
strong leader would say, right, this
is what is happening. This is where
we are going. We will call it 35 or
40 billion. We will save to the
European Union, there is the check,
but it will not have a signature on
it until we are satisfied with the
stage. The government is hampered by
the lack of a strong personality who
could do that, make a political play
with other European leaders that
might break the deadlock.
that is why the full Cabinet have
not discussed what the future Brexit
deal will be.
That is the
astonishing thing. There has been no
sort of vision of what Britain is
going to look like after Brexit. We
have got down in what the
negotiation position for tomorrow
will be. What does it look like in
terms of immigration, trade with the
rest of the world, what life will
look like for ordinarily... Ordinary
There are visions for this,
but they will not agree on one. Is
there such a thing as a Tory Cabinet
Minister who could have one single
vision without them all ripping each
other's heads off? Probably not.
That's all for today.
Join me again next Sunday
at 11.00 here on BBC One.
Until then, bye bye.
Sarah Smith and Richard Moss with the latest political news. Sarah discusses the upcoming budget with Conservative MPs Jacob Rees-Mogg and Stephen Hammond. She talks about Brexit with former spin doctor and now editor-at-large of the New European Alastair Campbell and prominent leave campaigner Gisela Stuart. The political panel consists of journalist Iain Martin, Gaby Hinsliff of The Guardian and Tom Newton Dunn of The Sun.