26/01/2014 Sunday Politics North West

Morning folks. Welcome to the Sunday Politics.

Ed Balls has gone socialist and fiscal Conservative in one speech.

He promises to balance the biggest bit of the budget. And to bring back

the 50p top tax rate. Political masterstroke, or a return to old

Labour? If you go to work by public

transport, chances are the price of your ticket has just gone up -

again. We'll speak to Transport Secretary Patrick McLoughlin. He's

our Sunday Interview. And it's been another wet week

across much of the UK, but what s the outlook according to this man?

This morning.This morning. Held in recent years by party veterans like

And with me - as always - the political panel so fresh-faced,

entertaining and downright popular they make Justin Bieber look like a

boring old has-been just desperate to get your attention. Nick Watt,

Helen Lewis and Janan Ganesh, and they'll be tweeting quicker than a

yellow Lamborghini racing down Miami Beach. Being political nerds, they

have no idea what I'm talking about. Ed Balls sprung a surprise on us all

yesterday. We kinda thought Labour would head for the election with a

return to the 50p top rate of tax. But we didn't think he'd do it now.

He did! The polls say it's popular, Labour activists now have a spring

in their step. The Tories say it's a return to the bad old days of the

'70s, and bosses now think Labour is anti-business. Here's the Shadow

Chancellor speaking earlier this morning. I was part of a Government

which did very many things to open up markets, to make the Bank of

England independent, to work closely with business, but the reality is we

are in very difficult circumstances and because if I'm honest you,

George Osborne's failure in the last few years, those difficult

circumstances will last into the next Parliament. Business people

have said to me they want to get the deficit down, of course they do But

to cut the top rate... It is foolish and feeds resentment I want to do

the opposite and say look, pro-business, pro investment, pro

market, but pro fairness. Let's get this deficit down in a fairway and

make the reforms to make our economy work for the long term. What are the

political implications of Labour now in favour of a 50%, in practise 352%

top rate of tax? One of the political implications I don't think

exist is that they'll win new voters. I'm not sure many people out

there would think, I would love to vote for Ed Miliband but I'm not

sure if he wants to tax rich people enough. It will con Dale their

existing vote but I don't think it is the kind of, in the 1990s we

talked about triangulation, moving beyond your core vote, I don't think

it is a policy like that. If there has been a policy like that this

year, this month, it has been the Tories' move on minimum wage. I

thought Labour would come back with their own version, a centre-right

policy, and instead they have done this. I think we talk about the 35%

strategy that Labour supposed will have, I think it is a policy in that

direction rather than the thing Tony Blair or Gordon Brown would have

done. Where he was not clear is on how much it would raise. We know the

sum in the grand scheme of things isn't much, the bedroom tax was

about sending a message. What we are going to see is George Osborne and

Ed Balls lock as they try to push the other one into saying things

that are unpopular. The Tories, ?150,000 a year, that's exactly

where Ed Balls want them to be. All three main parties have roughly the

same plan, to run a current budget surplus by the end of the next

Parliament. George Osborne said ?12 billion of welfare cuts, hasn't said

how he is going to do it. Ed Balls is giving an idea that he is going

to restore this 50 persons rate The contribution of that will be

deminimus. It is not much, but what does it say about your values.

Because it is that package, it is cleverer than people think. Where

the challenge is is the question that Peter Mandelson posed at the

last election, which is can the Labour Party win a general election

if it doesn't have business on its side? That's the big challenge and

that's the question looking difficult for them this morning

Does it matter if Labour has business on its side. I thought the

most fascinating thing about this announcement is it came from the guy

mindful of business support, Ed Balls. When in opposition and when a

Minister and as a shadow as a result, he's been far more conscious

than Ed Miliband about the need not to alienate the CB Bill. In the

run-up of an election. This is a measure of Ed Miliband's strength in

the Labour Party, that his view of things can prevail so easily over a

guy who for the last 15 years has taken a different view. Eight out of

ten businesses according to the CBI don't want us to leave business

Business is in a bit of a cleft stick. Ed Miliband would like to see

businesses squealing, and Ed Balls is clearly not so comfortable on

that one. There's a difference on that. Mind you, they were squealing

this morning from Davos. They probably had hangovers as well. The

other thing they would say is this is not like Ed Balls thinks that 50p

is the optimal rate forever, it what go eventually. Isn't that what

politicians said when income tax was introduced? Yeah, in '97 Labour

regarded 40 persons as the rate where it would stay.

It's been a bad week for the Lib Dems. Again. Actually, it's been one

of the worst weeks yet for Nick Clegg and his party in recent

memory, as they've gone from talking confidently about their role in

Government to facing a storm of criticism over claims of

inappropriate sexual behaviour by a Lib Dem peer, Chris Rennard, and a

Lib Dem MP, Mike Hancock. Here's Giles with the story of the week. A

challenge to Nick Clegg's authority as he face as growing row over the

Liberal Democrat... I want everyone to be treated with respect by the

Liberal Democrats. We are expecting him to show moral leadership on our

behalf. A good man has been publicly destroyed by the media with the

apparent support of Nick Clegg. I would like Nick Clegg to show

leadership and say, this has got to stop. When Nick Clegg woke up on

Monday morning he knew he was in trouble, staring down the barrel of

a stand justify with Lord Rennard over allegations that the peer had

inappropriately touched a number of women. Chris Rennard thought he was

cleared. Nick Clegg wanted more I said if he doesn't apologise, he

should withdraw from the House of Lords. If he does that today, what

do you do then? I hope he doesn t. I think no apology, no whip. 2014 was

starting badly for the Liberal Democrats. Chris Rennard refused to

apologise, saying you can't say sorry for something you haven't

done. The and he was leaning towards legal action. Butch us friends

better defending Pym and publicly. This is a good, decent man, who has

been punished by the party, with the leadership of the party that seems

to be showing scant regard for due process. But his accusers felt very

differently. It is untenable for the Lib Dems to have a credible voice on

qualities and women's issues in the future if Lord Rennard was allowed

to be back on the Lib Dem benches in the House of Lords. Therein lay the

problem that exposed the weaknesses of the Lib Dem leaders. The party's

internal structures have all the simplicity of a circuit diagram for

a supercomputer, exposing the complexity of who runs the Liberal

Democrats? The simple question that arose of that was can the leader of

the Lib Dems remove a Lib Dem peer? The simple answer is no. The Lib Dem

whips in the Lords could do it but if enough Lib Dem peers disagreed,

they could overrule it. Some long-stand ng friends of roar

Rennard think he is either the innocent victim of a media

witch-hunt or at the least due process has been ridden over rough

shot by the leadership. Nobody ever did spot Lord Rennard as he didn't

turn up to the Lords, will citing ill health. But issued a statement

that ruled out an apology. He refused to do so and refused to

comply with the outcome of that report, so there was no alternative

but for the party to suspend his membership today. On Wednesday Nick

Clegg met Lib Dem peers, not for a crunch decision, but to discuss the

extraordinary prospect of legal action against the party by the man

long credited with building its success. The situation was making

the party look like a joke. One Tory MP said to one of my colleagues this

morning, the funny thing about the Liberal Democrats, you managed to

create a whole sex scandal without any sex. And we can laugh at

ourselves but actually it is rather serious. And it got more serious,

when an MP who had resigned the Lib Dem whip last year was expanded from

the party over a report into allegations of serious and unwelcome

sexual behaviour towards a constituent. All of this leaves the

Lib Dems desperately wishing these sagas had been dealt with long ago

and would now go away. Nick Clegg ended the week still party leader.

Lord Rennard, once one of their most powerful players, ended the week,

for now, no longer even in it. Giles on the Lib Dems' disastrous

week. Now, as you doubtless already know, on Tuesday Lib Dem MPs will

vote to choose a new deputy leader. You didn't know that? You do now.

The job of Nick Clegg's number two is to speak with a genuine Lib Dem

voice, untainted by the demands of coalition Government. At this point

in the show we had expected to speak to all three candidates for the

post, held in recent years by party veterans like Vince Cable and Simon

Hughes. We thought it being quite a significant week for the party, they

might have something to say. And here they are. Well that's their

pictures. For various reasons, all three are now unavailable. Malcolm

Bruce, he's reckoned to be the outsider. His office said he had a

"family commitment". Gordon Birtwistle, the Burnley MP, was

booked to appear but then told us, "I was at an event last night with

Lorely Burt" - she's one of the candidates - "and she told me it was

off". And Lorely Burt herself, seen by many as the red hot favourite,

told us: "Because of the Rennard thing we don't want to put ourselves

in a position where we have to answer difficult questions." How

refreshingly honest. Helen, how bad politically is all this for the Lib

Dems? What I think is the tragic irony of the Lib Dems is they've

been revealed as being too democratic. In the same way that

their party conference embarrassed Nick Clegg by voting sings that he

signed up to, and now everything has to be run past various

sub-committees first. Is it democratic or chaotic? It is

Byzantine. Mike Hancock was voluntarily suspended, and this week

he was properly suspended. It was new information into the public

domain that forced that. I'm already hearing Labour and Conservative

Party musing that if it is a long Parliament, we will form a minority

Government. It is a disaster for them. Voters like parties that

reflect and are interested this their concerns. Parties that are

self obsessed turn them off. The third party, if they carry on like

this, they'll be the fifth party in the European elections, so they have

got to draw a line under this. They do that, if they do, through

mediation. As I understand it, Chris Rennard,s who has go devoted his

entire life to the Liberal Democrats, and previously the

Liberal Party, is keen to draw a line under this. He is up for

mediation but he needs to know that the women that he has clearly

invaded their personal space, that there wouldn't be a possible legal a

action from them. The it is very difficult to see how you could

resolve that. Except he is threatening through his friends

these famous friends, to spill all the beans about all the party's sex

secrets. Isn't the danger for the Lib Dems, this haunts them through

to the European elections, where they'll get thumped in the European

elections? They'll get destroyed in the European elections, which keeps

it salient as a story over the summer. And it has implications for

Nick Clegg's leadership. He's done a good job until now, perhaps better

than David Cameron, of exercising authority over his party. He had a

good conference in September. Absolutely, and now the Lib Dems

have looked like a party without a leader or a leadership structure.

Part of that is down to the chaotic or Byzantine organisational

structure of the party. Part of it is Nick Clegg's failure to assert

himself and impose himself over events. Is it Byzantine or

Byzantine. It is labyrinthine. You don't get these words on the Today

programme. The cost of living has been back on the agenda this week as

Labour and the Tories argue over whether the value of money in your

pocket is going up or down. Well there's one cost which has been

racing ahead of inflation and that's the amount you have to pay to travel

by train, by bus and by air. Rail commuters have been hard hit over

the last four years, with the cost of the average season ticket going

up by 18% since January 2010, while wages have gone up by just 3.6% over

the same period. It means some rail users are paying high prices with

commuters from Kent shelling out more than ?5,000 per year from the

beginning of this month just to get to work in London. It doesn't

compare well with our European counterparts. In the UK the average

rail user spends 14% of their average income on trains. It is just

1.5% in Italy. Regulated fares like season tickets went up 3.1% at the

beginning of this month, and with ministers keen to make passengers

fought more of the bills, there are more fare rises coming down the

track. And Patrick McLoughlin joins me now for the Sunday Interview

Welcome. You claim to be in the party of hard-working people, so why

is it that since you came to power rail commuters have seen the cost of

their average season ticket going up in money terms by over 18% while

their pay has gone up in money terms by less than four? I would point out

that this is the first year in ten years that we have not had an above

inflation increase on fares. The Government accepts we have got to do

as much as we can to help the passengers. A big inflation increase

since 2010. This is the first year in ten years that it has not been

above RPI, but we are also investing huge amounts of money into the

railways, building new trains for the East Coast Main Line and the

great Western. We are spending 500 million at Birmingham station, this

is all increasing capacity, so we are seeing investments. Over the

next five years Network Rail will invest over ?38 billion in the

network structure. We also have an expensive railway and it is ordinary

people paying for it. A season ticket from Woking in Surrey,

commuter belt land in London, let's look at the figures. This is a

distance of over 25 miles, it cost over ?3000 per year. We have picked

similar distances to international cities.

The British commuter is being ripped off. The British commuter is seeing

record levels of investment in our railways. The investment has to be

paid for. We are investing huge amounts of money and I don't know

whether the figures you have got here... I'm sure they are likewise,

as you have managed to do... White -- ten times more than the Italian

equivalent. We have seen transformational changes in our

railway services and we need to carry on investing. We were paying

these prices even before you started investing. We have always paid a lot

more to commute in this country than our European equivalents. I'm not

quite sure I want to take on Italy is a great example. You would if you

were a commuter. You is a great example. You would if you

the other rates of taxation has to be paid as well. Isn't it the case

they are making profits out of these figures and using them to subsidise

cheaper fares back in their homeland? The overall profit margin

train companies make is 3%, a reasonable amount, and we have seen

a revolution as far as the railway industry is concerned.

a revolution as far as the railway 20 years we have seen passenger

journeys going from 750 million to 1.5 billion. That is a massive

revolution in rail. Let me look 1.5 billion. That is a massive

spokesperson for the German government, the Ministry of

transport. They are charging huge fares in

Britain to take that money back to subsidise fares in Germany. What do

you say to that? We are seeing British companies winning contracts

in Germany. The National Express are winning contracts to the railways.

What about the ordinary commuter? They are paying through the nose so

German commuters can travel more cheaply. We are still subsidising

the railways in this country, but overall we want to reduce the

subsidy we are giving. We are still seeing growth in our railways and I

want to see more people using them. Why do you increase rail fares at

the higher RPI measure than the lower CPI measurement? That is what

has always been done, and we have stopped. This is the first time in

ten years that we have not raised the rail figures above RPI. You

still link fares to RPI. You use the lower CPI figure when it suits you,

to keep pension payments down for example, but the higher one when it

comes to increasing rail fares. We are still putting a huge subsidy

into the rail industry, there is still a huge amount of money going

from the taxpayer to support the rail industry. I am not asking you

about that, I am asking you why you link the figures to the higher RPI

vesture Mark if we are going to pay for the levels of investment, so all

the new trains being built at Newton Aycliffe for the East Coast Main

Line and the great Western, ?3. billion of investment, new rolling

stock coming online, then yes, we have to pay for it, and it is a

question of the taxpayer paying for it all the -- or the passenger.

You have capped parking fines until the next election, rail commuters we

have seen the cost of their ticket has gone up by nearly 20%, you are

the party of the drivers, not the passengers, aren't you?

We are trying to help everybody who has been struggling. I think we are

setting out long-term plans for our railways, investing heavily in them

and it is getting that balance right. But you have done more for

the driver than you have for the user of public transport. I don t

accept that. They are paying the same petrol prices as 2011. This is

the first time in ten years that there has not been an RPI plus

rise. We are investing record amounts. Bus fares are also rising,

4.2% in real terms in 2010, at a time when real take-home pay has

been falling. This hits commuters particularly workers who use buses

on low incomes, another cost of living squeeze. I was with

Stagecoach in Manchester on Friday, and I saw a bus company investing in

new buses. Last week First ordered new buses. Part of your hard-working

families you are always on about, they are the ones going to work

early in the morning, and yet you are making them pay more for their

buses in real terms than they did before. They would be happier if

they could travel more cheaply. It is about getting investment in

services, it has to be paid for Why not run the old buses for five more

years? Because then there is more pollution in the atmosphere, modern

buses have lower emissions, and we are still giving huge support

overall to the bus industry and that is very important because I fully

accept that the number of people, yes, use the train but a lot of

people use buses as well. High-speed two, it has been delayed because 877

pages of key evidence from your department were left on a computer

memory stick, part of the submission to environmental consultation. Your

department's economic case is now widely regarded as a joke, now you

do this. Is your department fit for purpose? Yes, and as far as what

happened with the memory stick, it is an acceptable and shouldn't have

happened, and therefore we have extended the time. There has been an

extension in the time for people to make representation, the bill for

this goes through Parliament in a different way to a normal bill. It

is vital HS2 provides what we want. What I am very pleased about is when

the paving bill was passed by Parliament just a few months ago,

there was overwhelming support, and I kept reading there was going to be

70 people voting against it, in the end 30 people voted against it and

there was a good majority in the House of Commons. So can you give a

guarantee that this legislation will get onto the statute books? I will

do all I can. I cannot tell you the exact Parliamentary time scale. The

bill will have started its progress through the House of Commons by

2015, and it may well have concluded. The new chairman of HS2

said he can bring the cost of the line substantially under the budget,

do you agree with that? The figure is ?42 billion with a large

contingency, and David Higgins, as chairman of HS2, is looking at the

whole cast and seeing if there are ways in which it can be built

faster. At the moment across London we are building Crossrail, ?14.

billion investment. There was a report last week saying what an

excellent job has been done. Crossrail started under Labour.

Actually it was Cecil Parkinson in the 1990 party conference. You may

get HS2 cheaper if you didn't pay people so much, why is the

nonexecutive chairman of HS2 on ?600,000? And the new chief

executive on ?750,000. These are very big projects and we need to

attract the best people become so we are going for the best engineers in

the world to engineer this project. It is a large salary, there is no

question about it, but I'm rather pleased that engineers rather than

bankers can be seen to get big rewards for delivering what will be

very important pieces of national infrastructure. I didn't have time

to ask you about your passenger duty so perhaps another time. We are

about to speak to Nigel Mills and all of these MPs on your side who

are rebelling against the Government, how would you handle

them? We have got to listen to what our colleagues are talking about and

try to respond it. Would you take them for a long walk off a short

pier? I'm sure I would have many conversations with them. An

immigration bill to tack the immigration into the UK. When limits

on migration from Bulgaria and Romania were lifted this year there

were warnings of a large influx of migrant workerses from the two new

European countries. So far it's been more of a dribble than a flood. Who

can forget Labour MP Keith Vaz greeting a handful of arrivals at

Luton Airport. But it is early days and it is one of the reasons the

Government's introduced a new Immigration Bill. The Prime Minister

is facing rebellion from backbenchers who want tougher action

on immigration from abroad. Nigel Mills would reimpose restrictions on

how many Romanians and Bulgarians can come here. Joining me is Nigel

Mills, Conservative MP behind the amendment and Labour MP Diane

Abbott. Welcome. Nigel Mills, there hasn't been an influx of Romanians

and Bulgarians. Why do you want to restore these, kick these

transitional controls way forward to 2019? I don't think any of us were

expecting a rush on January 1st Andrew. I think we were talking

about a range of 250,000 to 350 000 people over five years. That's

obviously a large amount of people, especially when you think net

migration to the UK was well in excess of the Government's target of

tens of thousands last year. The real concern is that it would be

ever increasing our population, attracting lots of low-skilled,

low-wage people, which keeps our people out of work and wages down.

Did you accept that if you were to accept this, it would be in breach

of the Treaty of Rome, the founding principle of the European Union We

were trying to keep the restrictions that Bulgaria and Romania accepted

for their first seven years of EU membership, on the basis that when

we signed the treaty we weren't aware that we would have a huge and

catastrophic recession we are still recovering from. But you would be in

breach of the law, correct? The UK Parliament has a right to say we

signed this deal before the terrible recession, and we need a bit longer

in our national interest. It is worth noting that Bulgaria and

Romania haven't met all their accession requirements. The

Bulgarian requirement passed a law... So if they break the law it

is alright for us to break the law? Is we should be focusing on trying

to get 2. 4 million of our own in work, and 1 million people not in

work... Let me bring in Diane Abbott. Will you vote for this

amendment and why? It is in breach of the treaty. While I deplore MPs

that try to cause trouble, these MPs have been particularly mindless

because what they want to do wouldn't be legal. However, it is a

Tory internal brief, if I might say so. Maybe you can cause trouble by

voting for it. No, that would be going too far. Underlying it is a

real antagonism for David Cameron. They have had to hold off on this

bill until January. It was supposed to be debating before Christmas As

we speak they've not cut a deal so it could be pretty grus om. Nigel

Mills, what do you say to that I think there is a recognition that

there is a problem with the amount of migration from EU countries that

we need to tackle. We could try to achieve an annual cap perhaps,

longer limits on when countries get free movement. I think the debate is

moving in the right direction, but I think those people who are trapped

out of work and desperately looking for work want something to be done

now and not wait a few more years while we have more assessments

Andrews. People are worried about the level of immigration. They I it

is too high. That's the consensus in the country. We spoke to to

migration centre in Hackney and they said they are struggling to cope

with the number of people using their services. These are people

with problems with the law. In the past years EU migrants put in more

to the economy in taxation than they take out in benefits. When it comes

to free movement, which is agitating Nige em, that horse has bolted. We

signed a treaty. There is nothing people like Nigel Mills can do,

unless they want to rip their party apart, God forbid. Will you go as

far as to rip your party apart, Nigel Mills? Are you going to take

this all the way? Would you rather see this bill go down than your

amendment not be accepted? This is a very important bill. I think we all

want to see measures on the statute book, so the last thing we want to

see is this bill go down. We do need to set out clearly that we have real

concerns about the level of EU migration and something needs to be

done. Would you rather have the bill without your amendment or no bill at

all? I am hoping we can have the bill with the amendment. I know

that, but if you can't? Is that will depend on what the Labour Party

decide to do. They are talking tougher on immigration but will they

take action on it? Your party has been talking tough on immigration

but I will be surprised if an Ed Miliband Labour Party would vote for

egg in direct cameravention of the Treaty of Rome. It would make no

sense. Nigel Mills is wishing for the impossible. If I was a Tory I

would be wringing high hands. He hasn't ruled out crashing the bill.

That's incredible. Where will this end, Nigel Mills? We'll end with a

vote on Thursday. There's a lot of amendments people can use to show

their concern about migration. We want limited and proportionate

action, and that's what I am proposing. I want to see the bill on

the statute book, I want the restrictions on people who shouldn't

be here getting bank accounts and driving licences. I don't want to

crash this bill but there's more measures we need in it. Nigel Mills

thank you. You are going to be - popping up I think on the Sunday

Politics East Midlands. Diane Abbott, thank you as well.

We're in for more heavy rain and high winds across the UK today. You

may remember that one UKIP councillor - he's since been

suspended - caused controversy last weekend by blaming the recent

flooding on the legalisation of gay marriage. Why didn't I think of

that? So who better than this man to bring you the unofficial forecast.

I'll be bringing you the late least UKIP weather from your area.

You're watching Sunday Politics Also coming up in just over 20

minutes, I'll be looking at the week ahead with our political panel.

Hello. Coming up in the north`west, we made the landlords who say they

will be forced to slam the door and tenants on benefits. People on

benefit are going to be the last choice for landlords if they feel

they can get other tenants who are less risky. Through our studio

door, we welcome Alison McGovern, the Labour MP for Wirral South and

David Rutley, the Conservative MP for Macclesfield. We start with the

news that unemployment in the north`west was down between

September and November. The number of people without jobs fell to

270,000, a rate of 7.9%, down from 8.6%. That means 24,000 fewer people

are out of work. The Clement Minister Esther McVey says it is

welcome news. What we are seeing since 2010 is that private`sector

jobs have gone up by 49,000. It is an area that is highly dependent on

the public sector, and we are rebalancing that, getting private

enterprise. What I see on the ground is things like jaguar Land Rover,

and they have apprenticeships there and really high`end IT stop, so you

see a mix. This is what you wanted, Alison, a drop in unemployment. You

must be pleased. I am, of course, and it is really encouraging to see

anyone moving to work. What Esther should have mentioned there is that

some of the people moving into the private sector as a result of

reclassification, so it does not mean anything on the ground. The

other big worry for me is two things `` firstly, how many of these jobs

are zero hours contract or part time where people want to be full`time.

People are not going to be feeling the benefit as much as they should

be. And secondly, we have a huge number of young people, 250,000 in

our country, that are long`term unemployed. That is really bad for

our future, so we must see more action on that. But both the

part`time and long`term unemployment numbers have improved. I think the

key issue is that unemployment hasn't just fallen, it's fallen by

0.7%. That is a big drop, much more than the national drop. Yes, it is

absolutely right that is a good thing. Liverpool city region, my

home, has fared through this recession much better than the

naysayers that we would, and I am proud about that. The issue we have

got, though, is that it has taken as a long time to recover from the

global financial crisis that we saw in 2008. We have effectively had

three years where we should have been recovering, and other countries

around the world were recovering and we were not. Let's ask David. You

raise issues there. What do you say to the criticisms Alison raises I

think you answered them in your statistics. We're seeing

improvements across the board. We want to make sure youth unemployment

falls further, but if you look at what is going on in Alison and my

constituency, it is dropping staggeringly across the north`west,

by the order of 20 or 30%. We need to go further, because this must be

sustained by private`sector led growth. That is what is happening.

The naysayers, including Ed Miliband and Ed Balls, were saying this was

impossible, and if there was an Academy Awards for forecasting

failure, it would be with them, because they did not see what was

happening with growth of jobs. I'm sorry... Let me finish. It is to

local businesses we have seen growth, and we have unleashed their

potential. George Osborne said he would close the deficit by the end

of this Parliament. He has failed. He said he would protect our

triple`A rating, and he has failed. I can't possibly think that the

Chancellor must feel that he has succeeded on every measure. The fact

is, he has not. Your leaders said listen to the IMF, and this week,

they have increased their broadcast for our growth trajectory, and so,

enough said. We are moving forward in the right direction. We have to

leave that there. We have heard much about how the cuts affected councils

in places like Liverpool, but this week, ministers were in the city to

launch a pilot scheme which might help. The local impact fund aims to

hand out ?100 million to charities and social enterprises across

England, creating and improving services.

Founded and managed by local parents, this nursery in Liverpool

is a community hub which, with more money, believes it could do much

more. We are based on a series of 29 cabins from which we deliver 10

places of childcare everyday. It is not ideal. We are currently bidding

to refurbish a grade two listed building, which would be absolutely

ideal. It would be fantastic power community and the children. This set

of buildings was meant to be temporary. After ten years, the

nursery is still here. Down the road, this is the listed building

that Local Impact Fund cash could help bring back to life. So where is

the fund coming from? ?1 million comes from Europe, which is matched

by another million from a charitable investment fund. The Local Impact

Fund could provide unsecured loans of between 50000 and ?250,000 to

local social enterprises or charities. Last year, Liverpool so

its European funding cut in line with other English cities. The mayor

is happy to pilot the Local Impact Fund in Liverpool, but he says it is

hardly redressing the balance for lost funds. It is not simple to get

carried away. We have lost a, so I don't think it really balances that

out. `` hundred and ?30,000. But it will still help those companies

deliver more in communities like ours. This room full of charity and

social enterprise bosses know the bottom line is what counts. Many

have been turned down by traditional lenders, according to the manager of

the charitable fund. We are interested in the outcomes. We have

a track record of ten years of making loans to organisations in the

local that have been hugely successful and grown, and they have

grown in terms of what they have been able to do for local

communities. If Liverpool's pilot succeeds, community nurseries and

other groups like this across the north`west will get their chance to

bid for funds of their own. Is this the elusive big society I

think it is the big society at work. It is community work, the right way

to go. Talking with Alison beforehand, we both work in our

communities. If you can engage with the business community and community

groups and local authorities and provide a vehicle you can channel

funding in from Europe and from central government and local

enterprise partnerships, you have a vehicle that will make a big

difference. Do you agree? The point I agree on, and we definitely do

agree, some of the most worthwhile things you get involved in as an MP

are in your constituency at the grassroots, bringing people

together. I would not be doing my job as an opposition member of

Parliament if I didn't point out what more councils like Liverpool

and Wales could be leading on it they had had a similar level of cuts

as Surrey and other places that don't have half the deprivation we

do. I think he is right on that It is a good thing in and of itself,

but let's not get carried away. The amount of struggle local authorities

are still facing is still highly significant. The ferocity of the

cuts they face undermines their ability to collaborate with others.

It is good news. It is innovative and will help a lot different

charities get involved. All I would say yes, yes, and let's have a fair

deal for cities in the north so we can do even more of those and have

even more good news. Not just cities, the area 's roundabout. I

want the north`west to succeed. The point Alison is making is this is a

sticking plaster to bring in little projects which actually, councils

should have the power to be doing themselves. It is not all about the

council. If you try and bring about social change just with the council,

you will not succeed. You must involve local businesses, community

groups. We both know that. This is the first Liverpool. Alison does not

know that. What I see on the ground is my local authority, Wirral,

trying to underpin things that want to do things in the community. But

they're constantly drawn away from that by having to manage horrific

cuts. Council officers cannot possibly do what they need to do if

they are focused internally. If you leveraged the funding that comes in

through bigger community engagement and match funding from businesses

and Europe, you will have better results. It is a first for Liverpool

and the north`west. We have other local enterprise partnerships coming

in from Cheshire, Warrington, Lancashire and Cumbria. This will

roll out across the region. Is it also an example of how good Europe

can be for people? No, I think there are funds. There are European

structural funds. We can have a separate debate about how useful

they are and how best they could be allocated, but while they exist

let's use them for our region. These vehicles are the way to do it. Thank

you. According to one survey this week,

landlords are closing the doors to tenants on benefits. They are

concerned about them not paying rent on time when universal credit is

eventually roll that across the region. That is because it is paid

to tenants rather than directly to landlords. That could lead to a

shortage of homes. The way in which housing benefits

are paid is changing, and for landlords, there is no room for risk

all for tenants who could end up in arrears. It was awful. It was the

lowest point. Joanne is a single mother on benefits. Her rent is paid

directly to the landlord. Under universal credit, she will get the

money and will have to budget for rent. In the past, she has been

evicted, and fears the same could happen again. Day`to`day living now

is a nightmare, to be honest. Sometimes, we can't eat, and

basically, it is just a struggle. It is one less thing to worry about

while it is going straight to the landlord. If it came to me, I would

debate whether to give it all to him or to chop up anything that I need.

Private sector tenants already have their housing benefit paid to them,

unless special arrangements have been made with the council. But with

plans to change benefit payments from fortnightly to monthly, some

landlords are reluctant to take on tenants on benefits. The actual

concept of universal credit is very good, apart from the fact may want

to include housing benefit and pay this directly to the tenant. At the

moment, we take a of housing benefit tenants who are vulnerable, and the

benefit comes to us. When this doesn't happen, that is going be a

serious problem. This is why many landlords are veering away and

evicting tenants. The government says there has been no fall in the

number of claimants in the private rented sector.

According to a recent survey, four out of five landlords are unwilling

to let properties to people who received housing benefit. In the

last 12 months, seven in ten landlords letting to tenants on

benefits are owed around ?3000. There are huge pressures on housing

and the welfare system, so what is the solution? Really what the

government needs to do is have a good, clear fallback, that if there

is a problem, the rent will be paid directly to the landlord. Many

people on benefits can manage their finances, but unfortunately, the

experience of landlords letting to benefit tenants in the last year is

that 70% of them have had arrears from those tenants. So people on

benefits are going to be the last choice for landlords if they feel

they can get other tenants who are less risky. The Citizens Advice

Bureau in Manchester deals with hundreds of calls every day to with

housing benefit. With a shortage of social housing, more people needing

to rent, and changes to the welfare system, there are major concerns

that many could end up on the streets. People in social housing

are subject to what is called the spare room subsidy, better known as

the bedroom tax, meaning if they have one spare room, they have a 14%

benefit cut. If there are two rooms, that is 25%. Many people simply

cannot afford to stay in their social housing, so they are having

to look for properties in the private rented sector. It is putting

up competition for those rented properties, and we have found in our

research that if you are on benefits, you cannot afford many of

the properties in that sector. The government says its reforms are

about restoring fairness to a welfare system that has spiralled

out of control. But landlords are yet to be convinced that they won't

be out of pocket. We are joined from London by Kate

Webb from Shelter, the homelessness charity. Thank you for being here.

Please explain what these changes are. Very little is actually

changing. At the moment, most private tenants on housing benefit

to help pay rent received the money to themselves, and they are

responsible for paying it onto their landlord. That is also what will

happen under universal credit. There are rules that protect landlords, so

if someone has a lot of problems which mean they might struggle to

manage their finances or if they go into arrears, protection kicks in to

make sure landlords get the money. But in the broad scheme of things,

it is business as usual, which is why we are slightly confused by the

reaction from some landlords. As we saw in our film, landlords do seem

to be worried. They are, and I think the government hasn't done a good

enough job at explaining to landlords what is changing, and more

importantly, what is not changing. We can tell from talking to them

that lots of them seem to think the protection it disappearing, or that

it will be a confusing situation. We are seeing to the government they

must do better at reassuring landlords that the risk is not

really there. Kate, overall, for tenants on benefits, how difficult

might this get? We are very worried. Housing benefit is not an an usual

situation to be in. Lots of us find that our income drops a while and we

need support to pay the rent, but we are worried that because landlords

are evidently very nervous at the moment, more of them will say, we

will not take anyone who is even a risk, someone even with an insecure

job for changing job in the near future. We are worried people will

find it very hard to find somewhere to rent. We are already seeing that.

The number of people made homeless because their landlord has withdrawn

the tenancy is at an all`time high, and we are concerned about how

ordinary families will keep a roof over their head. Thank you very

much. David, you must be worried? I don't quite understand why the

landlords are coming to the conclusions they have come to. She

is saying because you have not explained it properly. But there are

protections in place. There where one or two people who said they

might do this, and it was reported if you weeks ago. But when I was in

business 20 years before I came into Parliament, I always found that the

creditworthiness of potential clients or customers, and if they

were able to be supported by the product we are offering, we would

take them on board. The issue was giving confidence to landlords that

this does not apply to everyone on housing benefit. Why did you need to

change the system at all? The point is, when people get into work, 5%

of them get paid on a monthly basis. What we want to do is to get people

ready for returning to work, so at the moment, benefits are paid every

two weeks. The idea here is give people the responsibility to pay

their own rent. They get paid on a monthly basis, and they can pay it

to the landlord. That is all that has changed. We're making sure there

are protections that landlords, if a tenant gets into arrears over eight

weeks, they can make sure those payments get paid back to the

landlord rather than the tenant Allison, what do you think? This is

another DWP special. A bit more of a mess from Iain Duncan Smith and go.

Universal credit all sounds lovely. You support the idea, then? Well,

but you have to deliver things. It is not enough on government to have

nice ideas. You must do things. Iain Duncan Smith will have had a whole

five years to get this done, and it is absolute chaos. This is another

example of the department being in a bit of a shambles, and unable to get

anything done. Clearly, landlords are confused about something here,

and they have issues and concerns, and if you look at the many reports

there have been into the process of universal credit, and the things we

have heard in Parliament about the inability of the department to

manage this change, it makes me surprised that ministers are still

talking about it as of everything is fine. They must be totally

disconnected from the reality. There is a huge culture we need to

change, the way that welfare is delivered. We have done it for ages.

I think Tony Blair wanted to do it in his first Parliament. We have had

three years. There are fundamental changes in direction. It is a ? 0

billion saving. How many times have ministers come back to parliament

Otello is yet more delays in these changes? I am not surprised people

are confused about what is happening here. Kate Webb from Shelter who we

heard from did not seem to have a problem in principle, it was just

the communication. Yes. As I say, it seems to be another DWP special of

confusing people, saying this is a timeline of what will happen, and

then saying actually, no, we don't know. It is no surprise people are

confused, given the chaos they ceded to be in. It is true, isn't it, that

landlords seem to be worried about having to deal with the DWP as

opposed to councils at the moment? From your place it seems so. I had

not had communication from landlords in my area. But look at the

statistics in the last two years. The number of people in the private

rented sector has increased. So I understand there are concerns, and

this is a big chunk of that sector. One third of people in it are on

housing benefit. I don't think landlords will be changing

significantly, and we must address the concerns of those who have

raised it. Do you agree that if the report was delivered, competently,

if you like? I think, given the housing market and the lack of

supply and need to build more houses, you need to look at the way

housing benefit is delivered. The big underlying problem is the lack

of support that would supply, and we need to do more on that as a

country. We need to have good houses available for all families. We are

working through those issues on the supply side. And now, 60 seconds.

The Ribble Valley MP Nigel Evans has pleaded not guilty to charges of

sexual offences against seven men. His trial is due to start in March.

Preston's Guildhall could close if a buyer could not be found. The

council is ending a ?1 million subsidy to save money. Cumbria and

Wigan councils also announced further cuts. Ricky Tomlinson's

campaign to overturn a 40`year`old conviction was debated in the

Commons. He was jailed for conspiracy to

intimidate following the builders' strike in 1972. Conditions were

absolutely appalling. Rather than bashing bankers, the

mayor of Salford wants in on the act. He thinks a council run bank

could rid the market of payday lenders and loan sharks. Will try to

make the best use of the interest we get on that money for the benefit of

the people of Salford. And the Labour Euro MP and Elaine McCarthy

is stepping down after 20 years in Brussels. She says it has been an

enormous privilege and honour to serve the north`west.

Let me ask you briefly about fracking, because your council

leader in Cheshire East has said that they will not be any at all. Do

you agree? Said that he won't be giving any permissions, I think In

principle, I think there are economic benefits for fracking. We

need to make sure the safety and environmental issues are understood

completely. What he is saying is, there are actually other

opportunities around. So you are against the idea of a blanket ban,

as he once? I think there are issues on the environmental and safety

front, but on principle, you can see there are benefits. What he is

saying is, there are more immediate opportunities in geothermal around

the crew area. Let's see what comes from that. Alison, goodbye to Arlene

McCarthy. Yes. She has been a phenomenal MEP. She is someone I

have worked with, and she has served us so well. I hope she goes on to do

more than things, which I'm sure she will, but I'm sorry about politics

and the north`west. Thank you both coming in. Next week, look at all

women short lists with Esther McVey and Stephen Twigg. For now back to

London. back to you.

UKIP leader Nigel Farage is never far away from controversy, but this

week he's been outdoing himself He was hit over the head with a placard

by a protester in Kent, provoked outrage by saying women with

children are worth less to city firms, and said the ban on owning

handguns was 'crackers'. He also seemed less than sure of his party's

own policies when I interviewed him on the Daily Politics. And the story

that got everyone talking was the suggestion by a UKIP councillor that

flooding is linked to gay marriage. We'll talk about all of that in a

moment, but first, over to Nigel with the weather. Weather for all

areas of the British Isles but definitely not "Bongo Bongo Land."

You may have heard about a storm in a tea cup developed when you kip

councillor in Oxfordshire blamed the floods on the gay marriage Bill The

old party is focusing on the view of UKIP members like him, even though

he had said a sell yuj of things before when a Tory councillor. How

quickly things change depending on when the blouse. There are

occasional barmy views by people of all persuasions. In Whitby a Labour

councillor claimed of fathered a child with an extra terrorist ral,

and said his real mother was a foot green alien. And in Wales a

councillor thinking about heading off for the

slopes, there were flurries of embarrassment for the Tories after

Aidan Burly organised a Nazi skiing party in a resort.

Anyone heading to Brussels, perhaps on the gravy train, watch out for

hot air. In Britain temperatures are rising

ahead of the European elections in May. It could get stormy, so advise

light aircraft. Watch out for outbreaks of common sense, and no

chance of cyclonic fruit cakes. Back to you, Andrew, with the rest of the

Sunday Politics. Nick, if it was any other party that

had bon through the past week it would be in meltdown. And maybe it

is harming UKIP and maybe it isn't. What do you think? That just shows,

that great weather forecast, Prince Charles now has a rival to be an

excellent weather forecaster, as does the Duchess of Cornwall. It

shows why Nigel Farage is the fefr candidate to the European elections.

Our invitation to the British people to kick the establishment. The

establishment have spent five years that the European Parliament is a

waste of time, so who are you going to vote for? A Nigel Farage type of

person. What was important about your eadviceration of Nigel Farage

on Daily Politics is that when it came to the substance, they

flounder. But the point about that party is they may have the thinnest

set of policies, but people know what they stand for more than any

other parties - get out of Europe, a grammar school in every town. If any

other leading politician called for an end to the ban on handguns, at a

time when we've seen these appalling gun deaths in the United States now

almost one every week in some terrible siege in a school. It would

be a crisis. It seems to wash off him. He's got congenital

foot-and-mouthitis. Straight into another wild nothing to do with why

people might vote UKIP. I don't think people are desperate to have

handgun licences back in this country. It is such an unusual

phenomenon, UKIP, that if this was a Tory or a Labour or a Lib Dem saying

it, we've seen the damage done to the Lib Dems on a much more serious

manner, we would say this is terminal. But maybe it adds to this

image that we are not like the other parties. I think that is it. We keep

waiting for these scandals and embarrassments to do damage to

UKIP's poll ratings, but it's not working. It is ultimately because if

you are an antiestablishment party, if you are an anti-system party the

rules of the game which apply to the establishment parties don't apply to

you. And the more ramshackle and embarrassing you are, the more

authentic you seem. It what be take something for them not to finish

second in May. Do they spend the following 12 months sinking in the

poll snoos And George Osborne's strategy is fame everything as

Labour versus the Conservatives The electorate will have their fun in

May. Maybe the Tories will be beat into third place but in thejection

is that -- but in the general election it is Labour versus the

Tories. The Conservative Party will run around, 46 letters to Graham

Brady, a leadership contest. That sort of scenario. UKIP, if it rules

well in the European elections, could cause big trouble for Mr

Cameron and Mr Clegg couldn't it? The big point about this, David

Cameron said this is not a political party but a pressure group. This is

the way to look at UKIP, and the way it is used by people in the right of

the party, who say we have to do this. I like the policy of painting

the trains in their old liveries. It would be like my old train set. I

like the bigger passports. Pre-GNER... And London and Midland.

I used to be a train spotter. Gordon Birtwhistle has been on the

phone. Good to know you are watching but pity you are not here. He wanted

to clarify he had constituency commitments to prevent him coming on

the show to talk about becoming leader of the party, but he didn't

dispute anything we said on the show.

Yesterday, Ed Balls said that housing investment will be a central

priority for the next Labour Government. It's a big issue, as the

lack of new homes pushes up the the price of owning or renting. Well,

tomorrow the Tories will announce what they say is the most ambitious

programme of affordable housebuilding for 20 years. The

Government sees housing as a really important part of the economy.

That's why we are announcing a 23 billion package for 165,000 new

affordable homes. So individual builders, councils, housing

associations can bid for that money. Phase one, which we are halfway

through at the moment, we've built 170,000 houses. 99,000 already

coming out of the ground, so we ve made real progress on that. So,

165,000 new, affordable homes. It is a lot. Let me add three more words.

Over three years. It is not such a lot. It is not, and Labour's

commitment is 200,000 homes a year and even that isn't enough. The

problem here is that the vest interest is with people who already

have homes. They have a vote in the system through the planning

regulations. In London there is a gap in the hedge through Richmond

Park through which you should be able to see St Paul's Cathedral

That's why you cannot build homes where you want them. I don't think

we want to build homes over Richmond Park. He wasn't saying that. That's

dies an Tyne -- that's Byzantine. You've got to deal with supply,

which is why Labour is talking about 200,000 a year, and what George

Osborne has done with supply is helping with demand. We know the

Help to Buy Scheme is pretty dangerous, and Mark Carney is keen

to put the break on that. If you are to deal with supply, you have to do

radical things. Chris Huhne talked about on brownfield sites you can

tax people who are holding the land as if the development has taken

place. Then if you are really going to deal with it you have to talk

about the greenfield sites, and you have to deal with the garden cities

argument, which is too much for the Tories. All the parties seem to

agree building new houses is a political winner. I hope that they

are right. I'm not sure they are. The housing market is the example of

what economists call the insider in-outsider problem. People who are

already homeowners have no rational incentive to vote for more housing

stock. Even if you leave aside the Conservative arable objections, if

you are a homeowner there is an interest to stick with the planning

promise that we have. So then we are stuck between a rock and a hard

place. Not only are we growing at the moment but our population is

growing. I've seen projects that in quite quickly we will overtake

Germany and become the largest populated country in Europe. If

that's the case we've got to build homes. We have. If you look at Tower

Hamlets in London, the population is r ging higher than the number of

dwelling. Classically the theory's been young people are most affected

by this and they don't vote much. But when their parents have young

Johnny stuck at home at 37, that's an electoral issue. That's why the

garden cities project is interesting, because they finance

themselves. You zone it for development, it is worth ?2 million

an acre and then you can build on it. But who is going to want the

greenfield sites gone. And how quickly can we build garden cities

today? Some were started before the Town and Country Planning Act. I've

read stats about the way Chinese and Japanese are building houses and

they were slower than that. Here's a thought, sticking on the housing

theme. Ed Miliband came up with the energy freeze, a populist

interventionist move. Then the use it or lose it to land developers.

Then breaking up the banks. Now the 50p tax rate. How much would you put

on Labour coming up for rent controls? That's already a big

split. They are split already on it. They have. In London it is a popular

policy. It might not play well in the rest of the country. I would say

50-50 on that. I think Labour supporting rent controls like the

Tories having a go at welfare. The policy may be individually popular

but it sends an impression about the party which might be less attract

active. It confirms underlying suspicions that vote these guys into

power and suddenly they are tampering with the private economy.

The memories of the '70s when Governments tried and failed to do

that. It is riskier than a superficial reading of the polls

would suggest. One to watch? I think they are looking at it. That was the

key message of the Ed Balls speech on housing, is looking at supply and

how you get to that 200,000 figure a year, which is substantially more

than what Kris Hopkins is talking about. What we didn't get to talk

about, remember we had Michael Wilshaw on, the Chief Inspector of

Schools. We all consumed was Mr Gove's man, the Education

Secretary's man. Now according to the Sunday Times he is spitting

blood about the way Mr Gove and his office are speaking about him behind

the scenes. We've checked the quotes and he stands by them, so I think

we'll have to have the head of Ofsted back on the programme. If you

are watching, we're here. All that to the Lib Dems who didn't come on

today. That's all for today. Thanks to all

my guests. The Daily Politics is back on Monday at midday on BBC Two,

and I'll be here again next week. Remember, if it's Sunday, it's the

Sunday Politics. Britain, with 120,000 soldiers

is now at war with Germany This would be the first

truly modern war.