23/03/2014 Sunday Politics North West

Morning, folks. Welcome to the Sunday Politics. The dust has barely

settled on George Osborne's Budget and, amazingly, for once it hasn't

all gone horribly wrong by the weekend. So, is this the election

springboard the Tories needed, and where does it leave Labour? Turns

out the big Budget surprise was a revolution in how we pay for old

age. The Pensions Minister says he's relaxed if you want to spend it all

on a Lamborghini. He'll join us later. And could the man with the

maracas be on his way to Westminster? Bez from the Happy

Mondays tells us about his unlikely plan to become an

And in the North West: Securing our financial future or searching for

fool's gold? Can our scientists really compete

with the golden triangle down south? In London, the Mafia man gets to

stay in Axbridge. Are there ways of making the European arrest warrant

work better? -- Uxbridge. And who better to help guide you through all

of that than three journalists, who dispense wisdom faster than Grant

Shapps calls out the numbers in his local bingo hall over a pint of

beer. Yes, they're hard-working and they're doing the things they enjoy.

Cup of tea, number three. It's Nick Watt, Polly Toynbee and Janan

Ganesh. So, George Osborne delivered his

fifth Budget on Wednesday and had so many glowing front pages the day

afterwards he must be running out of room to pin them up in on his

bedroom wall. Although it's probably a pretty big wall. For those of you

who didn't have time to watch 3 5 hours of Budget coverage on the BBC,

here's Giles with the whole thing in three minutes.

Budget days have a rhythm of their own, driven partly by tradition

like that photocall at 11 Downing Street and part logistics, how to

get this important statement out and explain to those whom it affects -

us? Behind-the-scenes of a Budget Day is much the same. This ritual

red boxery may be the beginning of the end of weeks of work behind the

scenes in the Treasury and sets the clock ticking on the process of

finding out the answer to one question. You got any rabbits in the

box, Chancellor? Yes, there will be something in the Budget we don't

know about. Time marches steadily towards the statement and already

commentators are hovering over what those potential surprises are. As

Big Ben chimes, all focus returns to the Commons, where there is Prime

Minister's questions and the Chancellor gets up and does his

thing. Once he's on his feet and remembering there is still no copy

of the details, the major measures are rapidly highlighted as they come

and then put up on screen. A cap on Government welfare spending set for

2015/16 at 119 billion. Income tax personal allowance raised to

?10,500. Bingo duty halved, which ticked boxes for some but was

unlikely to make anyone a poster boy. And the beer tax cut of 1p or

the froth on the top. And changes to pensions allowing people to take

their money out in one lump sum rather than being forced to accept a

fixed annual pay-out, or annuity. This is a Budget for the makers the

doers and the savers and I commend it to the House. Not everyone can

focus on the Budget by listening to what the Chancellor says. We need to

get a copy of the script. We do not get that till he sits down. I'm

going to go into the House of Commons to get that right now. There

will be a response on that and all the other things from Mr Miliband.

The Chancellor spoke for nearly an hour but he did not mention one

essential fact, the working people of Britain are worse off under the

Tories. It is a tricky job answering the Budget at the best of times

though some, including Labour MPs, think it is better to mention the

Budget when you do. Here we are. I am going to go. I am

not the only journalist missing Ed Miliband's speech. Many others leave

the Chamber as the Chancellor sits down to attend a special briefing

from the Chancellor's advisory team. I am hotfoot to the studio. There is

a little more detail to the Budget than the Budget Speech. That detail

can be whether words unravel and other interpretations emerge. By now

the gaggle of supporters and detractors are taking the debate

onto the airwaves. Are you the BBC? Have the Daily Politics packed up?

No, we're still standing and, days later, still trying to assess

whether the measures announced still seem fresh and appetising or have

already gone stale in the minds of voters?

How significant are these two poles this morning putting Labour and Tory

nip and tuck? Osborne gave his party a good bounce. It was an

astonishingly theatrical coup. At first glance, it seems like a huge

gift to all people. That is where all of the money has been channelled

by this government. They have been ultra-protected, triple locked.

Pensioners have done very well and others less well. It is not

surprising. Normally a budget which is well received on the day and the

day after has unravelled by the weekend. This time, it has not, so

far. The dangerous thing for the Labour Party now, George Osborne is

the assessment this thing called the baseline. He says, in government,

you must control the baseline. The Labour party controlled in 2001 and

2005 and he needs to control it next time. He is controlling it on fiscal

policy because labour is matching them on everything. The danger for

Labour on the big, headline grabbing issue, which was freeing up

annuities on pensions, that again Labour was pretty much saying it was

going to support it though it were saying it has to be fair and

cost-effective. On a big, policy issue, they are following on behind

George Osborne. George Osborne is controlling the crucial baseline.

Are we in danger of reading too much into the political implications of

the budget? The good thing about the pensions policy is, if it does

unravel, it will not happen for ten years and, by that time, George

Osborne will have left office. Towards the end of his speech, I

thought, that is not enough. There is not an idea in your budget which

is politically very vivid a year before an election. What I

underestimated was, how many frustrated savers that are in the

country. There are a lot of people who are frustrated by low interest

rates and tax rates on pension pots. This was an explicit gesture for

them. That is what has paid off in the polls in the past few days. You

spend all of your money on your wardrobe, is that right? The bingo

poster was a kind of get out of jail card for Labour. It gave them

something to zoom in on. Everyone beat up on Grant Shapps, the Tory

chairman. We read in the daily Telegraph that the fingerprints of

the Chancellor were all over this poster. The Chancellor signed off it

-- off on it and so did Lynton Crosby. They referred to working

class people as, they are. How did it get into the Telegraph? We can

only presume but grant Shapps made it clear that it was not him. We had

a time when Labour politicians, we saw from the response of Ed Miliband

onwards, they were not quite sure how to react to this budget. A lot

of detail had to be absorbed. Suddenly, here is something we can

talk about. You can see the thinking behind the poster was very sensible.

We are not Tory toffs, we are interested in helping people who do

not come from our backgrounds. The wording was awful and played into

every cliche. It was all his fault. It shows how unsophisticated he

was. There were people from Tory HQ who agreed the budget. A month down

the line will the budget look as good? Probably. Once people look at

it, pensions are fiendishly conjugated. Once they look and see

what it will do with people having to pay for their own care because

they can now take capital at their pension, that will come as a shock

to a lot of people with small savings. It all be gone on their

care. The polling will be neck and neck all the way. In the past,

George Osborne has been accused of using his Budgets to tinker at the

margins or pull cheap tricks on his political opponents. Perish the

thought. But the big surprise in this year's statement was a

genuinely radical shake-up of the pensions system that will affect

most people who've yet to retire. At the moment, everyone is saving money

into a defined contribution pension, that is the type most common in the

private sector. They can take 2 % of the pot is a tax-free lump sum when

they retire. The rest of the money, for most people, they are forced to

buy an annuity, a form of insurance which provide a guaranteed monthly

income until they die. Annuities have hardly been a bargain since

interest rates were flat slashed following the financial crash. Even

with a ?100,000 pension pot would only get an income of ?5,800 a year

at current rates. From 2018, pensioners will not be forced to buy

an annuity. They can do what they like with their money, even taking

the entire pot as a lump some but paying tax on 75% of it.

With an average pension pot closer to around ?30,000, pensioners would

be more likely to buy a Skoda instead of a Lamborghini. Most newly

retired people who take the cash are more likely to spend the money

paying off their mortgage, helping a family member to buy a property or

investing the money elsewhere. Well, earlier I spoke to the Pensions

Minister. He's a Lib Dem called Steve Webb. I began by asking him if

he still thought the reforms might lead to pensioners splurging all

their savings on supercars. What this reform is about is treating

people as adults. For far too long, we have said, we will make sure you

save for your old age and then we will control each year how much is

spent on what you spend it on. What we are saying is because we have

formed -- reformed the state pension, we will be much more

relaxed about what people do with their own money. The evidence is

that people who have been frugal and saved hard for retirement do not

generally blows a lot. They will spin it out. It is treating people

as adults and giving them choices they should have had all along. It

is a red herring, isn't it? The average pension pot is between 5000

and 30,000. Lamborghinis aren't an option, correct? I gather only about

5000 people a year retiring can buy a flashy Italian sports car. It

might be about paying off a mortgage, paying off outstanding

debts. Maybe spending more money earlier in retirement when they are

fit and able and can enjoy it more. We will give people guidance. We

will make sure when they retire there is someone to have a

conversation with talking through the implications of spending the

money early and options of investing it. This will be a real step

forward. Even if you have a much bigger pension pot, say half ?1

million, which is way bigger than the average, even then the marginal

rates of tax will be a disincentive to take it all out at once. You will

lose huge chunks of it at the 4 % band and then the 45% band. The tax

system gives you the incentive to spread it out if the tax threshold

is a bit over 10000 and the state pension is a bit over 7000, the

first 3000 you draw out in a given year is tax-free. The next band is

at 20%. Spreading your money will mean you pay less tax. That is why,

in general, people will not blow the lot up front. They will spread it

out over their retirement. You have kept this policy quiet. Not even a

hint. How did you test it? How did you make sure it would be robust?

You did not do a consultation. I have been talking about freeing up

the annuity market for a decade The idea of giving people more choice.

The government has relaxed rules over this Parliament. It was not a

completely new idea. We know in places like Australia and America,

people have these freedoms. We already have something to judge it

by. We will spend the next year talking to people, working it

through. There will be a three-month consultation. I want people to have

choices about their own money. There is detail still to be worked out and

we are in listening mode about how we implement it. When you announce

something you cannot do widespread consultation, for the reasons I have

given, you do run the risk of unforeseen consequences? Pension

companies this morning are indicating, you, the government can

write you are looking for ?25 billion of infrastructure investment

from us. You hold our shell below the water line. That may not happen.

We spoke internally about the implications for instruction --

infrastructure. It seems to me there will still be long-term investments.

Many people want to turn their whole pot into an income. I understand the

insurance companies are lobbying, but I'm convinced there will still

be plenty of money for investment and infrastructure. If the

Chancellor's pro-savings measures work, that will generate more

savings. With no requirement now to buy an annuity, surely it is the

case that pension pots are another ordinary savings fund, so why should

they continue to get favourable tax treatment? Bear in mind that a lot

of the tax treatment of pensioners is tax deferred so most people pay

tax at the standard rate. If they put money into a pension, they don't

pay tax when they earn it, but they do at retirement. We do want, we

will still have automatic enrolment into workplace pensions, we do want

people to build up, because at age 20 and 30 nobody thinks about

retirement. It is still vital that people do reach retirement to have

these new choices with a decent sized pension pot. Pensions. Tax

breaks because they were supposed to provide an income in retirement

that is how it was structured, but that is no longer a requirement

surely that undermines the case that if they get tax breaks, other forms

of savings should get tax breaks. Other forms do get tax breaks, of

course. The return with ISAs is tax free. The point with pensions is

that you are simply deferring your earnings. There is a bit when high

tax rate payers get a kick when they are working and then retire on

standard rate, so there is the issue of the top getting too many tax

breaks, but the basic principle that you pay tax when you get the income

seems right to me and isn't affected by these changes. You have announced

save friendly measures, are we right to look at them as a consolation

prize because savers have suffered from the Government's policy of

keeping interest rates abnormally low? It is certainly the case that

very low interest rates have been a huge boon to people of working age

with mortgages, and people who have retired said they thought they could

have got a better deal on their savings. I think there is a

recognition that whilst we have done the right thing with pensioners on

the state pension, we have brought in the triple lock, and many will

bent on -- benefit from these changes. Why don't savers who are

not pensioners get the same help? They have been hit by low interest

rates as well. Those of working age, many of them say they have

benefited from low interest rates was predominantly people in

retirement have not had the benefit. Obviously people of working age will

have benefited from the tax allowance so it is a myth to say the

Budget was all about pensioners And yet even when the Office for Budget

Responsibility takes into account your new measures, it still shows

that over the next five years households will save less and less,

indeed the savings ratio falls by 50%. You haven't done enough. One of

the things we know is that the economy is picking up strongly, and

as we have more confidence about the future they will be more willing to

consume now, so without these measures it may be that the saving

rate would have fallen further. We want people to save and spend, it is

about getting the right balance As the economy picks up, people will

want to spend more of their money and it is about getting the balance

right. You make the point that if people are little profligate with

their private pensions, they will have the state pension to fall back

on and it will be higher than it has been, but it is also the case that

in these circumstances they will still be entitled to housing benefit

and even to perhaps some council tax benefit as well. Do you know by how

much this could put the welfare bill up? We think the impact will be

relatively modest because the sort of people who save for a pension and

make sacrifices while they are at work are not the sort of people who

get to 65 and decide to blow the lot for the great privilege of receiving

council tax benefit or housing benefit. There will be people on the

margins and benefit. There will be people on the

who retire with some capital want to put some money away for their

funeral. People like to save even into retirement so the myth of the

spendthrift pensioner I don't believe. I think this has been

rightly welcomed. Ever fancied a Lamborghini yourself? If you turned

the camera around you would see my 2-door Corsa!

What's your favourite thing about an election? Could it be the candidates

ringing on your door while you're having dinner? The leaflets piling

up on your doormat? Or the endless adverts aimed at hardworking

families? Well, if you thought that was bad enough, then you might want

to consider going overseas for the 2015 election because the parties

are going to be aiming their message at you like never before. Adam's

been to Worcester to find out more. One of the most famous political

figures in history lived here, she is called Worcester woman. She was

in her 30s, working class with a couple of kids, aspirational yet

worried about quality of life. But she wasn't a real person, she was a

label for the kind of voter new Labour were trying to reach and she

was later joined by Mondeo man and several others. Doesn't that all

seem a bit 90s? The technique, called segmentation, was used by

George Bush in 2004. Then refined by Barack Obama. Rather than focusing

on crude measures like cars and hometowns, they delved into the

minds of voters. It is not just women, not just people who live in

cities, but if you start to put together these groups of people you

can even in an anecdote or way imagine who they are, what types of

language and imagery might relate to them. We have been given access to a

new polling model being used here by this firm, which is pretty close to

the one we are told is being used by the Tories. It carves the country

into six personality types, and we are trying it out on Worcester woman

and wast of man. We are using an online quiz to work out who is in

which segment. Meet new monk, Susie. She feels well represented. I

know the Budget and the increases to childcare, I think at the moment I

am fairly represented. This puts her in the category of optimistic

contentment, people who feel they are doing OK. Terry, on the other

hand, isn't happy about Britain today. Health and safety and all

that! I hardly recognise the country a living in any more? Yes. Are you

ready for the result? He is Mr comfortable nostalgia, they tend to

favour the Tories and UKIP. They dislike the cultural changes they

see as altering Britain for the worst. That sums me up. Tony is

worried as well but feels much less secure. I look forward to the future

with optimism or anxiety? Anxiety. Optimist or pessimist? Pessimist.

His category is... You feel a bit insecure, you think the Government

could probably help you more? Yes. Labour picks up a lot of these

voters. This man is being asked to do more and more at work, but he is

getting less and less. I am getting more towards the despair side.

Things are getting tougher, generally? It puts him into the

segment called long-term despair, people who feel left out. Finally,

this is ever thoughtful Carol. I am a bit of an idealist. Her idealism

makes her a cosmopolitan critic I am a liberal person. Apparently a

lot of the media fit into this category as well. There is one group

of voters we have not come across, people who show calm persistence.

They hope things will get better but don't expect them to. They are

coping, rather than comfortable Presumably they are all out of work.

Which group are you win? You can take the poll on the BBC website,

and in the coming weeks we will be doing our own polling using the six

segments to see of the politicians really have worked out how we think.

And as Adam said, if you want to try the survey for yourself, you can go

to the BBC website and click on the link.

And we're joined now by the pollster, Rick Nye. Welcome to

Sunday Politics. We have had Worcester woman, Worcester man, is

this any different? It is a recognition that or politician -

all politics these days is like this. It enables them to cut them

more finally. You think all politics is coalition politics, you think

they have to put together these groups of people, not that the Lib

Dems will always be in power? No, and if you listen to the coverage

these days you might think it is about grumpy old men on the one hand

with Guardian readers on the other. It is far more complicated than

that, there is a lot of churning going on underneath which is driven

by people's value systems. A lot of this has been pioneered in the

United States, very sophisticated on their election techniques, and in

Britain we are always the first to grab whatever the New Year will is

from America. How do you think this will translate to this country? I

think it means that if you are target photo you will still get the

same of leaflets and people calling, but you will probably have different

kinds of conversations because people on the other side, the party

campaigners, will think they know more about you. Will I know who you

are? If I am a party campaigner will I know, looking down the

street, who fits into which category? You will be able to

approximate that with all of the other data that you have gathered

through polling, or doing local campaigning, that is the idea to

make sense of this vast quantity of data people have about voters. We

asked our panel to fill in your survey. Nick is optimistic

contentment, 99%. He was 1% cosmopolitan critic, which is how he

keeps his job at the Guardian. Polly's job could not be more

secure, 100% cosmopolitan critics, and Janan Ganesh, optimistic

contentment, which is what you would expect from a financial Times

columnist. What do you make of this technique? Why are you only 99? It

sounds really clever. 95% of the population five years ago voted

Labour or the Conservatives. We have got away from that. It is coalition

politics. You need sophisticated methods. Presumably you must not

lose touch with basic points. You said it was used in the US

presidential elections. Wasn't there them moment emit Romney 's sweet

when the initial response was, we did not know the sort of people

voted. His next response was, we did not know these people existed.

Unless you know about certain key demographics, you are wasting your

time. Is it important in modern campaigning? I think it is useful

because it is about attitude. We have got Mosaic. We have got Acorn.

It does not tell us very much. What people think and feel may be

different to their income. You can be quite a high earner and anxious.

You can be quite a low earner and feeling aspirational and optimistic

about the future. I think this does get something else. In days gone by,

particularly in America, overwhelmingly, if you are in the

better of segment, you would be Republican and the blue-collar

workers and some academics and Liberals voted Democrat. In the last

election, the richest 200 counties in America voted Democrat. That is

an attitude thing. Income does not tell you how people will vote. There

is a huge, working-class base of support for the Republicans. It is

unavoidable. Add a time when people no longer identify with ideologies

or class blocks, you have to go the temperament and lifestyle and

manageable. In America there were 128 segments according to lifestyle

and Outlook. Once you get to that stage, it becomes close to useless.

We were talking about the budget earlier. What other polls saying

about the budget? The lead of labour has been narrowed over the

Conservatives. -- Labour. Osborne and Cameron as an academic team have

always had a lead over Miller band and Balls. This week it is about

economic management. -- over Mr Miller band.

Thank you for being with us today. It's just gone 11:30am. You're

watching the Sunday Politics. We say goodbye to viewers in Scotland, who

leave us now for Sunday Politics Scotland. Coming up here in 20

minutes: We'll Hello, I'm Arif Ansari. Comhng up in

the North West: Securing our financial future or searching for

fool's gold? Can our scienthsts really compete with the golden

triangle down South? We are saying very clearly that we

are ready to challenge Cambridge and Oxford.

We had a great programme last week, but sadly you probably didn't see

it. We had a few problems, so sorry if you missed us. Hopefully you can

see this week's guests ` thd Labour MP for Garston and Halewood and

Shadow Environment Secretarx, Maria Eagle. And Stephen O'Brien, the

Conservative MP for Eddisbury. We will be talking about thd Budget

today. What you think was the most significant thing announced? I think

after the very difficult ye`rs of austerity, to try and fix the

problem is that the country faced, that we had a Budget that w`s a

reward for the richest people having gone through these difficult times,

in terms of the pensioners `nd savers. `` British people. People

being trusted with the savings that they have put away and having a

chance to get the rewards from the income that they wanted to generate.

What did you think was the lost important thing? It was a mhssed

opportunity. It did not bal`nce the economy between the growth hn the

south`east and what is happdning in the Northwest. Unemployment in the

north`west is going up, whilst it is falling nationally. The Chancellor

did not take any opportunitx about that. He did nothing to tackle the

cost of living prices that people around the country of feeling after

his posterity measures. We will have that debate.

So, booze and bingo were among the winners in the Chancellor's fifth

Budget, but what specifically for the North West? George Osborne gave

?150,000 to the Tim Parry Johnathan Ball Peace Centre in Warrington

There was confirmation of a loan guarantee for the Mersey Gateway

bridge. And there was investment for regional airports which could help

Liverpool and Blackpool airports attract new passengers `

Manchester's too big to qualify But, in a week when unemploxment was

down nationally but up here, the Chancellor gave some of his biggest

backing to those he called the "makers." He said half the

manufacturers that would benefit from ?7 billion towards energy costs

were in the the North. And `s Claire Hamilton reports, they were told to

get investing. Hammering home the Conservative s

support for business in the North West. The party chairman is having a

tour of marginal seats. These type of businesses, rather than having

the carbon price base going up, it sounds very technical, the bottom

line is that they will not have to pay so much for their electricity

and there will be able to kdep on making things here. There are 2 0

people in this factory who have jobs.

Here at this steel works in Bolton, they have built world`famous

stadiums. They built buildings for the Olympics. The energy cost to

keep this company running h`ve been huge and they have welcomed the

energy cost cuts. We are always welcoming ways that we can save

money for energy, so that it can go off the price of the product that we

sell. Also in the Budget, more

apprenticeships. But this MP has reservations. I have lobbied by my

constituents about the failtres so I will look at the facts in detail

of what the government has `nnounced today, so far today they have failed

this industry. Watching the Budget and fold,

leaders of industry in Manchester. But what was missing? We export 30%

of our production, so areas that we might have needed help were

corporation tax incentive so that for every pound that we export,

perhaps a little bit back to give this the increment `` encouragement

to invest. Manufacturers in the North West

believe that this year's Budget is something that they can build on.

And we're also joined now bx Professor Geraint Johns, an expert

in economics at Lancaster University.

In terms of supporting business what you think of the Budget? There

are two things that help thd north`west. There is the increase in

the annual investment allow`nce which has gone up to ?500,000 year.

I am sure that other businesses will welcome that, it will affect the

vast majority of businesses. It allows them to write off thd cost of

investment against any taxes that they are paying and reduces that tax

virgin. The difficulty `` t`x burden. The difficulty is that some

of it will be a dead weight. There will be investment going on from

firms that would have been going on anyway. It is a nudge in thd right

direction. There is also thd relief that has been given on energy bills.

This includes the reduction in the rate of growth of the carbon tax

for. So this is something that is due to go to ?18 per tonne of

carbon, and carbon taxes ard something that hit businessds. There

will be particular relief for companies that are energy intensive.

This is something that will benefit some firms especially in thd North

West. We must look at the ilpact that it has on green targets for the

country in 2020. What you think, Maria Eagle? I think

it is true that it will help businesses, but it will do nothing

for smaller distances, who like households when it comes to paying

gas and electricity bills. We know that growth and employment will come

from small firms, sweating the Chancellor has missed an opportunity

to do something for those slall firms. `` so I think the Ch`ncellor.

The investment is helping slall and medium`sized enterprises, those

enterprises who are investing relatively small amounts, btt they

are the ones that create most of the jobs. But Maria Eagle says that it

will only help the big businesses? No, I think that it will also help

the smaller businesses. Most of the smaller businesses are presdnted in

the North West. That is where the creation of jobs comes from. That

will help the levels of confidence. Whilst I accept the argument of

Professor Geraint Johns, it will be the investment that will help the

confidence. Small businesses are very ilportant

for growth and securing the recovery and what it does appear to have been

done in this Budget to help larger businesses. However, the bank of

Britain is a feature in the Budget, and there are proposals abott using

this to secure loans for sm`ll businesses. It is something that the

Bank of England has said, that small businesses are still going back to

the banking system than thex are borrowing from it, and we would not

expect that at this stage in the cycle. In terms of the energy costs,

are you concerned, it as an Energy Secretary, that we might miss our

energy and carbon targets? Its leaves uncertainty for the green

economy. The new work, green jobs in the workforce. It has stoppdd the

increase in the carbon pricd, which would have promoted investmdnt in

those industries in the futtre. I am concerned about that. I also think

that smaller businesses would benefit more from deep `` frieze of

energy prices that the Labotr Party are promising. The North West needs

that. Our unemployment rate is going up at a time when it is falling

throughout the country. Yes, what you think of the hncrease

of unemployment to 8.1%. Being the largest population by

region in the country, it h`s to be said that the unemployment rate is

very much coming down, in mx constituency, and in many p`rts

across. What was really intdresting was that in the high energy

intensive industries which `re often the biggest industries, I used to

supervise such industries, ht really makes a difference in securhng the

jobs and securing the price that you can explore that. So these jobs will

be created by these measures and we hope that that can be continued We

now have industries being rdplaced by its smaller sized industries

The problem with job creation in the north`west is the jobs that have

been created nationally, many of them are in the South East `nd many

of them are low paid and no