16/03/2014 Sunday Politics Northern Ireland

Morning folks. Welcome to the Sunday Politics. George Osborne's fifth

Budget will offer more tax relief for the lower paid but not for

middle income earners being thrust into the 40p tax bracket. That's our

top story. Ed Balls says millions of people

aren't feeling any benefit from the recovery. We'll discuss the economy

with big political beasts from Labour, the Conservatives, and the

Lib Dems. Now that Ed Miliband has effectively ruled out an in/out EU

referendum, how does UKIP deal with Tory claims that a vote for UKIP

means no of cycling. The three areas of

London getting a cash boost to try something different.

And with me as always our top political panel - Nick Watt, Helen

Lewis and Janan Ganesh. They'll be tweeting their thoughts using the

hashtag #bbcsp throughout the programme. So, just three months

after his last major financial statement, George Osborne will be at

the despatch box again on Wednesday, delivering his 2014 Budget. The

Chancellor has already previewed his own speech, pledging to build what

he calls a "resilient economy". The message I will give in the Budget is

the economic plan is working but the job is far from done. We need to

build resilient economy which means addressing the long-term weaknesses

in Britain that we don't export enough, invest enough, build enough,

make enough. Those are the things I will address because we want Britain

to earn its way in the world. George Osborne's opposite number, Ed Balls,

has also been talking ahead of the Budget. He says not everyone is

feeling the benefit of the economic recovery, and again attacked the

Government's decision to reduce the top rate of tax from 50 to 45%.

George Osborne is only ever tough when he's having a go at the week

and the voiceless. Labour is willing to face up to people on the highest

incomes and say, I'm sorry, justifying a big tax cut at this

time is not fair. We will take away the winter allowance from the richer

pensioners, and I think that's the right thing to do. George Osborne

might agree, but he's not allowed to say so. That was the Chancellor and

the shadow chancellor. Janan, it seems like we are in a race against

time. No one argues that the recovery is not under way, in fact

it looks quite strong after a long wait, but will it feed through to

the living standards of ordinary people in time for the May election?

They only have 14 months to do it. The big economic variable is

business investment. Even during the downturn, businesses hoarded a lot

of cash. The question is, are they confident enough to release that

into investment and wages? Taking on new people, giving them higher pay

settlements. That could make the difference and the country will feel

more prosperous and this time next year. But come to think of it, it

strikes me, that how anticipated it is, it's the least talked about

Budget for many years. I think that is because the economy has settled

down a bit, but also because people have got used to the idea that there

is no such thing as a giveaway. Anything that is a tax cut will be

taken away as a tax rise or spending cut. That's true during the good

times but during fiscal consolidation, it's avoidable. --

unavoidable. There is a plus and minus for the Conservatives here.

49% of people think the government is on roughly the right course, but

only 16% think that their financial circumstances will improve this

year. It will be a tough one for the Labour Party to respond to. I agree

with Janan. Everyone seems bored with the run-up to the Budget. The

front page of the Sunday Times was about fox hunting, the front page of

the Sunday Telegraph was about EU renegotiation. Maybe we are saying

this because there have not been many leaks. We have got used to

them, and most of the George Osborne chat on Twitter was about how long

his tie was. Freakishly long. I wouldn't dare to speculate why.

Anything we should read into that? I don't know. For a long while there

was no recovery, then it was it is a weak recovery, and now, all right,

it's strong but not reaching everyone in the country. That is

where we are in the debate. That's right, and the Conservative MPs are

so anxious and they are making George Osborne announcing the rays

in the personal allowance will go up, saying it might go up to 10,750

from next year, and Conservative MPs say that that's OK but we need to

think about the middle voters. People are saying the economy is

recovering but no one is feeling it in their pocket. These are people

snagged in at a 40p tax rate. The Tories are saying these are our

people and we have to get to them. He has given the Lib Dems more than

they could have hoped for on raising the threshold. Why is he not saying

we have done a bit for you, now we have to look after our people and

get some of these people out of that 40% bracket? Partly because the Lib

Dems have asked for it so insistently behind-the-scenes.

Somebody from the Treasury this week told me that these debates behind

the scenes between the Lib Dems and Tories are incredibly tenacious and

get more so every year. The Lib Dems have been insistent about going

further on the threshold. The second reason is that the Tories think the

issue can work for them in the next election. They can take the credit.

If they enthusiastically going to ?12,000 and make it a manifesto

pledge, they can claim ownership of the policy. The Liberal Democrats

want to take it to 12,500, which means you are getting into minimum

wage territory. It's incredibly expensive and the Tories are saying

that maybe you would be looking at the 40p rate. The Tories have played

as well. There have been authorised briefings about the 40p rate, and

Cameron and Osborne have said that their priority was helping the

lowest paid which is a useful statement to make and it appeals to

the UKIP voters who are the blue-collar workers. And we are

right, the economy will determine the next election? You assume so. It

was ever that is. It didn't in 1992 or 1987. It did in 1992.

Ed Miliband's announcement last week that a Labour government would not

hold a referendum on Europe unless there's another transfer of powers

from Britain to Brussels has certainly clarified matters. UKIP

say it just shows the mainstream parties can't be trusted. The

Conservatives think it means UKIP voters might now flock back to them

as the only realistic chance of securing a referendum. Giles Dilnot

reports. When it comes to Europe and

Britain's relation to it, the question is whether the answer is

answered by a question. To be in or not to be in, that is the question,

and our politicians have seemed less interested in question itself but

whether they want to let us answer it. Labour clarified their position

last week. There will be no transfer of powers without an in out

referendum, without a clear choice as to whether Britain will stay in

the EU. That seems yes to a referendum, but hold on. I believe

it is unlikely that this lock will be used in the next Parliament. So

that's a no. The Conservatives say yes to asking, in 2017, if

re-elected, but haven't always. In 2011, 81 Tory MPs defied the PM by

voting for a referendum on EU membership: the largest rebellion

against a Tory prime minister over Europe. Prompted by a petition from

over 100,000 members of the public. The wrong question at the wrong time

said the Foreign Secretary of a coalition Government including

selfie-conciously-pro European Lib Dems, who had a referendum pledge in

their 2010 manifesto, but only in certain circumstances. So we have

the newspapers, and the public meeting leaflets. UKIP have always

wanted the question put regardless. But Labour's new position may change

things and The Conservatives think so. I think it does, because, you

know, we are saying very clearly, like UKIP, we want a referendum, but

only a Conservative government can deliver it because most suffer

largest would say it is possible in the first past the post system to

have a UKIP government -- sophologists. And then it's easy for

as to say that if a UKIP vote lets in a Conservative government, then

they won't hold a referendum. UKIP seem undaunted by the clarifications

of the other parties, campaigning like the rest but with a "tell it

how it is, just saying what you're thinking, we aren't like them"

attitude. They seem more worried about us and what we want, and I

don't see that in the other parties. In parts of the UK, like South

Essex, it's a message they think is working. They are taking the voters

for granted again and people have had enough. People are angry, they

see people saying they will get a vote on the European Union, but then

it just comes down the road. They were quick to capitalise on the

announcements, saying only the Conservatives will give you say, so

does it change things? Not really. We have been talking about a

referendum and having a debate on the European Union for years, and

the other parties are playing catch up. They have a trust issue. Nobody

trusts them on the European Union and that is why people come to us.

Who the average UKIP voter is, or how they voted before is

complicated, and what dent they might make on Conservative and

Labour votes in 2015 is trickier still, but someone's been crunching

the numbers anyway. We reckon it is between 25 and 30% of the electorate

broadly share the UKIP motivation, so to top out at that level would be

difficult. That's an awful lot of voters, but it's not the majority,

and this is the reason why the main parties can't afford to just openly

appealed to the UKIP electorate too hard because the elections are won

and lost amongst the other 70%, the middle-class, the graduate, the

younger, ethnic minorities. An appeal to the values of UKIP voters

will alienate some of the other groups, and they are arguably more

significant in winning the election. Whatever, the numbers UKIPers seem

doggedly determined to dig away at any support the other parties have

previously enjoyed. Giles Dilnot reporting. UKIP's

leader, Nigel Farage, joins me now for the Sunday Interview.

Nigel Farage, welcome back. Good morning. So the Labour Party has

shot a fox. If Ed Miliband is the next by Minister, there will not be

a referendum customer there's a long way between now and the next

election, and Conservative party jobs and changes. We had a cast-iron

guarantee of a referendum from camera, then he three line whip

people to vote against it, and now they are for it. What the Labour

Party has done is open up a huge blank to us, and that is what we

will go for in the European elections this coming year in May. I

think there is a very strong chance that Labour will match the

Conservative pledge by the next general election. There may be, but

at the moment he has ruled it out, and if he does not change his mind

and goes into the election with the policy as it is, the only chance of

a referendum is a Tory government. If you think the Tories will form a

majority, which I think is unlikely. Remember, two thirds of our voters

would never vote Conservative anyway. There is still this line of

questioning that assumes UKIP voters are middle-class Tories. We have

some voters like that, but most of them are coming to us from Labour,

some from the Lib Dems and a lot of nonvoters. But it come the election

you failed to change Mr Miliband's line, I repeat, the only chance of a

referendum, if you want a referendum, if that is what matters,

and the polls suggest it doesn't matter to that many people, but if

that is what matters, the only way you can get one is to vote

Conservative. No, because you have a situation in key marginals,

especially where all three parties are getting a good share, where we

will see, and this depends a lot on the local elections and the European

elections, there are target constituencies where UKIP has a

reasonably good chance of winning a seat, and that will change the

agenda. Every vote for UKIP makes a Tory government less likely. Arab

voters are not Tory. Only a third of the UKIP boat comes from the

Conservative party -- our voters are not Tory. -- the UKIP vote. It was

mentioned earlier, about blue-collar voters. We pick up far more Labour

Party and nonvoters than conservatives. On the balance of

what the effect of the UKIP boat is, the Tories should worry about

us, they should worry about the fact they have lost faith with their own

electorate. Even if there is a minority Ed Miliband government, it

means no referendum. Labour and the Liberal Democrats are now at one on

the matter. The next election is in a few weeks time, the European

elections. What happens in those elections will likely change the

party stands and position on a referendum. The fact that Ed

Miliband has said this means, for us, our big target on the 22nd of

May will be the Labour voters in the Midlands and northern cities, and if

we do hammer into that boat and we are able to beat Labour on the day,

there's a good chance of their policy changing. One poll this

morning suggests Labour is close to you at 28, the Conservatives down at

21, the Lib Dems down at eight. You are taking votes from the

Conservatives and the Liberal Democrats. We are certainly taking

votes from the Lib Dems but that is comparing the poll with one year ago

when I don't think most people knew what the question really was. You

seem to be in an impossible position because the better you do in a

general election, the less chance there will be a referendum by 2020.

No, look at the numbers. Only a third of our voters are

Conservatives. When we have polled voters that have come to us, we

asked them if there was no UKIP candidate who would you vote for,

less than one in five said Conservative. Less than one in five

UKIP voters would be tempted to vote Conservative under any circumstances

so the arithmetic does not suggest we are the Conservative problem, it

suggests we are hurting all of the parties and the reason the Tories

are in trouble is because they have lost their traditional base. Why do

you think Nick Clegg is debating Europe? I think they are in

trouble, at 8% they could be wiped out, they could go from 12 to

nothing and I think it is a chance for Nick Clegg to raise their

profile. They are fringe party with respect to this contest so I see why

he wants to do it. One of our big criticisms is that we have not been

able to have a full debate on national television on the

alternatives of the European Union so I am looking forward to it. How

are you preparing? I think you can be over scripted with these things.

Are you not doing mock debates? No, I am checking my facts and figures

and making sure that I can show the British people that in terms of

jobs, we would be far better off not being within the European Union, not

being within its rule book, not suffering from some of the green

taxes they are putting on the manufacturing industry. The idea

that 3 million jobs are at risk, I want to show why that is nonsense.

Who do you think is playing you in their mock debates? They probably

went to the pub and found someone! We will see. You have promised to do

whatever it takes to fund your European election campaign, how much

has been given so far? Just give it a few weeks and you will see what

Paul is planning to do. He has made a substantial investment in the

campaign already. How much? I'm not answering that for now. We are well

on our way to a properly funded campaign and our big target will be

the big cities and the working vote in those communities. Your deputy

chairman Neil Hamilton is another former Tory, he says so far we

haven't seen the colour of his money. Exactly two weeks ago, and

things have changed since then. Mr Sykes has written a cheque since

then? Yes. This morning's papers saying you will be asking MEPs to

contribute ?50,000 each, is that true? Over the next five years, yes.

Not for the European campaign. So lack of money will not be an excuse.

We will have a properly funded campaign. How we raise the kind of

money needed to fund the general election afterwards is another

question. What is UKIP's policy on paying family members? We don't

encourage it and I didn't employ any family member for years. My wife

ended up doing the job and paid for the first seven years of my job. She

is paid now? Until May, then she comes off the payroll am which

leaves me with a huge problem. In 2004 you said, UKIP MEPs will not

employ wives and there will be no exceptions. An exception was made

because I became leader of the National party as well as a leader

of the group in European Parliament. Things do change in

life, and you can criticise me for whatever you like, but I cannot be

criticised for not having a big enough workload. No, but you didn't

employ your wife when you had told others not to do it your party.

Nobody else in my party has a big job in Europe and the UK. We made

the exception for this because of very unusual circumstances. It also

looks like there was a monetary calculation. Listen to this clip

from a BBC documentary in 2000. It is a good job. I worked it out

because so much of what you get is after tax that if you used the

secretarial allowances to pay your wife on top of the other games you

can play, I reckon this job in Stirling term is over a quarter of

?1 million a year. That is what you would need to earn working for

Goldman Sachs or someone like that. I agree with that. More importantly

the way you really make money in the European Parliament is being their

five days a week, because you sign in every day, you get 300 euros

every day, and that is how people maxed out. The criticism of me is

that I am not there enough so whatever good or bad I have done in

the European Parliament, financial gain has not been one of the

benefits. There have been allegations of you also employing a

former mistress on the same European Parliamentary allowance, you deny

that? I am very upset with the BBC coverage of this. The ten o'clock

news run this as a story without explaining that that allegation was

made using Parliamentary privilege by somebody on bail facing serious

fraud charges. I thought that was pretty poor. You have a chance to do

that and you deny you have employed a former mistress? Yes, but if you

look at many of the things said over the last week, I think it is

becoming pretty clear to voters that the establishment are becoming

terrified of UKIP and they will use anything they can find to do us down

in public. Is an MEP employs his wife and his former mistress, that

would be resigning matter, wouldn't it? Yes, particularly if the

assumption was that money was being taped for work but was not being

done. Who do you think is behind these stories? It is all about

negative, it is all about attacks, but I don't think it is actually

going to work because so much of what has been said in the last week

is nonsense. A reputable daily newspaper said I shouldn't be

trusted because I had stored six times for the Conservative party, I

have never even stored in a local council election. I think if you

keep kicking an underdog, it will make the British people rally around

us. Is it the Conservatives? Yes, and the idea that all of our voters

are retired colonels is simply not true. We get some voters from the

Labour side as well. Would you consider standing in a Labour seat

if you are so sure you are getting Labour votes? Yes, but the key for

UKIP is that it has to be marginal. Just for your own future, if you

fail to win a single soul -- single seat in the general election, if Ed

Miliband fails to win an outright majority, will you stand down as

UKIP leader? I would think within about 12 hours, yes. I will have

failed, I got into politics not because I wanted a career in

politics, far from it. I did it because I don't think this European

entanglement is right for our country. I think a lot of people

have woken up to the idea we have lost control of our borders and now

is the moment for UKIP to achieve what it set out to do. Will UKIP

continue without you if you stand down? Of course it will. I know that

everyone says it is a one-man band but it is far from that. We have had

some painful moments, getting rid of old UKIP, new UKIP is more

professional, less angry and it is going places. Nigel Farage, thank

you for being with us. So, what else should we be looking

out for in Wednesday's Budget statement? We've compiled a Sunday

Politics guide to the Chancellor's likely announcements.

Eyes down everyone, it's time for a bit of budget bingo. Let's see what

we will get from the man who lives at legs 11. Despite some good news

on the economy, George Osborne says that this will be a Budget of hard

truths with more pain ahead in order to get the public finances back

under control. But many in the Conservative party, including the

former chancellor Norman Lamont, want Mr Osborne to help the middle

classes by doing something about the 4.4 million people who fall into the

40% bracket. Around one million more people pay tax at that rate compared

to 2010 because the higher tax threshold hasn't increased in line

with inflation. Mr Osborne has indicated he might tackle the issue

in the next Conservative manifesto, but for now he is focused on helping

the low paid. It's likely we will see another increase in the amount

you can earn before being taxed, perhaps up another ?500 to ?10,500.

The Chancellor is going to flesh out the details of a tax break for

childcare payments, and there could be cries of 'house' with the promise

of more help for the building industry. The Help To Buy scheme

will be extended to 2020 and there could be the go-ahead for the first

Garden City in 40 years. Finally, bingo regulars could be celebrating

a full house with a possible cut in bingo tax.

And I've been joined in the studio by the former Conservative

chancellor Norman Lamont, in Salford by the former Labour Cabinet

minister Hazel Blears, and in Aberdeen by the Lib Dem deputy

leader, Malcolm Bruce. Let me come to Norman Lamont first, you and

another former Tory Chancellor, Nigel Lawson, have called in the

fall in the threshold for the rate at which the 40p clicks in. I would

have preferred an adjustment in the Budget but I agree with what you are

saying, it sounds like the Chancellor will not do that. My main

point is that you cannot go on forever and forever increasing the

personal allowance and not increasing the 40% tax threshold

because you are driving more and more people into that band. It is an

expensive policy because in order to keep the number of people not paying

tax constant, you have to keep adjusting it each year. When this

was introduced by Nigel Lawson, it applied to one in 20 people, the 40%

rate, it now applies to one in six people. By next year, there will be

6 million people paying base. Why do you think your Tory colleagues seem

happy to go along with the Lib Dems and target whatever money there is

for tax cuts rather -- on the lower paid rather than the middle incomes?

They are not helping the lowest paid. If you wanted to really help

the lowest paid people you would raise the threshold for national

insurance contributions, which is around ?6,000. Is it the Lib Dems

stopping any rise in the 40p threshold? We are concentrating on

raising the lower threshold because we believe that is the way to help

those on lower incomes. Whilst they haven't benefited as much as the

lower paid they have participated and I think people understand right

now, if you were going to prioritise the high earners, when we are still

trying to help those on lower and middle incomes who haven't enjoyed

great pay increases but have got the benefit of these tax increases, that

is why we would like to do it for the minimum wage level. But the

poorest will not benefit at all. The poorest 16% already don't pay tax.

Why don't you increase the threshold at which National Insurance starts?

You only have two earned ?5,500 before you start to pay it. You've

got to remember that the raising of the threshold to ?10,000 or more was

something the Tories said we could not afford. Why are you continuing

to do it? If you want to help the working poor, the way would be to

take the lowest out of national insurance. The view we take is they

are benefiting, and have benefited from, the raising of the tax

threshold. You now have to earn ?10,000, we hope eventually 12,500,

and that means only people on very low wages. If you opt out of

national insurance, you're saying to people that you make no contribution

to the welfare system, so there is a general principle that people should

participate and paying, and also claim when they need something out.

We thought raising the threshold was simple and effective at a time of

economic austerity and the right way to deliver a helpful support to

welcoming people. -- working people. With the Labour Party continue to

raise the threshold, or do they think there is a case that there are

too many people being dragged into the 40p tax bracket? If Norman

Lamont thinks this is the right time to benefit people who are reasonably

well off rather than those who are struggling to make ends meet, then

genuinely, I say it respectfully, I don't think he's living in the world

the rest of us are. Most working people have seen their wages

effectively reduced by about ?1600 because they have been frozen, so

the right thing is to help people on modest incomes. I also understand

that if the 40% threshold went up, the people who would benefit the

most, as ever, are the people who are really well off, not the people

in the middle. The Conservatives have already reduced the 50p tax on

people over ?150,000 a year, and we have to concentrate on the people

going out to work, doing their best to bring their children up and have

a decent life and need a bit of help. I think raising the threshold

is a good thing. We would bring back the 10p tax, which we should never

have abolished, and do things with regard to childcare. At the moment,

childcare costs the average family as much as their mortgage, for

goodness sake. We would give 25 hours free childcare for youngsters

over three and four years old. That would be a massive boost the working

families. We are talking about nurses, tube drivers, warrant

officers in the army. There are many people who are not well off but have

been squeezed in the way everybody has been squeezed and they are

finding it continuing. I am stunned by Malcolm's argument where

everybody should pay something so you should not take people out of

national insurance, but the principle doesn't apply to income

tax. You can stand that argument on its head and apply it to income tax.

Most people don't see a difference between income tax and national

insurance, it's the same thing to most people. It is true that it

isn't really an insurance fund and there is an argument from merging

both of them. But we have concentrated on a simple tax

proposition. Norman is ignoring the fact the people on the 40% rate have

benefited by the raising of the personal allowance. To say they have

been squeezed is unfair. The calculation is that an ordinary

taxpayer will be ?700 better off at the current threshold, and about

?500 better off at the higher rate. It is misleading to say the better

off we'll be paying more. I agree with Hazel, if you go to the 40%

rate, it's the higher earners who benefit the most, and we won't do

that when the economy is not where it was before the crash. How much

will the lower paid be better off if you reintroduce the 10p rate?

Significantly better off. I don't have the figure myself, but they'd

be significantly better off and the Budget should be a mixture of

measures to help people who work hard. That is why I think the

childcare issue has to be addressed. ?100 a week of the people

with childcare payments. It is a massive issue. We want the job is

guaranteed to get young people back into work. There's been hardly any

discussion about that, and we have nearly 1 million people who have

been out of work for six months or more, and as a country we need to do

something to help that. 350,000 full-time students, so it is a

misleading figure. It is not a million including full-time

students. All parties do this. It sounds to me, Malcolm Bruce, you

have more in common with the Labour Party than you do with the

Conservatives. You want an annual levy on houses over ?2 million, so

does Labour. A lot of your members want to scrap the so-called bedroom

tax and so does labour. You think every teacher should have a teaching

qualification, and so does Labour. Your policy on the EU referendum is

the same. Let me go on. And you want to scrap the winter fuel allowance

for wealthy pensioners. We want to make sure we get the public finances

in order and we have grave reservations about the Labour Party

promises. But they followed your spending plans in the first year.

The point we are making is spending plans in the first year.

The point we are making is we can make a fairer society and stronger

economy if you keep the public finances moving towards balance. We

don't think the Labour Party will take a stand that track. It is

interesting that the Labour Party want to introduce the 10p rate that

Gordon Brown abolished. We consider that before we can -- committed to

the 0% rate -- we considered that. It makes a complicated system

difficult and we think it's better doing it that way. As a fiscal

conservative, why are you talking about any tax cuts when the deficit

is over ?100 billion, and effectively, anything you propose

today can only be financed by more borrowing. I totally agree with you.

I said that this week. I thought the best thing would have no Budget. The

main thing is to get the deficit down. My argument is is that you

have an adjustment in tax rates it should be shared between the

allowances and the higher rate, but I don't think that the progress on

the deficit is something we can give up on. This is still a very long way

to go. We're only halfway through. Hazel, does it make sense to borrow

for tax cuts? I am reluctant to do this, but I agree with both Norman

and Malcolm. Malcolm Bruce wants to borrow for tax cuts. We absolutely

need to get the deficit down and get finances on a strong footing. But we

also have to think about having some spending in the system that in the

longer run saves us money. We all know we need to build new homes. I

don't think it's necessarily the right priority to give people in

London mortgage relief in terms of ?600,000. We have to get the balance

right. Sometimes it is right to spend to save. I'm afraid we have

run out of time. There will be plenty more discussion in the lead

up to the Budget on Wednesday. It's just gone 11:35am. 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, Frances O'Grady, the General Secretary of the TUC, joins

us discuss Hello and welcome to Sunday Politics

in Northern Ireland. Three hundred jobs go at Coleraine's DVA and the

DUP accuses Sinn Fein of endangering hundreds more over welfare reform

delays. Scare stories or a cause for genuine concern? We talk to the

Finance Minister, Simon Hamilton. Described as a political giant, we

look back at Tony Benn's involvement in politics here over the years.

And with their thoughts on it all, the economist Paul Gosling and

academic Pete Shirlow. The loss of some 300 jobs at the

Driver and Vehicle Agency could be just the tip of the iceberg if

welfare reform is not implemented here, says the DUP. The former

Finance Minister, Sammy Wilson, has forecast that 1600 civil servants

employed by the Department of Work and Pensions could be in danger of

redundancy - but is he being alarmist? With me now is Mr Wilson's

successor as Finance Minister, Simon Hamilton. Thank you for joining us.

Let's start with the job losses in the DVA. Did the announcement that

we were losing 300 jobs - most of them in Coleraine - come as a

surprise? We think we knew for a long time that the jobs were under

threat. We are mounted a strong case. We knew that the government

and Westminster wanted to cut costs. Some of those jobs could have been

done in Coleraine and elsewhere in Northern Ireland. We have a good

track record of doing work like that. We also do it for benefits and

for Social Security as well. You made a robust case, you had a

petition of 40,000 signatures objecting to the change. It did not

make any difference. I think a good case was made. It was not as a prize

that the government were looking at this. It does show that this

decision has been not -- has not been taken here but has been taken

by Westminster. There will be a ruthlessness if we do not in

Northern Ireland do things in welfare reform. The situation could

get worse because in a speech on Thursday night, you warrant that the

next four years could eclipse the last four years. It is not the sort

of message I like to put out there, but I would feel my job if I do not

stress that is to be ball. We are getting lots of good evidence that

the economy is growing, unemployment is falling, the housing department

-- area is going in the right direction as well. We are about

halfway down that road of austerity and in Northern Ireland we will feel

the impact for the next four years. The Treasury has signalled the 70%

of expenditure for the next few years. What could that mean for

Northern Ireland? If you look at the projections for 2015-16 where we do

have data, we have ?100,000 taken out of our budget. That is coming on

the back of all the cuts that we have had to deal over the last

couple of years. It presents us with a choice, going for a crude front

line cut which can be designed to protect the centre of government we

can look at what government does and look at making changes more

effectively and efficiently. The government has made a promise to be

balanced the economy. If you look at what has happened in that context,

then perhaps it is what we would expect. We would expect to see a

reduced dependence on public sector employment. We have a large public

sector in Northern Ireland. It has been too large for too long. The

private sector has to be grown, that is why we are seeing a reduction in

corporation tax. It is a challenge looking from where we are coming

from. A third of our employment is in the public sector, it is hard to

be balanced in terms of the private sector. I am determined that public

sector which has provided a cushion of the last couple of years, the

private sector has struggled in this country. That can be seen as a drag.

If it is reformed, if we can make it improve, it will be a beneficial

contribution to the economy. It is pretty bad, Sammy Wilson, your

predecessor highlighted the risk. He said 1600 jobs are at risk in the

civil service. Do you agree with them? I do agree with him. I have

been giving the same message over the last few months. The lack of

leadership shown by parties like Sinn Fein are threatening... What

about the DUP? We have achieved quite a lot, we have flexibility

that would ensure that the bedroom tax does not affect people who are

already getting hit by other benefit cuts in Northern Ireland. Sinn Fein

and others are refusing to move forward. That is not just

threatening further reductions, we have lost ?15 million this year. We

will lose more in the next few years and penalties. Around 1500 jobs in

Northern Ireland where people are doing Social Security work on behalf

of customers in England and Wales could be lost. They are likely to be

lost. As we have seen with the DVA this week, why would an English

minister want to keep jobs in Northern Ireland. Interesting

figures. You have set aside ?50 million for the first penalty. It

goes up incrementally, it will increase to 1,000,000,005 years?

Yes. -- ?1 billion in five years. In five years it will have gone up.

Never mind what the Chancellor will pass on in terms of the cuts across

the whole of the UK. These are self-inflicted fines which have been

as a result of a lack of leadership from parties like Sinn Fein. It will

have a real affect on people on the ground. It will have a devastating

effect on public services Northern Ireland. It is not a lack of willing

this on my part or members of my party. -- willingness. We have been

making this clear to the SDLP, Sinn Fein and others. We cannot afford to

take this hit, vulnerable people will suffer because of the impact of

this on public service deliveries. Thank you very much. Paul, what do

you make of those figures? It demonstrates the difficulty we have

with devolution. Theoretically, although we have devolution,

politicians have very little choice to implement the vast majority of

the welfare reforms. What we need is for the Republicans are nationalists

to work together. I think that is what the focus in Northern Ireland

will be, not whether one particular party is blocking one particular

part of welfare reform. But an ability to work together to better

Northern Ireland. Sinn Fein take a very different view and says the

other parties are causing the problems. Somebody needs to do

something very quickly to sort things out. If there had been a

solution at around Richard Haass, these would sort themselves out. We

have a political system that is not functioning. The failure to reach an

agreement on welfare reforms just a symptom of that. Pete, how do you

see it? I think given the complex geography is we have, the impacts of

this will be even. It will affect constituents more. The other issue

is, what is the response to this in terms of the third sector and how we

develop other areas in the public sector so we have more than just the

argument about we said no, you said yes. We have seen success in other

areas, other parts of Europe where they have looked at different ways

to improve the economy. Do you see any sign of political will or desire

to make that choice? There is a lack of knowledge just -- not just with

politicians. We have not come to terms with our modern default

society. Any thoughts on that, Simon? Is there any truth in that

politicians have been focused elsewhere. We are putting ourselves

at a disadvantage? What you described as the other issues are

incredibly important. How they fit into the grand scheme of politics in

Northern Ireland. Are they holding us hostage? We have been in Stormont

for seven, coming on eight years. We have made progress in bread in the

areas. This is not an issue we are facing. Given the issues are steady

is giving us, reality is starting to bite. We will have to make difficult

decisions, some that we may not like in their entirety but we will have

to do something about. What we have done in terms of welfare of, and

flexibility is that we have negotiated, shows that we can use

devolution to work again some of the worst things we come against from 's

-- Westminster. The cost of not receiving and losing ?1 billion will

make it incredibly difficult for us to take better decisions on the

cuts. This is not the only issue. We need to improve social housing. We

have blockages in other areas across the reform. Thank you all very much

indeed. St Patrick's Day has turned into St

Patrick's 'Week' it seems, especially for politicians from this

island who made their annual pilgrimage to Washington for a

series of high profile engagements. The Taoiseach met President Obama

while the First and Deputy First Ministers met Vice President Biden.

The Secretary of State was there too and Martina Purdy asked her if she

agrees with Richard Haass's comment that the peace process here might

not be quite as robust as people think. No, I think there are in many

parts of the world who have looked at the success that has been

achieved in Northern Ireland, and wish they could have emulated it. It

is difficult to transplant a particular model to other parts of

the world. I genuinely think that political readership in Northern

Ireland should be proud of what they have achieved. But they also

recognise there is more work to be done. That is something that

President Clinton emphasised in his visit to Northern Ireland. It is

something the Prime Minister recognised. Ensuring that many more

children have ways out of their barriers based on religion. What I

have been taking to Washington as a message is that this is what has

been achieved in Northern Ireland, real progress. A recognition that

further work could yield tremendous further benefits and taking Northern

Ireland further forward, that is a message that has been

sympathetically received by Washington. It seems we are further

back than we were a few months ago. What is this that is of the six

cases, can you shed any light? The controversy around OTRs and what

they have been positive than a setback. There still appears to be a

willingness from the party of all political leaders in Northern

Ireland to work forward on this. I hope that the OTR crisis will not

see the party leaders meetings abandoned altogether. On those

excuses, we have set up an enquiry, headed up by one of the most senior

and well respected judges in the country. We are determined to

provide the facts of how the scheme operated. Including what the current

position is in relation to cases which remained under review. -- and

on those excuses. Can you tell us that London is not handling those

excuses now? No, they are not. The Secretary of State talking to

Martina Purdy. His interest in Northern Ireland was

long-standing and he helped keep the issue on the Westminster agenda -

just one of the many tributes paid to Tony Benn who died on Friday.

During his long and sometimes controversial political career, Mr

Benn gave support to Sinn Fein and advocated a united Ireland. But

despite - or maybe because of that - he opposed the Labour Party formally

organising here. Mark Langhammer campaigned for many years to change

the policy and is with me now. Welcome to the programme. You knew

Tony Benn a little bit, you met him a couple of times. I met him at a

conference in Blackpool in a tearoom with a senior education official.

Who was from north Belfast and who had access with all of these men. We

met in context of the Labour Party policy at the time. It was for unity

by consent. It meant that the Labour Party government had the vote. Ed

Miliband was governor of Northern Ireland. It was a colonial position.

Eamon had spoken with two wings, there was our view that Labour

should get in and contest elections. Those with the view that

Labour should get out. How did he justify it to you? He topped about

socialism and Chrissie. How did he see his position about a democratic

one? -- he spoke about socialism and democracy. He was a very humorous

man. The one thing about Tony Benn, he was very rooted in the movement.

He was really from the Methodist tradition than anything else. His

mother had beaten into them, you do all the good you can. He was very

unlike the sort of political class of the day. He was a conviction

politician, he was quite partisan politician, I think. He was an

national figure in the way that nobody else in the Labour Party was.

You agreed with them in terms of left right politics. He was a bit of

a hero in terms of that. Not really. At the critical time, I think Tony

Benn did the wrong thing. What he said that he was a cynical as and he

supported as a technology Minister, Meridian. Whenever the Bevan Atlee

consensus started to break down in the 70s. It was about full

employment, the NHS, putting people first, essentially. At a certain

stage the labour movement was working at a surly. -- adversarial

way. There was Barbara Kassel and Ted Heath, at a critical time, he

voted and went against bullet and industrial democracy and effectively

open the door to Thatcherism. -- Bullock. Insofar as that he was

able to bring Sinn Fein in from the political called, was his

contribution helpful or not? I think it was a good contribution through

his diaries. When Callaghan visited Northern Ireland, you will remember

that footage of him speaking out of the window, at that stage Callaghan

was introduced with the notion that Labour should govern. When it got

into the government -- Cabinet meeting, the critical thing was

avoiding responsibility. The Foreign Minister said exactly

the same thing, keep it arms length. Keep it out there. If you did

nothing else, you opened a window on the adverse resolve the middle-class

at that time. Let's hear from Paul and Pete.

He was to a lot of people and man of principle first and foremost. But

still his policies were full of contradictions. There were a whole

case of those. His stanza Northern Ireland did change somewhat over

time. He called for United stations to come in here. He was when I met

once in England many years ago he did have a capacity to learn. He

made a speech once that I was that, it was talking about unionists as

colonialists. I challenged him on it. I said my family have been in in

Northern Ireland and 500 years in which time we have become indigence.

He would engage with you, but he would be sharp if he disagreed with

you. -- indigenous. We have to remember, an intellectual and

capable man. But also had his faults. I met Tony many times. He

was a lovely man and should be remembered for his engaging

personality, the fact that he brought ideas of democracy and

accountability to the forefront and we should remember that way. Let's

take a look back at the week in 60 Seconds with Rosy Billingham.

We are not going away. A message from victims as a widower accounts

to MLAs how she lost her husband. -- a Wood Hill. 17 bullets were put

into his back. Richard has had a stark warning for us in Washington.

The passage of time will only create an environment and social division

will intensify, violence will increase. Jonathan Powell joined the

peace process stands by his claim that the DUP knew about OTR course

versions. What we want to try and do is have politicians solving some of

these problems of the past, not trying to beat each other over the

head over it. An enquiry into political interference was resolved.

I am chairing this enquiry. You are not sharing it very well.

failure marked success. -- not success. Andrew, back to you.

Has George Osborne got a rabbit in his Budget hat? Will the Chancellor

find a way to help the squeezed middle? And how do Labour respond?

All questions for The Week Ahead. And joining Helen, Janan and Nick to

discuss the budget is the general secretary of the Trades Union

Congress Frances O'Grady. Welcome back to the programme. I know the

TUC has a submission, but if you could pick one thing that you wanted

the Chancellor to do above all, what would it be? We want a budget for

working people, which means we have to crack the long-term problem of

investment in the British economy. Certainly I would like the

Chancellor to merit that title they want of the new workers party, and

take action on living standards, but if they're going to do that it's got

to be about unlocking investment. In the period where the economy has

been flat-lining there has been little business investment, but

there are signs towards the end of last year that it is beginning to

pick up. But a long way to go. The problem is we have key industries

like construction and manufacturing that are still smaller than they

were before the recession. The government itself, of course, has

slashed its own capital investment budget by half. There is plenty of

good and important work that needs to be done from building houses to

improving the transport system, to improving our schools. And the

government really needs to pick up that shovel and start investing in

our economy to get the decent jobs we need, the pay increases we need,

and that in itself will help stimulate demand. It was Alistair

Darling who cut in 2011, and it's interesting that Ed Balls in his

plans for the next parliament would run a current budget surplus by the

end of the parliament as opposed to George Osborne who would have an

overall budget surplus. That gives Ed Balls or -- more wriggle room to

do what you talk about, but he is reticent to talk about it. He does

not want to say that he has an opportunity to spend on investment

because he fears if he says it he will be attacked by the

Conservatives for being irresponsible. Why is business doing

this? The recession was deeper than any since the war and the recovery

was slower than almost any since the war. The lag, the time it takes to

get over that is longer than anyone expected. I read the same evidence

as you towards the end of last year pointing to money being released,

and it depends what it is released on, whether it is capital investment

or bringing in people on higher wages. The one surprise in the

downturn is how well the employment figures have done, but they have not

invested in new capacity and they are sitting on a lot of dosh. I

looked at one set of figures that said if you took the biggest company

in Britain, they have about 715 billion pounds in corporate treasury

-- the biggest companies. I think it's reduced a little but they are

sitting on a mountain in dash of skills. Yes, but they're not

investing in skills, wages, or sustainable jobs. The new jobs we

have seen created since 2010, the vast majority of them have been in

low paid industries, and they are often zero hours, or insecure, or

part-time. So it's not delivering a recovery for ordinary working

people. Government ministers, as you know when you lobby them, they are

anxious to make out that they know the job is not done and the recovery

has just begun, but the one bit they are privately proud of, although

they can't explain it, is how many private-sector jobs have been

created. A lot of unions have done sensible deals with employers to

protect jobs through this period, but it's not sustainable. The

average worker in Britain today is now ?2000 a year worse off in real

terms than they were. On a pay against price comparison? It doesn't

take into account tax cuts. The raising of the personal allowance is

far outweighed by the raising VAT. Does the raising of the threshold

which the Lib Dems are proud of and the Tories are trying to trade

credit for, does it matter to your members? -- take credit for. It

matters that it is eclipsed by the cuts in benefits and know what is

conned any more. We're going to hear a lot about the raising of the

allowance, but as long as the real value of work, tax credits, things

like that, people won't feel it in their pocket, and they will find it

harder and harder to look after their family. When you look at the

other things that could take over from consumer spending which has

driven the recovery, held by house price rising in the south, it is

exports and business investment, and you look at the state of the

Eurozone and the emerging markets which are now in trouble, and the

winter seems to have derailed the US recovery. It won't be exports.

Indeed, the Obie Eich does not think that will contribute to growth until

2015 -- OBI. So the figures we should be looking at our business

investment. And also the deficit. The deficit is 111 billion, and that

is a problem, because we are not at the end of the cutting process,

there are huge cuts to be made. I understand we are only a third of

the way through. That will definitely affect business

confidence. It is clear that the strategy has failed. Borrowing has

gone up and it's not delivered improved living standards and better

quality jobs, so cutting out of the recession is not going to work. The

structural budget deficit was going to be eliminated three weeks today

under the original plan. They missed target after target. Every economist

has their own definition of that. I think Mark Carney is right when he

says that fundamentally the economy is unbalanced and it is not

sustainable, growth is not sustainable. But if it clicked on,

it would be more balanced. It is not just north and south and

manufacturing a way out with services, but it is also between the

rich and everybody else. What do you make of the fact that there will

effectively be another freezing public sector pay, or at least no

more than 1%? Not even that for nurses and health workers. But they

will get 3% progression pay. 70% of nurses will not get any pay rise at

all. They get no progression pay at all. I think this is smack in the

mouth. Smack in the mouth to dedicated health care workers who

will feel very, very discontented about the decision. Danny

Alexander, I saw him appealing to health workers do not move to strike

ballots and said they should talk to their department. But about what? Is

that real pay cut has been imposed, what are workers left with? So do

you expect as a result of yet more tough controls on public sector pay

that unrest is inevitable? I know some unions will be consulting with

their members, but ultimately it's always members who decide what to

do. It does seem to me insulting not to at least be honest and say that

we are cutting real pay of nurses, health care workers, on the back of

a ?3 billion reorganisation of the NHS that nobody wanted and nobody

voted for. Their long-term changes taking place here that almost talks

about -- there are long-term changes. It is how lower percentage

wages have become of GDP on how big the percentage of profits is. It

seems to me there is a strong case for some kind of realignment there.

The biggest event of my life, in this world, is the entry of a couple

of billion more people into the labour supply. At the end of the

Cold War, India and China plugged into the global economy. If there is

a greater supply of that factor of production, logically you conclude

that wages will fall or stagnate and that has been the story in this

country and America and large parts of Western Europe in the last

generation. What is not possible is for governments to do much about

it. They can ameliorate it at the margins, but the idea that the

government controls living standards, which has become popular

over the last six months, and the Labour Party have in establishing

that, and I don't think it's true. George Osborne's options are

astonishingly limited compared to public expectations. If wages have

reached a modern record low as percentage of GDP, who is going to

champion the wage earner? We have lost Bob Crow, Tony Benn passed

away, so who is the champion? The trade union movement is the champion

of ordinary workers. We need those larger-than-life figures that we

will mess. Have you got them yet? We have a generation of workers coming

through. One thing about the loss of Bob Crow is that the whole union

movement has responded strongly to that, and we want to say that we are

strong and united and here to stand up for working people and we will

fight as hard as Bob Crow did. Whoever replaces Bob Crow or Tony

Benn, we can be sure they will not come from Eton because they all have

jobs in the government. I want to put up on the screen what even

Michael Gove was saying about this coterie of Old Etonian 's.

He's right, is he not? He's absolutely right. We have the idea

of the manifesto being written by five people from Eton and one from

Saint Pauls. A remarkable example of social mobility that George Osborne,

who had the disadvantage of going to Saint Pauls has made it into that

inner circle. Here is the question, what is Michael Gove up to? If you

saw the response from George Osborne, there was no slap down, and

they know this is an area they are weak on an David Cameron will not

comment on it. If this had been a Labour shadow minister making a

similarly disloyal statement, they might have been shot at dawn. But

there is a real tolerance from Michael Gove to go freelance which

comes from George Osborne. It's about highlighting educational

reforms that he wants to turn every school in to eat and so it won't

happen in the future. But it's also pointing out who did not go to Eton

school and who would be the best candidate to replace David Cameron

as leader, George Osborne, and who did go to Eton school, Boris

Johnson. Michael Gove is on manoeuvres to destroy Boris

Johnson's chances of being leader. It's a good job they don't have an

election to worry about. Hold on. I think they are out of touch with

businesses as well as working people. You ask about who is talking

about wage earners. Businesses are. They are worried that unless living

standards rise again there will be nobody there to buy anything. We are

running out of time, but the TUC, are enthusiastic about HS2? We

supported. We think it's the kind of infrastructure project that we need

to invest in long-term. He could, if we get it right, rebalance north and

south and create good jobs along the way -- it could. Thank you very much

tool. I have to say that every week -- thank you very much to you all.

That's all for today. I'll be back next Sunday at 11am, and Jo Coburn

will be on BBC Two tomorrow at midday with the Daily Politics.

Remember if it's Sunday, it's the Sunday Politics.