16/03/2014 Sunday Politics Northern Ireland


16/03/2014

Mark Carruthers with the latest political news, interviews and debate. Andrew Neil looks ahead to the budget and speaks to UKIP leader Nigel Farage.


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

:00:37.:00:44.

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

:00:45.:00:47.

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

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top story. Ed Balls says millions of people

:00:50.:00:54.

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

:00:55.:00:57.

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

:00:58.:01:04.

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

:01:05.:01:07.

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

:01:08.:01:09.

means no of cycling. The three areas of

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London getting a cash boost to try something different.

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

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

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

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

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

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

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

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

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build resilient economy which means addressing the long-term weaknesses

:02:12.:02:14.

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

:02:15.:02:18.

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

:02:19.:02:22.

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

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

:02:26.:02:28.

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

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

:02:32.:02:38.

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

:02:39.:02:41.

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

:02:42.:02:45.

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

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

:02:52.:02:55.

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

:02:56.:02:58.

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

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

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

:03:10.:03:12.

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

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

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

:03:23.:03:26.

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

:03:27.:03:30.

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

:03:31.:03:34.

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

:03:35.:03:38.

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

:03:39.:03:41.

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

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

:03:49.:03:52.

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

:03:53.:03:56.

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

:03:57.:04:00.

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

:04:01.:04:04.

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

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

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

:04:15.:04:18.

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

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only 16% think that their financial circumstances will improve this

:04:24.:04:27.

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

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

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

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

:04:42.:04:46.

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

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

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

:04:58.:05:05.

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

:05:06.:05:10.

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

:05:11.:05:14.

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

:05:15.:05:19.

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

:05:20.:05:26.

so anxious and they are making George Osborne announcing the rays

:05:27.:05:29.

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

:05:30.:05:34.

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

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

:05:43.:05:45.

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

:05:46.:05:49.

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

:05:50.:05:54.

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

:05:55.:05:57.

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

:05:58.:06:04.

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

:06:05.:06:08.

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

:06:09.:06:15.

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

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

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

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

:06:26.:06:28.

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

:06:29.:06:33.

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

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

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

:06:43.:06:48.

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

:06:49.:06:52.

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

:06:53.:06:56.

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

:06:57.:07:01.

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

:07:02.:07:05.

Cameron and Osborne have said that their priority was helping the

:07:06.:07:08.

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

:07:09.:07:11.

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

:07:12.:07:17.

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

:07:18.:07:24.

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

:07:25.:07:31.

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

:07:32.:07:35.

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

:07:36.:07:38.

from Britain to Brussels has certainly clarified matters. UKIP

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

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

:07:46.:07:49.

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

:07:50.:07:50.

reports. When it comes to Europe and

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

:07:57.:08:00.

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

:08:01.:08:04.

and our politicians have seemed less interested in question itself but

:08:05.:08:07.

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

:08:08.:08:15.

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

:08:16.:08:23.

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

:08:24.:08:26.

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

:08:27.:08:31.

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

:08:32.:08:36.

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

:08:37.:08:45.

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

:08:46.:08:48.

voting for a referendum on EU membership: the largest rebellion

:08:49.:08:51.

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

:08:52.:09:01.

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

:09:02.:09:05.

said the Foreign Secretary of a coalition Government including

:09:06.:09:06.

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

:09:07.:09:09.

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

:09:10.:09:12.

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

:09:13.:09:15.

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

:09:16.:09:18.

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

:09:19.:09:28.

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

:09:29.:09:32.

only a Conservative government can deliver it because most suffer

:09:33.:09:40.

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

:09:41.:09:46.

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

:09:47.:09:54.

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

:09:55.:10:02.

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

:10:03.:10:04.

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

:10:05.:10:08.

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

:10:09.:10:14.

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

:10:15.:10:19.

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

:10:20.:10:22.

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

:10:23.:10:29.

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

:10:30.:10:36.

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

:10:37.:10:41.

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

:10:42.:10:46.

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

:10:47.:10:53.

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

:10:54.:10:55.

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

:10:56.:10:59.

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

:11:00.:11:03.

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

:11:04.:11:08.

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

:11:09.:11:10.

complicated, and what dent they might make on Conservative and

:11:11.:11:13.

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

:11:14.:11:19.

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

:11:20.:11:24.

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

:11:25.:11:28.

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

:11:29.:11:33.

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

:11:34.:11:36.

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

:11:37.:11:41.

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

:11:42.:11:46.

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

:11:47.:11:50.

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

:11:51.:11:54.

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

:11:55.:11:57.

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

:11:58.:11:58.

previously enjoyed. Giles Dilnot reporting. UKIP's

:11:59.:12:04.

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

:12:05.:12:16.

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

:12:17.:12:23.

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

:12:24.:12:28.

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

:12:29.:12:31.

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

:12:32.:12:34.

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

:12:35.:12:37.

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

:12:38.:12:42.

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

:12:43.:12:45.

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

:12:46.:12:50.

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

:12:51.:12:53.

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

:12:54.:12:56.

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

:12:57.:13:01.

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

:13:02.:13:08.

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

:13:09.:13:12.

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

:13:13.:13:15.

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

:13:16.:13:20.

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

:13:21.:13:23.

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

:13:24.:13:27.

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

:13:28.:13:34.

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

:13:35.:13:38.

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

:13:39.:13:41.

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

:13:42.:13:46.

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

:13:47.:13:51.

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

:13:52.:13:54.

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

:13:55.:13:59.

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

:14:00.:14:05.

elections, there are target constituencies where UKIP has a

:14:06.:14:08.

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

:14:09.:14:13.

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

:14:14.:14:18.

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

:14:19.:14:22.

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

:14:23.:14:28.

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

:14:29.:14:32.

Party and nonvoters than conservatives. On the balance of

:14:33.:14:35.

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

:14:36.:14:39.

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

:14:40.:14:44.

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

:14:45.:14:48.

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

:14:49.:14:52.

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

:14:53.:14:57.

elections. What happens in those elections will likely change the

:14:58.:15:00.

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

:15:01.:15:04.

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

:15:05.:15:08.

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

:15:09.:15:12.

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

:15:13.:15:15.

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

:15:16.:15:28.

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

:15:29.:15:35.

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

:15:36.:15:39.

Conservatives and the Liberal Democrats. We are certainly taking

:15:40.:15:47.

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

:15:48.:15:51.

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

:15:52.:15:57.

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

:15:58.:16:00.

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

:16:01.:16:08.

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

:16:09.:16:14.

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

:16:15.:16:18.

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

:16:19.:16:22.

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

:16:23.:16:28.

UKIP voters would be tempted to vote Conservative under any circumstances

:16:29.:16:31.

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

:16:32.:16:37.

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

:16:38.:16:41.

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

:16:42.:16:47.

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

:16:48.:16:53.

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

:16:54.:17:01.

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

:17:02.:17:08.

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

:17:09.:17:13.

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

:17:14.:17:16.

able to have a full debate on national television on the

:17:17.:17:20.

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

:17:21.:17:31.

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

:17:32.:17:41.

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

:17:42.:17:45.

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

:17:46.:17:52.

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

:17:53.:17:55.

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

:17:56.:18:00.

taxes they are putting on the manufacturing industry. The idea

:18:01.:18:06.

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

:18:07.:18:13.

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

:18:14.:18:19.

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

:18:20.:18:25.

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

:18:26.:18:31.

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

:18:32.:18:36.

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

:18:37.:18:46.

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

:18:47.:18:51.

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

:18:52.:18:55.

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

:18:56.:19:01.

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

:19:02.:19:06.

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

:19:07.:19:13.

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

:19:14.:19:21.

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

:19:22.:19:27.

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

:19:28.:19:35.

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

:19:36.:19:42.

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

:19:43.:19:46.

money needed to fund the general election afterwards is another

:19:47.:19:56.

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

:19:57.:20:01.

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

:20:02.:20:06.

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

:20:07.:20:13.

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

:20:14.:20:21.

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

:20:22.:20:29.

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

:20:30.:20:32.

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

:20:33.:20:36.

of the group in European Parliament. Things do change in

:20:37.:20:41.

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

:20:42.:20:46.

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

:20:47.:20:50.

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

:20:51.:20:59.

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

:21:00.:21:04.

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

:21:05.:21:09.

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

:21:10.:21:16.

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

:21:17.:21:21.

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

:21:22.:21:25.

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

:21:26.:21:30.

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

:21:31.:21:37.

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

:21:38.:21:42.

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

:21:43.:21:46.

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

:21:47.:21:50.

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

:21:51.:21:56.

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

:21:57.:22:01.

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

:22:02.:22:05.

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

:22:06.:22:09.

benefits. There have been allegations of you also employing a

:22:10.:22:14.

former mistress on the same European Parliamentary allowance, you deny

:22:15.:22:21.

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

:22:22.:22:25.

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

:22:26.:22:30.

made using Parliamentary privilege by somebody on bail facing serious

:22:31.:22:37.

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

:22:38.:22:46.

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

:22:47.:22:50.

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

:22:51.:22:55.

becoming pretty clear to voters that the establishment are becoming

:22:56.:22:59.

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

:23:00.:23:06.

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

:23:07.:23:13.

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

:23:14.:23:17.

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

:23:18.:23:23.

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

:23:24.:23:31.

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

:23:32.:23:35.

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

:23:36.:23:40.

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

:23:41.:23:45.

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

:23:46.:23:49.

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

:23:50.:23:55.

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

:23:56.:24:03.

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

:24:04.:24:10.

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

:24:11.:24:20.

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

:24:21.:24:25.

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

:24:26.:24:33.

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

:24:34.:24:39.

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

:24:40.:24:45.

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

:24:46.:24:51.

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

:24:52.:24:57.

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

:24:58.:25:01.

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

:25:02.:25:05.

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

:25:06.:25:09.

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

:25:10.:25:13.

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

:25:14.:25:21.

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

:25:22.:25:26.

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

:25:27.:25:35.

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

:25:36.:25:38.

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

:25:39.:25:44.

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

:25:45.:25:47.

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

:25:48.:25:50.

Politics guide to the Chancellor's likely announcements.

:25:51.:25:52.

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

:25:53.:25:56.

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

:25:57.:25:59.

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

:26:00.:26:03.

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

:26:04.:26:06.

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

:26:07.:26:08.

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

:26:09.:26:11.

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

:26:12.:26:18.

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

:26:19.:26:21.

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

:26:22.:26:27.

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

:26:28.:26:29.

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

:26:30.:26:36.

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

:26:37.:26:39.

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

:26:40.:26:45.

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

:26:46.:26:47.

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

:26:48.:26:51.

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

:26:52.:27:08.

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

:27:09.:27:11.

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

:27:12.:27:15.

a full house with a possible cut in bingo tax.

:27:16.:27:17.

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

:27:18.:27:19.

chancellor Norman Lamont, in Salford by the former Labour Cabinet

:27:20.:27:22.

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

:27:23.:27:25.

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

:27:26.:27:30.

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

:27:31.:27:34.

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

:27:35.:27:45.

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

:27:46.:27:49.

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

:27:50.:27:56.

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

:27:57.:28:00.

personal allowance and not increasing the 40% tax threshold

:28:01.:28:03.

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

:28:04.:28:08.

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

:28:09.:28:12.

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

:28:13.:28:19.

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

:28:20.:28:25.

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

:28:26.:28:32.

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

:28:33.:28:36.

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

:28:37.:28:51.

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

:28:52.:28:56.

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

:28:57.:29:02.

the lowest paid people you would raise the threshold for national

:29:03.:29:07.

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

:29:08.:29:12.

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

:29:13.:29:21.

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

:29:22.:29:30.

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

:29:31.:29:33.

lower paid they have participated and I think people understand right

:29:34.:29:37.

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

:29:38.:29:42.

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

:29:43.:29:46.

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

:29:47.:29:50.

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

:29:51.:29:56.

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

:29:57.:30:03.

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

:30:04.:30:08.

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

:30:09.:30:16.

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

:30:17.:30:19.

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

:30:20.:30:28.

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

:30:29.:30:31.

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

:30:32.:30:38.

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

:30:39.:30:42.

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

:30:43.:30:47.

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

:30:48.:30:51.

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

:30:52.:30:56.

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

:30:57.:31:00.

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

:31:01.:31:05.

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

:31:06.:31:09.

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

:31:10.:31:15.

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

:31:16.:31:18.

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

:31:19.:31:22.

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

:31:23.:31:29.

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

:31:30.:31:32.

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

:31:33.:31:36.

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

:31:37.:31:40.

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

:31:41.:31:45.

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

:31:46.:31:49.

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

:31:50.:31:54.

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

:31:55.:31:58.

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

:31:59.:32:03.

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

:32:04.:32:09.

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

:32:10.:32:12.

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

:32:13.:32:15.

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

:32:16.:32:20.

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

:32:21.:32:24.

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

:32:25.:32:29.

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

:32:30.:32:34.

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

:32:35.:32:37.

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

:32:38.:32:43.

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

:32:44.:32:47.

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

:32:48.:32:51.

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

:32:52.:32:57.

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

:32:58.:33:00.

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

:33:01.:33:03.

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

:33:04.:33:08.

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

:33:09.:33:13.

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

:33:14.:33:15.

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

:33:16.:33:21.

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

:33:22.:33:24.

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

:33:25.:33:29.

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

:33:30.:33:36.

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

:33:37.:33:39.

been squeezed is unfair. The calculation is that an ordinary

:33:40.:33:43.

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

:33:44.:33:49.

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

:33:50.:33:52.

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

:33:53.:33:58.

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

:33:59.:34:01.

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

:34:02.:34:07.

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

:34:08.:34:14.

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

:34:15.:34:20.

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

:34:21.:34:23.

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

:34:24.:34:27.

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

:34:28.:34:30.

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

:34:31.:34:37.

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

:34:38.:34:40.

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

:34:41.:34:44.

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

:34:45.:34:49.

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

:34:50.:34:55.

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

:34:56.:34:57.

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

:34:58.:35:03.

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

:35:04.:35:06.

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

:35:07.:35:12.

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

:35:13.:35:15.

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

:35:16.:35:19.

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

:35:20.:35:24.

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

:35:25.:35:29.

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

:35:30.:35:33.

in order and we have grave reservations about the Labour Party

:35:34.:35:39.

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

:35:40.:35:44.

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

:35:45.:35:46.

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

:35:47.:35:50.

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

:35:51.:35:52.

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

:35:53.:35:56.

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

:35:57.:36:00.

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

:36:01.:36:06.

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

:36:07.:36:12.

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

:36:13.:36:18.

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

:36:19.:36:22.

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

:36:23.:36:26.

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

:36:27.:36:30.

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

:36:31.:36:35.

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

:36:36.:36:39.

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

:36:40.:36:41.

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

:36:42.:36:48.

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

:36:49.:36:54.

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

:36:55.:37:00.

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

:37:01.:37:06.

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

:37:07.:37:11.

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

:37:12.:37:15.

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

:37:16.:37:19.

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

:37:20.:37:22.

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

:37:23.:37:28.

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

:37:29.:37:33.

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

:37:34.:37:39.

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

:37:40.:37:41.

up to the Budget on Wednesday. It's just gone 11:35am. You're

:37:42.:37:46.

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

:37:47.:37:49.

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

:37:50.:37:52.

minutes, Frances O'Grady, the General Secretary of the TUC, joins

:37:53.:37:54.

us discuss Hello and welcome to Sunday Politics

:37:55.:38:09.

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

:38:10.:38:13.

DUP accuses Sinn Fein of endangering hundreds more over welfare reform

:38:14.:38:16.

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

:38:17.:38:22.

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

:38:23.:38:24.

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

:38:25.:38:30.

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

:38:31.:38:31.

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

:38:32.:38:44.

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

:38:45.:38:47.

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

:38:48.:38:50.

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

:38:51.:38:53.

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

:38:54.:38:56.

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

:38:57.:39:00.

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

:39:01.:39:13.

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

:39:14.:39:16.

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

:39:17.:39:20.

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

:39:21.:39:27.

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

:39:28.:39:38.

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

:39:39.:39:42.

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

:39:43.:39:46.

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

:39:47.:39:54.

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

:39:55.:39:59.

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

:40:00.:40:06.

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

:40:07.:40:19.

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

:40:20.:40:32.

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

:40:33.:40:39.

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

:40:40.:40:42.

Northern Ireland do things in welfare reform. The situation could

:40:43.:40:49.

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

:40:50.:40:54.

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

:40:55.:41:00.

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

:41:01.:41:05.

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

:41:06.:41:10.

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

:41:11.:41:18.

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

:41:19.:41:26.

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

:41:27.:41:32.

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

:41:33.:41:36.

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

:41:37.:41:45.

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

:41:46.:41:50.

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

:41:51.:41:55.

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

:41:56.:42:00.

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

:42:01.:42:09.

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

:42:10.:42:15.

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

:42:16.:42:20.

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

:42:21.:42:27.

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

:42:28.:42:31.

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

:42:32.:42:36.

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

:42:37.:42:41.

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

:42:42.:42:46.

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

:42:47.:42:53.

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

:42:54.:43:00.

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

:43:01.:43:05.

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

:43:06.:43:10.

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

:43:11.:43:17.

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

:43:18.:43:25.

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

:43:26.:43:31.

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

:43:32.:43:41.

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

:43:42.:43:44.

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

:43:45.:43:50.

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

:43:51.:43:54.

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

:43:55.:44:03.

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

:44:04.:44:15.

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

:44:16.:44:23.

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

:44:24.:44:27.

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

:44:28.:44:30.

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

:44:31.:44:37.

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

:44:38.:44:45.

Northern Ireland where people are doing Social Security work on behalf

:44:46.:44:49.

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

:44:50.:44:53.

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

:44:54.:44:59.

minister want to keep jobs in Northern Ireland. Interesting

:45:00.:45:05.

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

:45:06.:45:13.

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

:45:14.:45:23.

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

:45:24.:45:33.

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

:45:34.:45:42.

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

:45:43.:45:47.

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

:45:48.:45:51.

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

:45:52.:45:56.

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

:45:57.:46:03.

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

:46:04.:46:11.

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

:46:12.:46:19.

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

:46:20.:46:26.

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

:46:27.:46:40.

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

:46:41.:46:43.

with devolution. Theoretically, although we have devolution,

:46:44.:46:50.

politicians have very little choice to implement the vast majority of

:46:51.:46:59.

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

:47:00.:47:04.

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

:47:05.:47:08.

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

:47:09.:47:12.

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

:47:13.:47:22.

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

:47:23.:47:25.

other parties are causing the problems. Somebody needs to do

:47:26.:47:29.

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

:47:30.:47:35.

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

:47:36.:47:40.

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

:47:41.:47:45.

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

:47:46.:48:03.

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

:48:04.:48:10.

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

:48:11.:48:23.

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

:48:24.:48:28.

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

:48:29.:48:34.

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

:48:35.:48:40.

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

:48:41.:48:45.

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

:48:46.:48:53.

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

:48:54.:49:06.

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

:49:07.:49:12.

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

:49:13.:49:22.

politicians have been focused elsewhere. We are putting ourselves

:49:23.:49:27.

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

:49:28.:49:33.

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

:49:34.:49:39.

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

:49:40.:49:46.

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

:49:47.:49:52.

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

:49:53.:50:00.

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

:50:01.:50:05.

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

:50:06.:50:09.

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

:50:10.:50:14.

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

:50:15.:50:18.

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

:50:19.:50:29.

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

:50:30.:50:34.

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

:50:35.:50:47.

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

:50:48.:50:52.

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

:50:53.:51:00.

indeed. St Patrick's Day has turned into St

:51:01.:51:03.

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

:51:04.:51:06.

island who made their annual pilgrimage to Washington for a

:51:07.:51:08.

series of high profile engagements. The Taoiseach met President Obama

:51:09.:51:11.

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

:51:12.:51:14.

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

:51:15.:51:18.

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

:51:19.:51:21.

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

:51:22.:51:24.

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

:51:25.:51:27.

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

:51:28.:51:32.

is difficult to transplant a particular model to other parts of

:51:33.:51:37.

the world. I genuinely think that political readership in Northern

:51:38.:51:40.

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

:51:41.:51:44.

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

:51:45.:51:47.

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

:51:48.:51:53.

something the Prime Minister recognised. Ensuring that many more

:51:54.:52:13.

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

:52:14.:52:19.

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

:52:20.:52:25.

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

:52:26.:52:34.

further work could yield tremendous further benefits and taking Northern

:52:35.:52:42.

Ireland further forward, that is a message that has been

:52:43.:52:44.

sympathetically received by Washington. It seems we are further

:52:45.:52:50.

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

:52:51.:52:56.

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

:52:57.:52:59.

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

:53:00.:53:05.

willingness from the party of all political leaders in Northern

:53:06.:53:11.

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

:53:12.:53:18.

see the party leaders meetings abandoned altogether. On those

:53:19.:53:23.

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

:53:24.:53:30.

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

:53:31.:53:36.

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

:53:37.:53:39.

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

:53:40.:53:47.

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

:53:48.:53:55.

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

:53:56.:53:57.

Martina Purdy. His interest in Northern Ireland was

:53:58.:54:00.

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

:54:01.:54:04.

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

:54:05.:54:07.

During his long and sometimes controversial political career, Mr

:54:08.:54:10.

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

:54:11.:54:13.

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

:54:14.:54:16.

organising here. Mark Langhammer campaigned for many years to change

:54:17.:54:21.

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

:54:22.:54:25.

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

:54:26.:54:31.

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

:54:32.:54:38.

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

:54:39.:54:43.

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

:54:44.:54:48.

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

:54:49.:54:52.

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

:54:53.:55:03.

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

:55:04.:55:06.

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

:55:07.:55:26.

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

:55:27.:55:31.

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

:55:32.:55:40.

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

:55:41.:55:50.

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

:55:51.:55:55.

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

:55:56.:56:01.

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

:56:02.:56:06.

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

:56:07.:56:14.

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

:56:15.:56:19.

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

:56:20.:56:24.

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

:56:25.:56:31.

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

:56:32.:56:35.

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

:56:36.:56:41.

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

:56:42.:56:47.

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

:56:48.:56:53.

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

:56:54.:56:59.

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

:57:00.:57:08.

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

:57:09.:57:16.

voted and went against bullet and industrial democracy and effectively

:57:17.:57:17.

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

:57:18.:57:30.

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

:57:31.:57:36.

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

:57:37.:57:43.

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

:57:44.:57:46.

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

:57:47.:57:53.

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

:57:54.:57:58.

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

:57:59.:58:01.

avoiding responsibility. The Foreign Minister said exactly

:58:02.:58:11.

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

:58:12.:58:16.

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

:58:17.:58:20.

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

:58:21.:58:26.

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

:58:27.:58:29.

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

:58:30.:58:36.

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

:58:37.:58:39.

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

:58:40.:58:45.

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

:58:46.:58:52.

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

:58:53.:58:58.

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

:58:59.:59:03.

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

:59:04.:59:11.

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

:59:12.:59:22.

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

:59:23.:59:27.

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

:59:28.:59:32.

was a lovely man and should be remembered for his engaging

:59:33.:59:36.

personality, the fact that he brought ideas of democracy and

:59:37.:59:41.

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

:59:42.:59:46.

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

:59:47.:59:54.

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

:59:55.:59:58.

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

:59:59.:00:05.

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

:00:06.:00:12.

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

:00:13.:00:16.

will intensify, violence will increase. Jonathan Powell joined the

:00:17.:00:23.

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

:00:24.:00:34.

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

:00:35.:00:37.

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

:00:38.:00:42.

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

:00:43.:00:49.

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

:00:50.:00:56.

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

:00:57.:01:10.

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

:01:11.:01:15.

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

:01:16.:01:16.

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

:01:17.:01:28.

discuss the budget is the general secretary of the Trades Union

:01:29.:01:30.

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

:01:31.:01:35.

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

:01:36.:01:38.

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

:01:39.:01:45.

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

:01:46.:01:49.

investment in the British economy. Certainly I would like the

:01:50.:01:56.

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

:01:57.:02:00.

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

:02:01.:02:09.

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

:02:10.:02:14.

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

:02:15.:02:17.

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

:02:18.:02:23.

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

:02:24.:02:26.

like construction and manufacturing that are still smaller than they

:02:27.:02:31.

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

:02:32.:02:35.

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

:02:36.:02:41.

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

:02:42.:02:45.

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

:02:46.:02:50.

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

:02:51.:02:55.

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

:02:56.:02:59.

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

:03:00.:03:07.

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

:03:08.:03:10.

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

:03:11.:03:14.

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

:03:15.:03:18.

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

:03:19.:03:23.

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

:03:24.:03:27.

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

:03:28.:03:30.

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

:03:31.:03:32.

Conservatives for being irresponsible. Why is business doing

:03:33.:03:40.

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

:03:41.:03:43.

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

:03:44.:03:49.

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

:03:50.:03:56.

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

:03:57.:03:58.

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

:03:59.:04:03.

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

:04:04.:04:07.

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

:04:08.:04:12.

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

:04:13.:04:15.

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

:04:16.:04:22.

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

:04:23.:04:25.

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

:04:26.:04:32.

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

:04:33.:04:36.

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

:04:37.:04:40.

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

:04:41.:04:47.

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

:04:48.:04:51.

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

:04:52.:04:56.

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

:04:57.:04:59.

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

:05:00.:05:05.

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

:05:06.:05:09.

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

:05:10.:05:14.

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

:05:15.:05:17.

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

:05:18.:05:22.

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

:05:23.:05:28.

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

:05:29.:05:36.

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

:05:37.:05:45.

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

:05:46.:05:48.

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

:05:49.:05:51.

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

:05:52.:05:57.

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

:05:58.:06:01.

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

:06:02.:06:05.

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

:06:06.:06:11.

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

:06:12.:06:14.

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

:06:15.:06:17.

other things that could take over from consumer spending which has

:06:18.:06:22.

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

:06:23.:06:25.

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

:06:26.:06:28.

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

:06:29.:06:33.

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

:06:34.:06:38.

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

:06:39.:06:46.

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

:06:47.:06:52.

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

:06:53.:06:56.

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

:06:57.:07:01.

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

:07:02.:07:05.

the way through. That will definitely affect business

:07:06.:07:09.

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

:07:10.:07:12.

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

:07:13.:07:16.

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

:07:17.:07:22.

structural budget deficit was going to be eliminated three weeks today

:07:23.:07:28.

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

:07:29.:07:33.

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

:07:34.:07:37.

says that fundamentally the economy is unbalanced and it is not

:07:38.:07:41.

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

:07:42.:07:49.

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

:07:50.:07:52.

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

:07:53.:07:58.

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

:07:59.:08:01.

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

:08:02.:08:07.

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

:08:08.:08:14.

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

:08:15.:08:18.

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

:08:19.:08:24.

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

:08:25.:08:28.

will feel very, very discontented about the decision. Danny

:08:29.:08:34.

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

:08:35.:08:38.

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

:08:39.:08:44.

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

:08:45.:08:50.

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

:08:51.:08:57.

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

:08:58.:09:01.

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

:09:02.:09:06.

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

:09:07.:09:11.

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

:09:12.:09:18.

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

:09:19.:09:24.

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

:09:25.:09:29.

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

:09:30.:09:37.

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

:09:38.:09:40.

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

:09:41.:09:46.

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

:09:47.:09:50.

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

:09:51.:09:54.

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

:09:55.:09:58.

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

:09:59.:10:01.

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

:10:02.:10:06.

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

:10:07.:10:09.

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

:10:10.:10:14.

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

:10:15.:10:16.

government controls living standards, which has become popular

:10:17.:10:20.

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

:10:21.:10:25.

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

:10:26.:10:29.

astonishingly limited compared to public expectations. If wages have

:10:30.:10:35.

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

:10:36.:10:40.

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

:10:41.:10:46.

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

:10:47.:10:51.

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

:10:52.:10:57.

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

:10:58.:11:01.

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

:11:02.:11:05.

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

:11:06.:11:09.

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

:11:10.:11:14.

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

:11:15.:11:18.

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

:11:19.:11:22.

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

:11:23.:11:25.

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

:11:26.:11:35.

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

:11:36.:11:44.

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

:11:45.:11:50.

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

:11:51.:11:54.

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

:11:55.:11:59.

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

:12:00.:12:04.

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

:12:05.:12:08.

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

:12:09.:12:11.

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

:12:12.:12:15.

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

:12:16.:12:20.

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

:12:21.:12:25.

comes from George Osborne. It's about highlighting educational

:12:26.:12:27.

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

:12:28.:12:31.

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

:12:32.:12:35.

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

:12:36.:12:38.

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

:12:39.:12:42.

Johnson. Michael Gove is on manoeuvres to destroy Boris

:12:43.:12:50.

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

:12:51.:12:54.

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

:12:55.:12:59.

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

:13:00.:13:04.

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

:13:05.:13:06.

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

:13:07.:13:12.

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

:13:13.:13:18.

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

:13:19.:13:23.

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

:13:24.:13:27.

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

:13:28.:13:34.

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

:13:35.:13:38.

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

:13:39.:13:41.

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

:13:42.:13:46.

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

:13:47.:13:49.

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