16/03/2014 Sunday Politics South West


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


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


Budget will offer more tax relief 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


In the South West, the concdrn about means no


In the South West, the concdrn about the tourist tax. And fresh hopes for


Cornish nationists. Right on! 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


Lewis and Janan Ganesh. They'll be 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


recovery, and again attacked 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


They only have 14 months to do it. 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 992


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


voters might now flock back to them 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


and goes into the election with the 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


situation in key marginals, 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


electorate. Even if there is a 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 2 20. 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


so the arithmetic does not suggest 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 Who do you think is playing you in


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 paying family members? We don't


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 fraud charges. I thought that was


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


is the moment for UKIP to achieve 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


want Mr Osborne to help the middle 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, 00.


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, 00,


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 ?1 00 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 full-time students, so it is a


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 we can make a fairer society and stronger


The point we are making is we can 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 to go. We're only halfway through.


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


Coming up on the Sunday Polhtics in General Secretary of the TUC, joins


Coming up on the Sunday Polhtics in the Southwest...


Fresh hope for Cornish nationalists. Right on! And for the next 20


minutes, I'm joined by Consdrvative MEP Julie Girling, and Labotr


councillor Chaz Singh. Welcome to both of you.


This week, Julie was disappointed by a letter she received from the


floods minister making it plain that the government will not be `pplying


for money from the European pot designed to help with natur`l


disasters. The Environment Secretary said the damage caused by the floods


wasn't bad enough to justifx a claim.


I would be perfectly happy to apply if we qualify, but I would have to


talk to other colleagues in government, but when I last looked


at it, we needed to get a threshold of three billion.


One MP described that as tosh, saying the real reason the


government isn't applying is to spare the blushes of Euroscdptic


Tories. If Europe came in whth a serious amount of money to sort out


some of the problems in Somdrset and other parts of the country, it is


going to be slightly embarr`ssing. They will not be able to sax


anything rude about Europe. Julie, as an MEP, how likelx is it


if the UK applies for this grant, that they could get it? It depends


on the amount of damage. It's based on the percentage of GDP of each


member state. We got it in 2007 when we had serious flooding. 130


million, wasn't it? When thd Labour government was in power. I was


involved then because I was on the county council in Gloucestershire. I


don't see any reason why thd claim shouldn't get to the same sort of


magnitude as it did then. I can t say for sure because I'm not privy


to all the numbers. Would it be worth a go? I certainly think we


should apply. Tessa Munt is talking nonsense when she says about it s


sparing the blushes of Eurosceptic Tories. The letter I've had is from


Dan Rogerson as the Minister for floods and he's a North Cornwall


Liberal Democrat. It's got nothing to do with whether you are pro`or


anti`Europe, it is just abott reaching the threshold. I would like


government, and I have written to the secretary of state and Dan to


look at this again because H think you are wrong. The EU Commission


press office said that the president, Jose Manuel Barroso has


said an application to the fund by the UK would be viewed


constructively. It would indeed We've done work behind the scenes in


Brussels to make sure that the commission would look at it


constructively. It doesn't lean we would get it. There is a lilited


period of ten weeks to applx. We are getting very close to the end of


that. I just think it's wrong not to apply. I think we should apply. If


we don't reach it, we don't reach it, but it's wrong not to try. I've


tried very hard to get that message across. What do you make of that? As


Julie said, 2007, Labour did apply for the money and got that loney. It


helped those very people th`t need help now. It's no good saying that


we're not speaking to the rhght people. I think it is a question of


making sure that if that cl`im does go in, speaking to the right people,


it is more importantly who `re the people and even though Dan Rogerson


does live in North Cornwall, that is not, for me, a strong enough


argument just because he resides in North Cornwall. So there was


confusion... The argument w`s not because he lives there, he hs the


Minister responsible. Only the government can apply. I can't apply


as an MEP. People keep asking me to but I can't. Only the state


government can apply. And in your opinion, it would be a big listake


not to? Dan is a minister in this government. It is divisive to start


talking about Tories and Lib Dems... But that is a realistic


argument. You can't not sit there with Europe on the agenda, there is


no way in the world that we can say it is not an issue. It is an issue.


It is affecting everybody. @s is this situation, it's their life and


happening to those very people. Tourism has long been a key part of


the south`west economy, providing many thousands of jobs. Talk this


week of a tourism tax has ldd to warnings that anything that might


put visitors off might lead to a slowdown in the region's recovery.


But a local government minister said charging tourists an extra pound a


night could help our cash strapped Falmouth Harbour, with views that


attract thousands of visitors to the area every year. But as loc`l


government budgets are squedzed should these visitors be asked to


pay ?1 a night tourist tax for the privilege? Would it put you off I


guess so, yes. Being a penshoner, I guess it would.


It is estimated the page th`t population of Cornwall swells from


500,000 to millions during the summer months. These visitors are


using things like public tohlets, the roads and the buses. A Lib Dem


local government Minister h`s suggested a tourist bed tax could be


one way local authorities in places like Cornwall could raise more of


their own money. Not all holiday`makers agree?


You are helping the local economy by being here anyway. The local shops


get your money, the hotel gdts your money.


Figures from the Tourism Alliance suggest across Devon and Cornwall,


hundreds of millions of pounds are paid to the Treasury through VAT on


to this spending. It says direct taxation on things


like alcohol and petrol dutx raises around ?460 million a year hn


Cornwall, ?480 million in Ddvon Even if a tourist tax went straight


to the local coffers, those at the sharp end are not convinced and


would rather see a cut in [email protected] The high rates of VAT are very


difficult. We have seen a cttback in services in terms of cleaning


beaches, keeping toilets opdn. VisitCornwall, our marketing body


has been cut, we are in a thme of public cuts and more tax and


demands. I think it doesn't sound a lot, a pound, does it? But H think


it may be the straw that wotld break the camel's back at a time when we


are all trying to recover from a difficult recession.


But one Dartmouth business owner thinks extra cash for services would


be good for traders. I don't think it would deter people.


I'm sure that people realisd the pressure rural communities `re


under. I don't think people would look at it like that. I think they


would think if it helps somdwhere like Dartmouth to stay spechal, they


would be happy to pay it. It's not a huge amount of money.


The concept of councils being more in control of their own tax`raising


powers is generally welcomed by those in local government, but there


is less agreement on whether a tourist tax is the way to go. The


simple answer is if we charge too much, people won't come to Cornwall,


they will stay in Devon. We need to make sure that people come `nd enjoy


Cornwall and not put them off. Let's think about what's right for


Cornwall, but let's make sure that those decisions are being t`ken in


Cornwall, not in Westminster. Whatever form it takes, one thing we


all agree on is the need for support for the tourism industry with all


eyes on next week's budget. Tax on tourism, is that a good idea?


No, it's not a good idea. In the piece it clearly said, at the end of


the day, Cornwall is trying to encourage people to come and visit,


not put people off. The ladx at the front of the piece did say, as a


pensioner, it would affect her. One pound a night is not the answer to


everything. I think you havd to look at other things that will hdlp more


businesses in terms of making sure that they can look at their business


rates. Like the VAT? Maybe the VAT, look at that as an option. This idea


has been plucked out of the air to say this is what we need to do. What


about the figures that Tamshn gave there, Cornwall has a popul`tion of


500,000 which goes to millions in summer and you have to provhde those


services for the tourists to use with such a small percentagd of the


population paying the costs for road use, public toilets? If you pay


?1000 for holiday accommodation ?5 a week does not seem that mtch? But


when you start multiplying the figures, people going away `nd


talking about it and saying, last year we paid this much... It is a


bit of a bedroom tax. Is th`t going to turn people off? I think it will.


But there are other options have to look at.


Will it turn people off? I think it will. I'm delighted to hear Chaz say


that he doesn't support it because Siddique Khan is on record of


actually putting forward thd idea of tourist tax. It is not Labotr


policy, but it is being talked about. I think it is the wrong way


to go. I very much support the reduced VAT. It is absolutely proven


across Europe and in other places such as the States that if xou


reduce local VAT, you can rdduce costs. 20% VAT on your meal


currently, if that was reduced to six or 7%, that will be


significantly less you are paying for a meal and you will be going out


more. Several MPs are calling for that. Adrian Sanders wants ht down


to 5%. The absolute amount hs up for debate. But I do think that would be


a much better campaign for Westminster politicians to get


behind. Compared to France for example where it is somewhere


between seven and 9%. We ard competing with that. If you go to


France, they do have a tourhst tax, you see that on the tariff. When


you've reduced the VAT, and you ve stimulated the tourist industry and


actually stimulated growth, then you can talk about tourist tax. You cut


VAT and introduce a secondary tax? You could, and I'm not suggdsting


that, but if you look at thd American example, that's wh`t they


do. Would that work or would hotels and guesthouses still have to remain


competitive and they end up paying this cost? There would be an element


of competitiveness for any business that has a certain amount of people


coming in as tourists. Most importantly, we have seen the rise


of the staycation so we know that less people are flying into


Cornwall, but coming from UK cities. People will be thinking, if there is


an opportunity where there hs a reduction in VAT, that would


probably work far better. I think it makes sense to almost pilot a scheme


first and see how that goes. I will have to stop you there.


The Liberal Democrats are promising to give Cornwall its own assembly.


The pledge, which was voted in at the party's Spring conference last


weekend does depend on the Lib Dems securing a majority, but it has


given new life to the devolttion Another week where Scotland's bid


for devolution tops the news agenda. This time, it was Gordon Brown who


made the headlines. But Scotland isn't the only place fighting for


independence. Right on! Promise me one thhng, you


will not stop singing and d`ncing and playing music and feasthng. .


At the Lib Dems Spring confdrence, the party voted to allow Cornwall to


create a lawmaking assembly like Wales. That is if they get dlected


of course. We haven't heard a national party hitherto comlit to


looking at the Cornish case seriously, looking at the provision


for Cornwall. Locally, in Cornwall, we've had a number of polithcal


parties at different times flirt with the idea, locally. The Liberal


Democrats are the first UK wide party to say that we understand that


there is a case for devoluthon to Cornwall and we have set th`t


alongside the progress that is being made elsewhere.


The Lib Dems might feel there is a case for Cornwall, but do voters?


I think it would be a good hdea At the moment, everything is governed


by people who don't live in Cornwall.


I'm Cornish born and bred and nobody is more Cornish than I am, but I


don't think we need to alter anything.


The establishment of a Cornhsh assembly is not a new idea. 12 years


ago, a 50,000 name petition was handed to Downing Street calling for


one to be created. Since thdn, the language has been undergoing a




Dual road signs are becoming a common sight. But all of thhs is


making leading business figtres in the county feel increasinglx


uncomfortable. I don't think this is a realistic


proposal in any meaningful timescale. We are too far away from


a self`sustaining point. Incomes are too low, we need to work on getting


Cornwall together, working together, income levels to the nation`l


average before we talk about devolution.


But for this film producer, it's not just about numbers, it's about


Cornwall's heritage. Most Cornish people I know `re very


happy to be considered Brithsh and want to be part of Britain `nd


actually the decentralisation argument is one of allowing us to


take charge of our own desthny, our own future, be consulted our own


aspirations so we can be a proper player in the British familx.


Joining us to discuss this we have Dick Cole, the leader of Mebyon


Kernow. Lovely Celtic music we heard there. You have been campaigning for


a devolved Cornish assembly for years, are you now pleased that the


Lib Dems have adopted this stance? I have got to say that I would welcome


any of the London centred p`rties taking initiatives in favour of more


power to Cornwall. When I bdcame the leader of MK some years ago, the


first thing I asked for was for a cross`party campaign to givd bring


people together to argue for a Cornish assembly. As you have


referenced in that piece, the 5 ,000 declarations that were taken to


Westminster, all members of different parties joined in that


campaign. If we had a Cornish assembly, would it be able to offer


residents the same kind of benefits as Scottish and Welsh assemblies


provide? For example, free university education for Cornish


students, free residential care in care homes, is that the sort of


thing you think it may be able to offer? The key to the argumdnt we


are making and we brought ott a document last night called Towards a


National Assembly, it is about people in Cornwall having ddmocratic


control over the public sector, making the decisions that m`tter. At


the moment in Cornwall, you have got local government and three puarters


of the public sector is controlled from outside of Cornwall. Wd take


the view that the whole public sector should be controlled within


Cornwall. We should be making the decisions. In Scotland, thex have


done such things as to safeguard the NHS from what happened in England,


they have had no prescription charges for example, that is a


political decision that whodver is in charge of the assembly would make


in the future. It is about being ambitious for Cornwall and not


sitting back and doing what Westminster tells us.


Julie, at the moment, Scotl`nd offers Scottish students frde


education, EU rules prevent there being any discrimination across


European states so it has to offer free education to students from


across European states, but not England and Wales because


discrimination within a nathon is permissible. Obviously, if they


become independent that would become a problem because they may have an


influx of thousands of studdnts applying from England and W`les Is


this the kind of thing that you think Cornwall could also do? Is it


possible? I have no fundamental princhpled


objection to it. I have an hssue about the size and whether `


population of half a million can sustain that level of indepdndence,


independent decision`making. That is round the costs of that. If you are


going to take control entirdly of public spending at that levdl, you


have got to have the political structure to do so. I know that the


Mabyon Kernow suggestion is they would effectively return fotr


district councils so we would end up with a lot more elected people in


Cornwall, how would that be paid for? How would it work? Are we too


small in Cornwall, you won't have the clout that, say, Wales `nd


Scotland have? I think people in Cornwall get very fed up behng told


we are too poor, or not clever enough to do that. I did not say


that. I said it's a question of scale. I was coming onto th`t. The


comment was made that we ard too poor. The reason we are too poor is


that we live in an overcentralised state and the further away xou are


from London, the less well off you are. It is about devolution, trying


to get the whole of the United Kingdom refashioned in a more


democratic way so that it is more even and there is less regional


disparity. Regional disparities, if Cornwall


were to get an assembly, yot could end up a neighbour, how would that


affect you? `` a poor neighbour. Just go back to


your piece, 12 years ago, 50,00 people signed. What happened from


there? I think this, from mx point of view, I think towards thd end of


December, this is the Lib Ddms saying we are going to go it alone.


This is another of their far`fetched ideas where they think they can make


Cornwall independent. I do not think it is structured in a way that there


is no background evidence... There was a petition... 12 years `go. But


is it something we are trying to do prior to the election? At the end of


the day, it is one of those punching in the air policies where you think


are we going to get anything out of this? There's more to Cornw`ll


becoming independent, it dodsn't need to be. The fear is that our...


Could I just see please stop using the word independence, this is about


devolution within the United Kingdom. We despair when it is


misrepresented in that manndr. I dare say that the Liberal Ddmocrats


are using this politically, they have said it before and failed to


follow through. We presented 50 000 signed declarations to a Labour


government and they did nothing They threw it in the dustbin and


didn't have the decency to consider devolution to Cornwall and H think


that was a real missed opportunity. If it was, maybe it wasn't ` proper


job. This is part of a biggdr debate. You are right about that.


With the Scotland independence debate, it is interesting, there are


discussions about English ddmocracy as opposed to Scottish and Welsh.


They are really in their early stages, but the promoter on after


September. `` they will motor on. If Scotland becomes independent, we


will have to deal with the hssue of how we govern the UK, and that is


when this will become reallx important.


We will be discussing that lore as time goes on.


It is time for our regular round`up of the political week in 60 seconds.


Pupils in Devon were promisdd ? 00 a year as the schools minister


announced a funding shake`up. It is the biggest step towards


fairer schools funding in a decade. There was concern about plans for


some 999 calls in Cornwall to be answered in North Yorkshire.


People are going to have serious problems if they are ill.


The badger cull debate was back at Westminster.


This is a devastating disease having a devastating impact on cattle


farmers. Ministers were told they must do


more to stop the spread of wind farms. One Conservative MP said


small rural communities are plunged into what can only be descrhbed as a


miserable... It was revealed that parking meters


which don't give change are making Cornwall Council ?300,000 a year.


It's disgusting. Let's look at the parking charges.


This is something that alwaxs annoys people. If vending machines can give


change, why can't parking mdters? They can in some places. It's costs.


You put in more sophisticatdd machines, they will cost more. This


is a local decision. We just talked about local authorities. ?300,0 0,


the money is there, the will has got to be there in order to takd on


board new technology. That is the Sunday Politics in the


south`west. Thanks to my gudsts industrial action is a sign of


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 want of the new workers party, and


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 investing in skills, wages, or


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?


terms than they were. On a pay 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, driven the recovery, held by house


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 improved living standards and better


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


school in to eat and so it won't 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.


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