16/03/2014 Sunday Politics South West

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 V@T. 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

revival. SPEAKS IN CORNISH.

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.