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Morning everyone, and welcome
to the Sunday Politics.
I'm Sarah Smith.
And this is your guide
to all the big stories that
are shaping politics this weekend,
and a few of the smaller ones too.
Philip Hammond is getting ready
to deliver his latest Budget
on Wednesday and he's not short
of advice - to spend more,
show restraint, even
to stop being an Eyore -
but can he change the direction
of the country and his government?
Conservative Party darling
Jacob Rees-Mogg has
some advice of his own.
He thinks the Chancellor
is being far too gloomy about Brexit
- he joins me live to explain why.
The former Leave campaign leader,
Gisela Stuart, will be here debating
with pro-EU campaigner
Alastair Campbell, after taking
a trip to her native Germany
to speak to businesses
And, as we wait to find out what's
on the menu for this week's budget,
we're in a diner off
the A1 in Peterborough,
finding out who people most trust
with the economy -
Philip Hammond or John McDonnell?
In the South West, was this
Plymouth Tory MP right
to suggest his party
smells of decline?
I was asked a series
of questions and I answered
All that coming up in the programme.
And with me for for all of it,
three journalists who've promised
not to show off like Michael Gove
by using any long economicky words -
although I'm not sure they really
know that many anyway -
it's Tom Newton Dunn,
Gaby Hinsliff and Iain Martin.
Let's take a look at the big
political stories making the news
this Sunday morning,
and as you might expect there's
plenty of speculation
about what might or not might be
in Philip Hammond's Budget.
The Chancellor is promising a big
investment in new technology,
including driverless cars -
which could be on the road by 2021.
He's been interviewed
in the Sunday Times,
where he talks about plans to reach
the target of building
300,000 homes every year,
or the equivalent of a city
the size of Leeds.
That paper speculates that he's
attempting to turn from "fiscal
Phil" into "hopeful Hammond"
as he tries to set out
a vision for the country,
not just a list of numbers.
The Sunday Telegraph thinks that
Mr Hammond is planning to offer
a pay rise to nurses as part
of a bid to take on Labour.
But that hasn't impressed
Shadow Chancellor John McDonnell.
He's spoken to a number of papers
and is calling for an emergency
budget to invest in public services
and help struggling households.
So that's a taste of what you might
hear on Wednesday and Mr Hammond
and Mr McDonnell have both been
appearing this morning
on the Andrew Marr Show.
I think Britain has a very
bright future ahead of it,
and we have to embrace
the opportunities that
a post-Brexit world will offer.
They will be opportunities that
are based on huge change,
huge technological evolution.
It's not always going to be easy,
but the British people have shown
time and time again that we're up
for these challenges.
For many people out there,
this is a depression.
We've had people whose wages
have been cut by 10%.
Nurses, for example.
We've had people who are now...
1.25 million food parcels handed out
in the sixth richest
country in the world.
That's what I call a recession
for large numbers of people.
We will be talking about Labour and
their economic policies in a moment,
but let's start with what we might
expect from the budget. We will talk
to our panel of political observers.
Philip Hammond is under pressure to
set out a bold vision and reset the
government's programme. Can we
No, we can't. We have
heard enough from the Chancellor
across various broadcast and his
article in the Sunday Times. I think
we will not be getting a bold
budget. His precise words short... A
short time ago were a balanced
budget. Some Tory hearts will think.
They desperately want something to
go out and shout about, something to
capture people's imagination, and do
big and bold things, like how on
earth are they going to build those
new 300,000 houses a year? There are
good reasons why he has chosen what
appears to be a pretty staid,
Conservative budget, and that is
that they are probably unable to get
anything bold through Parliament.
His capital is so low among Tory
MPs. If you have a minority
government, it is tricky.
seen ministers on programmes like
this in the last few weeks putting
in the bids for what they would like
spending on, whether it be payment
for nurses or parliament. Would he
struggled to get something radical
through the Commons?
Big ideas cost
money. That's the problem. Bold
ideas are controversial. In some
ways, Tory MPs are asking their
Chancellor to do the impossible.
Government is already doing
something big and bold, which is
Brexit. That has implications for
how much money is available, how
many risks you want to take with
everything else. What is crucial is
that he demonstrates a reputation
for competence. The reputation that
the Conservative government has for
economic competence, that many
people prefer them to Labour on the
issue of economic competence. The
worst thing he could do is come up
with a big, bold idea that
unravelled quickly. What they
absolutely don't want is to come up
with an exciting idea that falls
apart three days after the budget.
He is under pressure from
Brexiteers, who are suspicious of
him. Does he have to offer them
Part of his problem is he
has to offer so many different
people different things. This is
Philip Hammond trying to be and
It is hard to tell
At least in theoretical
terms. His longer-term difficulty is
that, if you look at the economic
cycle, we are getting to a point
where we are probably overdue, if
you put Brexit to one side, overdue
some kind of correction or downturn,
if you look what has happened to
asset prices globally. What will be
worrying for the Treasury is, just
as everyone is saying we should turn
on the taps and build this or that,
we might be at the top of a cycle,
and the Treasury will want to lose
something in the armoury in terms of
probably growing the deficit if
there are economic difficulties in
the next two years, and then there
is Brexit as well.
I think so. Talking to
his friends and colleagues over the
last few days, he had to make a
call, which was precisely how much
can I get away with, with my
political capital being as low as it
is, with the mixed problems he had
at the last budget, and a lot of the
party disliking his approach to
Brexit. He is damned if he is,
damned if he doesn't. Universal
Credit, we are expecting a reduction
in the time it takes to wait,
business rates, affected by high
inflation... I think we will see a
problem fixing budget which will
probably do quite a lot of important
spadework in many areas.
pick up on some of this later in the
Let's speak now to the Conservative
MP Jacob Rees-Mogg, this week
he helpfully launched an alternative
"budget for Brexit" and advised
the Chancellor to be less gloomy
about the consequences
of leaving the EU.
Thank you for joining us. Your
alternative budget is pretty
radical. Almost half corporation
tax, Cap Stamp duty to help the
London market. It seems you are
advocating the opposite from what we
will hear from your Chancellor on
There are two parts to
the proposals I suggested. One is
that we should show that after we
have left the European Union, the UK
is open to the rest of the world. It
is about opening up to the rest of
the world. Secondly, looking at the
modelling that has been done by the
Treasury and some other forecasters,
which has been so comprehensively
wrong. The forecasts made about what
would happen after Brexit have
turned out to be hopelessly false.
The team at Cardiff University have
done some modelling based on the
classical economic principles and
what happens if you move to free
trade that would be very positive
for the economy.
You are predicting
a Brexit dividend of £135 billion,
which sounds fantastic. Why are you
right, and everybody else, including
the Bank of England and the
Institute for Fiscal Studies, why
are they all wrong?
It depends on
the type of modelling. The modelling
that have been done by the Treasury
have been based on gravity models,
which work on the basis of the
nearness of the market and the size
of the economy you are trading with.
These have been wrong in the past.
They predicted that if we joined the
euro, trade would grow by 300%. That
was then revised down to 200%, but
it is fantasyland. The model I am
working on, by Sir Patrick Minford,
who has a record of getting these
things right. He was right about the
exchange rate mechanism, right about
Being right in the past
doesn't mean you are right about the
future. Why do you think the
Treasury will not pick up the same
numbers, if this is so obvious to
I think the Treasury was
humiliated by the errors in its
forecast prior to Brexit, and is
trying to defend its position. The
short-term economic consequences of
a vote to leave was one of the most
dishonest documents to come out of
the Treasury, purely a piece of
political propaganda. They are
wounded by that and sticking to the
same script, rather than looking at
other forecasts and other experts.
You think the governor of the Bank
of England is an enemy of Brexit,
and it sounds like you think the
Treasury is opposed to it. As the
Chancellor fallen under their spell
as well, and been persuaded to be an
enemy of Brexit?
I have admiration
the Chancellor, but George Osborne,
his predecessor, was the architect
of Project Fear. He was too close to
the Bank of England and lost his
independence. That is what needs to
change. It is an opportunity in the
budget for Philip Hammond to show he
is putting aside the Treasury's
mistakes in the past. It is very
encouraging what he is saying this
morning, about a more positive
approach to Brexit.
Lord Lawson has
accused Philip Hammond of being very
close to sabotage on Brexit. He says
we need a can-do man at the Treasury
and not a prophet of doom.
that Philip Hammond is an
exceptionally intelligent man, a
very thoughtful man. It is not a bad
thing to have a Chancellor who is
serious minded and steady, rather
than one who is a showman and uses
the Exchequer to interfere in
I have a lot
of confidence in the Chancellor.
When you launched your budget for
Brexit, you said the government has
to deliver the £350 million for the
NHS that was delivered during the
referendum, even though you didn't
think that promise should have been
made. Is that something they now
need to deliver wrong?
It is. This
only happens once we have left.
Politicians have to recognise that
voters don't look at the small print
of electoral policies. If you put
£350 million on the side of a bus
and say it may be available for the
NHS, it is reasonable for people to
think that is a promise. Brexit was
won by the Leave campaign, so it it
is important that they deliver on
that promise. Politicians must keep
faith with voters and deliver on
implied promises, as well as ones
that are set out in detail.
Cabinet will move on to talk about
the Brexit bill this week, and we
understand they may need to come up
with more money to satisfy EU
demands. The more money spent on
that is less money available for
things like spending on the NHS. Are
you worried about the size of the
You have your finger on
the important point. The government
will have to choose whether to give
lots of money to the European Union,
or whether to spend money on UK
public services, and that will be
part of the negotiation. On all
these issues, it comes down to
choice is the government makes. I
would encourage the government to
choose our own domestic public
services rather than expensive
schemes in continent or Europe.
are you advocating that the
government should spend up to £2.5
billion on a no deal scenario?
It is important that we are ready to
leave in the event of no deal. If we
left with no deal we would on
current figures still be saving the
remains of 18 billion so we would be
saving 15 and a half billion against
paying for the financial framework.
To show we're ready on day one would
be money well spent and most would
be needed any way. We need to have
new customs arrangements in place
even if it is not for a no deal
There are suggestions
that the Government might back down
on the idea of putting the time and
date of leaving the EU on the face
of the bill. Would you be Exxon
certained if that was -- concerned
if that was remove prd the bill?
is in Article 50, unless Article 50
is extended by the Council of Europe
we leave on 20th March 2019 and it
makes accepts that should be the
same in -- sense that should be in
same in domestic law. But that is a
secondary concern from my point of
view. It is important that we leave
on that date.
Stay there if you
We're joined in the studio
by the former minister
He's no relation to the Chancellor,
but he is a member
of the Treasury Select Committee
and he's one of the Tory MPs named
as "Brexit mutineers"
by the Daily Telegraph
this week - lucky him.
I'm assured you're no relation to
the Chancellor. Let's just pick up
on what Jacob Rees Mogg was saying.
How important is it to you as a
rebel that the Government does put
the date on.
I agree with Jacob it
is in the Article 50 process, the
key reason it is important is the
negotiations look like they're going
to be tricky and longer than we
expected and it may well be that we
are still negotiating up until March
2019. We could have a short couple
of weeks period of extension. Why do
harm to the economy by falling out
on a precise time? If those
negotiations need to be extended.
They won't go on for more than a
couple of weeks, because there will
be elections in Europe in June 2019
and there is no chance of a new
commission or Parliament dealing
with this. Giving it flexibility and
with this flexibility the government
said it wants flexibility in
negotiations, why give all the
advantage to the other side? Part of
that was evidenced yesterday by
somebody suggesting they will ask
for the Margaret Thatcher rebate to
be suspended. That is as a result of
putting the date on the bill.
did not agree with the Brexit
committee and think it is important
that we set the date and time?
think it is perfectly reasonable to
set the date and time and I think
these negotiations fill the time
available. The United States and
Australia agreed a free trade deal
between April 2003 and February
2004. These things don't need to be
interm Knabl if both sides want to
agree. I think the British
electorate would be very concerned
if nearly three years after the vote
to leave, we still hadn't left. I
think most people expected that we
would have left by now. The
negotiations realistically to get
through the approval of the European
Parliament and so on need to be
completed by at the end of next
year, going up to the last minute I
don't think is real is tick.
on to talk about a trade deal and
getting that done, the EU need to
agree to move on and we need to
settle the divorce, cabinet are
going to be talking about the amount
that needs to be spent on that,
Stephen what manned, are you happy
for the Government to offer more?
hope that the Government will stick
to the Florence speech in terms of
ensuring that we fulfil our
liabilities and obligations. I'm not
clear exactly whether that is 20
billion or 40 billion and I'm not
sure the government is. If part of
the divorce bill is then some
settlement for getting the trade
deal, we will need to examine that
Jacob Rees Mogg, is this
that might spark another war in the
party if the cabinet suggest they're
prepared to pay more?
I think we
need to go back to what you said,
that the - the EU said they want us
to settle the money first. The
Government doesn't need to follow
that. They need our money. If we
don't pay any money for the final 21
months of the framework, the EU has
about 20 billion pounds gap in its
finances and it has no legal
requirement to borrow. So it
insolvents or the Germans and the
others pay more. So our position on
money is very strong and we
shouldn't fall into the trap of
thinking just because Mr Barnier
said it it is as if he has received
tablets of stone like Moses, he has
There is a sense that the
Government feels a mo generous offer
would set a good tone, the kind of
approach that Jacob Rees Mogg
suggests would not make for smooth
It probably wouldn't. But
we have to be clear what we are
paying for and what we are getting.
No one is suggesting we should hand
over money without proper scrutiny.
It may be appropriate to put money
to facilitate international trade to
secure jobs. We have to be careful
about the analysis about what the
scale and size of Brexit dividend is
and the size of payments will be.
You mustn't confuse gross and net
and there is disagreement about some
of the numbers.
On that, Jacob Rees
Mogg in his budget for Brexit
suggests in five years time we would
have a 135 billion Brexit bonus. Do
you think it is real is tick.
using some analysis that has some
flaws. It is predicting a price drop
in the United Kingdom of 10%. Tariff
drops will only be 3 or 4%. It is
predicting huge productivity gains,
the likes of which we have not seen
in 20 years. Thirdly, despite his
view on modellers there is evidence
that they weren't and if you go into
the detail of the analysis, some of
the data is 14 years out of date.
Jacob Rees Mogg, you're being
I don't think
that right. I think the fall in
prices comes because you make the
economy more competitive and you
take away tariffs which reduces the
price of food by 20%. That is a big
reduction. Bear in mind that the
biggest tariffs hit food, clothing
and foot wear that, harm the poorest
in society the most. The gains from
productivity come from is in
additional tariffs. Leading to other
saving and further investment I
think the modelling done by the
professor is as good as modelling
can be. That doesn't mean it is
infallible. The failure of gravity
model is well known.
was accused of auditioning for the
job of Chancellor by using long
words. Do you know any good long
I don't think that
we want to get into this type of
business actually. I think all
Conservatives and Steven and I very
much agree on this, want to show as
united a front as we can manage.
There are differences on some
aspects of policy, but in terms of
individuals we want to stand
together and support the best
interests of the government.
Brexit Secretary David Davis
was in Berlin this week trying
to win the support of business
leaders there for a comprehensive
free trade deal with the EU.
He warned them against putting
'politics above prosperity'
and reportedly got a bit
of a frosty reception.
Well, the former Labour MP
Gisela Stuart was one of the leaders
of the Vote Leave referendum
We travelled with Gisela to Germany
to meet the business leaders
she says will help secure a good
trade deal for the UK.
Here's her film.
I was born and brought up
in this part of Germany,
and although I've lived in the UK
for the past 40 years,
and represented the constituency
of Birmingham and Edgbaston for 20
years, my family still live here,
and I've kept many links.
I was chair of Vote Leave,
and together with only a handful
of other Labour MPs,
we campaigned to leave
the European Union because we
thought the country would be
better off outside.
It's hard to remember now, but back
in the 1970s, when we joined
the European Economic Community,
people thought that by joining
the club we would see the kind
of economic miracle Germany
experienced in the '70s back home.
The "Deutsche Wirtschaftswunder"
would come to Britain.
But, of course, it didn't.
Within a few short years
of the devastation of World War II,
Germany had emerged as
the largest economy in Europe.
success is down to
the pragmatism of its business.
German Mittelstand is family
long-term thinking, reliability,
are very important values.
Changing moods on a political
landscape and changing frameworks
are toxic for our way of doing
business, and we want
that to go away.
German business is not given
to making big political statements
out of step with government policy,
but talk to those in decision-making
positions, and it is clear
that they want to secure a good deal
with the United Kingdom.
BMW employs almost 90,000
people here in Germany,
and exports just under
1 million cars annually.
The UK is a vital market.
What we are really seeking right now
is more clarity, more certainty,
because in our cycle of investment,
cycle of development,
it's about a seven-year or so period
that we look at,
but we are now, of course, starting
to think about what comes next,
and what we need to see now
is what is going to be
the trading relationship,
how are the logistics going to look,
what is going to be
the requirements for people
moving across the continent?
Because all of these things
are important to us today.
And, by the way, they will be just
as important tomorrow.
Berlin is well aware that
if the European Commission
is allowed to put up trade barriers
against Britain, it will be
German business, German consumers
and German employees
who will suffer.
I think it's very
important that we complete
the first phase successfully.
The first phase of the negotiations,
which looks at the financial
consequences of Great Britain
leaving the EU.
And then it's not a question
of punishment payments.
It's about when you are part
of a multilayer, contractual
obligation and you want to leave
that, then of course it takes
a whole lot of obligations
which you have to deal with,
so both sides are satisfied and can
live with the consequences.
It isn't everyone's interests
for the UK to part on good terms.
Of course there was going to be
upset when the UK voted to leave,
but creating uncertainty over
the terms of UK's exit will simply
have a disruptive effect
on exports to UK markets.
Far better to have a sensible,
amicable negotiation that results
both sides being able to trade
together and work
Markus Krall is managing
director of Goetzpartners,
and heads the Financial
Institution Industry Group.
Is it true to say that,
if we negotiate Brexit well,
then a good Brexit can actually
strengthen the United Kingdom,
the European Union and Germany?
It's absolutely true.
I think that this
is about two things.
One, about proving that
free trade is possible
between a European Union that is
smaller and a former member country.
If you don't prove that free
trade is possible there,
then the question becomes,
what is Europe standing for?
Number two is, I also
believe the free trade,
free market and democratic and less
bureaucratic approach that Britain
has chosen as the path
into the future is a role
model for Europe.
The time has come both
for the United Kingdom
and for the EU to be more clear
about what kind of
deal we can achieve.
Both sides need to be bold.
As long as we remain open to free
trade and sensible co-operation,
we can arrive at something that
will benefit both sides.
But one thing's obvious -
if we are an open and free trading
economy, we've got one big
cheerleader on our side,
and that is German business.
That was Gisela Stuart
setting out her case
and we'll be hearing
from the opposite side
of the argument in the coming weeks.
Gisela Stuart joins us in the studio
now, as does Alastair Campbell.
He used to work for Tony Blair
in Number 10, set up
the New European Newspaper
to campaign against Brexit,
and is so pro-European that at this
year's Labour conference
he was heard playing Ode
to Joy on the bagpipes.
Welcome both of you.
We will start with your point in the
film, that you think the German
business once the EU to offer the UK
a generous deal because it is in
their interests, yet the president
of the German equivalent of the CBI
said that defending the single
market must be the priority for the
EU, and another says that the
cohesion of the remaining member
states remains the highest priority.
The president of the CBI just after
the referendum said that it would be
in nobody 's interest to introduce
tariffs and trade barriers. On the
UK side, I don't think there's a
full understanding that economic
interests are incredibly important,
that they are trying to cover
economic interests on the cohesion
of the 27. I think different
economic interests will raise the
head of different countries. The
German auto industry is as important
as the financial sector is here. The
banking crisis is far from over, but
the big riffs which were going on is
that the E U is losing its second
biggest net contributor. Countries
like Germany want a deal with the UK
that is a free open market. There
are other tensions in the EU that
wants to become more protectionist,
and that is a bad thing.
the film there with the Jacob
Rees-Mogg interview. No matter what
side of leave you are, it is
delusional and all driven by wishful
thinking. You could find a
businessman who says Brexit will be
good for Germany. The vast bulk of
British businesses think this is a
disaster, as do the vast bulk of
European businesses. One of the
delusions on which they ran their
campaign is the idea that they need
us more than we need them. That is
Be you self about £80
billion more in goods and services
into the UK than we do to them, and
Germany has one of the biggest
deficits. It is in their interest.
Of course it is, but it is a myth
that they need us more than we need
them. The damage that will be done
to us, even with a good deal. Let's
be frank, where these negotiations
are, Theresa May is either going to
end up with a bad deal and dumber or
no Deal. A bad deal is bad, and a no
deal is a catastrophe.
setting up ideas that which were not
there to begin with and knocking
them down. Delusional.
the Brexit bonus.
If we had a
referendum, it was a democratic
decision. I know you don't like it
and that a lot of business would
have preferred to stay with the
status quo. We have had the
referendum. Undermining political
institutions is in no one's
interests. It is functioning
democracies which lead to economic
Theresa May fought an
election Inc on a hard Brexit that
As we heard from BMW,
there is uncertainty for business.
There will be elections, European
elections, in 2019. There will be a
change of the Commission and the
parliament. We have a narrow window
to implement the mandate for the
referendum which Parliament voted
for. So rather than you undermining
this country, why don't you work
together to get the best deal?
Because we totally disagree.
don't want a good deal?
favour of a good deal, and I could
give them some advice as to how they
get a good deal. First, you have a
cabinet that has an agreed strategy.
18 months in, they don't have that.
I am not undermining a deal. I am
continuing to pose questions about
what they are trying to do and how
they are trying to do it. This is
democracy. Democracy is the ability
for Parliament, which is not doing
its job properly, and the public, to
keep scrutinising, and if they want
to change their mind, having the
right to do that.
You were trying to
encourage the Taoiseach yesterday to
play hardball with the UK.
I am on
the side of the UK, and I am worried
that if we go down the path that we
are being taken down, and Theresa
May and Boris Johnson and the rest
of them, this shambolic path, we are
going to do fundamental, lasting
damage to the country we love. I
don't care about the Civil Aviation
Authority. I care about Britain. --
I don't care about the European
Union. If every lorry going into the
UK today was stopped for just two
minutes, we would create an instant
17 mile traffic jam. These people
just don't care...
I am not these
people! Let us not conflate... You
either decide that you are
implementing a democratic decision
of a referendum that was called and
over 17 million voted.
You will not
stop me debating it. Just as Nigel
Stop talking about Nigel
Farrell Raj. Vote Leave was not
Nigel Farage. There is no desire in
Germany to punish the United
They are behaving
There is a battle of
protectionism and free market going
on. If we implement this properly,
give businesses the kind of
incentives they want, we can get a
good deal. So you want a bad deal?
You are driven by wishful thinking.
Gisela Stuart, you are saying that
business will intervene to prevent
things like tariffs being put in
place? They are leaving it a bit
late to put pressure on.
find that business is laying out the
kind of things they need to get
those deals. I can find as much
fault with the speed of the
progress, but what I really do
resent is that you are actually
encouraging other countries to
Know I am not! I spoke
out in support of the Irish
Taoiseach because I spent a lot of
time with Tony Blair and his team on
the Good Friday Agreement. The
people who are driving this hard
Brexit without thinking it through,
still no answer on how you do Brexit
in our island without a hard border.
I think the Irish Taoiseach is right
to call out the government on the
incompetence and the fact they have
not thought it through.
the result of the referendum and the
fact that we will be leaving the EU?
I accept the result of the
referendum, but I do not accept that
the country will definitely leave,
because the country is entitled to
change its mind. As the chaos and
costs mount, the public is entitled
to change its mind and will change
There is no evidence at
Come out with me!
me to finish the sentence. There is
a changing of mind happening, a
crystallisation. Unlike you, I have
fought five elections and I have won
five elections. I have probably
spoken to more people like you.
may do, I'm just saying, come out on
the road with me...
40% of the
population in the middle just want
us to get on with it. What that film
showed is that if you want to make
it a self-fulfilling prophecy that
it's a disaster, which I don't. I
want to implement a deal that is
good for British jobs. The rest of
the world is changing in terms of
technology. Currently, Germany
hasn't even got a government, and
nobody is laughing about that.
they are stable without a
Let's leave it there.
It's coming up to 11.40,
you're watching the Sunday Politics.
Coming up on the programme,
we'll be looking at the latest
opinion polls and we'll bring
you the results of our moodbox
asking whether Phllip Hammond
or John McDonnell should be running
First though, its time for
the Sunday Politics where you are.
Hello, I'm Martyn Oates.
the Sunday Politics where you are.
Coming up on the Sunday Politics
here in the South West...
Councils turn to crowdfunding
to pay for projects.
or a desperate resort to charity as
further cuts loom?
If a community was looking
to do something, a
project that was doing
a statutory function,
there would be nothing
against doing that.
I think it is something
to be looking into, into
And for the next 20 minutes,
I'm joined by Defra Minister
and Cornish MP George Eustice,
and Labour MEP Claire Moody.
Welcome back to both of you.
This week, a Plymouth Tory MP made
national headlines after claiming
Theresa May's government
smells of decline.
The former Army captain, Johnny
Mercer, also appeared to question
the decision to appoint
former Chief Whip Gavin Williamson
as Defence Secretary, saying it
seems to have sent a message to
the military community that he's not
100% comfortable with.
Following the piece
in the Daily Telegraph, he
spoke to the BBC.
I was asked a series of questions
and they answered them in an honest
-- and I answered them.
I'm afraid I will always do that,
I suppose, and it may well be
to my detriment.
But I'm afraid you can't
have a personality transplant
just because you come into politics.
George, this comes a couple of weeks
after Gary Streeter, the South West
Devon MP, likened the present
Parliament to the 92-97 Parliament,
John Major's government,
which was rather
prone, to say the least.
The government is in a bit
of a mess, isn't it?
No, I don't accept that.
I think the truth is in politics
you get your ups and down.
There are a lot of
downs at the moment?
What you do is you read
the newspapers about things...
Look at the Commons this week!
You get a prevailing
media narrative at times
that doesn't give you good weather.
I have seen that many times
when I was press secretary to David
I remember in 2007 it was
supposed to be disastrous.
The end of him, he wasn't
going to be able
People talked about
against David Cameron.
And in the end he came
back from that.
It just turned out
it was a short-term
The truth is this government has,
this week, broke through the EU
We're not through that process yet
by any means, George.
We're getting through this process.
We are starting to bring
this bill through.
Bring this bill forward.
There have been announcements
the Prime Minister has
made on housing.
Lots of ministers are out there.
We have made announcements
in Defra on things like
introducing CCTV in slaughterhouses.
On a new body to protect
the environment, and many others
There is a lot of work
going on behind the scenes.
It doesn't always get covered.
As a minister I'm encouraged.
A lot of acrimony behind the scenes
as well, one suspects.
George is saying, so we are
getting on with the job?
That was a sterling effort
at defending the situation.
But really, you can see
there is going to be
nothing but Brexit in
the House for years to come.
And you can see the way
it is being managed is about
managing the Tory party.
It is not about the
interest of the country.
And you've got a within fights
within fights happening on the Tory
There is the obvious
comparison with the 92-97
But to be honest, that looks
like a very smooth ride
compared to what we are seeing
in Westminster right now.
On the Brexit, it was
a divisive referendum
that split the country.
What we've all got to
do now in Parliament,
whichever party you belong to,
has put the country back together.
And actually come up
with a partnership
that can reconcile people.
OK, we will see what happens.
on it would be a start.
And the Labour Party.
We will see what happens
in the Commons next week.
Rural life as we know
it is disappearing fast.
That was the warning this
week from the National
A report by the organisation
claims the rural
population will fall by 1%
in the next 20 years.
Young people are being
forced out by high house
prices and poor broadband
and transport infrastructure.
Johnny Rutherford has
been taking a look at
So I was thinking,
where could I film
to get a model example
And then it came to me.
Well, I needed a rural village that
still definitely had a school,
a post office, a shop,
a church and a good old pub.
But really, let's get
this in perspective.
According to figures
from the National Housing
Federation this week, classical
community villages are becoming
Scenes like this could really and up
as museum pieces if the
In the last five years,
figures show the Southwest
has seen five rural schools close,
nine post offices shut
up shop, and 217 pubs
pulled their last pints.
I hesitate to put it as crudely
as this, but it is out of
sight, out of mind.
I don't see any reason why
somebody by dint of the
geography where they live, should be
seriously disadvantaged in their
access to services that
the rest of society gets.
It's thought that building
clusters of affordable
housing on the edges of our villages
could stem the drain of young people
Young people and working age
people and families are
being forced out of villages,
because they can't afford to
With young people and families
moving out, what is
happening is services
are closing down.
If you haven't got the houses,
you are not even at the starting
We need houses in the community
for people to live in.
And then the services
Also affecting already squeezed
families in the run-up to Christmas,
this week we heard the price of food
and soft drinks were up by 4.1%
since last year.
And vegetables by even more.
The Office for National Statistics
say those costs though
are offset by lower petrol costs -
cold comfort according to the
As prices rise faster,
the impact of the
public sector take-up on workers
in that sector gets all the harsher.
But perhaps even more
importantly for a lower
are particularly feeling the effects
at the moment, is the freeze on
nearly all working age benefits.
That gets harsher,
the faster inflation rises.
The Chancellor should
definitely do something about
that when he stands
up at the budget.
Meanwhile, farmers, a big
part of rural life, face
unprecedented change with Brexit.
They are worried their produce
will be undercut by cheap
They may be little communities,
but they have big questions.
It is hoped the Chancellor
won't overlook them when
he delivers his budget next week.
You'll be all right.
At least you're close to the pub.
George, you are deaf minister with a
keen interest in this. There has
been talk of rural proofing all
policies in the past, hasn't there?
Still this criticism stands.
of this is demographic change. You
have an ageing population in rural
communities. One of the challenges
is getting the right kind of
affordable housing for young
families. That would help the
village school, shops, all sorts of
things. Part of the key with our
villages is to enable incremental
modest extensions to those villages
with affordable houses so you can
slightly change the demographic and
get more younger people there and
improve the population. There has
been a lot of work done to try to
safeguard post offices. £2 billion
has been spent on rural post offices
in the last seven years. And some
3000 have been protected where they
are the last shop in the village or
a community. There is no programme
of systematic post office closure,
as there was under Gordon Brown. We
scrapped all of that. But the
ultimate solution is to try to get a
change to the demographic.
an adviser to Gordon Brown. I seem
to recall you even had a rural czar.
We are still left with people...
of the big problems we are facing in
our rural communities is actually
there is a higher incidence of low
pay in rural areas. It is not just
on housing, although it is a big
issue. You have got this additional
disadvantaged in rural communities
of the low pay making the housing
more and more unaffordable. You
can't deal with just the housing.
You have to look at getting in the
infrastructure in place. And
employment as well. To keep our
young people in our region, never
mind just the rural communities.
George, I want to make the most of
the fact we have you here as farming
Minister. On that point, we have
heard this in select committee
hearings, farmers very concerned
they could be new trade deals which
allow cheap produce, livestock
raised, -- livestock raised at lower
standards than in the UK,
undercutting and ultimately
We have high
standards of food safety and animal
welfare. We will protect that.
this clear in government, but this
is something Michael Gove wants to
What you can do in these sort of
negotiations is, it is possible to
say that he will do a free-trade
agreement, allow some produce in,
provided the meat equivalent
standards to the UK. It is a common
thing in trade negotiations. We had
similar things with Canada. We
enabled them to sell some products
here provided it is at the same
standard as ours. That is quite
Our major market for a
farming produce is the European
Union. Actually the outcome of the
negotiations in relation to the EU -
UK in the future is what will matter
to our livestock farmers. Keeping
the standards as well, so that we
have the related standard. I know
the debate about the chlorinated
chicken in the US is something we
simply don't want to see in the UK.
But we've got to make sure that our
farmers have access.
That is the
stuff going the other way. That is
the big thing for Elan producers in
the south-west. They were saying
before the select committee a couple
of weeks ago that if they don't get
the tariff free access, it will be
cataclysmic debarred from them. Can
you guarantee they will and if so
how will you achieve it?
both ways. With the European Union
we have a trade deficit of 60
billion plus a year. There are
dangers producers of bacon, Iris
producers of beef, Spanish producers
of tomatoes, French producers of
wine, who desperately need access to
the UK market. That is why I am
confident we can do the free-trade
agreement. We have similar
regulatory structures, identical at
the moment. They will not be changed
in a hurry. It is quite possible to
recognise the equivalent and put in
place a comprehensive customs
There is no simplicity.
We saw from the sauce me scandal
there are cross-border supply
chains. A Danish bacon producer
bring their pork to Cornwall to
produce their bacon here. It is not
as if we can go, it's dead simple,
it will be sorted because they need
us. There are 27 under -- other
It is in their interests
to do that free-trade agreement.
Crowdfunding - if you haven't heard
of it, expect to soon.
It is the latest way
of raising money for projects.
Rather than go to the bank
for a loan, people with new business
ideas increasingly go online and ask
people to pledge money.
It's not just businesses
trying to get people
to invest directly in projects.
Councils grappling with an ever
tighter squeeze on the public purse
are seizing the opportunity, too.
Take a Plymouth Street with a long
history. A building that became a
And some locals
with a vision. And it's now a
vibrant community space. It hosts
activities from yoga to African
drumming to Cub Scouts, thanks to a
crowdfunding project. Cash pledges
from people in the area and a
helping hand from Plymouth City
We knew once we had got 25%
of our target in, they would chime
in with 5000, which is 50% of our
target. That was a game changer when
that £5,000 turned up into our
account. We could see the finish
Plymouth was the first council
in the country to partner with South
West -based cried fund .co .uk. We
all know local authorities are under
financial pressure. Is it there to
replace things that you should be
For this particular fund it
is about spending it in a way the
community want to spend it, and
using crowd fonder as an indicator
for what projects they like to see.
That doesn't preclude statutory
projects. If they went up and people
were willing to back in their own
money, which sometimes they are.
Equally we can place towards those.
Towards library works, road changes.
If the community are behind it, we
can pledge to it.
Cried fund a
Plymouth has hit its million mark.
The South West councils are
following suit. In Dorset, a cried
from the platform has been used for
youth service funding. In Cornwall,
the council is getting involved in
projects like this. On a Roger
largerscale in London, crowdfunding
has been used for things like
libraries, with political backing
from the top.
Help you make a
difference in your local area.
is the thinking of Cornwall about
claims authorities are crowdfunding
their way out of a financial crisis?
That is not what we are doing. We're
not asking the crowd or the
communities to fund statutory
services. This has added value to
it. And things community really want
to get involved in.
corner, this woman was part of the
crowdfunding team for the Council.
She is clear there is a lying on how
and what councils should fund.
a tricky line. The money Plymouth
City Council pledge comes from
developers. It is not a budget that
has been cut from somewhere else is
to make savings.
It has been great
opening up union corner. We have
seen changes in behaviour.
of Plymouth has high deprivation
levels. It has a licensed sex trade.
One of those shots as gone since
union corner open. Have you noticed
the area changing?
businesses have opened.
communities benefit and cried fund
Plymouth celebrates a £1 million
milestone, any plans to extend the
things it likes to fund would be a
In a statement since that peace was
shot, Plymouth City Council said
they do not use crowdfunding for a
statutory services and have no plans
to do so. Claire, it struck me
watching that peace, you have a
Conservative council, a Lib Dem led
council and a labourer may also in,
this is marvellous. It is the Labour
may who is making the most thorough
use of this. -- Labour mayor. For
libraries, that seems staggering,
The crowdfunding in
Plymouth was actually started under
Labour. We are fully in favour of
supporting communities developing
projects in their communities like
the one we saw just now. And
facilitating those, helping those
work. Adding something extra, as was
said in the peace. That is the
What is the
difference between Jacob Rees-Mogg
saying people providing food for
food banks is uplifting, and
crowdfunding? People on the left
jumped on Jacob Rees-Mogg and said
it was outrageous.
This is the point
about statutory services at what we
as a society, as a whole, should be
supporting people. We have seen the
cuts to local government. They have
been dramatic. There are statutory
services. They are statutory for a
reason. They shouldn't be subject to
whether or not people are
fund-raising. The point being fund
raising provide that additional --
those additional pieces. People
those additional pieces. People
being able to eat is not an extra.
At some point a line is crossed. I
can see that you have got a
playground at one end of the
spectrum. Statutory services at the
other. A lot of people would say
that libraries are core services
that people traditionally expect
local authorities to provide?
would say that as well. I would want
libraries to because services. But
the other point, what we are also
dealing with, is the cuts that have
happened to local government. When
you get down to the bone, if it is
about providing a care service, or a
library, you have to provide the
care service. You have to make sure
those statutory services are in
place. Rightly or wrongly, big
libraries aren't necessarily seen as
I don't think it is new
to have fund-raising appeals for
certain projects. 30 years ago a
Leisure Centre in my constituency
had private fundraising to raise
money towards the local athletics
track. They have got a similar
fundraising appeal now done through
crowdfunding to raise an amount to
refurbish their swimming pool. I
think these operations have got more
authenticity when they are done by a
community trust or a particular
organisation, a charity that is
behind a project. But equally, if a
local authority getting involved can
help get more people engaged, I
don't have a problem. But I think it
should really be for capital assets,
community assets, where people know
where their money is going and know
that it is not going to be
displacing other activities.
there a line in your view that
shouldn't be crossed?
I think with
libraries, that is probably on the
borderline. The truth is that
library usage has been going down as
more people have access to the
Internet and they are not using
libraries as much. Local authorities
do have quite a dilemma about
whether they keep those libraries
open. In many cases local town
councils have taken them on because
they have judged they are an
important asset. In some cases town
councils will move their offices
into libraries to give them an
additional function and more
revenue. There are a lot of
different ways to do this. Things
like sporting facilities and
community assets is what it should
Time for a round-up of the political
week in 60 seconds.
South West Headteachers have signed
a letter urging the chance to
increase funding for schools. The
Humphrey Davies School joined the
delegation to Downing Street.
schools that are cutting back and
are not able to offer the full
curriculum. I have had to go through
of hours GP service is being
Is easier to do that than
have patients waiting for hours and
potentially not getting assessed.
Could South West water end up back
in public hands? It is only a matter
of time, according to this expert.
would actually be -- be very
surprised if in five years these
companies are still in private
And she was the first woman to take
a seat in the House of Commons. Now
almost 100 years on, the campaign to
build a statue to Plymouth's Nancy
It is about time we started
celebrating this important first.
George, education funding a massive
issue during the election. Shortly
after the election the government
said it had listened and come up
with a solution. This week we have
seen Headteachers from across the
country saying, you have entirely
failed to do that?
I don't accept
They are the experts, and
People will always want more
money. There is always ways of
spending money. If you look at what
actually happened, it has been an
historic injustice with rural
communities getting less. We changed
the formula to rebalance that, to
add... If these Headteachers were
unhappy and the parents are unhappy,
and your councils are unhappy, it
causes trouble for you as a
government, as individual MPs? My
view is that we responded to the
fact that there was concern at some
schools -- about some schools were
going to have a reduction in the
budget. Up to 1%. Straight after
that we put an extra £1.3 billion in
in order to ensure that all schools
get an increase. Those schools will
have a cut as a result of the
You would spend more money,
where will you find it?
investing in our future in these
schools. What you are not saying is
that actually these schools are
seeing real terms cuts. That is
going on year-on-year on year. We
are facing a crisis into the future
with the education system. We are
talking about community funding, we
are seeing all schools having to go
to parents to ask for money because
they have too. Not for additional
things. It is a real crisis that we
Philip Hammond will deliver his
Budget on Wednesday -
he's moved it to the Autumn
if you remember - and he'll be
hoping it can help re-define
the Government in the eyes
of the public.
But when it comes to
the economy, do people trust
the Conservatives, or Labour?
Here's Ellie Price
with the moodbox.
MUSIC: The Road to Nowhere
by Talking Heads.
All eyes will be on the Chancellor
this week as we find out
what he has been cooking
up in his Budget.
So we have pulled off the A1
near Peterborough to ask people here
who they trust with the economy -
is it the Chancellor,
Philip Hammond, or is it
Labour's John McDonnell?
Which one's Tory?
I voted Conservative
for the last two
elections, don't feel very confident
now, so I'm going to swap.
If I said to you which
of these characters
would you trust with the economy,
what would you say?
The one who's currently
running it, because they
seem to be bringing
the deficit down.
Because I'm an NHS worker.
For me, it's just about
spending, public spending.
Labour always overspend.
John McDonnell, I think
capitalism as we know it is tanked
and I think we need
a radical re-think.
Broken his egg, who do you trust
more on the economy?
Because they never come up trumps
with anything that they
reckon they're going to do.
If I had to make you
choose one of them?
The man that's there, Hammond.
I wouldn't trust
Philip Hammond with a
bag of marbles or a plastic ball!
Who do you trust
more on the economy?
Oh, the Conservatives.
I just think they're better
for the small businessman.
We need a Maggie or
a Winston Churchill,
somebody in there with
balls to say, right,
that's the direction
going in, that's what
we are going to do.
I've got balls!
What are you doing?
Putting balls in holes
by the look of it!
I suppose the lesser of the two
evils is anything but Tory,
but I say that without a great
deal of conviction.
Having grown up in the '70s
with all the rubbish on the
streets, the strikes, the unions.
Re-nationalisation and they're
going to spend a lot of money
and increase taxes and it will pull
the country down.
I've seen an awful loft of all-day
breakfasts today, but it
is clearing up time here
at the diner and time
to reveal the Moodbox.
Take it away, Tim.
As you can say it was
a close-run thing, but
like any fiscally responsible
Chancellor, I've done my maths and
counted and Philip Hammond got six
more votes than John McDonnell.
Oh, chip, thank you very much!
That was Ellie and the entirely
at the Stibbington diner near
But for a slightly more scientific
understanding of how the public view
the parties on this and other
issues, let's have a look
at some recent polling.
Here's where the Conservatives
and Labour stood on the economy back
when the Prime Minister called
the snap election in April,
when the Conservatives had a big
lead, as they did in many
The most recent poll by the same
company reckoned Labour had narrowed
the gap significantly,
as they have in other areas,
although they're still 10 points
behind the Tories on this issue.
And there was another survey much
discussed at Westminster this week,
showing that while the gap
between Theresa May
and Jeremy Corbyn has narrowed
drastically since that pre-election
period, Mrs May is,
despite her many problems,
still pretty much level-pegging
in polling terms or
even slightly ahead.
And when it comes to how
people intend to vote
while the Tories are behind,
there's no sign of a
big Labour lead yet.
Tony Blair thinks that,
given the current "mess"
inside the Government,
Jeremy Corbyn's party should be
10 or 15 points ahead.
Well, many in Labour will find it
easy to dismiss both Tony Blair
and the opinion polls, as they both
called the last election entirely
wrong, so what if anything do
these polls tell us?
Let's turn to our expert panel.
Labour are now eight points on the
economy, according to a poll. Why is
there a gap between Labour and the
There seems to be a
deep-seated reservation in the minds
of many voters. They look at Jeremy
Corbyn and John McDonnell and
imagine them in charge of the
country, the finances, national
security, and think... It is
unfashionable to point out in many
circles that Labour did not win the
last election, and it didn't win it
for that kind of reason. Jeremy
Corbyn is very good at attracting
and inspiring young people and
people who had not voted before. We
underestimated his capacity to do
that. But he wasn't great at turning
Tories to Labour, or sealing off
those final reservations. The
government have had a shambolic few
weeks. We are tripping over
resigning a cabinet ministers. They
are fighting like ferrets. A lot of
people are having a really tough
time and looking at the government
to help them, and are unimpressed
with what they see. But there seems
to be a final fence that Corbyn does
not seem to be able to get over.
Isn't Tony Blair right, that Labour
should be 15 or 20 points ahead?
think he's completely wrong, and is
revealing he is out of date. I think
Labour are in a really good
position. If you look at what they
have achieved in the last year,
going into Christmas 2016, Corbyn
had just managed to avoid, had to
re-fight Labour leadership contest.
They were 20 points behind. Theresa
May was at the top of her game.
Through the general election and
beyond it, they have continued to
build their movement. They are very
effective on social media. I think
they are in a strong position, and
they need about 60 seats to win the
next general election. They will
probably start with 25 of those. The
fact that they are closing the gap
on the economy suggests that a lot
of voters are now giving them a
chance or a hearing, which they
certainly were not getting a year
ago. I think they have done very
Can they be confident with a
slim lead against the government?
am slightly more with Tony Blair
than with Iain. This goes back to
that very general election result. A
huge turnout for Labour for Jeremy
Corbyn. If you asked that same 40%
of people today, do you want Jeremy
Corbyn to be Prime Minister? Where
you really voting for Jeremy Corbyn
to lead the British governmentanswer
is no, because Theresa May still,
despite the fact she is presiding
over a shambolic cabinet, she has
the most support for Prime Minister.
The last general election may have
just been a giant by-election,
because everyone was so short that
Theresa May would get in.
Chancellor Philip Hammond gave
Labour a bit of a gift, when he
said, there were not any unemployed
people in Britain. A slip of the
tongue. Was that damaging?
to look at the context he was saying
it in, which will not be the context
of the Facebook meme you will get
shortly. He was asked about future
unemployment, and he was saying that
when technological advances came,
unemployment didn't materialise.
They would not be able to use that
against him so easily if it didn't
have something that people think
about the Conservative government,
which is that they are out of touch,
they have no idea about some people,
that they refuse to see what they
have done. People have that idea
about the Conservatives, so to drop
a bit of a clanger in that regard...
The budget is on Wednesday, and also
this week, the Brexit committee will
be meeting. What will they be
talking about and why does it
What Stephen Hammond said to
you a few moments ago was
fascinating. Tomorrow is going to be
the big meeting. It is the
negotiations committee. Nine or so
ministers have recently been
included in that, like Michael Gove.
They are going to be talking about
the money, precisely how much they
offer in two weeks' time to meet
this deadline in the December
council for phase two. Michael Gove
and Boris Johnson want to add in
conditions. They want to say, we
will give you this as long as we get
that. What was fascinating with
Stephen Hammond just now was that he
revealed that it wasn't just the
Brexiteers in Cabinet who want a
more precise definition of what we
are going for, it is the remainers
In the heart of the
government, David Davis is trying to
keep the bill as low as possible,
possibly around 30%. The divorce
Bill and future liabilities. Some in
the civil service have suggested
that it has to be 40 or above. What
it reveals to me is really, it's
another function of Britain not
really having a proper Prime
Minister. In normal circumstances,
of course the Cabinet is divided. A
strong leader would say, right, this
is what is happening. This is where
we are going. We will call it 35 or
40 billion. We will save to the
European Union, there is the check,
but it will not have a signature on
it until we are satisfied with the
stage. The government is hampered by
the lack of a strong personality who
could do that, make a political play
with other European leaders that
might break the deadlock.
that is why the full Cabinet have
not discussed what the future Brexit
deal will be.
That is the
astonishing thing. There has been no
sort of vision of what Britain is
going to look like after Brexit. We
have got down in what the
negotiation position for tomorrow
will be. What does it look like in
terms of immigration, trade with the
rest of the world, what life will
look like for ordinarily... Ordinary
There are visions for this,
but they will not agree on one. Is
there such a thing as a Tory Cabinet
Minister who could have one single
vision without them all ripping each
other's heads off? Probably not.
That's all for today.
Join me again next Sunday
at 11.00 here on BBC One.
Until then, bye bye.
Sarah Smith and Martyn Oates with the latest political news. Sarah discusses the upcoming budget with Conservative MPs Jacob Rees-Mogg and Stephen Hammond. She talks about Brexit with former spin doctor and now editor-at-large of the New European Alastair Campbell and prominent leave campaigner Gisela Stuart. Martyn is joined by Conservative MP George Eustice. The political panel consists of journalist Iain Martin, Gaby Hinsliff of The Guardian and Tom Newton Dunn of The Sun.