19/11/2017 Sunday Politics South West

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

about Brexit.

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

expect that?

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.

We have

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

something?

Part of his problem is he

has to offer so many different

people different things. This is

Philip Hammond trying to be and

dynamic.

It is hard to tell

sometimes.

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.

It sounds

impossible.

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.

We will

pick up on some of this later in the

programme.

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

Wednesday.

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

the euro.

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

you?

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.

I think

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

absolutely everything.

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.

The

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

exit bill?

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.

Why

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

situation.

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?

It

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

would.

We're joined in the studio

by the former minister

Stephen Hammond.

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.

You

did not agree with the Brexit

committee and think it is important

that we set the date and time?

I

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.

To move

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?

I

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

carefully.

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

not.

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

relations.

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.

He is

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

hopelessly optimistic?

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.

Michael Gove

was accused of auditioning for the

job of Chancellor by using long

words. Do you know any good long

economic words?

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.

Thank

you.

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

campaign.

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.

Germany's extraordinary

success is down to

the pragmatism of its business.

German Mittelstand is family

dominated, forward-thinking,

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.

TRANSLATION:

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

together post-Brexit.

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.

Looking at

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

not true.

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.

You are

setting up ideas that which were not

there to begin with and knocking

them down. Delusional.

35 billion,

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

stability.

Theresa May fought an

election Inc on a hard Brexit that

was rejected.

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.

You

don't want a good deal?

I'm in

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

Farage...

Stop talking about Nigel

Farrell Raj. Vote Leave was not

Nigel Farage. There is no desire in

Germany to punish the United

Kingdom.

They are behaving

reasonably.

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.

You will

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

undermine...

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.

You accept

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

its mind.

There is no evidence at

the moment.

Come out with me!

Allow

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.

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.

And

they are stable without a

government!

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

the economy.

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.

Admirably enterprising,

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

the future.

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

manner.

-- 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

Cameron.

I remember in 2007 it was

supposed to be disastrous.

The end of him, he wasn't

going to be able

to continue.

People talked about

leadership challenges

against David Cameron.

And in the end he came

back from that.

It just turned out

it was a short-term

story.

The truth is this government has,

this week, broke through the EU

Withdrawal Bill.

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

as well.

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?

Bless him!

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

benches.

There is the obvious

comparison with the 92-97

government.

But to be honest, that looks

like a very smooth ride

compared to what we are seeing

in Westminster right now.

OK.

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.

Government together

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

Housing Federation.

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

its findings.

So I was thinking,

where could I film

to get a model example

of a

rural village?

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

fewer.

Scenes like this could really and up

as museum pieces if the

decline continues.

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

and families.

Young people and working age

people and families are

being forced out of villages,

because they can't afford to

live there.

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

point.

We need houses in the community

for people to live in.

And then the services

come afterwards.

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

Resolution Foundation.

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

income households,

who

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

foreign imports.

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.

A lot

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.

You were

an adviser to Gordon Brown. I seem

to recall you even had a rural czar.

We are still left with people...

One

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

destroying them?

We have high

standards of food safety and animal

welfare. We will protect that.

Is

this clear in government, but this

is something Michael Gove wants to

do?

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

common.

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?

Trade cuts

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

agreement.

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

countries.

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

derelict eyesore.

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

Council.

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

line.

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

doing?

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.

What

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.

Baguette union

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.

It is

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.

This part

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?

Yeah, three

businesses have opened.

As

communities benefit and cried fund

Plymouth celebrates a £1 million

milestone, any plans to extend the

things it likes to fund would be a

political decision.

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,

doesn't it?

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

important part.

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

being

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?

I

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

statutory.

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.

Is

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

really do.

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.

I know

schools that are cutting back and

are not able to offer the full

curriculum. I have had to go through

redundancy processes.

Somerset's out

of hours GP service is being

asked...

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.

I

would actually be -- be very

surprised if in five years these

companies are still in private

hands.

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

Astor.

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

that.

They are the experts, and

they?

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

changes.

You would spend more money,

where will you find it?

This is

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

are facing.

Thank

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?

No 7.

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.

Labour.

Why?

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?

No one.

Why?

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!

Hello, Bob.

Oh, hello.

Who do you trust

more on the economy?

Oh, the Conservatives.

Do you?

Why's that?

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

we are

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

unscientific Moodbox,

at the Stibbington diner near

Peterborough.

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

other areas.

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

Tories?

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?

I

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

well.

Can they be confident with a

slim lead against the government?

I

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.

The

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?

You have

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

matter?

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