26/01/2014 Sunday Politics South

Morning folks. Welcome to the Sunday Politics.

Ed Balls has gone socialist and fiscal Conservative in one speech.

He promises to balance the biggest bit of the budget. And to bring back

the 50p top tax rate. Political masterstroke, or a return to old

Labour? If you go to work by public

transport, chances are the price of your ticket has just gone up -

again. We'll speak to Transport Secretary Patrick McLoughlin. He's

our Sunday Interview. And it's been another wet week

across much of the UK, but what's the outlook according to this man?

This morning.This morning. Held in recent years by party veterans

In the South: The council with money in the bank and a large

And with me - as always - the political panel so fresh-faced,

entertaining and downright popular they make Justin Bieber look like a

boring old has-been just desperate to get your attention. Nick Watt,

Helen Lewis and Janan Ganesh, and they'll be tweeting quicker than a

yellow Lamborghini racing down Miami Beach. Being political nerds, they

have no idea what I'm talking about. Ed Balls sprung a surprise on us all

yesterday. We kinda thought Labour would head for the election with a

return to the 50p top rate of tax. But we didn't think he'd do it now.

He did! The polls say it's popular, Labour activists now have a spring

in their step. The Tories say it's a return to the bad old days of the

'70s, and bosses now think Labour is anti-business. Here's the Shadow

Chancellor speaking earlier this morning. I was part of a Government

which did very many things to open up markets, to make the Bank of

England independent, to work closely with business, but the reality is we

are in very difficult circumstances and because if I'm honest you,

George Osborne's failure in the last few years, those difficult

circumstances will last into the next Parliament. Business people

have said to me they want to get the deficit down, of course they do But

to cut the top rate... It is foolish and feeds resentment I want to do

the opposite and say look, pro-business, pro investment, pro

market, but pro fairness. Let's get this deficit down in a fairway and

make the reforms to make our economy work for the long term. What are the

political implications of Labour now in favour of a 50%, in practise 352%

top rate of tax? One of the political implications I don't think

exist is that they'll win new voters. I'm not sure many people out

there would think, I would love to vote for Ed Miliband but I'm not

sure if he wants to tax rich people enough. It will con Dale their

existing vote but I don't think it is the kind of, in the 1990s we

talked about triangulation, moving beyond your core vote, I don't think

it is a policy like that. If there has been a policy like that this

year, this month, it has been the Tories' move on minimum wage. I

thought Labour would come back with their own version, a centre-right

policy, and instead they have done this. I think we talk about the 35%

strategy that Labour supposed will have, I think it is a policy in that

direction rather than the thing Tony Blair or Gordon Brown would have

done. Where he was not clear is on how much it would raise. We know the

sum in the grand scheme of things isn't much, the bedroom tax was

about sending a message. What we are going to see is George Osborne and

Ed Balls lock as they try to push the other one into saying things

that are unpopular. The Tories, ?150,000 a year, that's exactly

where Ed Balls want them to be. All three main parties have roughly the

same plan, to run a current budget surplus by the end of the next

Parliament. George Osborne said ?12 billion of welfare cuts, hasn't said

how he is going to do it. Ed Balls is giving an idea that he is going

to restore this 50 persons rate The contribution of that will be

deminimus. It is not much, but what does it say about your values.

Because it is that package, it is cleverer than people think. Where

the challenge is is the question that Peter Mandelson posed at the

last election, which is can the Labour Party win a general election

if it doesn't have business on its side? That's the big challenge and

that's the question looking difficult for them this morning

Does it matter if Labour has business on its side. I thought the

most fascinating thing about this announcement is it came from the guy

mindful of business support, Ed Balls. When in opposition and when a

Minister and as a shadow as a result, he's been far more conscious

than Ed Miliband about the need not to alienate the CB Bill. In the

run-up of an election. This is a measure of Ed Miliband's strength in

the Labour Party, that his view of things can prevail so easily over a

guy who for the last 15 years has taken a different view. Eight out of

ten businesses according to the CBI don't want us to leave business

Business is in a bit of a cleft stick. Ed Miliband would like to see

businesses squealing, and Ed Balls is clearly not so comfortable on

that one. There's a difference on that. Mind you, they were squealing

this morning from Davos. They probably had hangovers as well. The

other thing they would say is this is not like Ed Balls thinks that 50p

is the optimal rate forever, it what go eventually. Isn't that what

politicians said when income tax was introduced? Yeah, in '97 Labour

regarded 40 persons as the rate where it would stay.

It's been a bad week for the Lib Dems. Again. Actually, it's been one

of the worst weeks yet for Nick Clegg and his party in recent

memory, as they've gone from talking confidently about their role in

Government to facing a storm of criticism over claims of

inappropriate sexual behaviour by a Lib Dem peer, Chris Rennard, and a

Lib Dem MP, Mike Hancock. Here's Giles with the story of the week. A

challenge to Nick Clegg's authority as he face as growing row over the

Liberal Democrat... I want everyone to be treated with respect by the

Liberal Democrats. We are expecting him to show moral leadership on our

behalf. A good man has been publicly destroyed by the media with the

apparent support of Nick Clegg. I would like Nick Clegg to show

leadership and say, this has got to stop. When Nick Clegg woke up on

Monday morning he knew he was in trouble, staring down the barrel of

a stand justify with Lord Rennard over allegations that the peer had

inappropriately touched a number of women. Chris Rennard thought he was

cleared. Nick Clegg wanted more I said if he doesn't apologise, he

should withdraw from the House of Lords. If he does that today, what

do you do then? I hope he doesn t. I think no apology, no whip. 2014 was

starting badly for the Liberal Democrats. Chris Rennard refused to

apologise, saying you can't say sorry for something you haven't

done. The and he was leaning towards legal action. Butch us friends

better defending Pym and publicly. This is a good, decent man, who has

been punished by the party, with the leadership of the party that seems

to be showing scant regard for due process. But his accusers felt very

differently. It is untenable for the Lib Dems to have a credible voice on

qualities and women's issues in the future if Lord Rennard was allowed

to be back on the Lib Dem benches in the House of Lords. Therein lay the

problem that exposed the weaknesses of the Lib Dem leaders. The party's

internal structures have all the simplicity of a circuit diagram for

a supercomputer, exposing the complexity of who runs the Liberal

Democrats? The simple question that arose of that was can the leader of

the Lib Dems remove a Lib Dem peer? The simple answer is no. The Lib Dem

whips in the Lords could do it but if enough Lib Dem peers disagreed,

they could overrule it. Some long-stand ng friends of roar

Rennard think he is either the innocent victim of a media

witch-hunt or at the least due process has been ridden over rough

shot by the leadership. Nobody ever did spot Lord Rennard as he didn't

turn up to the Lords, will citing ill health. But issued a statement

that ruled out an apology. He refused to do so and refused to

comply with the outcome of that report, so there was no alternative

but for the party to suspend his membership today. On Wednesday Nick

Clegg met Lib Dem peers, not for a crunch decision, but to discuss the

extraordinary prospect of legal action against the party by the man

long credited with building its success. The situation was making

the party look like a joke. One Tory MP said to one of my colleagues this

morning, the funny thing about the Liberal Democrats, you managed to

create a whole sex scandal without any sex. And we can laugh at

ourselves but actually it is rather serious. And it got more serious,

when an MP who had resigned the Lib Dem whip last year was expanded from

the party over a report into allegations of serious and unwelcome

sexual behaviour towards a constituent. All of this leaves the

Lib Dems desperately wishing these sagas had been dealt with long ago

and would now go away. Nick Clegg ended the week still party leader.

Lord Rennard, once one of their most powerful players, ended the week,

for now, no longer even in it. Giles on the Lib Dems' disastrous

week. Now, as you doubtless already know, on Tuesday Lib Dem MPs will

vote to choose a new deputy leader. You didn't know that? You do now.

The job of Nick Clegg's number two is to speak with a genuine Lib Dem

voice, untainted by the demands of coalition Government. At this point

in the show we had expected to speak to all three candidates for the

post, held in recent years by party veterans like Vince Cable and Simon

Hughes. We thought it being quite a significant week for the party, they

might have something to say. And here they are. Well that's their

pictures. For various reasons, all three are now unavailable. Malcolm

Bruce, he's reckoned to be the outsider. His office said he had a

"family commitment". Gordon Birtwistle, the Burnley MP, was

booked to appear but then told us, "I was at an event last night with

Lorely Burt" - she's one of the candidates - "and she told me it was

off". And Lorely Burt herself, seen by many as the red hot favourite,

told us: "Because of the Rennard thing we don't want to put ourselves

in a position where we have to answer difficult questions." How

refreshingly honest. Helen, how bad politically is all this for the Lib

Dems? What I think is the tragic irony of the Lib Dems is they've

been revealed as being too democratic. In the same way that

their party conference embarrassed Nick Clegg by voting sings that he

signed up to, and now everything has to be run past various

sub-committees first. Is it democratic or chaotic? It is

Byzantine. Mike Hancock was voluntarily suspended, and this week

he was properly suspended. It was new information into the public

domain that forced that. I'm already hearing Labour and Conservative

Party musing that if it is a long Parliament, we will form a minority

Government. It is a disaster for them. Voters like parties that

reflect and are interested this their concerns. Parties that are

self obsessed turn them off. The third party, if they carry on like

this, they'll be the fifth party in the European elections, so they have

got to draw a line under this. They do that, if they do, through

mediation. As I understand it, Chris Rennard,s who has go devoted his

entire life to the Liberal Democrats, and previously the

Liberal Party, is keen to draw a line under this. He is up for

mediation but he needs to know that the women that he has clearly

invaded their personal space, that there wouldn't be a possible legal a

action from them. The it is very difficult to see how you could

resolve that. Except he is threatening through his friends

these famous friends, to spill all the beans about all the party's sex

secrets. Isn't the danger for the Lib Dems, this haunts them through

to the European elections, where they'll get thumped in the European

elections? They'll get destroyed in the European elections, which keeps

it salient as a story over the summer. And it has implications for

Nick Clegg's leadership. He's done a good job until now, perhaps better

than David Cameron, of exercising authority over his party. He had a

good conference in September. Absolutely, and now the Lib Dems

have looked like a party without a leader or a leadership structure.

Part of that is down to the chaotic or Byzantine organisational

structure of the party. Part of it is Nick Clegg's failure to assert

himself and impose himself over events. Is it Byzantine or

Byzantine. It is labyrinthine. You don't get these words on the Today

programme. The cost of living has been back on the agenda this week as

Labour and the Tories argue over whether the value of money in your

pocket is going up or down. Well there's one cost which has been

racing ahead of inflation and that's the amount you have to pay to travel

by train, by bus and by air. Rail commuters have been hard hit over

the last four years, with the cost of the average season ticket going

up by 18% since January 2010, while wages have gone up by just 3.6% over

the same period. It means some rail users are paying high prices with

commuters from Kent shelling out more than ?5,000 per year from the

beginning of this month just to get to work in London. It doesn't

compare well with our European counterparts. In the UK the average

rail user spends 14% of their average income on trains. It is just

1.5% in Italy. Regulated fares like season tickets went up 3.1% at the

beginning of this month, and with ministers keen to make passengers

fought more of the bills, there are more fare rises coming down the

track. And Patrick McLoughlin joins me now for the Sunday Interview

Welcome. You claim to be in the party of hard-working people, so why

is it that since you came to power rail commuters have seen the cost of

their average season ticket going up in money terms by over 18% while

their pay has gone up in money terms by less than four? I would point out

that this is the first year in ten years that we have not had an above

inflation increase on fares. The Government accepts we have got to do

as much as we can to help the passengers. A big inflation increase

since 2010. This is the first year in ten years that it has not been

above RPI, but we are also investing huge amounts of money into the

railways, building new trains for the East Coast Main Line and the

great Western. We are spending 500 million at Birmingham station, this

is all increasing capacity, so we are seeing investments. Over the

next five years Network Rail will invest over ?38 billion in the

network structure. We also have an expensive railway and it is ordinary

people paying for it. A season ticket from Woking in Surrey,

commuter belt land in London, let's look at the figures. This is a

distance of over 25 miles, it cost over ?3000 per year. We have picked

similar distances to international cities.

The British commuter is being ripped off. The British commuter is seeing

record levels of investment in our railways. The investment has to be

paid for. We are investing huge amounts of money and I don't know

whether the figures you have got here... I'm sure they are likewise,

as you have managed to do... White -- ten times more than the Italian

equivalent. We have seen transformational changes in our

railway services and we need to carry on investing. We were paying

these prices even before you started investing. We have always paid a lot

more to commute in this country than our European equivalents. I'm not

quite sure I want to take on Italy is a great example. You would if you

were a commuter. You is a great example. You would if you

the other rates of taxation has to be paid as well. Isn't it the case

they are making profits out of these figures and using them to subsidise

cheaper fares back in their homeland? The overall profit margin

train companies make is 3%, a reasonable amount, and we have seen

a revolution as far as the railway industry is concerned.

a revolution as far as the railway 20 years we have seen passenger

journeys going from 750 million to 1.5 billion. That is a massive

revolution in rail. Let me look 1.5 billion. That is a massive

spokesperson for the German government, the Ministry of

transport. They are charging huge fares in

Britain to take that money back to subsidise fares in Germany. What do

you say to that? We are seeing British companies winning contracts

in Germany. The National Express are winning contracts to the railways.

What about the ordinary commuter? They are paying through the nose so

German commuters can travel more cheaply. We are still subsidising

the railways in this country, but overall we want to reduce the

subsidy we are giving. We are still seeing growth in our railways and I

want to see more people using them. Why do you increase rail fares at

the higher RPI measure than the lower CPI measurement? That is what

has always been done, and we have stopped. This is the first time in

ten years that we have not raised the rail figures above RPI. You

still link fares to RPI. You use the lower CPI figure when it suits you,

to keep pension payments down for example, but the higher one when it

comes to increasing rail fares. We are still putting a huge subsidy

into the rail industry, there is still a huge amount of money going

from the taxpayer to support the rail industry. I am not asking you

about that, I am asking you why you link the figures to the higher RPI

vesture Mark if we are going to pay for the levels of investment, so all

the new trains being built at Newton Aycliffe for the East Coast Main

Line and the great Western, ?3. billion of investment, new rolling

stock coming online, then yes, we have to pay for it, and it is a

question of the taxpayer paying for it all the -- or the passenger.

You have capped parking fines until the next election, rail commuters we

have seen the cost of their ticket has gone up by nearly 20%, you are

the party of the drivers, not the passengers, aren't you?

We are trying to help everybody who has been struggling. I think we are

setting out long-term plans for our railways, investing heavily in them

and it is getting that balance right. But you have done more for

the driver than you have for the user of public transport. I don t

accept that. They are paying the same petrol prices as 2011. This is

the first time in ten years that there has not been an RPI plus

rise. We are investing record amounts. Bus fares are also rising,

4.2% in real terms in 2010, at a time when real take-home pay has

been falling. This hits commuters particularly workers who use buses

on low incomes, another cost of living squeeze. I was with

Stagecoach in Manchester on Friday, and I saw a bus company investing in

new buses. Last week First ordered new buses. Part of your hard-working

families you are always on about, they are the ones going to work

early in the morning, and yet you are making them pay more for their

buses in real terms than they did before. They would be happier if

they could travel more cheaply. It is about getting investment in

services, it has to be paid for Why not run the old buses for five more

years? Because then there is more pollution in the atmosphere, modern

buses have lower emissions, and we are still giving huge support

overall to the bus industry and that is very important because I fully

accept that the number of people, yes, use the train but a lot of

people use buses as well. High-speed two, it has been delayed because 877

pages of key evidence from your department were left on a computer

memory stick, part of the submission to environmental consultation. Your

department's economic case is now widely regarded as a joke, now you

do this. Is your department fit for purpose? Yes, and as far as what

happened with the memory stick, it is an acceptable and shouldn't have

happened, and therefore we have extended the time. There has been an

extension in the time for people to make representation, the bill for

this goes through Parliament in a different way to a normal bill. It

is vital HS2 provides what we want. What I am very pleased about is when

the paving bill was passed by Parliament just a few months ago,

there was overwhelming support, and I kept reading there was going to be

70 people voting against it, in the end 30 people voted against it and

there was a good majority in the House of Commons. So can you give a

guarantee that this legislation will get onto the statute books? I will

do all I can. I cannot tell you the exact Parliamentary time scale. The

bill will have started its progress through the House of Commons by

2015, and it may well have concluded. The new chairman of HS2

said he can bring the cost of the line substantially under the budget,

do you agree with that? The figure is ?42 billion with a large

contingency, and David Higgins, as chairman of HS2, is looking at the

whole cast and seeing if there are ways in which it can be built

faster. At the moment across London we are building Crossrail, ?14.

billion investment. There was a report last week saying what an

excellent job has been done. Crossrail started under Labour.

Actually it was Cecil Parkinson in the 1990 party conference. You may

get HS2 cheaper if you didn't pay people so much, why is the

nonexecutive chairman of HS2 on ?600,000? And the new chief

executive on ?750,000. These are very big projects and we need to

attract the best people become so we are going for the best engineers in

the world to engineer this project. It is a large salary, there is no

question about it, but I'm rather pleased that engineers rather than

bankers can be seen to get big rewards for delivering what will be

very important pieces of national infrastructure. I didn't have time

to ask you about your passenger duty so perhaps another time. We are

about to speak to Nigel Mills and all of these MPs on your side who

are rebelling against the Government, how would you handle

them? We have got to listen to what our colleagues are talking about and

try to respond it. Would you take them for a long walk off a short

pier? I'm sure I would have many conversations with them. An

immigration bill to tack the immigration into the UK. When limits

on migration from Bulgaria and Romania were lifted this year there

were warnings of a large influx of migrant workerses from the two new

European countries. So far it's been more of a dribble than a flood. Who

can forget Labour MP Keith Vaz greeting a handful of arrivals at

Luton Airport. But it is early days and it is one of the reasons the

Government's introduced a new Immigration Bill. The Prime Minister

is facing rebellion from backbenchers who want tougher action

on immigration from abroad. Nigel Mills would reimpose restrictions on

how many Romanians and Bulgarians can come here. Joining me is Nigel

Mills, Conservative MP behind the amendment and Labour MP Diane

Abbott. Welcome. Nigel Mills, there hasn't been an influx of Romanians

and Bulgarians. Why do you want to restore these, kick these

transitional controls way forward to 2019? I don't think any of us were

expecting a rush on January 1st Andrew. I think we were talking

about a range of 250,000 to 350 000 people over five years. That's

obviously a large amount of people, especially when you think net

migration to the UK was well in excess of the Government's target of

tens of thousands last year. The real concern is that it would be

ever increasing our population, attracting lots of low-skilled,

low-wage people, which keeps our people out of work and wages down.

Did you accept that if you were to accept this, it would be in breach

of the Treaty of Rome, the founding principle of the European Union We

were trying to keep the restrictions that Bulgaria and Romania accepted

for their first seven years of EU membership, on the basis that when

we signed the treaty we weren't aware that we would have a huge and

catastrophic recession we are still recovering from. But you would be in

breach of the law, correct? The UK Parliament has a right to say we

signed this deal before the terrible recession, and we need a bit longer

in our national interest. It is worth noting that Bulgaria and

Romania haven't met all their accession requirements. The

Bulgarian requirement passed a law... So if they break the law it

is alright for us to break the law? Is we should be focusing on trying

to get 2. 4 million of our own in work, and 1 million people not in

work... Let me bring in Diane Abbott. Will you vote for this

amendment and why? It is in breach of the treaty. While I deplore MPs

that try to cause trouble, these MPs have been particularly mindless

because what they want to do wouldn't be legal. However, it is a

Tory internal brief, if I might say so. Maybe you can cause trouble by

voting for it. No, that would be going too far. Underlying it is a

real antagonism for David Cameron. They have had to hold off on this

bill until January. It was supposed to be debating before Christmas As

we speak they've not cut a deal so it could be pretty grus om. Nigel

Mills, what do you say to that I think there is a recognition that

there is a problem with the amount of migration from EU countries that

we need to tackle. We could try to achieve an annual cap perhaps,

longer limits on when countries get free movement. I think the debate is

moving in the right direction, but I think those people who are trapped

out of work and desperately looking for work want something to be done

now and not wait a few more years while we have more assessments

Andrews. People are worried about the level of immigration. They I it

is too high. That's the consensus in the country. We spoke to to

migration centre in Hackney and they said they are struggling to cope

with the number of people using their services. These are people

with problems with the law. In the past years EU migrants put in more

to the economy in taxation than they take out in benefits. When it comes

to free movement, which is agitating Nige em, that horse has bolted. We

signed a treaty. There is nothing people like Nigel Mills can do,

unless they want to rip their party apart, God forbid. Will you go as

far as to rip your party apart, Nigel Mills? Are you going to take

this all the way? Would you rather see this bill go down than your

amendment not be accepted? This is a very important bill. I think we all

want to see measures on the statute book, so the last thing we want to

see is this bill go down. We do need to set out clearly that we have real

concerns about the level of EU migration and something needs to be

done. Would you rather have the bill without your amendment or no bill at

all? I am hoping we can have the bill with the amendment. I know

that, but if you can't? Is that will depend on what the Labour Party

decide to do. They are talking tougher on immigration but will they

take action on it? Your party has been talking tough on immigration

but I will be surprised if an Ed Miliband Labour Party would vote for

egg in direct cameravention of the Treaty of Rome. It would make no

sense. Nigel Mills is wishing for the impossible. If I was a Tory I

would be wringing high hands. He hasn't ruled out crashing the bill.

That's incredible. Where will this end, Nigel Mills? We'll end with a

vote on Thursday. There's a lot of amendments people can use to show

their concern about migration. We want limited and proportionate

action, and that's what I am proposing. I want to see the bill on

the statute book, I want the restrictions on people who shouldn't

be here getting bank accounts and driving licences. I don't want to

crash this bill but there's more measures we need in it. Nigel Mills

thank you. You are going to be -- popping up I think on the Sunday

Politics East Midlands. Diane Abbott, thank you as well.

We're in for more heavy rain and high winds across the UK today. You

may remember that one UKIP councillor - he's since been

suspended - caused controversy last weekend by blaming the recent

flooding on the legalisation of gay marriage. Why didn't I think of

that? So who better than this man to bring you the unofficial forecast.

I'll be bringing you the late least UKIP weather from your area.

You're watching Sunday Politics. Also coming up in just over 20

minutes, I'll be looking at the week ahead with our political panel.

Welcome to Sunday Politics Sites. Basingstoke and Deane has one of the

largest property portfolios of any council and all of those rents make

up a nice little earner. I'm joined by both Labour and Conservative

representatives. On Friday, the government has said that take`home

pay has gone. Cost`of`living crisis is sounding like a political slogan.

It is one year comparing with another. A few weeks back at the

full four years of the coalition, independent commentators are

questioning it. It will improve further. By the time we get the

election, or you have dropped the great cost crisis? Now, because the

figures might have altered a bit, but there might still be an issue as

to how much of hits working people have taken. You agree with the

figures, that he is going up and people are better off? That is what

the figures are saying. GDP is increasing, and... Are people saying

that in their pockets? Business confidence is growing, people are

employing, employment is at record levels, unemployment is falling.

More work needs to be done but this economic plan is working and we're

not seeing a double dip or triple dip recession or a requirement for

plan B. What about Ed Balls's flat`lining? We do not see that any

more. This is the narrative that they are coming out with. It is a

narrative that will continue, it has validity and it has resonance on the

doorstep. That is what will count. It is a people feel and how they

feel they have been treated over the period of Parliament, not one year

to the next. Who will be responsible for taking the economy forward, the

people who got us into the mess in the first place are the people who

are repairing things? What about energy, Christmas power cuts cost

millions for thousands as storms brought down the power lines across

the South of England in particular. The Rye 100,000 homes without

electricity in our region. Last week the bosses of the power distribution

companies got a grilling from MPs. One MP found the witnesses less than

impressive. I was absolutely amazed at the level of complacency, the

content for customers, and we'll know somebody who was affected by

this and the southern region, and to find out that the reaction times,

the number of people that were without electricity on Christmas Day

and Boxing Day was quite remarkable. After complacency from all of you.

I think that Ofgem will go away and they will go away and they will do a

better job next time around. Will be not need financial incentive to do

this? They have a private company, why should they? They have a

responsibility to transfer electricity along the lines, that is

their responsibility. Do they need an incentive to do that? Rail I do

not think so, but I am preceded that we need to have a really kept the

way we have structured the electricity market. Ultimately,

these transition companies are monopoly providers and they have

shown utter contempt for their customers.

You asked the question in the Commons at the time of the storms,

what we need to do to electricity companies to persuade them to spend

more money? You are saying the select committees at their best,

calling the companies to account. Whether changes are going to be the

norm now. Every 100 years we are seeing these storms, but it is much

more frequent than that. The companies have to react to that. The

question I posed to the Prime Minister was, given those weather

changes, she not now be more investment in nature that river and

sea defences are scrutinised to make sure that they can be robust enough

to deal with these weather changes. How can you persuade a private

company that they need to do that? Response from them was that they

were going to go away and be kept this. I am reluctant to provide

legislation at this stage... At it might be needed. That is the final

threat, but as a conservative we preferred to have that first step of

saying, this is a responsibility from a company, this is what you

actually have to do. But bear in mind that these storms that we have

not seen many years. The Select Committee's threat of legislation,

is that enough? What we are seeing is the consequences of that year

rate privatisation coming home to roost. This is all predicted. ``

Thatcher's privatisation. We do not have this problem in France. State

owned French companies own large part of British power supplies. The

last Labour government should have taken stronger action, yes, and

hopefully the lessons of the last few months will persuade the

opposition that they should have taken stronger action on government

and that the current model is broken. Ed Miliband's freeze.

Investment is drying up. All of these foreign companies, why should

they come and get involved in a market where prices might be frozen.

One boss said that there is dramatic cooling of investment. Companies are

recognising that they will be a change of government that will

deliver a different structure. They will have to live with it. The

current structure is anti`consumer in this country. Are you actually

advocating state ownership when it was under the last government that

we ended up with five companies dominating. State ownership? As far

as I'm concerned, that is an option. The FSB has a conference tomorrow

for they will be telling the government just what it needs to do

to help with Spanish in. `` help expansion. What will the message be?

We are very excited, this is the first policy day that the FSB is

holding. We have a line`up of very impressive speakers. You have a lot

of influence now? As far as the employment figures are concerned,

small businesses are beginning to employ people again and that is to

be very welcomed. We are seeing unemployment figures going down and

that has to be welcomed. You expect more growth in 2014? Yes, we do.

What either hurdles? The concern that I would have over reducing

unemployment and people taking on more, when we hit that 7% figure

that Mark Carney has been talking about, he sees that as a figure to

put increases in interest rates. For your members, interest`rate rises in

Dorset, what with the consequences be? The consequences that we are

still fragile, we have seen great improvements, but the economy is

still fragile and what I would not want to see as interest rates

suddenly rising because we have hit a magic figure. What about pay

rises? People who have not had pay rises in small firms, should they be

getting it now? Should they be thinking about paying it? The facts

about these businesses, largely small businesses pay above the

minimum wage and often above the living wage. Small businesses are

and have been giving their employees increases, not of the size... And

certainly you have to feel for private sector workers who have had

their pay frozen. You think that you would like to pay people more? We

already pay well above the minimum wage and have done for some years.

But of course there is no more money coming into the public sector. It

has to be found within the existing coffers and we do not even know the

full local government finance settlement rose from Eric Pickles,

who is yet to declare his plan. There could be more cuts coming in

the next few weeks. Apart from the public sector, do you think that

small businesses in the private sector should be thinking about a

bit of a pay rise and what would you say to the Chancellor about interest

rates. This is the engine behind British economy. 50% of our GDP

comes from small and medium`sized businesses. 50% of our employees

come from them, 95% of companies in Britain actually imply ten or less

people. `` employee. This is why we have reduced corporation tax, this

is whether such energy. Very much these messages that the Chancellor

understands and wants to support. Pay rise? That is for the Chancellor

to make up. Hopefully we'll invite me back in March when the budget

comes out and that is when you will see comments about the pay rises. In

the Thames Valley, are we seeing the expansion that we're hearing being

talked about in a wider economic level? The Thames Valley has never

been hit as badly as the rest of the country. We are first out of

recession. Looking nationwide, because there are other parts of the

economy nanny to be taken on board. But certainly the signs are good

locally. 1.I would add to what David said is of course that the impact of

business rates on small businesses is disproportionately heavy. Small

businesses are still clobbered with the tax that is inherently unfair on

small businesses and does need changing. What would you say about

that? He's absolutely right. The only signs which argued is that we

have a freeze which will be continued and as far as employment,

the 2000 pounds NIC that we can get by employing more people, the

government is doing things. I'm not here to support either of them, but

as far as small businesses are concerned, things are looking

better, but we are not out of the woods yet. Councils are busy setting

budgets, we were talking about them a moment ago, worrying about where

savings be made. But imagine if you were running a council and you had

another source of income that brought in more than their council

tax and the government grand combined. `` grant.

No one would claim that Basingstoke shares much with Dallas. If you

would own up to line dancing. Basingstoke and Deane Borough

Council may not have oil but it does have land and property, lots and

lots of it. And it is a huge property spinner. `` moneyspinner.

We own all sorts of things, warehouses, concert halls, doctors

surgeries, coffee shops. You do not run a GP surgery. We do not run a GP

surgery recovery shop, we own the property and we get rent from the

property. How much says that bring in? It brings in about ?50 million,

that is more than we get from government grant or council tax. It

has one of the largest commercial portfolios of any local authority.

It is not as Basingstoke that relies on harrying out its property to make

a profit, David Cameron would be delighted to know that the council

in his constituency also rents out. Who you rent two is also just as

important, so what are the criteria? It depends on what fits in with the

other criteria in the borough, we need to be adding something to the

quality of life for our residents. For example, the shopping centre,

when they decided that they wanted out of that we were able to step in

and buy it. It was a 1950s, 1960s shopping centre and brought it up to

the current standards. Currently if you are renting a property, the

recession must have been a tough time. We have lost substantial

amounts, interest rates are half what they used to be. Basingstoke

has nearly ?115 million in the bank. It is that rarest of beast 's, a

debt free council, one that is about to freeze council tax for the fourth

year in a row. Recently it rented someone's to an indoor skydiving

centre and a coffee shop next door, bringing in ?100,000 per year. Even

though this has led some to accuse the borough of moving into the

coffee business. The rate of return was such that it enabled us to

invest twice or three times the amount in other things we do not

then have to worry about the rate of return from that. We can put those

into longer term project for the benefit of the community which we

would not otherwise have been able to do. Can you see yourself smaller

and more moving down that private line? We need to learn how to work

with private business, because that is how you make the most gains.

People say, you have all of these assets, why don't you spend them?

Don't mind using them, but investing wisely so that you get a return and

you can recycle the money is the right way. But going out and

frittering the money, in 40 years's ten you will not have a council here

who will be able to continue to invest, it will be a council that

has no money to invest. Is this just because the good people

of Basingstoke have over the years built up this investment? Other

councils must look at them with greedy eyes. They are Newtown, they

have a of land invested in the first place, but that approach is

responsible. There are an accountable body and the money is

coming in for the benefit of the local community. To be not have

bought houses? I will not decry them. It disappoints me to learn

that they are cutting, for example, subsidies to local CB this year. You

would have thought that that would have been a priority in the current

climate. `` the local CAB. They are accountable, they are probably more

transparent than many of the businesses. Good luck to them. Would

you say there is line that must not crossed here? You know a lot about

the Armed Forces. There was a suggestion that they could be Royal

Navy people preaching the virtues of British shipbuilding. Do you think

that you'd happen? , you were right, `` you are right, there needs to be

a line drawn. Bournemouth focuses on to risen. There is a lot of work

that we do to allow wide portfolio to be managed. One that actually

supports... You have outsourced a lot in Bournemouth... But that is

good, you do not necessarily want councils running things, but you

want them to benefit from being able to outsource things. The land is

owned by the council, therefore... That they are outsourcing as well.

We outsource some. That is something for the local authority to

determine. But it is wise for councils throughout the country to

consider that. You were saying that Sandhurst is quite a good investment

for the government. It is twofold, it strengthens relationships with

countries around the world, but also the paper that service as well. In

the same way that overseas students benefit from coming here to go to

university. Are you saying that they should have a right to buy the boat?

And maintain them. He was the 62nd round up.

`` here is the round`up in 60 seconds.

Photographers outside the home of MP Mike Hancock this because he was

suspended `` this week as he was suspended from the Liberal Democrats

over accusations of inappropriate sexual advances towards a

constituent. The EU wants half of all household

rubbish recycled by 2020. This will cheer village is much more

21st`century. They have got what they think is the first phone box to

offer high`speed Wi`Fi. The MP who did the ceremony was surprised to

get an old`fashioned phone call. It rang. In Sussex they were playing

host to European anti`fracking protesters. It is important for

people to get in front of the companies and say, we refuse it. As

we were saying, they still have a nationalised energy situation. But

the Russians, some of them do on their own boats. The Russian sailors

might get called up and bring their brought into action. The merchant

Navy, if you like, they can be upgraded when actually required, so

it is reservists. We talked about Mike Hancock year, the Liberal

Democrats having a very hard time of it. Lord Rennard, Chris Hughton

before that. Is it just their turn for sleaze? `` Chris Huhne. Everyone

has skeletons in their cupboards. I be doing the rate thing? It is

managing it, they do not think that the Lib Dems have done very well

about managing it. They have a very democratic structure which is a

hindrance in this situation, is it, or is it actually part of what they

would say is one of their virtues? That the whole membership gets to

have involvement year? I think that there are prospect is more ``

process is more democratic, but a candidate has to be selected and go

through the various stages, my concern is that we absolutely need

to improve that scrutiny on the one side. We must make sure that we have

the best people stepping forward, but we only get the best people

stepping forward if they feel that they have the general support of the

nation. The balance of that... It is not what they have done before they

are selected, it is the behaviour afterwards. No one is

questioning... The issue about Mike Hancock... But I do not think it was

a case of will for the Kim MPs are peers. It is the way that we manage

it. The Lib Dems clearly have a lot to learn from other parties. I think

that all parties can learn from this episode as well. That is the Sunday

politics in the south. Thank you to both of my guests. You can keep

up`to`date with my blog. Back to Andrew.

constituency, very pleased. Andrew, back to you.

UKIP leader Nigel Farage is never far away from controversy, but this

week he's been outdoing himself He was hit over the head with a placard

by a protester in Kent, provoked outrage by saying women with

children are worth less to city firms, and said the ban on owning

handguns was 'crackers'. He also seemed less than sure of his party's

own policies when I interviewed him on the Daily Politics. And the story

that got everyone talking was the suggestion by a UKIP councillor that

flooding is linked to gay marriage. We'll talk about all of that in a

moment, but first, over to Nigel with the weather. Weather for all

areas of the British Isles but definitely not "Bongo Bongo Land."

You may have heard about a storm in a tea cup developed when you kip

councillor in Oxfordshire blamed the floods on the gay marriage Bill The

old party is focusing on the view of UKIP members like him, even though

he had said a sell yuj of things before when a Tory councillor. How

quickly things change depending on when the blouse. There are

occasional barmy views by people of all persuasions. In Whitby a Labour

councillor claimed of fathered a child with an extra terrorist ral,

and said his real mother was a foot green alien. And in Wales a

councillor thinking about heading off for the

slopes, there were flurries of embarrassment for the Tories after

Aidan Burly organised a Nazi skiing party in a resort.

Anyone heading to Brussels, perhaps on the gravy train, watch out for

hot air. In Britain temperatures are rising

ahead of the European elections in May. It could get stormy, so advise

light aircraft. Watch out for outbreaks of common sense, and no

chance of cyclonic fruit cakes. Back to you, Andrew, with the rest of the

Sunday Politics. Nick, if it was any other party that

had bon through the past week it would be in meltdown. And maybe it

is harming UKIP and maybe it isn't. What do you think? That just shows,

that great weather forecast, Prince Charles now has a rival to be an

excellent weather forecaster, as does the Duchess of Cornwall. It

shows why Nigel Farage is the fefr candidate to the European elections.

Our invitation to the British people to kick the establishment. The

establishment have spent five years that the European Parliament is a

waste of time, so who are you going to vote for? A Nigel Farage type of

person. What was important about your eadviceration of Nigel Farage

on Daily Politics is that when it came to the substance, they

flounder. But the point about that party is they may have the thinnest

set of policies, but people know what they stand for more than any

other parties - get out of Europe, a grammar school in every town. If any

other leading politician called for an end to the ban on handguns, at a

time when we've seen these appalling gun deaths in the United States now

almost one every week in some terrible siege in a school. It would

be a crisis. It seems to wash off him. He's got congenital

foot-and-mouthitis. Straight into another wild nothing to do with why

people might vote UKIP. I don't think people are desperate to have

handgun licences back in this country. It is such an unusual

phenomenon, UKIP, that if this was a Tory or a Labour or a Lib Dem saying

it, we've seen the damage done to the Lib Dems on a much more serious

manner, we would say this is terminal. But maybe it adds to this

image that we are not like the other parties. I think that is it. We keep

waiting for these scandals and embarrassments to do damage to

UKIP's poll ratings, but it's not working. It is ultimately because if

you are an antiestablishment party, if you are an anti-system party the

rules of the game which apply to the establishment parties don't apply to

you. And the more ramshackle and embarrassing you are, the more

authentic you seem. It what be take something for them not to finish

second in May. Do they spend the following 12 months sinking in the

poll snoos And George Osborne's strategy is fame everything as

Labour versus the Conservatives The electorate will have their fun in

May. Maybe the Tories will be beat into third place but in thejection

is that -- but in the general election it is Labour versus the

Tories. The Conservative Party will run around, 46 letters to Graham

Brady, a leadership contest. That sort of scenario. UKIP, if it rules

well in the European elections, could cause big trouble for Mr

Cameron and Mr Clegg couldn't it? The big point about this, David

Cameron said this is not a political party but a pressure group. This is

the way to look at UKIP, and the way it is used by people in the right of

the party, who say we have to do this. I like the policy of painting

the trains in their old liveries. It would be like my old train set. I

like the bigger passports. Pre-GNER... And London and Midland.

I used to be a train spotter. Gordon Birtwhistle has been on the

phone. Good to know you are watching but pity you are not here. He wanted

to clarify he had constituency commitments to prevent him coming on

the show to talk about becoming leader of the party, but he didn't

dispute anything we said on the show.

Yesterday, Ed Balls said that housing investment will be a central

priority for the next Labour Government. It's a big issue, as the

lack of new homes pushes up the the price of owning or renting. Well,

tomorrow the Tories will announce what they say is the most ambitious

programme of affordable housebuilding for 20 years. The

Government sees housing as a really important part of the economy.

That's why we are announcing a 23 billion package for 165,000 new

affordable homes. So individual builders, councils, housing

associations can bid for that money. Phase one, which we are halfway

through at the moment, we've built 170,000 houses. 99,000 already

coming out of the ground, so we ve made real progress on that. So,

165,000 new, affordable homes. It is a lot. Let me add three more words.

Over three years. It is not such a lot. It is not, and Labour's

commitment is 200,000 homes a year and even that isn't enough. The

problem here is that the vest interest is with people who already

have homes. They have a vote in the system through the planning

regulations. In London there is a gap in the hedge through Richmond

Park through which you should be able to see St Paul's Cathedral

That's why you cannot build homes where you want them. I don't think

we want to build homes over Richmond Park. He wasn't saying that. That's

dies an Tyne -- that's Byzantine. You've got to deal with supply,

which is why Labour is talking about 200,000 a year, and what George

Osborne has done with supply is helping with demand. We know the

Help to Buy Scheme is pretty dangerous, and Mark Carney is keen

to put the break on that. If you are to deal with supply, you have to do

radical things. Chris Huhne talked about on brownfield sites you can

tax people who are holding the land as if the development has taken

place. Then if you are really going to deal with it you have to talk

about the greenfield sites, and you have to deal with the garden cities

argument, which is too much for the Tories. All the parties seem to

agree building new houses is a political winner. I hope that they

are right. I'm not sure they are. The housing market is the example of

what economists call the insider in-outsider problem. People who are

already homeowners have no rational incentive to vote for more housing

stock. Even if you leave aside the Conservative arable objections, if

you are a homeowner there is an interest to stick with the planning

promise that we have. So then we are stuck between a rock and a hard

place. Not only are we growing at the moment but our population is

growing. I've seen projects that in quite quickly we will overtake

Germany and become the largest populated country in Europe. If

that's the case we've got to build homes. We have. If you look at Tower

Hamlets in London, the population is r ging higher than the number of

dwelling. Classically the theory's been young people are most affected

by this and they don't vote much. But when their parents have young

Johnny stuck at home at 37, that's an electoral issue. That's why the

garden cities project is interesting, because they finance

themselves. You zone it for development, it is worth ?2 million

an acre and then you can build on it. But who is going to want the

greenfield sites gone. And how quickly can we build garden cities

today? Some were started before the Town and Country Planning Act. I've

read stats about the way Chinese and Japanese are building houses and

they were slower than that. Here's a thought, sticking on the housing

theme. Ed Miliband came up with the energy freeze, a populist

interventionist move. Then the use it or lose it to land developers.

Then breaking up the banks. Now the 50p tax rate. How much would you put

on Labour coming up for rent controls? That's already a big

split. They are split already on it. They have. In London it is a popular

policy. It might not play well in the rest of the country. I would say

50-50 on that. I think Labour supporting rent controls like the

Tories having a go at welfare. The policy may be individually popular

but it sends an impression about the party which might be less attract

active. It confirms underlying suspicions that vote these guys into

power and suddenly they are tampering with the private economy.

The memories of the '70s when Governments tried and failed to do

that. It is riskier than a superficial reading of the polls

would suggest. One to watch? I think they are looking at it. That was the

key message of the Ed Balls speech on housing, is looking at supply and

how you get to that 200,000 figure a year, which is substantially more

than what Kris Hopkins is talking about. What we didn't get to talk

about, remember we had Michael Wilshaw on, the Chief Inspector of

Schools. We all consumed was Mr Gove's man, the Education

Secretary's man. Now according to the Sunday Times he is spitting

blood about the way Mr Gove and his office are speaking about him behind

the scenes. We've checked the quotes and he stands by them, so I think

we'll have to have the head of Ofsted back on the programme. If you

are watching, we're here. All that to the Lib Dems who didn't come on

today. That's all for today. Thanks to all

my guests. The Daily Politics is back on Monday at midday on BBC Two,

and I'll be here again next week. Remember, if it's Sunday, it's the

Sunday Politics. Britain, with 120,000 soldiers

is now at war with Germany This would be the first

truly modern war. and resolve of entire populations

against each other. A war that would turn

the country upside down.