:00:36. > :00:44.Morning folks. Welcome to the Sunday Politics. George Osborne's fifth
:00:45. > :00:46.Budget will offer more tax relief for the lower paid but not for
:00:47. > :00:48.middle income earners being thrust into the 40p tax bracket. That's our
:00:49. > :00:53.top story. Ed Balls says millions of people
:00:54. > :00:56.aren't feeling any benefit from the recovery. We'll discuss the economy
:00:57. > :01:03.with big political beasts from Labour, the Conservatives, and the
:01:04. > :01:07.Lib Dems. Now that Ed Miliband has effectively ruled out an in/out EU
:01:08. > :01:08.referendum, how does UKIP deal with Tory claims that a vote for UKIP
:01:09. > :01:18.In the south: After the floods, the means no chance
:01:19. > :01:20.In the south: After the floods, the clean`up. The prime minister
:01:21. > :01:23.promises to spend restoring confidence in the safety
:01:24. > :01:24.of cycling. The three areas of London getting a cash boost to try
:01:25. > :01:36.something different. And with me as always our top
:01:37. > :01:38.political panel - Nick Watt, Helen Lewis and Janan Ganesh. They'll be
:01:39. > :01:43.tweeting their thoughts using the hashtag #bbcsp throughout the
:01:44. > :01:46.programme. So, just three months after his last major financial
:01:47. > :01:51.statement, George Osborne will be at the despatch box again on Wednesday,
:01:52. > :01:54.delivering his 2014 Budget. The Chancellor has already previewed his
:01:55. > :02:05.own speech, pledging to build what he calls a "resilient economy". The
:02:06. > :02:08.message I will give in the Budget is the economic plan is working but the
:02:09. > :02:12.job is far from done. We need to build resilient economy which means
:02:13. > :02:16.addressing the long-term weaknesses in Britain that we don't export
:02:17. > :02:19.enough, invest enough, build enough, make enough. Those are the things I
:02:20. > :02:23.will address because we want Britain to earn its way in the world. George
:02:24. > :02:27.Osborne's opposite number, Ed Balls, has also been talking ahead of the
:02:28. > :02:29.Budget. He says not everyone is feeling the benefit of the economic
:02:30. > :02:36.recovery, and again attacked the Government's decision to reduce the
:02:37. > :02:40.top rate of tax from 50 to 45%. George Osborne is only ever tough
:02:41. > :02:43.when he's having a go at the week and the voiceless. Labour is willing
:02:44. > :02:47.to face up to people on the highest incomes and say, I'm sorry,
:02:48. > :02:53.justifying a big tax cut at this time is not fair. We will take away
:02:54. > :02:57.the winter allowance from the richer pensioners, and I think that's the
:02:58. > :03:02.right thing to do. George Osborne might agree, but he's not allowed to
:03:03. > :03:06.say so. That was the Chancellor and the shadow chancellor. Janan, it
:03:07. > :03:10.seems like we are in a race against time. No one argues that the
:03:11. > :03:13.recovery is not under way, in fact it looks quite strong after a long
:03:14. > :03:19.wait, but will it feed through to the living standards of ordinary
:03:20. > :03:23.people in time for the May election? They only have 14 months to do it.
:03:24. > :03:27.The big economic variable is business investment. Even during the
:03:28. > :03:32.downturn, businesses hoarded a lot of cash. The question is, are they
:03:33. > :03:36.confident enough to release that into investment and wages? Taking on
:03:37. > :03:39.new people, giving them higher pay settlements. That could make the
:03:40. > :03:46.difference and the country will feel more prosperous and this time next
:03:47. > :03:50.year. But come to think of it, it strikes me, that how anticipated it
:03:51. > :03:53.is, it's the least talked about Budget for many years. I think that
:03:54. > :03:58.is because the economy has settled down a bit, but also because people
:03:59. > :04:02.have got used to the idea that there is no such thing as a giveaway.
:04:03. > :04:07.Anything that is a tax cut will be taken away as a tax rise or spending
:04:08. > :04:10.cut. That's true during the good times but during fiscal
:04:11. > :04:16.consolidation, it's avoidable. -- unavoidable. There is a plus and
:04:17. > :04:21.minus for the Conservatives here. 49% of people think the government
:04:22. > :04:23.is on roughly the right course, but only 16% think that their financial
:04:24. > :04:28.circumstances will improve this year. It will be a tough one for the
:04:29. > :04:35.Labour Party to respond to. I agree with Janan. Everyone seems bored
:04:36. > :04:40.with the run-up to the Budget. The front page of the Sunday Times was
:04:41. > :04:44.about fox hunting, the front page of the Sunday Telegraph was about EU
:04:45. > :04:49.renegotiation. Maybe we are saying this because there have not been
:04:50. > :04:54.many leaks. We have got used to them, and most of the George Osborne
:04:55. > :04:59.chat on Twitter was about how long his tie was. Freakishly long. I
:05:00. > :05:06.wouldn't dare to speculate why. Anything we should read into that? I
:05:07. > :05:13.don't know. For a long while there was no recovery, then it was it is a
:05:14. > :05:15.weak recovery, and now, all right, it's strong but not reaching
:05:16. > :05:21.everyone in the country. That is where we are in the debate. That's
:05:22. > :05:27.right, and the Conservative MPs are so anxious and they are making
:05:28. > :05:32.George Osborne announcing the rays in the personal allowance will go
:05:33. > :05:40.up, saying it might go up to 10,750 from next year, and Conservative MPs
:05:41. > :05:43.say that that's OK but we need to think about the middle voters.
:05:44. > :05:46.People are saying the economy is recovering but no one is feeling it
:05:47. > :05:51.in their pocket. These are people snagged in at a 40p tax rate. The
:05:52. > :05:56.Tories are saying these are our people and we have to get to them.
:05:57. > :06:02.He has given the Lib Dems more than they could have hoped for on raising
:06:03. > :06:06.the threshold. Why is he not saying we have done a bit for you, now we
:06:07. > :06:13.have to look after our people and get some of these people out of that
:06:14. > :06:15.40% bracket? Partly because the Lib Dems have asked for it so
:06:16. > :06:19.insistently behind-the-scenes. Somebody from the Treasury this week
:06:20. > :06:22.told me that these debates behind the scenes between the Lib Dems and
:06:23. > :06:26.Tories are incredibly tenacious and get more so every year. The Lib Dems
:06:27. > :06:31.have been insistent about going further on the threshold. The second
:06:32. > :06:37.reason is that the Tories think the issue can work for them in the next
:06:38. > :06:41.election. They can take the credit. If they enthusiastically going to
:06:42. > :06:45.?12,000 and make it a manifesto pledge, they can claim ownership of
:06:46. > :06:50.the policy. The Liberal Democrats want to take it to 12,500, which
:06:51. > :06:54.means you are getting into minimum wage territory. It's incredibly
:06:55. > :06:59.expensive and the Tories are saying that maybe you would be looking at
:07:00. > :07:04.the 40p rate. The Tories have played as well. There have been authorised
:07:05. > :07:06.briefings about the 40p rate, and Cameron and Osborne have said that
:07:07. > :07:10.their priority was helping the lowest paid which is a useful
:07:11. > :07:15.statement to make and it appeals to the UKIP voters who are the
:07:16. > :07:20.blue-collar workers. And we are right, the economy will determine
:07:21. > :07:24.the next election? You assume so. It was ever that is. It didn't in 1992
:07:25. > :07:33.or 1987. It did in 1992. Ed Miliband's announcement last week
:07:34. > :07:36.that a Labour government would not hold a referendum on Europe unless
:07:37. > :07:38.there's another transfer of powers from Britain to Brussels has
:07:39. > :07:44.certainly clarified matters. UKIP say it just shows the mainstream
:07:45. > :07:47.parties can't be trusted. The Conservatives think it means UKIP
:07:48. > :07:50.voters might now flock back to them as the only realistic chance of
:07:51. > :07:53.securing a referendum. Giles Dilnot reports.
:07:54. > :07:57.When it comes to Europe and Britain's relation to it, the
:07:58. > :08:02.question is whether the answer is answered by a question. To be in or
:08:03. > :08:05.not to be in, that is the question, and our politicians have seemed less
:08:06. > :08:08.interested in question itself but whether they want to let us answer
:08:09. > :08:21.it. Labour clarified their position last week. There will be no transfer
:08:22. > :08:24.of powers without an in out referendum, without a clear choice
:08:25. > :08:30.as to whether Britain will stay in the EU. That seems yes to a
:08:31. > :08:33.referendum, but hold on. I believe it is unlikely that this lock will
:08:34. > :08:37.be used in the next Parliament. So that's a no. The Conservatives say
:08:38. > :08:47.yes to asking, in 2017, if re-elected, but haven't always. In
:08:48. > :08:49.2011, 81 Tory MPs defied the PM by voting for a referendum on EU
:08:50. > :08:52.membership: the largest rebellion against a Tory prime minister over
:08:53. > :09:03.Europe. Prompted by a petition from over 100,000 members of the public.
:09:04. > :09:05.The wrong question at the wrong time said the Foreign Secretary of a
:09:06. > :09:08.coalition Government including selfie-conciously-pro European Lib
:09:09. > :09:11.Dems, who had a referendum pledge in their 2010 manifesto, but only in
:09:12. > :09:14.certain circumstances. So we have the newspapers, and the public
:09:15. > :09:17.meeting leaflets. UKIP have always wanted the question put regardless.
:09:18. > :09:25.But Labour's new position may change things and The Conservatives think
:09:26. > :09:31.so. I think it does, because, you know, we are saying very clearly,
:09:32. > :09:36.like UKIP, we want a referendum, but only a Conservative government can
:09:37. > :09:41.deliver it because most suffer largest would say it is possible in
:09:42. > :09:50.the first past the post system to have a UKIP government --
:09:51. > :09:57.sophologists. And then it's easy for as to say that if a UKIP vote lets
:09:58. > :10:03.in a Conservative government, then they won't hold a referendum. UKIP
:10:04. > :10:06.seem undaunted by the clarifications of the other parties, campaigning
:10:07. > :10:09.like the rest but with a "tell it how it is, just saying what you're
:10:10. > :10:16.thinking, we aren't like them" attitude. They seem more worried
:10:17. > :10:20.about us and what we want, and I don't see that in the other parties.
:10:21. > :10:27.In parts of the UK, like South Essex, it's a message they think is
:10:28. > :10:30.working. They are taking the voters for granted again and people have
:10:31. > :10:37.had enough. People are angry, they see people saying they will get a
:10:38. > :10:42.vote on the European Union, but then it just comes down the road. They
:10:43. > :10:48.were quick to capitalise on the announcements, saying only the
:10:49. > :10:54.Conservatives will give you say, so does it change things? Not really.
:10:55. > :10:57.We have been talking about a referendum and having a debate on
:10:58. > :11:02.the European Union for years, and the other parties are playing catch
:11:03. > :11:06.up. They have a trust issue. Nobody trusts them on the European Union
:11:07. > :11:09.and that is why people come to us. Who the average UKIP voter is, or
:11:10. > :11:11.how they voted before is complicated, and what dent they
:11:12. > :11:14.might make on Conservative and Labour votes in 2015 is trickier
:11:15. > :11:22.still, but someone's been crunching the numbers anyway. We reckon it is
:11:23. > :11:26.between 25 and 30% of the electorate broadly share the UKIP motivation,
:11:27. > :11:30.so to top out at that level would be difficult. That's an awful lot of
:11:31. > :11:35.voters, but it's not the majority, and this is the reason why the main
:11:36. > :11:38.parties can't afford to just openly appealed to the UKIP electorate too
:11:39. > :11:43.hard because the elections are won and lost amongst the other 70%, the
:11:44. > :11:48.middle-class, the graduate, the younger, ethnic minorities. An
:11:49. > :11:52.appeal to the values of UKIP voters will alienate some of the other
:11:53. > :11:55.groups, and they are arguably more significant in winning the election.
:11:56. > :11:58.Whatever, the numbers UKIPers seem doggedly determined to dig away at
:11:59. > :12:01.any support the other parties have previously enjoyed.
:12:02. > :12:04.Giles Dilnot reporting. UKIP's leader, Nigel Farage, joins me now
:12:05. > :12:21.for the Sunday Interview. Nigel Farage, welcome back. Good
:12:22. > :12:24.morning. So the Labour Party has shot a fox. If Ed Miliband is the
:12:25. > :12:29.next by Minister, there will not be a referendum customer there's a long
:12:30. > :12:33.way between now and the next election, and Conservative party
:12:34. > :12:36.jobs and changes. We had a cast-iron guarantee of a referendum from
:12:37. > :12:40.camera, then he three line whip people to vote against it, and now
:12:41. > :12:44.they are for it. What the Labour Party has done is open up a huge
:12:45. > :12:47.blank to us, and that is what we will go for in the European
:12:48. > :12:51.elections this coming year in May. I think there is a very strong chance
:12:52. > :12:55.that Labour will match the Conservative pledge by the next
:12:56. > :12:59.general election. There may be, but at the moment he has ruled it out,
:13:00. > :13:03.and if he does not change his mind and goes into the election with the
:13:04. > :13:09.policy as it is, the only chance of a referendum is a Tory government.
:13:10. > :13:14.If you think the Tories will form a majority, which I think is unlikely.
:13:15. > :13:17.Remember, two thirds of our voters would never vote Conservative
:13:18. > :13:21.anyway. There is still this line of questioning that assumes UKIP voters
:13:22. > :13:25.are middle-class Tories. We have some voters like that, but most of
:13:26. > :13:30.them are coming to us from Labour, some from the Lib Dems and a lot of
:13:31. > :13:37.nonvoters. But it come the election you failed to change Mr Miliband's
:13:38. > :13:40.line, I repeat, the only chance of a referendum, if you want a
:13:41. > :13:44.referendum, if that is what matters, and the polls suggest it doesn't
:13:45. > :13:47.matter to that many people, but if that is what matters, the only way
:13:48. > :13:52.you can get one is to vote Conservative. No, because you have a
:13:53. > :13:56.situation in key marginals, especially where all three parties
:13:57. > :14:00.are getting a good share, where we will see, and this depends a lot on
:14:01. > :14:06.the local elections and the European elections, there are target
:14:07. > :14:10.constituencies where UKIP has a reasonably good chance of winning a
:14:11. > :14:16.seat, and that will change the agenda. Every vote for UKIP makes a
:14:17. > :14:19.Tory government less likely. Arab voters are not Tory. Only a third of
:14:20. > :14:26.the UKIP boat comes from the Conservative party -- our voters are
:14:27. > :14:30.not Tory. -- the UKIP vote. It was mentioned earlier, about blue-collar
:14:31. > :14:33.voters. We pick up far more Labour Party and nonvoters than
:14:34. > :14:37.conservatives. On the balance of what the effect of the UKIP boat
:14:38. > :14:40.is, the Tories should worry about us, they should worry about the fact
:14:41. > :14:46.they have lost faith with their own electorate. Even if there is a
:14:47. > :14:49.minority Ed Miliband government, it means no referendum. Labour and the
:14:50. > :14:54.Liberal Democrats are now at one on the matter. The next election is in
:14:55. > :14:58.a few weeks time, the European elections. What happens in those
:14:59. > :15:01.elections will likely change the party stands and position on a
:15:02. > :15:06.referendum. The fact that Ed Miliband has said this means, for
:15:07. > :15:09.us, our big target on the 22nd of May will be the Labour voters in the
:15:10. > :15:14.Midlands and northern cities, and if we do hammer into that boat and we
:15:15. > :15:23.are able to beat Labour on the day, there's a good chance of their
:15:24. > :15:30.policy changing. One poll this morning suggests Labour is close to
:15:31. > :15:37.you at 28, the Conservatives down at 21, the Lib Dems down at eight. You
:15:38. > :15:41.are taking votes from the Conservatives and the Liberal
:15:42. > :15:48.Democrats. We are certainly taking votes from the Lib Dems but that is
:15:49. > :15:54.comparing the poll with one year ago when I don't think most people knew
:15:55. > :15:58.what the question really was. You seem to be in an impossible position
:15:59. > :16:04.because the better you do in a general election, the less chance
:16:05. > :16:10.there will be a referendum by 2020. No, look at the numbers. Only a
:16:11. > :16:15.third of our voters are Conservatives. When we have polled
:16:16. > :16:20.voters that have come to us, we asked them if there was no UKIP
:16:21. > :16:25.candidate who would you vote for, less than one in five said
:16:26. > :16:30.Conservative. Less than one in five UKIP voters would be tempted to vote
:16:31. > :16:35.Conservative under any circumstances so the arithmetic does not suggest
:16:36. > :16:38.we are the Conservative problem, it suggests we are hurting all of the
:16:39. > :16:43.parties and the reason the Tories are in trouble is because they have
:16:44. > :16:50.lost their traditional base. Why do you think Nick Clegg is debating
:16:51. > :16:59.Europe? I think they are in trouble, at 8% they could be wiped
:17:00. > :17:03.out, they could go from 12 to nothing and I think it is a chance
:17:04. > :17:10.for Nick Clegg to raise their profile. They are fringe party with
:17:11. > :17:15.respect to this contest so I see why he wants to do it. One of our big
:17:16. > :17:19.criticisms is that we have not been able to have a full debate on
:17:20. > :17:24.national television on the alternatives of the European Union
:17:25. > :17:37.so I am looking forward to it. How are you preparing? I think you can
:17:38. > :17:43.be over scripted with these things. Are you not doing mock debates? No,
:17:44. > :17:47.I am checking my facts and figures and making sure that I can show the
:17:48. > :17:53.British people that in terms of jobs, we would be far better off not
:17:54. > :17:58.being within the European Union, not being within its rule book, not
:17:59. > :18:04.suffering from some of the green taxes they are putting on the
:18:05. > :18:09.manufacturing industry. The idea that 3 million jobs are at risk, I
:18:10. > :18:15.want to show why that is nonsense. Who do you think is playing you in
:18:16. > :18:23.their mock debates? They probably went to the pub and found someone!
:18:24. > :18:27.We will see. You have promised to do whatever it takes to fund your
:18:28. > :18:33.European election campaign, how much has been given so far? Just give it
:18:34. > :18:40.a few weeks and you will see what Paul is planning to do. He has made
:18:41. > :18:48.a substantial investment in the campaign already. How much? I'm not
:18:49. > :18:53.answering that for now. We are well on our way to a properly funded
:18:54. > :18:59.campaign and our big target will be the big cities and the working vote
:19:00. > :19:03.in those communities. Your deputy chairman Neil Hamilton is another
:19:04. > :19:09.former Tory, he says so far we haven't seen the colour of his
:19:10. > :19:15.money. Exactly two weeks ago, and things have changed since then. Mr
:19:16. > :19:25.Sykes has written a cheque since then? Yes. This morning's papers
:19:26. > :19:32.saying you will be asking MEPs to contribute ?50,000 each, is that
:19:33. > :19:38.true? Over the next five years, yes. Not for the European campaign. So
:19:39. > :19:44.lack of money will not be an excuse. We will have a properly funded
:19:45. > :19:48.campaign. How we raise the kind of money needed to fund the general
:19:49. > :19:58.election afterwards is another question. What is UKIP's policy on
:19:59. > :20:03.paying family members? We don't encourage it and I didn't employ any
:20:04. > :20:10.family member for years. My wife ended up doing the job and paid for
:20:11. > :20:17.the first seven years of my job. She is paid now? Until May, then she
:20:18. > :20:25.comes off the payroll am which leaves me with a huge problem. In
:20:26. > :20:31.2004 you said, UKIP MEPs will not employ wives and there will be no
:20:32. > :20:34.exceptions. An exception was made because I became leader of the
:20:35. > :20:39.National party as well as a leader of the group in European
:20:40. > :20:43.Parliament. Things do change in life, and you can criticise me for
:20:44. > :20:48.whatever you like, but I cannot be criticised for not having a big
:20:49. > :20:57.enough workload. No, but you didn't employ your wife when you had told
:20:58. > :21:01.others not to do it your party. Nobody else in my party has a big
:21:02. > :21:06.job in Europe and the UK. We made the exception for this because of
:21:07. > :21:10.very unusual circumstances. It also looks like there was a monetary
:21:11. > :21:18.calculation. Listen to this clip from a BBC documentary in 2000. It
:21:19. > :21:23.is a good job. I worked it out because so much of what you get is
:21:24. > :21:27.after tax that if you used the secretarial allowances to pay your
:21:28. > :21:35.wife on top of the other games you can play, I reckon this job in
:21:36. > :21:38.Stirling term is over a quarter of ?1 million a year. That is what you
:21:39. > :21:44.would need to earn working for Goldman Sachs or someone like that.
:21:45. > :21:47.I agree with that. More importantly the way you really make money in the
:21:48. > :21:53.European Parliament is being their five days a week, because you sign
:21:54. > :21:58.in every day, you get 300 euros every day, and that is how people
:21:59. > :22:03.maxed out. The criticism of me is that I am not there enough so
:22:04. > :22:08.whatever good or bad I have done in the European Parliament, financial
:22:09. > :22:12.gain has not been one of the benefits. There have been
:22:13. > :22:18.allegations of you also employing a former mistress on the same European
:22:19. > :22:23.Parliamentary allowance, you deny that? I am very upset with the BBC
:22:24. > :22:27.coverage of this. The ten o'clock news run this as a story without
:22:28. > :22:32.explaining that that allegation was made using Parliamentary privilege
:22:33. > :22:39.by somebody on bail facing serious fraud charges. I thought that was
:22:40. > :22:48.pretty poor. You have a chance to do that and you deny you have employed
:22:49. > :22:52.a former mistress? Yes, but if you look at many of the things said over
:22:53. > :22:56.the last week, I think it is becoming pretty clear to voters that
:22:57. > :23:03.the establishment are becoming terrified of UKIP and they will use
:23:04. > :23:10.anything they can find to do us down in public. Is an MEP employs his
:23:11. > :23:15.wife and his former mistress, that would be resigning matter, wouldn't
:23:16. > :23:20.it? Yes, particularly if the assumption was that money was being
:23:21. > :23:27.taped for work but was not being done. Who do you think is behind
:23:28. > :23:33.these stories? It is all about negative, it is all about attacks,
:23:34. > :23:37.but I don't think it is actually going to work because so much of
:23:38. > :23:41.what has been said in the last week is nonsense. A reputable daily
:23:42. > :23:46.newspaper said I shouldn't be trusted because I had stored six
:23:47. > :23:50.times for the Conservative party, I have never even stored in a local
:23:51. > :23:56.council election. I think if you keep kicking an underdog, it will
:23:57. > :24:06.make the British people rally around us. Is it the Conservatives? Yes,
:24:07. > :24:12.and the idea that all of our voters are retired colonels is simply not
:24:13. > :24:22.true. We get some voters from the Labour side as well. Would you
:24:23. > :24:27.consider standing in a Labour seat if you are so sure you are getting
:24:28. > :24:35.Labour votes? Yes, but the key for UKIP is that it has to be marginal.
:24:36. > :24:43.Just for your own future, if you fail to win a single soul -- single
:24:44. > :24:48.seat in the general election, if Ed Miliband fails to win an outright
:24:49. > :24:52.majority, will you stand down as UKIP leader? I would think within
:24:53. > :24:58.about 12 hours, yes. I will have failed, I got into politics not
:24:59. > :25:03.because I wanted a career in politics, far from it. I did it
:25:04. > :25:06.because I don't think this European entanglement is right for our
:25:07. > :25:11.country. I think a lot of people have woken up to the idea we have
:25:12. > :25:18.lost control of our borders and now is the moment for UKIP to achieve
:25:19. > :25:24.what it set out to do. Will UKIP continue without you if you stand
:25:25. > :25:34.down? Of course it will. I know that everyone says it is a one-man band
:25:35. > :25:36.but it is far from that. We have had some painful moments, getting rid of
:25:37. > :25:40.old UKIP, new UKIP is more professional, less angry and it is
:25:41. > :25:46.going places. Nigel Farage, thank you for being with us.
:25:47. > :25:48.So, what else should we be looking out for in Wednesday's Budget
:25:49. > :25:50.statement? We've compiled a Sunday Politics guide to the Chancellor's
:25:51. > :25:54.likely announcements. Eyes down everyone, it's time for a
:25:55. > :25:57.bit of budget bingo. Let's see what we will get from the man who lives
:25:58. > :26:01.at legs 11. Despite some good news on the economy, George Osborne says
:26:02. > :26:04.that this will be a Budget of hard truths with more pain ahead in order
:26:05. > :26:07.to get the public finances back under control. But many in the
:26:08. > :26:09.Conservative party, including the former chancellor Norman Lamont,
:26:10. > :26:13.want Mr Osborne to help the middle classes by doing something about the
:26:14. > :26:20.4.4 million people who fall into the 40% bracket. Around one million more
:26:21. > :26:22.people pay tax at that rate compared to 2010 because the higher tax
:26:23. > :26:28.threshold hasn't increased in line with inflation. Mr Osborne has
:26:29. > :26:31.indicated he might tackle the issue in the next Conservative manifesto,
:26:32. > :26:37.but for now he is focused on helping the low paid. It's likely we will
:26:38. > :26:43.see another increase in the amount you can earn before being taxed,
:26:44. > :26:46.perhaps up another ?500 to ?10,500. The Chancellor is going to flesh out
:26:47. > :26:49.the details of a tax break for childcare payments, and there could
:26:50. > :27:06.be cries of 'house' with the promise of more help for the building
:27:07. > :27:10.industry. The Help To Buy scheme will be extended to 2020 and there
:27:11. > :27:12.could be the go-ahead for the first Garden City in 40 years. Finally,
:27:13. > :27:15.bingo regulars could be celebrating a full house with a possible cut in
:27:16. > :27:18.bingo tax. And I've been joined in the studio
:27:19. > :27:20.by the former Conservative chancellor Norman Lamont, in Salford
:27:21. > :27:23.by the former Labour Cabinet minister Hazel Blears, and in
:27:24. > :27:26.Aberdeen by the Lib Dem deputy leader, Malcolm Bruce. Let me come
:27:27. > :27:33.to Norman Lamont first, you and another former Tory Chancellor,
:27:34. > :27:43.Nigel Lawson, have called in the fall in the threshold for the rate
:27:44. > :27:47.at which the 40p clicks in. I would have preferred an adjustment in the
:27:48. > :27:52.Budget but I agree with what you are saying, it sounds like the
:27:53. > :27:57.Chancellor will not do that. My main point is that you cannot go on
:27:58. > :28:01.forever and forever increasing the personal allowance and not
:28:02. > :28:07.increasing the 40% tax threshold because you are driving more and
:28:08. > :28:10.more people into that band. It is an expensive policy because in order to
:28:11. > :28:16.keep the number of people not paying tax constant, you have to keep
:28:17. > :28:22.adjusting it each year. When this was introduced by Nigel Lawson, it
:28:23. > :28:29.applied to one in 20 people, the 40% rate, it now applies to one in six
:28:30. > :28:34.people. By next year, there will be 6 million people paying base. Why do
:28:35. > :28:39.you think your Tory colleagues seem happy to go along with the Lib Dems
:28:40. > :28:54.and target whatever money there is for tax cuts rather -- on the lower
:28:55. > :29:00.paid rather than the middle incomes? They are not helping the lowest
:29:01. > :29:02.paid. If you wanted to really help the lowest paid people you would
:29:03. > :29:09.raise the threshold for national insurance contributions, which is
:29:10. > :29:19.around ?6,000. Is it the Lib Dems stopping any rise in the 40p
:29:20. > :29:24.threshold? We are concentrating on raising the lower threshold because
:29:25. > :29:31.we believe that is the way to help those on lower incomes. Whilst they
:29:32. > :29:34.haven't benefited as much as the lower paid they have participated
:29:35. > :29:39.and I think people understand right now, if you were going to prioritise
:29:40. > :29:44.the high earners, when we are still trying to help those on lower and
:29:45. > :29:47.middle incomes who haven't enjoyed great pay increases but have got the
:29:48. > :29:53.benefit of these tax increases, that is why we would like to do it for
:29:54. > :29:59.the minimum wage level. But the poorest will not benefit at all. The
:30:00. > :30:04.poorest 16% already don't pay tax. Why don't you increase the threshold
:30:05. > :30:13.at which National Insurance starts? You only have two earned ?5,500
:30:14. > :30:18.before you start to pay it. You've got to remember that the raising of
:30:19. > :30:23.the threshold to ?10,000 or more was something the Tories said we could
:30:24. > :30:30.not afford. Why are you continuing to do it? If you want to help the
:30:31. > :30:36.working poor, the way would be to take the lowest out of national
:30:37. > :30:39.insurance. The view we take is they are benefiting, and have benefited
:30:40. > :30:45.from, the raising of the tax threshold. You now have to earn
:30:46. > :30:49.?10,000, we hope eventually 12,500, and that means only people on very
:30:50. > :30:53.low wages. If you opt out of national insurance, you're saying to
:30:54. > :30:58.people that you make no contribution to the welfare system, so there is a
:30:59. > :31:03.general principle that people should participate and paying, and also
:31:04. > :31:07.claim when they need something out. We thought raising the threshold was
:31:08. > :31:10.simple and effective at a time of economic austerity and the right way
:31:11. > :31:17.to deliver a helpful support to welcoming people. -- working people.
:31:18. > :31:20.With the Labour Party continue to raise the threshold, or do they
:31:21. > :31:26.think there is a case that there are too many people being dragged into
:31:27. > :31:30.the 40p tax bracket? If Norman Lamont thinks this is the right time
:31:31. > :31:33.to benefit people who are reasonably well off rather than those who are
:31:34. > :31:37.struggling to make ends meet, then genuinely, I say it respectfully, I
:31:38. > :31:42.don't think he's living in the world the rest of us are. Most working
:31:43. > :31:46.people have seen their wages effectively reduced by about ?1600
:31:47. > :31:52.because they have been frozen, so the right thing is to help people on
:31:53. > :31:56.modest incomes. I also understand that if the 40% threshold went up,
:31:57. > :32:00.the people who would benefit the most, as ever, are the people who
:32:01. > :32:05.are really well off, not the people in the middle. The Conservatives
:32:06. > :32:10.have already reduced the 50p tax on people over ?150,000 a year, and we
:32:11. > :32:13.have to concentrate on the people going out to work, doing their best
:32:14. > :32:17.to bring their children up and have a decent life and need a bit of
:32:18. > :32:21.help. I think raising the threshold is a good thing. We would bring back
:32:22. > :32:27.the 10p tax, which we should never have abolished, and do things with
:32:28. > :32:31.regard to childcare. At the moment, childcare costs the average family
:32:32. > :32:35.as much as their mortgage, for goodness sake. We would give 25
:32:36. > :32:38.hours free childcare for youngsters over three and four years old. That
:32:39. > :32:46.would be a massive boost the working families. We are talking about
:32:47. > :32:49.nurses, tube drivers, warrant officers in the army. There are many
:32:50. > :32:54.people who are not well off but have been squeezed in the way everybody
:32:55. > :32:58.has been squeezed and they are finding it continuing. I am stunned
:32:59. > :33:02.by Malcolm's argument where everybody should pay something so
:33:03. > :33:05.you should not take people out of national insurance, but the
:33:06. > :33:11.principle doesn't apply to income tax. You can stand that argument on
:33:12. > :33:14.its head and apply it to income tax. Most people don't see a difference
:33:15. > :33:19.between income tax and national insurance, it's the same thing to
:33:20. > :33:22.most people. It is true that it isn't really an insurance fund and
:33:23. > :33:28.there is an argument from merging both of them. But we have
:33:29. > :33:34.concentrated on a simple tax proposition. Norman is ignoring the
:33:35. > :33:37.fact the people on the 40% rate have benefited by the raising of the
:33:38. > :33:40.personal allowance. To say they have been squeezed is unfair. The
:33:41. > :33:46.calculation is that an ordinary taxpayer will be ?700 better off at
:33:47. > :33:50.the current threshold, and about ?500 better off at the higher rate.
:33:51. > :33:56.It is misleading to say the better off we'll be paying more. I agree
:33:57. > :33:59.with Hazel, if you go to the 40% rate, it's the higher earners who
:34:00. > :34:04.benefit the most, and we won't do that when the economy is not where
:34:05. > :34:11.it was before the crash. How much will the lower paid be better off if
:34:12. > :34:15.you reintroduce the 10p rate? Significantly better off. I don't
:34:16. > :34:21.have the figure myself, but they'd be significantly better off and the
:34:22. > :34:24.Budget should be a mixture of measures to help people who work
:34:25. > :34:29.hard. That is why I think the childcare issue has to be
:34:30. > :34:35.addressed. ?100 a week of the people with childcare payments. It is a
:34:36. > :34:38.massive issue. We want the job is guaranteed to get young people back
:34:39. > :34:41.into work. There's been hardly any discussion about that, and we have
:34:42. > :34:45.nearly 1 million people who have been out of work for six months or
:34:46. > :34:52.more, and as a country we need to do something to help that. 350,000
:34:53. > :34:55.full-time students, so it is a misleading figure. It is not a
:34:56. > :35:01.million including full-time students. All parties do this. It
:35:02. > :35:05.sounds to me, Malcolm Bruce, you have more in common with the Labour
:35:06. > :35:08.Party than you do with the Conservatives. You want an annual
:35:09. > :35:13.levy on houses over ?2 million, so does Labour. A lot of your members
:35:14. > :35:17.want to scrap the so-called bedroom tax and so does labour. You think
:35:18. > :35:21.every teacher should have a teaching qualification, and so does Labour.
:35:22. > :35:26.Your policy on the EU referendum is the same. Let me go on. And you want
:35:27. > :35:31.to scrap the winter fuel allowance for wealthy pensioners. We want to
:35:32. > :35:34.make sure we get the public finances in order and we have grave
:35:35. > :35:44.reservations about the Labour Party promises. But they followed your
:35:45. > :35:47.spending plans in the first year. The point we are making is we can
:35:48. > :35:50.make a fairer society and stronger economy if you keep the public
:35:51. > :35:55.finances moving towards balance. We don't think the Labour Party will
:35:56. > :35:58.take a stand that track. It is interesting that the Labour Party
:35:59. > :36:03.want to introduce the 10p rate that Gordon Brown abolished. We consider
:36:04. > :36:10.that before we can -- committed to the 0% rate -- we considered that.
:36:11. > :36:15.It makes a complicated system difficult and we think it's better
:36:16. > :36:17.doing it that way. As a fiscal conservative, why are you talking
:36:18. > :36:22.about any tax cuts when the deficit about any tax cuts when the deficit
:36:23. > :36:25.is over ?100 billion, and effectively, anything you propose
:36:26. > :36:29.today can only be financed by more borrowing. I totally agree with you.
:36:30. > :36:35.I said that this week. I thought the best thing would have no Budget. The
:36:36. > :36:39.main thing is to get the deficit down. My argument is is that you
:36:40. > :36:41.have an adjustment in tax rates it should be shared between the
:36:42. > :36:47.allowances and the higher rate, but I don't think that the progress on
:36:48. > :36:54.the deficit is something we can give up on. This is still a very long way
:36:55. > :36:59.to go. We're only halfway through. Hazel, does it make sense to borrow
:37:00. > :37:06.for tax cuts? I am reluctant to do this, but I agree with both Norman
:37:07. > :37:10.and Malcolm. Malcolm Bruce wants to borrow for tax cuts. We absolutely
:37:11. > :37:14.need to get the deficit down and get finances on a strong footing. But we
:37:15. > :37:18.also have to think about having some spending in the system that in the
:37:19. > :37:22.longer run saves us money. We all know we need to build new homes. I
:37:23. > :37:28.don't think it's necessarily the right priority to give people in
:37:29. > :37:32.London mortgage relief in terms of ?600,000. We have to get the balance
:37:33. > :37:38.right. Sometimes it is right to spend to save. I'm afraid we have
:37:39. > :37:40.run out of time. There will be plenty more discussion in the lead
:37:41. > :37:45.up to the Budget on Wednesday. It's just gone 11:35am. You're
:37:46. > :37:48.watching the Sunday Politics. We say goodbye to viewers in Scotland who
:37:49. > :37:52.leave us now for Sunday Politics Scotland. Coming up here in 20
:37:53. > :37:53.minutes, Frances O'Grady, the General Secretary of the TUC, joins
:37:54. > :38:07.us discuss the Welcome to Sunday Politics South, my
:38:08. > :38:11.name's Peter Henley. On today's show: It might have stopped raining
:38:12. > :38:14.but there's still the clearup from all the flooding to be done. We'll
:38:15. > :38:16.be hearing whether the government's bailout scheme for all the
:38:17. > :38:19.homeowners and farmers affected is actually working. More on that
:38:20. > :38:22.shortly. First, let's meet the two politicians who'll be with me for
:38:23. > :38:26.the next 20 minutes. George Hollingbery is the Conservative MP
:38:27. > :38:37.for Meon Valley and John Denham is the Labour MP for Southampton
:38:38. > :38:42.Itchen. Welcome both. John you have been highlighting the cost of living
:38:43. > :38:48.in the South seeing that wages have dropped in real terms with people
:38:49. > :38:54.more than ?2000 per year worse off. Housing costs are rising. Isn't that
:38:55. > :39:01.cost of living crisis for people knew they would be getting when they
:39:02. > :39:06.voted for austerity? I do not think so, they got by no the government
:39:07. > :39:11.would have sorted out the budget and the economy. Keegan the south`east
:39:12. > :39:19.winds are actually worse than other parts of the country. `` here in.
:39:20. > :39:24.House prices have risen, child care is more expensive here than in
:39:25. > :39:30.London. There is a real cost of living crisis. If you had actually
:39:31. > :39:34.followed the strategy we had in 2010 when the economy was growing you
:39:35. > :39:40.would have seen more growth which would have reduced more taxes to get
:39:41. > :39:44.the deficit down faster. What has actually happened as we are in the
:39:45. > :39:49.worst position today because we have had three years with no growth. The
:39:50. > :39:55.cost of living crisis did not have to be as bad as it is and if we do
:39:56. > :40:00.the things Labour wants to do, get a real house building programme going,
:40:01. > :40:04.cut and freeze interest rates, reform the energy market, there are
:40:05. > :40:10.practical things a government could do to tackle the cost of living
:40:11. > :40:17.crisis. That is the future, what about the history? I do not want to
:40:18. > :40:21.go into labour's ideas, that is up to them but everyone knows who
:40:22. > :40:29.crashed the car in the first place and we had to deal with that. ?140
:40:30. > :40:36.billion had to be found. This country simply had to cut spending.
:40:37. > :40:41.In the last year, unemployment has fallen by 23% in the south`east. The
:40:42. > :40:45.economy is now one of the fastest growing in Europe and by next year
:40:46. > :40:51.probably one of the fastest`growing in the GE. There is a long way to go
:40:52. > :40:56.yet, the deficit still needs to be dealt with. What has actually
:40:57. > :41:01.happened, which I find very strange coming from Labour, is that this
:41:02. > :41:06.time around the unemployment that arose during the recession was
:41:07. > :41:10.massively reduced because people took a view they would rather not
:41:11. > :41:17.see wage rises and keep their jobs for the longer term, that is what
:41:18. > :41:21.has happened. We have many jobs with low wages and many with low
:41:22. > :41:29.productivity, people cannot afford the rising cost of living. The
:41:30. > :41:36.deficit no longer needs to be dealt with now than it did three years
:41:37. > :41:40.ago. It has not worked. It has worked and all you need to do is
:41:41. > :41:48.look at international comparisons to know. We know we are the
:41:49. > :41:52.fastest`growing economy in Europe. We will talk further about what
:41:53. > :41:56.George Osborne will do in the budget any moment. A few weeks ago,
:41:57. > :41:59.politicians, and the media to be honest, were completely obsessed
:42:00. > :42:02.with water. Pouring down from the sky, bubbling up from the ground,
:42:03. > :42:05.surging through people's homes. But now, the sun's shining, the Prime
:42:06. > :42:07.Minister has waded in, and the government's providing compensation.
:42:08. > :42:09.Problem solved. Well, maybe not quite, as our Berkshire political
:42:10. > :42:24.reporter Patrick O'Hagan has been finding out.
:42:25. > :42:31.This is `` seeds, silage might cut to feed the cows during the winter
:42:32. > :42:38.when they are indoors. This should be cut in May but you can see the
:42:39. > :42:45.graph is dead. This man has sheep and cattle and those graphs and
:42:46. > :42:51.crops on his farm. He farms 1700 acres in all. The recent floods left
:42:52. > :42:58.much of them underwater. It is only in the last few days that the water
:42:59. > :43:05.has receded, exploding `` exposing the thick mud. It is only when you
:43:06. > :43:14.see all your hard work floating down the river that you feel miffed. For
:43:15. > :43:21.this woman the past few weeks have been some of the worst of her life.
:43:22. > :43:28.The water had risen from the lamp post outside to within three inches
:43:29. > :43:33.of the corner of my house. The water began rising until it was under her
:43:34. > :43:39.floorboards but thankfully got no higher. She is still desperately
:43:40. > :43:46.upset. I cannot put into words what... I cannot explain how awful
:43:47. > :43:54.it has been and how important it makes you feel. The Prime Minister
:43:55. > :44:03.has offered grants of up to 500 pounds to make your home resistant
:44:04. > :44:08.to floods, to get one, you apply to your local council. Angela does not
:44:09. > :44:14.know if it will be worth the effort. If we put in an application will it
:44:15. > :44:21.take years to go through the sausage machine? I do not know the best way
:44:22. > :44:27.to do it. In thousands of homes have been affected and should be
:44:28. > :44:33.eligible. For big organisations like Basingstoke and Deane council, bids
:44:34. > :44:36.are in already. It has bent ?400,000 on the floods and is applying to the
:44:37. > :44:45.government scheme which helps councils cost the dash cover the
:44:46. > :44:50.cost of emergencies. There is no way in which our residents should foot
:44:51. > :44:56.the bill for something which is after all a natural disaster. I am
:44:57. > :45:04.very confident we will get the money back. Farmers are offered
:45:05. > :45:09.compensation of up to ?5,000 each but when dealing with our farm of
:45:10. > :45:15.1700 acres in size, by thousand pounds does not get you very far.
:45:16. > :45:20.Don't get me wrong, we are very thankful for the money, it did not
:45:21. > :45:25.have to be done, but it is a drop in the ocean. Money is available to
:45:26. > :45:30.help farmers replace damage crops and help homeowners re`waterproof
:45:31. > :45:35.their walls and also to help councils recoup their costs but with
:45:36. > :45:40.few ready to sit down and do the necessary paperwork it will be
:45:41. > :45:46.months before we know if the money pledged by the government will be
:45:47. > :45:49.enough to meet demand. In One of the first places to be affected in the
:45:50. > :45:52.south was Hambledon in Hampshire, with roads disappearing under the
:45:53. > :45:55.floodwater at the beginning of the year. It's only been this week that
:45:56. > :45:59.they started removing the sandbags from the village. Tony Higham is the
:46:00. > :46:03.chair of the Hambledon Flood Action Group and joins us now. It is the
:46:04. > :46:07.human cost as much as the stuff you can put into spreadsheets and claim
:46:08. > :46:11.back. Lost business as well as houses flooded. Yes, I felt so
:46:12. > :46:15.terribly sorry for those people whose lives had been stood up side
:46:16. > :46:22.down, people who are paddling in water at the moment, for the last 72
:46:23. > :46:29.days our flight has gone on, you cannot evaluate that in human costs.
:46:30. > :46:33.Lost business as well from people who would have been doing work on
:46:34. > :46:41.some of those houses and cannot, people who could not get out to
:46:42. > :46:47.their vans as well. It is easy to look out for the shops or the pub
:46:48. > :46:51.but if you are a window cleaner, a Gardner or a cleaner or something
:46:52. > :47:08.and you cannot get to your clients you cannot work. Are people thinking
:47:09. > :47:12.about filling those forms in? They are. At the moment we are trying to
:47:13. > :47:16.stop people from flooding so it is still early days. The council will
:47:17. > :47:19.have got the deal ready quite soon. You were a National Flood Forum,
:47:20. > :47:23.were you not? Is the feeling they are one of anger? Are people saying
:47:24. > :47:31.if you had spent more money we would not have this problem? Of course. Is
:47:32. > :47:36.it important we do not forget about that now the sun is out? It is
:47:37. > :47:43.important not to just have a barbecue summer and forget about it.
:47:44. > :47:47.In 1944 we had this big ditch through the village of Hambledon and
:47:48. > :47:52.that was filled in so that American tanks could be parked in the village
:47:53. > :48:00.for D`day, our forefathers had it all sorted but what we have to do
:48:01. > :48:05.now is replicate that ditch. The rowdy huge amount of lessons to be
:48:06. > :48:09.learned, are we up to it as a country or are we wasting our time
:48:10. > :48:20.trying to deal with something that has not happened for 70 years?
:48:21. > :48:26.Hambledon has not had money spent. Are we ready as a country? I do not
:48:27. > :48:32.think any country can afford to be ready for the kind of biblical
:48:33. > :48:36.damage we suffered. It is worth noting that due to the efforts of
:48:37. > :48:41.this government and the previous government, the trouble that was
:48:42. > :48:46.encountered this time and the number of homes flooded were substantially
:48:47. > :48:53.lower than 2001. It is something we can celebrate from both sides of the
:48:54. > :48:58.political fence. I do not think with the kind of deluge we saw any more
:48:59. > :49:05.investment would have made a huge difference. Winchester this time
:49:06. > :49:09.flooded much later and for lifelong ban it had done previously and one
:49:10. > :49:18.of the key differences was just above Winchester the Moors had been
:49:19. > :49:29.in new ownership and the flooded in a different way and did not reach
:49:30. > :49:34.out which helped Winchester. I think we should worry that some of the
:49:35. > :49:40.expertise may be lost if we get as many redundancies as are planned in
:49:41. > :49:45.the environment agencies, staff who know about this stuff. The chief
:49:46. > :49:51.scientific officer said with climate change events like this will happen
:49:52. > :49:55.more and more often. That was a big investment started in flood
:49:56. > :50:00.prevention. We have got to sustain that. My worry is that the secretary
:50:01. > :50:06.of state removed flood prevention from his list of departmental
:50:07. > :50:10.priorities and he does not believe in climate change. There are no
:50:11. > :50:14.magic wands but you need government who understand these once in 100
:50:15. > :50:19.year events that happen every four or five years now. They are going to
:50:20. > :50:23.happen more often and investing in dealing with floods will be as much
:50:24. > :50:29.a part of the national infrastructure as railways or roads
:50:30. > :50:34.or railway lines. The key test will be, do they now understand this is
:50:35. > :50:43.not something that can be put on one side? What feeling do you get about
:50:44. > :50:48.that? As far as our pipe is concerned, this is obviously an
:50:49. > :50:55.investment, we have had the Environment Agency rules formula for
:50:56. > :51:06.the last nine years, the formula still remains. You think the formula
:51:07. > :51:10.is wrong? Yes, you divide the number of properties protected into the
:51:11. > :51:16.cost of the pipe and if it does not work, they will say it does not work
:51:17. > :51:21.this year or next year or ever, then we have a problem with the formula
:51:22. > :51:24.for a small rural community. The Prime Minister has said more
:51:25. > :51:31.flexibility has to be used as far as this formula is concerned for small
:51:32. > :51:35.rural communities. Thank you for talking to us about it. In just
:51:36. > :51:38.under two months we'll be going to the polls to elect the next European
:51:39. > :51:41.Parliament. We've heard a lot recently about how the parties will
:51:42. > :51:45.renegotiate terms or offer an in/out referendum. But what's their pitch
:51:46. > :51:50.to get us to vote for them at the end of May? We went over to Brussels
:51:51. > :51:53.to talk to MEPs from the five parties with representation in our
:51:54. > :52:00.region. Over the next five weeks we'll be hearing from all of them,
:52:01. > :52:04.today it's the Liberal Democrats. The reason to vote Liberal Democrat
:52:05. > :52:10.is because we believe in making this place work. It needs a lot of reform
:52:11. > :52:16.but we are here leading because for reform, we are determined to get the
:52:17. > :52:20.benefits of Europe for Britain. Until recently he was one of the
:52:21. > :52:24.UK's most the new European politicians. He counts
:52:25. > :52:32.crime`fighting among his achievements in the last five years.
:52:33. > :52:39.I have continued some of my earlier work in getting our police forces
:52:40. > :52:42.working together across frontiers to tackle the increasing problem of
:52:43. > :52:47.internationally organised crime. This is one of the areas where I
:52:48. > :52:51.think Britain benefit hugely from our membership of the European Union
:52:52. > :52:55.and weird I disagree with the Visa me and those conservatives who want
:52:56. > :53:03.to bring us out of things like the European arrest warrant. Surely at
:53:04. > :53:07.the moment it is for controlling our own borders and increasing our
:53:08. > :53:10.sovereignty? It says and I am pleased to see the cutting
:53:11. > :53:15.government has done much more of that than the previous government
:53:16. > :53:19.did. To fight crime, as any police officer will tell you, you need to
:53:20. > :53:27.have your police forces and your judiciary is working together. One
:53:28. > :53:33.of my jobs as an MEP is to explain what I do here. I spent time talking
:53:34. > :53:36.to people, people who often have experience through their
:53:37. > :53:42.professional lives, with other parts of the European Union, we have to
:53:43. > :53:48.tell them what we do and why. I wish there were more people arguing that
:53:49. > :53:54.case. We are the party of in. We will go out and take on the
:53:55. > :53:58.anti`Europeans, the narrow nationalists in this debate. We
:53:59. > :54:02.cannot have a country who would say you can put the blankets over your
:54:03. > :54:06.head and hope the world would go away. I want us to be a generous,
:54:07. > :54:14.tolerant and outward looking country. That means being a member
:54:15. > :54:19.of many of the great institutions we have helped to shape. I Cannes
:54:20. > :54:29.surely this is bad timing for people who share your opinions. The tabloid
:54:30. > :54:35.press say people of the United Kingdom are viscerally opposed to
:54:36. > :54:39.our membership of the European Union. I do not believe that, I feel
:54:40. > :54:46.people have got thoroughly fed up with this negative debate about
:54:47. > :54:50.Europe and constantly taking credit for Westminster for everything that
:54:51. > :54:55.goes right while blaming Brussels for what goes wrong. We might see an
:54:56. > :54:58.increase in the turnout at this election and I think more of the
:54:59. > :55:05.pro`Europeans will come out and make themselves heard. And over the next
:55:06. > :55:08.few weeks we'll be hearing in turn from the Conservatives, UKIP, Labour
:55:09. > :55:18.and the Green Party. Wednesday sees the budget of course, what are you
:55:19. > :55:28.hoping to hear from the Chancellor? A starting rate of being tax or 40p
:55:29. > :55:33.tax threshold being raised? I think the decision to cut the top rate of
:55:34. > :55:37.tax was wrong at a time when the country is struggling. I think there
:55:38. > :55:43.should be changes to the bank bonuses so we can afford to have a
:55:44. > :55:48.proper job creation or gram for long`term unemployed young people. I
:55:49. > :55:53.would like to see action taken to freeze and cut business rates. The
:55:54. > :55:57.things Labour have been setting out our things we would do if we were
:55:58. > :56:04.writing the budget this week. I doubt we will see those things.
:56:05. > :56:10.These are things Ed balls would do as Chancellor? They are things we
:56:11. > :56:14.have set out that we would do if we were in government facing the
:56:15. > :56:19.challenges of today. Although the growth we have had at the moment is
:56:20. > :56:23.welcome it is a long way from being sustained and being fair. There are
:56:24. > :56:27.many families here in southern England who viewed the economy is
:56:28. > :56:31.doing better then they look at their own pockets and household incomes
:56:32. > :56:36.and it does not feel like that to them. In those circumstances why was
:56:37. > :56:42.cutting the top rate of tax a priority for the country? There are
:56:43. > :56:47.still redundancies to come, all the austerity still has to carry through
:56:48. > :56:53.and people 's wages will not rise, we saw that with the public sector.
:56:54. > :57:02.The public sector pay rise this year will be 1%. Why Glasgow people are
:57:03. > :57:05.not feeling better. Every household, a government, anybody is any
:57:06. > :57:09.position where they cannot afford their expenditure, they have to cut
:57:10. > :57:17.it back. In the public sector the biggest cost is people and we have
:57:18. > :57:21.to keep a tax `` that. And the very bottom end I want to see the
:57:22. > :57:31.threshold rising, more people taken out of tax at the bottom end. In
:57:32. > :57:36.other words, fewer people paying any tax at all. The people who earn the
:57:37. > :57:42.least read the least tax that seems obvious. To be clear, the best way
:57:43. > :57:49.we can help the United Kingdom and its way forward in the world is to
:57:50. > :57:56.make sure we can pay our way. The only way to do that is control
:57:57. > :58:02.public spending. If we have got room for tax cuts they should be at the
:58:03. > :58:06.bottom end. If I was in the health service I would think you have spent
:58:07. > :58:10.?3 billion on a health service reorganisation that nobody wanted so
:58:11. > :58:14.the government is prepared to waste money on that scale, they are in no
:58:15. > :58:22.position to lecture people about how they spend. We managed to maintain
:58:23. > :58:28.the health service in real terms. Let's move on. Now our regular
:58:29. > :58:31.round`up of the political week in the South in 60 seconds, and where
:58:32. > :58:44.we discover that everything has a price. What price peace and quiet?
:58:45. > :58:48.?1000 according to Gatwick Airport who are offering the cash to people
:58:49. > :58:55.living nearby if they are allowed to build a second runway. Oxford City
:58:56. > :59:01.Council say rising property prices are causing them to offer properties
:59:02. > :59:08.as far away as Birmingham. Many say that is too far. The army tried to
:59:09. > :59:12.save a shilling by replacing regular soldiers with reservists but
:59:13. > :59:16.admitted mistakes in the outsourced recruitment process may leave them
:59:17. > :59:25.short`staffed. Launching a new Parliamentary maths group is Gosport
:59:26. > :59:33.MP backed teaching maths to those aged 18 to improve jobs. Some fancy
:59:34. > :59:38.engineering in these drones being tested by Sussex Place, the cost of
:59:39. > :59:50.this idea in the sky is ?35,000 each. Everything has a price. This
:59:51. > :59:56.week we are mourning the death of Bob Crow and Tony Benn, everybody in
:59:57. > :00:00.the eulogy said men of principles but at the time a lot of people
:00:01. > :00:08.disagreed with those principles, are we typically? Know, most people in
:00:09. > :00:13.Labour politics actually said they respected Margaret Thatcher. They
:00:14. > :00:17.did not agree with her but there is a desire in politics and the public
:00:18. > :00:23.for conviction politics. People were you know what they stand for and
:00:24. > :00:35.where they are coming from. I was pleased people from the right paid
:00:36. > :00:42.tribute to these two men. I saw Tony Benn in theatre, he was very
:00:43. > :00:47.entertaining to listen to. There is room for those people in politics
:00:48. > :00:50.and in life, he was a remarkable man. That's the Sunday Politics in
:00:51. > :00:53.the South, thanks to my guests George Hollingbery and John Denham.
:00:54. > :00:55.Don't forget to keep up`to`date with southern politics by reading my
:00:56. > :00:55.blog, there's the failure marked success. -- not
:00:56. > :01:13.success. Andrew, back to you. Has George Osborne got a rabbit in
:01:14. > :01:16.his Budget hat? Will the Chancellor find a way to help the squeezed
:01:17. > :01:24.middle? And how do Labour respond? All questions for The Week Ahead.
:01:25. > :01:28.And joining Helen, Janan and Nick to discuss the budget is the general
:01:29. > :01:33.secretary of the Trades Union Congress Frances O'Grady. Welcome
:01:34. > :01:37.back to the programme. I know the TUC has a submission, but if you
:01:38. > :01:42.could pick one thing that you wanted the Chancellor to do above all, what
:01:43. > :01:46.would it be? We want a budget for working people, which means we have
:01:47. > :01:52.to crack the long-term problem of investment in the British economy.
:01:53. > :01:58.Certainly I would like the Chancellor to merit that title they
:01:59. > :02:01.want of the new workers party, and take action on living standards, but
:02:02. > :02:12.if they're going to do that it's got to be about unlocking investment. In
:02:13. > :02:15.the period where the economy has been flat-lining there has been
:02:16. > :02:18.little business investment, but there are signs towards the end of
:02:19. > :02:25.last year that it is beginning to pick up. But a long way to go. The
:02:26. > :02:27.problem is we have key industries like construction and manufacturing
:02:28. > :02:33.that are still smaller than they were before the recession. The
:02:34. > :02:39.government itself, of course, has slashed its own capital investment
:02:40. > :02:42.budget by half. There is plenty of good and important work that needs
:02:43. > :02:48.to be done from building houses to improving the transport system, to
:02:49. > :02:53.improving our schools. And the government really needs to pick up
:02:54. > :02:57.that shovel and start investing in our economy to get the decent jobs
:02:58. > :03:02.we need, the pay increases we need, and that in itself will help
:03:03. > :03:09.stimulate demand. It was Alistair Darling who cut in 2011, and it's
:03:10. > :03:13.interesting that Ed Balls in his plans for the next parliament would
:03:14. > :03:17.run a current budget surplus by the end of the parliament as opposed to
:03:18. > :03:21.George Osborne who would have an overall budget surplus. That gives
:03:22. > :03:25.Ed Balls or -- more wriggle room to do what you talk about, but he is
:03:26. > :03:28.reticent to talk about it. He does not want to say that he has an
:03:29. > :03:31.opportunity to spend on investment because he fears if he says it he
:03:32. > :03:35.will be attacked by the Conservatives for being
:03:36. > :03:41.irresponsible. Why is business doing this? The recession was deeper than
:03:42. > :03:47.any since the war and the recovery was slower than almost any since the
:03:48. > :03:52.war. The lag, the time it takes to get over that is longer than anyone
:03:53. > :03:57.expected. I read the same evidence as you towards the end of last year
:03:58. > :04:01.pointing to money being released, and it depends what it is released
:04:02. > :04:05.on, whether it is capital investment or bringing in people on higher
:04:06. > :04:10.wages. The one surprise in the downturn is how well the employment
:04:11. > :04:13.figures have done, but they have not invested in new capacity and they
:04:14. > :04:18.are sitting on a lot of dosh. I looked at one set of figures that
:04:19. > :04:24.said if you took the biggest company in Britain, they have about 715
:04:25. > :04:28.billion pounds in corporate treasury -- the biggest companies. I think
:04:29. > :04:34.it's reduced a little but they are sitting on a mountain in dash of
:04:35. > :04:38.skills. Yes, but they're not investing in skills, wages, or
:04:39. > :04:43.sustainable jobs. The new jobs we have seen created since 2010, the
:04:44. > :04:48.vast majority of them have been in low paid industries, and they are
:04:49. > :04:52.often zero hours, or insecure, or part-time. So it's not delivering a
:04:53. > :04:57.recovery for ordinary working people. Government ministers, as you
:04:58. > :05:01.know when you lobby them, they are anxious to make out that they know
:05:02. > :05:06.the job is not done and the recovery has just begun, but the one bit they
:05:07. > :05:11.are privately proud of, although they can't explain it, is how many
:05:12. > :05:15.private-sector jobs have been created. A lot of unions have done
:05:16. > :05:19.sensible deals with employers to protect jobs through this period,
:05:20. > :05:24.but it's not sustainable. The average worker in Britain today is
:05:25. > :05:31.now ?2000 a year worse off in real terms than they were. On a pay
:05:32. > :05:39.against price comparison? It doesn't take into account tax cuts. The
:05:40. > :05:46.raising of the personal allowance is far outweighed by the raising VAT.
:05:47. > :05:49.Does the raising of the threshold which the Lib Dems are proud of and
:05:50. > :05:55.the Tories are trying to trade credit for, does it matter to your
:05:56. > :06:00.members? -- take credit for. It matters that it is eclipsed by the
:06:01. > :06:03.cuts in benefits and know what is conned any more. We're going to hear
:06:04. > :06:09.a lot about the raising of the allowance, but as long as the real
:06:10. > :06:12.value of work, tax credits, things like that, people won't feel it in
:06:13. > :06:16.their pocket, and they will find it harder and harder to look after
:06:17. > :06:19.their family. When you look at the other things that could take over
:06:20. > :06:24.from consumer spending which has driven the recovery, held by house
:06:25. > :06:27.price rising in the south, it is exports and business investment, and
:06:28. > :06:31.you look at the state of the Eurozone and the emerging markets
:06:32. > :06:35.which are now in trouble, and the winter seems to have derailed the US
:06:36. > :06:42.recovery. It won't be exports. Indeed, the Obie Eich does not think
:06:43. > :06:47.that will contribute to growth until 2015 -- OBI. So the figures we
:06:48. > :06:54.should be looking at our business investment. And also the deficit.
:06:55. > :06:58.The deficit is 111 billion, and that is a problem, because we are not at
:06:59. > :07:03.the end of the cutting process, there are huge cuts to be made. I
:07:04. > :07:06.understand we are only a third of the way through. That will
:07:07. > :07:10.definitely affect business confidence. It is clear that the
:07:11. > :07:13.strategy has failed. Borrowing has gone up and it's not delivered
:07:14. > :07:20.improved living standards and better quality jobs, so cutting out of the
:07:21. > :07:23.recession is not going to work. The structural budget deficit was going
:07:24. > :07:30.to be eliminated three weeks today under the original plan. They missed
:07:31. > :07:35.target after target. Every economist has their own definition of that. I
:07:36. > :07:40.think Mark Carney is right when he says that fundamentally the economy
:07:41. > :07:44.is unbalanced and it is not sustainable, growth is not
:07:45. > :07:51.sustainable. But if it clicked on, it would be more balanced. It is not
:07:52. > :07:54.just north and south and manufacturing a way out with
:07:55. > :08:00.services, but it is also between the rich and everybody else. What do you
:08:01. > :08:02.make of the fact that there will effectively be another freezing
:08:03. > :08:10.public sector pay, or at least no more than 1%? Not even that for
:08:11. > :08:15.nurses and health workers. But they will get 3% progression pay. 70% of
:08:16. > :08:20.nurses will not get any pay rise at all. They get no progression pay at
:08:21. > :08:25.all. I think this is smack in the mouth. Smack in the mouth to
:08:26. > :08:31.dedicated health care workers who will feel very, very discontented
:08:32. > :08:35.about the decision. Danny Alexander, I saw him appealing to
:08:36. > :08:42.health workers do not move to strike ballots and said they should talk to
:08:43. > :08:47.their department. But about what? Is that real pay cut has been imposed,
:08:48. > :08:53.what are workers left with? So do you expect as a result of yet more
:08:54. > :08:58.tough controls on public sector pay that unrest is inevitable? I know
:08:59. > :09:03.some unions will be consulting with their members, but ultimately it's
:09:04. > :09:07.always members who decide what to do. It does seem to me insulting not
:09:08. > :09:17.to at least be honest and say that we are cutting real pay of nurses,
:09:18. > :09:19.health care workers, on the back of a ?3 billion reorganisation of the
:09:20. > :09:27.NHS that nobody wanted and nobody voted for. Their long-term changes
:09:28. > :09:31.taking place here that almost talks about -- there are long-term
:09:32. > :09:38.changes. It is how lower percentage wages have become of GDP on how big
:09:39. > :09:43.the percentage of profits is. It seems to me there is a strong case
:09:44. > :09:48.for some kind of realignment there. The biggest event of my life, in
:09:49. > :09:51.this world, is the entry of a couple of billion more people into the
:09:52. > :09:55.labour supply. At the end of the Cold War, India and China plugged
:09:56. > :09:59.into the global economy. If there is a greater supply of that factor of
:10:00. > :10:04.production, logically you conclude that wages will fall or stagnate and
:10:05. > :10:07.that has been the story in this country and America and large parts
:10:08. > :10:11.of Western Europe in the last generation. What is not possible is
:10:12. > :10:15.for governments to do much about it. They can ameliorate it at the
:10:16. > :10:19.margins, but the idea that the government controls living
:10:20. > :10:22.standards, which has become popular over the last six months, and the
:10:23. > :10:27.Labour Party have in establishing that, and I don't think it's true.
:10:28. > :10:32.George Osborne's options are astonishingly limited compared to
:10:33. > :10:36.public expectations. If wages have reached a modern record low as
:10:37. > :10:42.percentage of GDP, who is going to champion the wage earner? We have
:10:43. > :10:47.lost Bob Crow, Tony Benn passed away, so who is the champion? The
:10:48. > :10:52.trade union movement is the champion of ordinary workers. We need those
:10:53. > :10:59.larger-than-life figures that we will mess. Have you got them yet? We
:11:00. > :11:04.have a generation of workers coming through. One thing about the loss of
:11:05. > :11:07.Bob Crow is that the whole union movement has responded strongly to
:11:08. > :11:11.that, and we want to say that we are strong and united and here to stand
:11:12. > :11:15.up for working people and we will fight as hard as Bob Crow did.
:11:16. > :11:19.Whoever replaces Bob Crow or Tony Benn, we can be sure they will not
:11:20. > :11:23.come from Eton because they all have jobs in the government. I want to
:11:24. > :11:25.put up on the screen what even Michael Gove was saying about this
:11:26. > :11:40.coterie of Old Etonian 's. He's right, is he not? He's
:11:41. > :11:45.absolutely right. We have the idea of the manifesto being written by
:11:46. > :11:52.five people from Eton and one from Saint Pauls. A remarkable example of
:11:53. > :11:55.social mobility that George Osborne, who had the disadvantage of going to
:11:56. > :12:03.Saint Pauls has made it into that inner circle. Here is the question,
:12:04. > :12:06.what is Michael Gove up to? If you saw the response from George
:12:07. > :12:09.Osborne, there was no slap down, and they know this is an area they are
:12:10. > :12:14.weak on an David Cameron will not comment on it. If this had been a
:12:15. > :12:18.Labour shadow minister making a similarly disloyal statement, they
:12:19. > :12:22.might have been shot at dawn. But there is a real tolerance from
:12:23. > :12:26.Michael Gove to go freelance which comes from George Osborne. It's
:12:27. > :12:29.about highlighting educational reforms that he wants to turn every
:12:30. > :12:32.school in to eat and so it won't happen in the future. But it's also
:12:33. > :12:37.pointing out who did not go to Eton school and who would be the best
:12:38. > :12:40.candidate to replace David Cameron as leader, George Osborne, and who
:12:41. > :12:44.did go to Eton school, Boris Johnson. Michael Gove is on
:12:45. > :12:51.manoeuvres to destroy Boris Johnson's chances of being leader.
:12:52. > :12:57.It's a good job they don't have an election to worry about. Hold on. I
:12:58. > :13:01.think they are out of touch with businesses as well as working
:13:02. > :13:04.people. You ask about who is talking about wage earners. Businesses are.
:13:05. > :13:09.They are worried that unless living standards rise again there will be
:13:10. > :13:15.nobody there to buy anything. We are running out of time, but the TUC,
:13:16. > :13:20.are enthusiastic about HS2? We supported. We think it's the kind of
:13:21. > :13:25.infrastructure project that we need to invest in long-term. He could, if
:13:26. > :13:29.we get it right, rebalance north and south and create good jobs along the
:13:30. > :13:35.way -- it could. Thank you very much tool. I have to say that every week
:13:36. > :13:39.-- thank you very much to you all. That's all for today. I'll be back
:13:40. > :13:44.next Sunday at 11am, and Jo Coburn will be on BBC Two tomorrow at
:13:45. > :13:46.midday with the Daily Politics. Remember if it's Sunday, it's the
:13:47. > :13:48.Sunday Politics.