23/03/2014 Sunday Politics Wales

Morning, folks. Welcome to the Sunday Politics. The dust has barely

settled on George Osborne's Budget and, amazingly, for once it hasn't

all gone horribly wrong by the weekend. So, is this the election

springboard the Tories needed, and where does it leave Labour? Turns

out the big Budget surprise was a revolution in how we pay for old

age. The Pensions Minister says he's relaxed if you want to spend it all

on a Lamborghini. He'll join us later. And could the man with the

maracas be on his way to Westminster? Bez from the Happy

Later in the programme: What would Mondays tells us about his unlikely

Later in the programme: What would Scottish independence mean for

In London, the Mafia man gets to Wales? We hear from the SNP.

In London, the Mafia man gets to stay in Axbridge. Are there ways of

making the European arrest warrant work better? -- Uxbridge. And who

better to help guide you through all of that than three journalists, who

dispense wisdom faster than Grant Shapps calls out the numbers in his

local bingo hall over a pint of beer. Yes, they're hard-working and

they're doing the things they enjoy. Cup of tea, number three. It's Nick

Watt, Polly Toynbee and Janan Ganesh.

So, George Osborne delivered his fifth Budget on Wednesday and had so

many glowing front pages the day afterwards he must be running out of

room to pin them up in on his bedroom wall. Although it's probably

a pretty big wall. For those of you who didn't have time to watch 3.5

hours of Budget coverage on the BBC, here's Giles with the whole thing in

three minutes. Budget days have a rhythm of their

own, driven partly by tradition, like that photocall at 11 Downing

Street and part logistics, how to get this important statement out and

explain to those whom it affects - us? Behind-the-scenes of a Budget

Day is much the same. This ritual red boxery may be the beginning of

the end of weeks of work behind the scenes in the Treasury and sets the

clock ticking on the process of finding out the answer to one

question. You got any rabbits in the box, Chancellor? Yes, there will be

something in the Budget we don't know about. Time marches steadily

towards the statement and already commentators are hovering over what

those potential surprises are. As Big Ben chimes, all focus returns to

the Commons, where there is Prime Minister's questions and the

Chancellor gets up and does his thing. Once he's on his feet and

remembering there is still no copy of the details, the major measures

are rapidly highlighted as they come and then put up on screen. A cap on

Government welfare spending set for 2015/16 at 119 billion. Income tax

personal allowance raised to ?10,500. Bingo duty halved, which

ticked boxes for some but was unlikely to make anyone a poster

boy. And the beer tax cut of 1p, or the froth on the top. And changes to

pensions allowing people to take their money out in one lump sum,

rather than being forced to accept a fixed annual pay-out, or annuity.

This is a Budget for the makers, the doers and the savers and I commend

it to the House. Not everyone can focus on the Budget by listening to

what the Chancellor says. We need to get a copy of the script. We do not

get that till he sits down. I'm going to go into the House of

Commons to get that right now. There will be a response on that and all

the other things from Mr Miliband. The Chancellor spoke for nearly an

hour but he did not mention one essential fact, the working people

of Britain are worse off under the Tories. It is a tricky job answering

the Budget at the best of times, though some, including Labour MPs,

think it is better to mention the Budget when you do.

Here we are. I am going to go. I am not the only journalist missing Ed

Miliband's speech. Many others leave the Chamber as the Chancellor sits

down to attend a special briefing from the Chancellor's advisory team.

I am hotfoot to the studio. There is a little more detail to the Budget

than the Budget Speech. That detail can be whether words unravel and

other interpretations emerge. By now the gaggle of supporters and

detractors are taking the debate onto the airwaves. Are you the BBC?

Have the Daily Politics packed up? No, we're still standing and, days

later, still trying to assess whether the measures announced still

seem fresh and appetising or have already gone stale in the minds of

voters? How significant are these two poles

this morning putting Labour and Tory nip and tuck? Osborne gave his party

a good bounce. It was an astonishingly theatrical coup. At

first glance, it seems like a huge gift to all people. That is where

all of the money has been channelled by this government. They have been

ultra-protected, triple locked. Pensioners have done very well and

others less well. It is not surprising. Normally a budget which

is well received on the day and the day after has unravelled by the

weekend. This time, it has not, so far. The dangerous thing for the

Labour Party now, George Osborne is the assessment this thing called the

baseline. He says, in government, you must control the baseline. The

Labour party controlled in 2001 and 2005 and he needs to control it next

time. He is controlling it on fiscal policy because labour is matching

them on everything. The danger for Labour on the big, headline grabbing

issue, which was freeing up annuities on pensions, that again

Labour was pretty much saying it was going to support it though it were

saying it has to be fair and cost-effective. On a big, policy

issue, they are following on behind George Osborne. George Osborne is

controlling the crucial baseline. Are we in danger of reading too much

into the political implications of the budget? The good thing about the

pensions policy is, if it does unravel, it will not happen for ten

years and, by that time, George Osborne will have left office.

Towards the end of his speech, I thought, that is not enough. There

is not an idea in your budget which is politically very vivid a year

before an election. What I underestimated was, how many

frustrated savers that are in the country. There are a lot of people

who are frustrated by low interest rates and tax rates on pension pots.

This was an explicit gesture for them. That is what has paid off in

the polls in the past few days. You spend all of your money on your

wardrobe, is that right? The bingo poster was a kind of get out of jail

card for Labour. It gave them something to zoom in on. Everyone

beat up on Grant Shapps, the Tory chairman. We read in the daily

Telegraph that the fingerprints of the Chancellor were all over this

poster. The Chancellor signed off it -- off on it and so did Lynton

Crosby. They referred to working class people as, they are. How did

it get into the Telegraph? We can only presume but grant Shapps made

it clear that it was not him. We had a time when Labour politicians, we

saw from the response of Ed Miliband onwards, they were not quite sure

how to react to this budget. A lot of detail had to be absorbed.

Suddenly, here is something we can talk about. You can see the thinking

behind the poster was very sensible. We are not Tory toffs, we are

interested in helping people who do not come from our backgrounds. The

wording was awful and played into every cliche. It was all his fault.

It shows how unsophisticated he was. There were people from Tory HQ

who agreed the budget. A month down the line will the budget look as

good? Probably. Once people look at it, pensions are fiendishly

conjugated. Once they look and see what it will do with people having

to pay for their own care because they can now take capital at their

pension, that will come as a shock to a lot of people with small

savings. It all be gone on their care. The polling will be neck and

neck all the way. In the past, George Osborne has been accused of

using his Budgets to tinker at the margins or pull cheap tricks on his

political opponents. Perish the thought. But the big surprise in

this year's statement was a genuinely radical shake-up of the

pensions system that will affect most people who've yet to retire. At

the moment, everyone is saving money into a defined contribution pension,

that is the type most common in the private sector. They can take 25% of

the pot is a tax-free lump sum when they retire. The rest of the money,

for most people, they are forced to buy an annuity, a form of insurance

which provide a guaranteed monthly income until they die. Annuities

have hardly been a bargain since interest rates were flat slashed

following the financial crash. Even with a ?100,000 pension pot would

only get an income of ?5,800 a year at current rates. From 2018,

pensioners will not be forced to buy an annuity. They can do what they

like with their money, even taking the entire pot as a lump some but

paying tax on 75% of it. With an average pension pot closer

to around ?30,000, pensioners would be more likely to buy a Skoda

instead of a Lamborghini. Most newly retired people who take the cash are

more likely to spend the money paying off their mortgage, helping a

family member to buy a property or investing the money elsewhere. Well,

earlier I spoke to the Pensions Minister. He's a Lib Dem called

Steve Webb. I began by asking him if he still thought the reforms might

lead to pensioners splurging all their savings on supercars. What

this reform is about is treating people as adults. For far too long,

we have said, we will make sure you save for your old age and then we

will control each year how much is spent on what you spend it on. What

we are saying is because we have formed -- reformed the state

pension, we will be much more relaxed about what people do with

their own money. The evidence is that people who have been frugal and

saved hard for retirement do not generally blows a lot. They will

spin it out. It is treating people as adults and giving them choices

they should have had all along. It is a red herring, isn't it? The

average pension pot is between 25000 and 30,000. Lamborghinis aren't an

option, correct? I gather only about 5000 people a year retiring can buy

a flashy Italian sports car. It might be about paying off a

mortgage, paying off outstanding debts. Maybe spending more money

earlier in retirement when they are fit and able and can enjoy it more.

We will give people guidance. We will make sure when they retire,

there is someone to have a conversation with talking through

the implications of spending the money early and options of investing

it. This will be a real step forward. Even if you have a much

bigger pension pot, say half ?1 million, which is way bigger than

the average, even then the marginal rates of tax will be a disincentive

to take it all out at once. You will lose huge chunks of it at the 40%

band and then the 45% band. The tax system gives you the incentive to

spread it out if the tax threshold is a bit over 10000 and the state

pension is a bit over 7000, the first 3000 you draw out in a given

year is tax-free. The next band is at 20%. Spreading your money will

mean you pay less tax. That is why, in general, people will not blow the

lot up front. They will spread it out over their retirement. You have

kept this policy quiet. Not even a hint. How did you test it? How did

you make sure it would be robust? You did not do a consultation. I

have been talking about freeing up the annuity market for a decade. The

idea of giving people more choice. The government has relaxed rules

over this Parliament. It was not a completely new idea. We know in

places like Australia and America, people have these freedoms. We

already have something to judge it by. We will spend the next year

talking to people, working it through. There will be a three-month

consultation. I want people to have choices about their own money. There

is detail still to be worked out and we are in listening mode about how

we implement it. When you announce something you cannot do widespread

consultation, for the reasons I have given, you do run the risk of

unforeseen consequences? Pension companies this morning are

indicating, you, the government can write you are looking for ?25

billion of infrastructure investment from us. You hold our shell below

the water line. That may not happen. We spoke internally about the

implications for instruction -- infrastructure. It seems to me there

will still be long-term investments. Many people want to turn their whole

pot into an income. I understand the insurance companies are lobbying,

but I'm convinced there will still be plenty of money for investment

and infrastructure. If the Chancellor's pro-savings measures

work, that will generate more savings. With no requirement now to

buy an annuity, surely it is the case that pension pots are another

ordinary savings fund, so why should they continue to get favourable tax

treatment? Bear in mind that a lot of the tax treatment of pensioners

is tax deferred so most people pay tax at the standard rate. If they

put money into a pension, they don't pay tax when they earn it, but they

do at retirement. We do want, we will still have automatic enrolment

into workplace pensions, we do want people to build up, because at age

20 and 30 nobody thinks about retirement. It is still vital that

people do reach retirement to have these new choices with a decent

sized pension pot. Pensions. Tax breaks because they were supposed to

provide an income in retirement, that is how it was structured, but

that is no longer a requirement, surely that undermines the case that

if they get tax breaks, other forms of savings should get tax breaks.

Other forms do get tax breaks, of course. The return with ISAs is tax

free. The point with pensions is that you are simply deferring your

earnings. There is a bit when high tax rate payers get a kick when they

are working and then retire on standard rate, so there is the issue

of the top getting too many tax breaks, but the basic principle that

you pay tax when you get the income seems right to me and isn't affected

by these changes. You have announced save friendly measures, are we right

to look at them as a consolation prize because savers have suffered

from the Government's policy of keeping interest rates abnormally

low? It is certainly the case that very low interest rates have been a

huge boon to people of working age with mortgages, and people who have

retired said they thought they could have got a better deal on their

savings. I think there is a recognition that whilst we have done

the right thing with pensioners on the state pension, we have brought

in the triple lock, and many will bent on -- benefit from these

changes. Why don't savers who are not pensioners get the same help?

They have been hit by low interest rates as well. Those of working

age, many of them say they have benefited from low interest rates

was predominantly people in retirement have not had the benefit.

Obviously people of working age will have benefited from the tax

allowance so it is a myth to say the Budget was all about pensioners. And

yet even when the Office for Budget Responsibility takes into account

your new measures, it still shows that over the next five years

households will save less and less, indeed the savings ratio falls by

50%. You haven't done enough. One of the things we know is that the

economy is picking up strongly, and as we have more confidence about the

future they will be more willing to consume now, so without these

measures it may be that the saving rate would have fallen further. We

want people to save and spend, it is about getting the right balance. As

the economy picks up, people will want to spend more of their money

and it is about getting the balance right. You make the point that if

people are little profligate with their private pensions, they will

have the state pension to fall back on and it will be higher than it has

been, but it is also the case that in these circumstances they will

still be entitled to housing benefit and even to perhaps some council tax

benefit as well. Do you know by how much this could put the welfare bill

up? We think the impact will be relatively modest because the sort

of people who save for a pension and make sacrifices while they are at

work are not the sort of people who get to 65 and decide to blow the lot

for the great privilege of receiving council tax benefit or housing

benefit. There will be people on the margins and

benefit. There will be people on the who retire with some capital want to

put some money away for their funeral. People like to save even

into retirement so the myth of the spendthrift pensioner I don't

believe. I think this has been rightly welcomed. Ever fancied a

Lamborghini yourself? If you turned the camera around you would see my

2-door Corsa! What's your favourite thing about an

election? Could it be the candidates ringing on your door while you're

having dinner? The leaflets piling up on your doormat? Or the endless

adverts aimed at hardworking families? Well, if you thought that

was bad enough, then you might want to consider going overseas for the

2015 election because the parties are going to be aiming their message

at you like never before. Adam's been to Worcester to find out more.

One of the most famous political figures in history lived here, she

is called Worcester woman. She was in her 30s, working class with a

couple of kids, aspirational yet worried about quality of life. But

she wasn't a real person, she was a label for the kind of voter new

Labour were trying to reach and she was later joined by Mondeo man and

several others. Doesn't that all seem a bit 90s? The technique,

called segmentation, was used by George Bush in 2004. Then refined by

Barack Obama. Rather than focusing on crude measures like cars and

hometowns, they delved into the minds of voters. It is not just

women, not just people who live in cities, but if you start to put

together these groups of people you can even in an anecdote or way

imagine who they are, what types of language and imagery might relate to

them. We have been given access to a new polling model being used here by

this firm, which is pretty close to the one we are told is being used by

the Tories. It carves the country into six personality types, and we

are trying it out on Worcester woman and wast of man. We are using an

online quiz to work out who is in which segment. Meet new monk,

Susie. She feels well represented. I know the Budget and the increases to

childcare, I think at the moment I am fairly represented. This puts her

in the category of optimistic contentment, people who feel they

are doing OK. Terry, on the other hand, isn't happy about Britain

today. Health and safety and all that! I hardly recognise the country

a living in any more? Yes. Are you ready for the result? He is Mr

comfortable nostalgia, they tend to favour the Tories and UKIP. They

dislike the cultural changes they see as altering Britain for the

worst. That sums me up. Tony is worried as well but feels much less

secure. I look forward to the future with optimism or anxiety? Anxiety.

Optimist or pessimist? Pessimist. His category is... You feel a bit

insecure, you think the Government could probably help you more? Yes.

Labour picks up a lot of these voters. This man is being asked to

do more and more at work, but he is getting less and less. I am getting

more towards the despair side. Things are getting tougher,

generally? It puts him into the segment called long-term despair,

people who feel left out. Finally, this is ever thoughtful Carol. I am

a bit of an idealist. Her idealism makes her a cosmopolitan critic. I

am a liberal person. Apparently a lot of the media fit into this

category as well. There is one group of voters we have not come across,

people who show calm persistence. They hope things will get better but

don't expect them to. They are coping, rather than comfortable.

Presumably they are all out of work. Which group are you win? You can

take the poll on the BBC website, and in the coming weeks we will be

doing our own polling using the six segments to see of the politicians

really have worked out how we think. And as Adam said, if you want to try

the survey for yourself, you can go to the BBC website and click on the

link. And we're joined now by the

pollster, Rick Nye. Welcome to Sunday Politics. We have had

Worcester woman, Worcester man, is this any different? It is a

recognition that or politician -- all politics these days is like

this. It enables them to cut them more finally. You think all politics

is coalition politics, you think they have to put together these

groups of people, not that the Lib Dems will always be in power? No,

and if you listen to the coverage these days you might think it is

about grumpy old men on the one hand with Guardian readers on the other.

It is far more complicated than that, there is a lot of churning

going on underneath which is driven by people's value systems. A lot of

this has been pioneered in the United States, very sophisticated on

their election techniques, and in Britain we are always the first to

grab whatever the New Year will is from America. How do you think this

will translate to this country? I think it means that if you are

target photo you will still get the same of leaflets and people calling,

but you will probably have different kinds of conversations because

people on the other side, the party campaigners, will think they know

more about you. Will I know who you are? If I am a party campaigner,

will I know, looking down the street, who fits into which

category? You will be able to approximate that with all of the

other data that you have gathered through polling, or doing local

campaigning, that is the idea to make sense of this vast quantity of

data people have about voters. We asked our panel to fill in your

survey. Nick is optimistic contentment, 99%. He was 1%

cosmopolitan critic, which is how he keeps his job at the Guardian.

Polly's job could not be more secure, 100% cosmopolitan critics,

and Janan Ganesh, optimistic contentment, which is what you would

expect from a financial Times columnist. What do you make of this

technique? Why are you only 99? It sounds really clever. 95% of the

population five years ago voted Labour or the Conservatives. We have

got away from that. It is coalition politics. You need sophisticated

methods. Presumably you must not lose touch with basic points. You

said it was used in the US presidential elections. Wasn't there

them moment emit Romney 's sweet when the initial response was, we

did not know the sort of people voted. His next response was, we did

not know these people existed. Unless you know about certain key

demographics, you are wasting your time. Is it important in modern

campaigning? I think it is useful because it is about attitude. We

have got Mosaic. We have got Acorn. It does not tell us very much. What

people think and feel may be different to their income. You can

be quite a high earner and anxious. You can be quite a low earner and

feeling aspirational and optimistic about the future. I think this does

get something else. In days gone by, particularly in America,

overwhelmingly, if you are in the better of segment, you would be

Republican and the blue-collar workers and some academics and

Liberals voted Democrat. In the last election, the richest 200 counties

in America voted Democrat. That is an attitude thing. Income does not

tell you how people will vote. There is a huge, working-class base of

support for the Republicans. It is unavoidable. Add a time when people

no longer identify with ideologies or class blocks, you have to go the

temperament and lifestyle and manageable. In America there were

128 segments according to lifestyle and Outlook. Once you get to that

stage, it becomes close to useless. We were talking about the budget

earlier. What other polls saying about the budget? The lead of labour

has been narrowed over the Conservatives. -- Labour. Osborne

and Cameron as an academic team have always had a lead over Miller band

and Balls. This week it is about economic management. -- over Mr

Miller band. Thank you for being with us today.

It's just gone 11:30am. You're watching the Sunday Politics. We say

goodbye to viewers in Scotland, who leave us now for Sunday Politics

Scotland. Coming up here in 20 minutes:

Hello, and on the Sunday Politics Wales: The SNP's deputy leader tells

us what Scottish independence could mean for Wales. The How should

Labour respond to criticism of the NHS, including from one of its own

MPs. Food there be another clinic in

Parliament? -- could there be another Kinnock.

But first, have enterprise zones taken off? Well, one entrepreneur

told us there are fundamental problems at one of the Welsh

government's flagship zones. He claims ministers are failing to

deliver their vision of an aerospace enterprise zone in the Vale of

Glamorgan. Economy Minister Edwina Hart has said that plans are in

place to address those concerns. Bethan Lewis reports.

They are meant to help the economy take-off, seven enterprise zones

across Wales which the Welsh government says will attract new

businesses, jobs and more wealth. The seven areas spoke us on specific

sectors and no surprise what this focus is. The Welsh government says

incentives have been crucial in attracting new businesses here, but

are the conditions in place to help those businesses succeed?

Sean owns a Cardiff hotel but was keen to start a business based on

his love of flying when he heard an aviation enterprise zone was planned

in the Vale of the Morgan. He secured a licence to sell light

aircraft which he will import from Europe once they have been modified

to meet UK standards. He got a grant from the Welsh government and

arranged to rent space in a hangar owned by a bigger company. It gave

the green light to our desires to develop a business. I think there is

a great amount of potential here. In fairness to the Welsh government,

the vision of what could be done with the area. Having been here two

years, we are struggling as a number of the businesses are struggling.

The crux of the problem is a clash between the traditional military use

of the site and the new commercial requirements of the enterprise zone.

The site is shared with the Ministry of Defence who operate the airfield,

the limited working hours are a frustration to business. They will

only operate Monday to Friday, 9:30pm until 4:30pm, office hours,

civil service office hours. The reality of business, especially

aviation, it is a seven-day week operation, it is very difficult to

get it off the ground, and it is a shame because the government needs

to be applauded for their vision of creating aviation enterprise zones.

Their ability to deliver that has to be questioned.

In this week 's enterprise committee at the assembly the Minister said

the problem was being addressed. A the company has been awarded a

contract to provide a nine to five service on Monday to Saturday April

the 1st, and Sundays will be available on request. We acknowledge

there has been difficulty for the businesses there that it is

difficult taking things through sometimes with the vast organisation

in terms of the chain of command, we are committed to get this right and

hopefully it will be right and businesses will be very happy and I

hope to attract further businesses. That is welcomed by one committee

member but he says more generally we need more facts and figures from the

Minister about how the enterprise zones across Wales are performing.

We are not getting the information we need from government at this

point in time, it is important we do get the information, though I do

realise commercial sensitivities about the amount of detail we get,

but if you have strategies in place, public money being pumped

into these enterprise zones, we need to be making sure we are getting

value for money, the jobs we really need in the Welsh economy are being

created and that is why we have to keep up the pressure on government

to prove the enterprises are giving us what we want. Performance

indicators for the enterprise zones have been published and there will

be job figures in due course, say the government. The minister 's

assurance on extended flying hours will be welcomed. Though this

businessman argues they will have to go further for Wales' aerospace

enterprise zone to reach its full potential.

Now, you're no doubt aware that Scotland will hold a referendum on

independence in September. If Scots vote yes two years to the

day tomorrow, March the 24th, 2016, will be their Independence Day, the

day Scotland leaves the UK and strikes out on its own. Tomorrow

Scotland's Deputy First Minister Nicola Sturgeon will be in Cardiff

to address the wealth government centre. I have spoken to her ahead

of her visit -- Welsh government centre. I will be setting out the

case for Scotland to be independent, the reasons we can be

independent, that I believe we should and must be independent, but

I will also be saying very clearly to people in Wales and Scotland

becoming independent, it is about taking responsibility for our own

decisions, it is a Vatican lean not about turning our back on our

friends and family in other parts in the UK -- emphatically. The links

between others and people in Scotland will always be very close,

the family links, the cultural, social ties, our ties of history.

These are ties we cherish very much here and it is important we

emphasise that while we are also emphasising the reasons why we want

Scotland to be independent. People down here scratching their

heads wondering how life would change if Scotland became

independent. What difference would it make to Wales?

It would make many positive differences to Scotland, obviously

that is the reasons I am arguing we should be independent, it would

benefit Scotland socially, economically, but one of the key

aspects of the argument I would be making in Cardiff is in many ways

Scotland being independent, by shifting the balance of power within

the existing UK, can be of benefit to other parts of the UK. We work as

a devolved administration very closely on certain issues with the

Welsh assembly government. We make common cause where that is in our

mutual interest. If you take the British Irish Council where we sit

together with the Republic of Ireland and the UK government having

another independent nation in their helps to shift the balance away from

Westminster which would clearly be in Scotland's interests but I think

will lead to a healthier relationship of the different

nations within the UK as well. I see advantages for people in Wales and

Northern Ireland as well as big advantages for people in Scotland.

It would be of advantage to people in England, you would have a

situation where the relationship between Scotland and the rest of the

UK would be one of equals. The First Minister in Wales disagrees with you

on that, he says Wales and Scotland need allies within the union. He is

wrong on that, is he? I think he is entitled to his

opinion, he is entitled to argue that case. I wouldn't suggest

otherwise. I respectfully disagree with him on that matter. Scotland

and Wales within the British Isles will continue to make common cause,

and will continue where it suits our shared interest to be on each

other's sides, I'm sure the Celtic relationship will continue to be a

very strong one, except for my play rugby which is probably an issue I

shouldn't go into at the moment. I think it can strengthen those

relationships, it doesn't need to undermine them at all. One of the

points that is often not properly appreciated, that is the

responsibility of those of us who argue for independence to mature it

is appreciated, an independent Scotland. Be part of the British

Isles, we would still be able to make common cause with Wales or

Northern Ireland or other members of the British Irish Council one that

suits our common purposes. And a currency union, if you had

your way. This is the other quibble. People in Wales should have a say on

the currency, if it is going to be a union, a new independent nation

involved, surely the people of Wales should have a say in whether they

like that arrangement. That is ultimately not a matter for

me. My response is being in a shared currency with an independent

Scotland doesn't change the currency arrangements for England or Wales. I

would argue very strongly it is in the interest of people in other

parts of the UK to remain within a currency union, given our trading

relationships, the contribution to the UK's balance of payments of our

oil and gas and other exports. It is an arrangement that would make sense

not just from Scotland's point of view but other parts of the UK.

People in Wales, suddenly the currency they use, would be under

partial control of a foreign country.

If you look at the fiscal commission report, the fiscal commission being

the team of economists that have looked at this in some detail for

the Scottish government, an independent team of economists, they

have set out the governance arrangements that would have to

apply if there is, as I believe there will be, a currency union, so

sustainability agreements between an independent Scotland and the UK

government image of the interests of all parts of the UK are catered for

there. I believe it is a common-sense arrangement and it is

one that would recognise the fact that Scotland as an independent

country would continue to be very close partner -- very close trading

partner. Let me put another policy of the Welsh government to you, the

funding arrangements, the Barnett formula that sets the budget in

Wales and Scotland, needs to be reformed because it short-changes

Wales and yet Scotland does very well out of it by comparison. Is

there any hope of Barnett reform before a referendum, or Scotland

votes no? Firstly, I don't accept Scotland gets treated particularly

generously through the Barnett formula. One of the big concerns we

have in Scotland, if there was to be a no vote, is we could see reform of

the Barnett formula that would lead to significant cuts to the Scottish

budget and that is something that would be of enormous concern to

Scotland. I completely understand Wales and the Welsh government wants

to argue the corner. But the Scot -- but if Scotland becomes independent

we become financially independent, we raise our own taxes, we decide

how those are spent. That is clearly in the interest, in my view,

Scotland. Of course, it would lead to a scenario in which Wales could

argue for, in their view, a fairer funding arrangements with the

Westminster government. If there is a No vote would you work with the

Welsh government to reform Barnett? Obviously Wales has to make its case

in terms of what it considers to be fairer funding. I think the point I

would make strongly is a good accept the premise that Scotland is treated

disproportionately generously through the Barnett formula, that is

not how it is felt in these times of cuts over the past number of years.

We would be against any reform of the Barnett formula that led to a

cut in Scotland's budget and clearly that is something that we would have

to argue very strongly with the Westminster government. It is

absolutely right of the Welsh government to argue with Westminster

they need fairer funding, but I don't believe that should be at the

expense of Scotland. I believe the best solution is for Scotland to be

independent. There can be no arguments about Scotland's finances

if we raise our own taxes and are responsible for our own spending

decisions. Scottish deputy First Minister,

Nicola Sturgeon. We'll be getting the response of the No camp in the

next few weeks. Now, last night Labour Party members

in Aberavon chose Stephen Kinnock as their parliamentary candidate.

Familiar name? That's because his father Neil used to be Labour's

leader and his mother was an MEP. What's more, his wife is the Prime

Minister of Denmark. I spoke to him earlier and asked how much time will

be able to spend in the constituency if he ever got elected?

My plan is to spend all of my working time working for people of

Aberavon between the constituency and Westminster. It would be the

usual role for an MP which is to divide his or her week between

Westminster and the constituency. My plan is to be there every single

weekend that I need to be there. One of the things you need to be able to

do is pass the Saturday morning shopping test, you need to be there

bumping into people, talking to people, listening to the issues and

concerns of the community, and you can only do that if you are living

in the community. I am sure your opponents will try to make much of

your name and said this is a Labour dynasty, a Labour elite, in just the

same weight Labour has said there is an elite in charge of the

Conservatives. How do you respond? I have been living in put all but for

the last three months, speaking to pretty much all of the Labour

members -- brought Tolbert. It is not universal advantage to have the

Senate I have. There are people who may have voted against me because of

my family is. It was much more about who I am and what I have done.

People really wanted to meet, talk and make a decision about who was

the best candidate. We had a very vigorous and intense competition

with some strong candidates, and I am of sleep delighted I emerged the

winner from that. The Labour Welsh government record is under huge

scrutiny and pressure on public services. Does that make your job

more difficult? There is this leak some policy areas

and competencies which are Welsh assembly, down which are

Westminster. The key thing is we work as a team. I look forward to

working with our excellent team of local councillors and with our

fantastic assembly member in Aberavon and we as a team can put

forward Labour's offer. That is on health, education, also crucially on

jobs. You heard me ask Mr Kinnock about

Labour's Welsh government. Perhaps the most wounding criticism it's

faced recently has come from one of its own MPs.

And glue it started her campaign after she claimed her husband, Owen

Roberts, spent 27 hours on a trolley before he died at the University

Hospital of Wales in Cardiff. It is not a personal campaign, and she

says she will keep going. Other patients have contacted her with her

own stories -- with their own stories will top that prompted this

response from the First Minister for top --. She has produced nothing but

anonymous comments that cannot be treated, we don't know whether they

are correct or not, they cannot be investigated. We have asked her on

more than one occasion to produce the evidence to back up her claims.

I have done it, the Ministry of health has done it, I have done it

in person and writing, she has not done it. You cannot show and the

dated protection act, I cannot show people 's names and addresses,

unless they want them to be made public. So I had to protect the

people who wrote to me. I made it quite clear in the synopsis that we

prepared for the First Minister after the meeting I had with him on

December the 2nd, that was included in the letter, several pages of

precis information. Many people have already complained. It is well-known

needs complaint are there. The Royal College of Nursing has asked to see

information about the case. When the health board released some details

she called for the board's chair and chief executive to resign for stop

we asked what action the health board had taken in response to the

very severe accusations made. They were affecting patient care. As a

Royal College which is the professional body we feel it is

detrimental to patient care that is not in the public domain. It is a

row Labour could have done without. Criticism from opponents is one

thing, but how should the Welsh government respond when there is

flak from both sides? It is the patients and clinicians that are

suffering. Well, let's discuss that question

now with Lee Waters, director of the think-tank, the Institute of Welsh

Affairs. It is a tricky position that Colin

Jones finds himself in. How should he handle it? -- car when Jones will

. He hasn't felt much pressure, he has had a relatively easy ride. The

big change, this is where the frustration is coming out, is that

London is coming for him. We have seen there is an explicit political

strategy, Grant Shapps said Labour 's record in Wales will be a key

issue in the general election next year with a theme that you know what

Labour looks like because they are governing Wales. Things are not

good. What happened in the last couple of weeks is an clue it has

been quoted in London newspapers, yesterday a strong piece in the

Daily Mail, where scrutineers coming on the Welsh government, most people

get the information in Wales about what is going on from the London

media. The London media has pretty much ignored us until now, but now

they are starting to turn the screws on the First Minister is feeling the

pressure. We saw frustration there. That anger that he has expressed, it

is not just from her, it is London pay more attention to what he is

doing. Over the last year both in the health professions who have been

getting agitated, have not been feeling they could fight back. But

also politically because this is friendly fire. She was asked to do

this enquiry by David Cameron, and enquiry into England, but she has

continuously pointed the finger towards Wales. The Health Ministry

and First Minister have been getting increasingly frustrated that she

hasn't backed that up. There is genuine frustration around that but

obviously this is a political issue and it is the internal elliptical

implications the First Minister is feeling the pressure. Within the

Labour Party, an opinion poll, leading of the Tories down to 1%.

Concerned with the Labour ranks about their strategy, and for every

time by ministers question Time David Cameron works at Miliband fork

the performance of the First Minister there is resentment at the

London level. He is facing questions from Labour HQ. There is bound to be

frustration. When Vegas two at Miliband and says for example on the

Barnett formula, he has been calling for reform for a number of years, he

has got nowhere. This week, in Scotland, the Liberal party have

said in Scotland the Labour Party is here to stay so they have

effectively told him they are not going to exceed to his demands and

as they hear more details. They offer is rated E is opening up a

weak flank for them at Westminster. The frustration is both erected at

the stage of the health service, the fact this is coming from a Labour

politician, and also in terms of its impact on the internal dynamics and

negotiations within the Labour Party. The way he responded, will

improve matters, one wonders how this round is going to end?

I don't think the turn in First Minister 's questions is

particularly helpful, he does get a little too strident at times. This

is going to get worse. He has no majority for stop health service

funding will get squeezed, the Wales audit office produced a report last

year which said within ten years there will be a funding shortfall in

Welsh public services of ?2.5 billion, just in Wales, two thirds

of the spending cuts coming from Westminster haven't yet been

implemented. The pressure on public services will get more intense and

there is no clear political strategy from the wash them and how they will

deal with that, they have to make the angel -- painful changes.

Whenever they try and close maternity unit there is huge protest

and they don't have a majority for stop there is a lot of pressure, no

quick fix and politics is very tricky. And the pressure from the

press will not lessen either. It will be a recurring theme. They

have got a point, the performance of education, in health service, and on

the economy, is not whether Welsh allotment would expect it to be.

They are struggling to find their story to tell back to defend

themselves and they are getting a lot of pressure internally and

externally which makes him ratty. We invited the Labour Party and the

Welsh government to come on the programme and join our discussion

but never he was available. It is Welsh Labour conference next week so

I dare say we will have an opportunity to ask them all about

it. And that's all from me decision, she will weigh up the

The big news is the popular server is struggling to control all of the

people who want to find out where they fit in the political spectrum.

It hasn't quite crashed but it is queueing up those people. Who would

have thought the Sunday Politics had so many viewers? It has never

happened on the X factor. This morning's papers don't make

comfortable reading for Labour with two separate polls showing the

party's lead over the Tories is down to just one point. And there's been

plenty of criticism of Ed Miliband's response to the Budget. Let's take a

look. You know you are in trouble when even the Education Secretary

calls you and out of touch bunch of elitist. Where is he? He is hiding!

I think he has been consigned to the naughty step by the Prime Minister.

The naughty step! And we're joined now by shadow chief secretary to the

Treasury, Chris Leslie. There was a widely criticised response by Ed

Balls to the Autumn Statement, now a widely criticised response by Ed

Miliband to the Budget. Does this show you are struggling at the

moment? Of course Ed Balls and Ed Miliband don't want to hear the fact

that in reality, for most people, life is getting harder and there is

the cost of living crisis. Did we get any mention of that in the

Budget? Of course we didn't. We were waiting for action on the cost of

living and it wasn't forthcoming. Ed Miliband came up with the tactic of

responding to the Budget without mentioning anything that was in it.

He mentioned the fact the personal tax allowance was a bit of a

giveaway but he takes more with the other hand. He is in favour of that,

right? Anything we can get but we need a lot more. Let me tell you

something else he mentioned, the fact the national debt has risen by

a third and George Osborne and David Cameron... They knew that before the

Budget. The borrowing figures were announced and Ed Miliband made

reference to those. There is not a lot of happiness on Labour

backbenchers about this, is there? And indeed not a lot of happiness in

the shadow cabinet. There is concern that Ed Miliband is on a journey to

remodel world capitalism whilst George Osborne is firing some love

bombs at Middle England by talking about freeing up the pensions market

and there is real nerves that what Ed Miliband is saying is not going

to be in tune with those middle income earners that the Labour Party

has got to attract if they are going to win the general election. When

Rachel Reeves used the medium of Radio 4 to announce you were broadly

in favour of the pension reforms announced by the Chancellor on

Friday night, was that a result of a decision taken by the shadow

cabinet? Is With annuities, they are a very old-fashioned product. There

are some serious questions which need to be addressed. Was that the

result of a Shadow Cabinet decision? We have not had a Shadow

Cabinet since the budget. We all want to make sure that we understand

the point about flexibility. No one is arguing with that. There are some

serious concerns. Let me give you a couple of examples. This is

something the Chancellor has done, he claims, for reasons of freedom

and flexibility. Is it a coincidence he is grabbing quite a lot of tax

from pensioners early on to plug a hole which is necessary because the

deficit has not gone down? Forgive me for being slightly cynical about

motives. For or against it? We need to have safeguards for protection of

pensioners. What will it do for the annuity market if most people still

want to have a steadying come for a third of their lives? -- steady

income. What does Labour have to do to get it show back on the road? The

question is, how do people feel? How many people will still not be

feeling better by the next election? Wages may be rising slightly but not

for a large and significant number of people. They were just looking at

the YouGov poll. If you look at the middle to low earners, they are

overwhelmingly pro-labour. Can Labour get those people out to vote?

They are really hurting. There are plenty of them. The question is

whether people are optimistic because they see figures as if they

look as if they are on the up or whether they vote according to how

they feel, which will still be very far behind. Cost of living has been

a major mantra from Labour. That's that this chart shows how things are

beginning to change. What this shows is that, sometime this year, after a

long time at which average earnings trailed inflation, they now overtake

it in the run-up to the election and they stay there for the forecast

period. What do you now do if your cost of living mantra is running out

of steam? I am not sure that, for most people, they will recognise the

sense that suddenly things will be getting better. Particularly the

younger generation are really feeling quite down about the

pressures they are facing to make ends meet. You can see the lines are

exaggerated because the Y axis on the side starts quite high up. It

does not start at zero. The other statistic from the OBR is that we

will not be getting back to the point where wages are exceeding

prices from the pre-banking crisis period until late 2017. There are

some really serious pressures that people are under. What they wanted

was a budget that would address concerns and, for the vast majority

of people, they will have heard the statement by George Osborne and

think, how is it really help them now? It did not address it. It is

clear that by 2015, average living standards will probably not have

returned to where they were in 2010. Average wages will not have

done that. On the other hand, the chart shows the sense of direction

is moving in the right way. Which one matters more with the

electorate? I suspect it is sense of direction. People sense of

prosperity does not need to be buoyant. It has to be something

worth preserving. We have to fear the all turn. That is what intrigued

me this week. People make too much of a fuss about the Parliamentary

response by Ed Miliband. People will forgive a bad day at the dispatch

box. What they will not forgive is the absence of a macro economic

mess. Labour have a very powerful message on living standards and lots

of popular, targeted interventions like the energy price freeze. You

can imagine they will be sufficiently nervous about that next

year. If living standards are not back to where they were, Labour can

say, are you better off now than when you were four years ago? The

reason why break and -- wallowed waken one that is because Jimmy

Carter mucked it up -- Ronald Reagan. Labour have to say, vote for

us and you will get 2 million homes. At the moment, the offer is very

modest. You need to find the money to do that. People need to

understand that housing is at the very heart of the economy, as well

as young people and their aspirations. At the moment, Labour

's offer is not spectacular in. If the focus group shows the cost of

living crisis have no longer has the attraction it did, what line do you

move onto? Yellow McCoy must remind people of the wasted years and the

cost of living pressures they have been under. -- we must remind

people. We want a recovery which has low growth, low wage. A race to the

bottom. They want a recovery that is felt by everyone, shared and felt by

all. Now, here's an idea to twist your melon. Mark Berry, better known

as Bez, it says here he's a member of something called The Happy

Mondays, wants to stand for parliament. He's best known for

being in a band, and not doing very much, so he might fit in. Here he is

in action. And Bez joins us from our Salford

studio. Good to see you. Is this a genuine candidacy or are you

twisting my melon? Amazing how time flies when you're having fun! You

having fun doing this candidacy? I am doing the job of the politicians

and standing up for the people and bringing attention to the horror of

fracking, which is a totally unsafe technology. There is no one in

mainstream politics who is discussing or saying anything about

it. It is an unsafe technology and it has been proven in America. You

see the process in America and the people out on the streets. The whole

atmosphere has been made toxic. These people are allowing it to

happen in the name of profit. This has been a Labour seat you are

fighting in Salford since 1945. It is a tough mountain. Supposing you

were to win, could you ever see yourself entering a coalition? With

a bit of luck I may be able to shame Labour politicians to do the job

properly and stand up for the rights of people. They are not and I am

having to do that job. All I am doing is causing debate and bringing

to attention the horror that is hanging on our doorsteps. It is not

only fracking but GM modified foods that they want to bring into this

country as well. Owen Paterson is one of the main lobbyists. Lobbying

is legalised bribery, by the way. It is run by the bankers. Basically, we

have to stop these monsters from getting into our country and turning

our land into a toxic waste. That is what I am trying to say. You are

raising the debate, as you are doing with us here. We do not really need

fracking. You have done that and you have talked about other things as

well. In terms of a new integrity, if you were to become an MP, would

you claim expenses? If I ever do get in charge, I would completely enter

the banking system and there would be expensive, but they would be like

bus passes and train passes. You behave like the people and you are

in touch with the people, you move with the people and do understand

what the people want. You do not live in acre Kuhn of your own making

of luxury, wealth and total disregard of everyone else. -- a

cocoon. If you did get into the Palace of Westminster and had to

mingle with all these people, who would you rather have in night out

with - Mr Cameron, Mr Miller band or Mr Clegg? I would be willing to

discuss politics with anybody. I would make them realise what they

are doing. I am glad too have a debate and with anyone. The people

of Salford, quite a lot people people behind me. I have been

speaking to Salford councillors. They are going to lend me their

support. The people of Salford, and not to forget the people of Eccles,

sending you much. We must stop this horror. There is a monster on our

doorstep and we must stop it, people. Do not forget to take your

maracas on campaign trail. Would you like a pair to shake yourself? You

shake your maracas against fracking! Thanks, Bez, goodbye. Thank you for

giving me a little platform to express my views. Now if there's one

thing that gets us hot under the collar here at the Sunday Politics

it's European elections. The only thing we like more than the

elections themselves is a TV debate about them. And we're in luck! Take

a look at this. Ladies and gentlemen, please welcome leader of

the Liberal Democrats and Deputy Prime Minister, Nick Clegg. Gives

the most fantastic welcome to Nigel Farage. I would challenge Nigel

Farage to a public, open debate, about whether she we should be out

all in of the European Union. I will do it for Nick Clegg. Since 2009, I

have taken part in 45% of votes in the European Parliament. Nigel

Farage has not tabled a single amendment since July 2009. Mr Clegg

has only taken part in 22% of votes in the House of commons. You can

watch the debate at 7pm on the 2nd of April over on BBC Two. And for a

chance to be part of the studio audience on the night and put your

question to the two party leaders, e-mail the question you'd like to

ask to [email protected] or tweet it using the hashtag

#europedebate. And Nick Clegg and Nigel Farage will be limbering up

this week with their first debate on LBC radio on Wednesday. Who is going

to come out the best? I suspect Nigel Farage. It is easy to portray

Nick Clegg as morally compromised, who has not asserted himself in

government. I do wonder about Nigel Farage, whether he is much better at

delivering a popular line and responding to the second question of

third question. Nick Clegg will win it hands over fist because he knows

this stuff. He is right. The evidence that he can produce about

what will happen if we pulled out of Europe will, I think, overwhelm

Nigel Farage 's one-liners. They will both be winners because you

will have the rare sight of the pro-European saying he likes the

European Union. That is unlike Eurosceptics who tie themselves up

in knots. 14 Nigel, one for Nick and one for both. There you go. Here is

a mess, it is Janen Ganesh. That's all for today. The Daily Politics is

on BBC Two at Lunchtime every day this week, I'll be back here next

week with Energy Secretary Ed Davey. Remember if it's Sunday, it's the

Sunday Politics.