20/03/2016 Sunday Politics Wales

Iain Duncan Smith follows up his resignation with a blistering

attack on George Osborne, saying some of the Chancellor's

budget measures are deeply unfair and damaging to the country.

It's being seen as a direct attack on Chancellor Osborne -

are his leadership hopes now holed below the waterline?

Later in the programme, we speak to to civil war over IDS's resignation,

Later in the programme, we speak to the new man in charge at the Wales

Office. How will things be But with questions

over who pays, is the And with me, as always,

the best and the brightest political panel in the business -

Nick Watt, Isabel Oakeshott and Janan Ganesh, who'll be tweeting

throughout the programme So, George Osborne unveiled

a Budget which he hoped would satisfy the Tory faithful,

generate a feel-good factor in the run up to the EU referendum

and enhance his own leadership That strategy started to come off

the rails within 24 hours as the Chancellor faced Tory

revolts on four fronts. And was blown to smithereens

on Friday night when welfare secretary Iain Duncan Smith resigned

over savings to disability payments. This morning open warfare

is breaking out We'll be devoting the next

half hour to this story, with analysis and comment from Nick,

Isabel and Janan and interviews with the shadow work and pensions

secretary Owen Smith, the Conservative backbencher

Heidi Allen, and the head of the Institute for

Fiscal Studies Paul Johnson. First, Giles Dilnot reports

on the very public falling out at the top of David

Cameron's government. When the Chancellor gets badly hurt

in an attack from his own side, we shouldn't be

surprised where it came Iain Duncan Smith and George Osborne

whenever was buddies and they are on the

opposite sides of the EU But for nearly six years,

they've worked together in government, delivering

welfare reform and savings. Last July, when the Chancellor

announced the living Those currently on the minimum wage

will see that pay rise And whilst in polling,

there was popular support for balancing the books

and reforming welfare, there was also angry protest,

especially from disabled people, who passionately believed

they had been targeted The deepest wound

a Work and Pensions Secretary could inflict

on his own governments, On Wednesday we were touted

a budget that would be dull, not much wriggle room or rabbits,

sugared or otherwise. Nonetheless, the Chancellor

and wannabe PM was The richest 1% pay 28%

of all income tax revenue, a higher proportion

than in any single year Proof that we are all

in this together. But not so for many disabled people

and enough Tory MPs, On welfare, last week my right

honourable friend the Secretary of State for Work and Pensions,

set out changes that will ensure that within the rising disability

budget, support is better It was a confirmation of changes

that just 48 hours later would see a resignation letter from the man

the Chancellor was referring to, questioning if enough

is being done to ensure These were changes to personal

independence payments that have replaced disability living

allowance, that would make it more likely large numbers

of recipients got less money, and in some cases

much less, in future. Something he regarded

as a compromise too far. According to Mr Duncan Smith,

the changes had demanded because too much emphasis on money-saving

exercises and that his welfare to work reforms

could not be repeatedly By this weekend, the government's

unofficial paramedic was dispatched to patch up

the internal wounds, Mr Duncan Smith's literary

cuts had inflicted. by the whole Cabinet on Wednesday

morning before the Chancellor And he was obviously

part of that process. These proposals came

from his department. And the PM's response

to the letter stressed... In the hours after

the budget, amid angry rumblings from the backbenches,

suddenly the government where describing

and announced policy Something that has been put forward,

there has been a review, And the suggestion

the next day from the PM We are going to discuss

what we put forward with the disability charities

and others, as the Chancellor said It is important this

increase in money goes to the people

who need it the most. The problem is, the internal party

concerns were that it looked like money was going to those that

didn't need it most. The headline rate of capital gains

tax currently stands at 28%. I am cutting the capital gains

tax paid by basic rate Iain Duncan Smith

said the disability reforms couldn't be defended

within a budget that benefits I'm told this was the most toxic

aspect for a large number And that he was not the only

conservative in government who'd considered

resignation over this. But not everyone was

sorry to see him go. The problems have been

at the heart of the DWP. I do not see eye to eye

with the Treasury, I'm not the Chancellor's

biggest supporter, shall we say, but the reality is,

in all the experiences I've had, the problems have been

with an evangelical point of view, They have consistently

failed disabled people As Stephen Crabb takes

on work and pensions, But clearly the quiet

man reflected if you're going to turn

up the volume at all, best rattle the windows

of Downing Street. A war of words has now broken out

in Iain Duncan Smith's old department, with one junior

minister accusing him of "shocking" behaviour,

but three other ministers rounding Mr Duncan Smith gave his first

post-resignation interview to Andrew Anybody who thinks this

is a here today, gone tomorrow I am genuinely frustrated, I have no

personal ambitions. If I never go back into government again, I will

not cry about that, it is not my ambition. I came into this

government, and let me be clear, I came into this government because I

cared about welfare reform. I spent eight years in social justice trying

to figure out why certain communities were so badly off and

how could we get them back to work and solve that one. Everything I

have done has been driven by my desire to improve the quality of

life for the worst. We can debate my policies, but my motivation has

always been a bad back. My motive now, I am concerned that I want to

succeed and it cannot do the things it should because it is too focused

on narrowly getting the deficit down without saying where it should for.

Minutes later the energy secretary Amber Rudd,

popped up to attack her former cabinet colleague -

saying she resents Mr Duncan Smith's "high moral tone".

I do remain perplexed. It indicated he was making progress. He wrote a

letter on Thursday night saying what he was doing and why we should

support it. So I don't understand. I do remain perplexed about it, but I

am disappointed. This is an man I sat a cabinet with for nearly a

year. He was a cabinet minister for nearly six years. I do respect him,

so to suddenly launch a bombshell on the rest of us in a way that is

difficult for us all to understand, is disappointing. It is the Tory

party now in open welfare and it is not easily quelled? If Amber Rudd is

perplexed, it is a dereliction of duty on her part to understand what

has been going on in her own Administration. In a way, there is

nothing sudden about this for Iain Duncan Smith, it has been brewing

for a long time. She has known that. He has been rustling for a long time

whether he can do better, staying where he is and operating within the

difficult constraints the Treasury has imposed on him. Or whether he is

better off out and saying what he really thinks. That is what tipped

him over the edge. The Downing Street strategy is to paint Iain

Duncan Smith as a kind of, head-banging Eurosceptic and try to

pretend it is all about the EU referendum. I don't think anyone who

watched Iain Duncan Smith this morning giving that powerful

interview to Andrew Marr, could really doubt that what this is about

is Iain Duncan Smith's real desire to do the right thing by the

disadvantaged. The rest is just noises off. When you look at some of

these clips come he comes out against the welfare cap, to

arbitrate. If you are sitting in the Labour Party right now, you will be

cutting up that interview and pouring it out at every opportunity.

This story will go on and on? I interviewed Iain Duncan Smith about

two months after the 2010 election. He said if George Osborne wants me

to be a cheese parer and do arbitrate cuts, I will be out.

Isabel says commie has been rustling for six years with this. He came

into this after the visit to the Easterhouse estate in Glasgow. He

had in Europe and championed the vulnerable. He came to it with a

mission to try and increase incentives for the low paid to

combat to work. To George Osborne, it is the bottom line. But it is not

going to go away, you have the extraordinary spectacle of three

ministers in his former department, pretty Patel included, putting out

statements in support of the Iain Duncan Smith. And you have the

pensions minister delivering a Downing Street script saying this is

about Europe, even though there is not a word about Europe in Iain

Duncan Smith's statement. Ross Altman, who was unhappy with Downing

Street and the Treasury on the pension changes coming out and

delivering what Downing Street one. It is a mess and it shows the normal

discipline you would expect in government really is a challenge but

the referendum. It is over the George Osborne? If wasn't on the

budget. Tax credits last summer, reversal on pension reforms this

year. And now this, you cannot deliver but on Wednesday which is

just a proposition by Thursday evening and by Friday evening

provokes a senior Cabinet colleagues resignation. It is bad for him.

The government should be able to stun them month after a general

election Monday, ... And start with them all going in different ways

during the referendum, it could get worse. They need this referendum out

of the way as quickly as possible. They need a comfortable victory by

would suggest, with the remaining side, David Cameron's side to have

any chance of putting a look on this. In four years' time, at a

general election will determine George Osborne's leadership chances?

Quite possibly. I don't know how the Chancellor will put this back

together again if you EU referendum campaign. It might not just be a

Osborne's future on the line, it could be the Prime Minister's the

Chancellor's fate if tied to the Prime Minister. They are the

project, they have worked together to make the Conservatives electable

again. It George Osborne goes down, David Cameron's position is in

doubt. I am not suggesting we care at this point, the it is

destabilising. And don't forget Cameron has never

been master of these events. As ever, he ain't controlling it. As we

know, these things have a life of their own, so it should keep us

busy. Iain Duncan Smith's resignation has

been simmering for some time but it was triggered by plans

to make cuts to disability benefits A few days before George Osborne's

budget, the government previewed plans to change the way claimants

were assessed for certain disability benefits, saving ?1.3 billion a

year. The office of budgetary responsibility said the changes to

the personal independence payments, or Pips, would adversely affect

370,000 people by 2020. The amount of Paire pick a person receives is

decided by awarding points based on need -- the amount of PIP. Grab

rails, personal toilet seats, arguing people would audit have

these items. Iain Duncan Smith resigned, saying the changes were

not responsible. Replying to the resignation, the Prime Minister said

it had now been agreed not to proceed with the policies in their

current form. But that wasn't the only major criticism levelled at

George Osborne's budget. The Chancellor confirmed he will miss

Fiorentina of his three fiscal rules. Next financial year, welfare

bill cost almost ?120 billion, well over the cap of ?115 billion, which

he introduced himself to restrict overall welfare spending. And he

also broke his debt rule, which promised that national debt would

decline every year as a proportion of national income. This financial

year, total debt is expected to be 83.7% of GDP, up from 83.3% in

2014-15. We did ask the Government for

an interview about the disability But we were told no

one was available. It's a familiar refrain these days,

especially when the government I'm joined now by the head

of the Institute for Welcome to the programme. It looks

like the government is making a U-turn on these cuts to disability

payments, how big a haul does that blow in the Chancellor's efforts to

get a budget surplus by 2020? The truth is we are talking very small

numbers in the context of ?800 billion a year or so of spending.

The Chancellor is aiming for nearly a billion pound surplus, he doesn't

get this, it takes just down to under ten, so in that sense it

doesn't matter all that much to his target the 2020. But he has already

inked in 3.5 billion of unspecified cuts, we don't know what they would

be to get this surplus, but there are about eight or 9 billion of

watch some might call jiggery-pokery, cuts to public

investment in the final year, and now this. It must make it more

difficult for them. There are all sorts of things in the budget aimed

at that particular year. Numbers are being moved around and there are

some unspecified spending cuts. It is important to see this in the

broader context. Unless something awful happens, we will get close to

a budget balance in 2019-20, which given that we were over 150 billion

in deficit in 2010, the biggest deficit in his time that we have

had, to get from their too close to surplus will be quite an

achievement. Economically and politically understand it matters

enormously, but economically, the difference between a ?10 billion

surplus and the deficit is almost hear the dash-mac when neither here

nor there. The Treasury would expect that

department to find ?1.3 billion elsewhere, is that right? Not

necessarily, this is unlike the health budget or the education

budget, it is determined by the demands on the budget. So I think if

they don't put these changes in, the presumption will be at least that

the spending will still be in the budget. The day after the budget,

you said the Chancellor had only a 50-50 chance of filling his surplus

in 2020. Would you like to recalibrate these odds? It is a

relatively small change in the context of where we are, still a

50-50 shot. The thing that will determine it is much less changes of

this kind and parsley more what happens to the economy, whether the

economy does better or worse than currently expected. In many ways,

the most important thing we learned on Wednesday is that the O BR has

much less optimistic about the economy, and therefore we will all

be worse off than we thought we were going to be. The Treasury, as Iain

Duncan Smith has been saying, has been clawing away at working age

benefits the years, for him this was the final straw. But isn't that

inevitable, if you have a government who ring fences pensions and the

NHS, the only big travel figure spending line is welfare? If you are

looking, like the government has been common to really dramatically

reduce the deficit significantly, you are not going to avoid doing

things on the welfare side. Much more than ?100 billion was spent on

just working age welfare, covered by that welfare cap, which is far more

than we spend on almost anything else, apart from health service and

pensions. But the Chancellor has created this fiscal position. Even

though it was weaker, he cut business rates, he cut corporation

tax, capital gains tax, he raised the personal allowance, and he

raised 40p income tax threshold. He didn't have to do any of that. Even

if he had done only some of that, he would not have had to look for these

cuts in disability for study has made that himself will stop you are

right, she didn't have to make any of those changes, but it was very

clearly in the Conservative manifesto to increase the personal

allowance. So presuming that he would have kept the manifesto

changes, he would have had to have done that, and has to do quite a lot

more route. Cutting those taxes clearly means you have to do some

other things to maintain his target. But he didn't have to do them. Also,

perhaps his leadership tensions did play a part. There were two major

areas where they could have raised a lot of money, pension reform, by

taking away the top tax-free, which could have saved billions, and

raising the fuel duty. If you don't visit now, when will you? Both could

have raised billions and he chose not to do it. Those are two very

different kinds of things. Yes, you are right, it is astonishing with

petrol prices at their lowest level for a very long time, chatty on

petrol at its lowest level since the mid-19 90s, the cost of driving a

car at its lowest level for perhaps 30 years. If you can't increase fuel

duties even then, that is a long-term problem for the Treasury,

because it brings in a lot of money, ?30 billion a year, and if that goes

it is a real problem. On pension tax will if it is a much more complex

issue. There are good economic arguments, for maintaining it as we

have at the moment, and had you got rid of that 40% relief, you would

have hit the 5 million or so people who pay 40% tax, it would have been

another slice of the population rather unhappy. The national debt,

not the deficit, will be 1.7 4 trillion by 20 20. If the government

was then to run a surplus of say 10 billion a year for ten years, which

would be unprecedented in British government, after a decade, the debt

would still, by my simple rhythmic calculation, the ?1.64 trillion. Is

that what you mean by economically irrelevant in running a surplus? The

key point about the size of the debt is it is size as a fraction of

national income. More important than the absolute level. As the -- even

running a surplus of 10 billion or so a year, you don't get too

prerecession levels of debt until the mid 2030s. The argument the

Chancellor would make the running a surplus year after year is that even

if you just run a balanced budget, it takes quite a lot of time just to

undo the damage that the crisis did. Joining me now from Glasgow

is the Shadow Work and Pensions Owen Smith, in his resignation

letter, Iain Duncan Smith says it is now time to look at ending the

protection of pensions. Do you agree with that? I don't think that should

be the first thing they look at at all, Andrew. I think the very clear

message that Iain Duncan Smith himself has delivered is their word

choices that could have been made in the budget, and the Chancellor made

them and he made the wrong ones coming chose to cut the benefits

from disabled people. As we have heard, the PIP cuts taking many

thousands of pounds away from the 370,000 people, and instead he chose

that he was going to cut corporation tax, which he -- is going to benefit

large countries in this country, and he chose to cut capital gains tax,

which were largely benefit people who have got a bit of money. So I

think there were different changes he could have made even within the

terms of this budget that would have been much fairer. I understand that,

but which are nevertheless have thinks it the benefits? -- ring

fenced? We need to look at all these things long-term, but it would be

for a Labour government when we get closer to the next election to the

absolute specifics on all of those pension benefits, but by and large,

let's be clear. The last Labour government worked incredibly hard to

raise pensioners out of poverty. We were incredibly successful in that

regard, a million pensioners lifted out of poverty under the last Labour

government and I don't think they ought to be the target for cuts,

just as I don't believe that disabled people ought to be. There

are myriad other choices the government could have taken. Iain

Duncan Smith today I think has been very honest in explaining how George

Osborne could have taken different choices, should have done, and in

his words he is dividing Britain, moving away from any notion of us

all being in it together. But you are committed to balancing current

spending, but if you have ring fenced pensions, as you have told us

this morning, presumably you would ring fence the NHS, or even add to

spending in the NHS, and you want to ring fence nearly all of welfare as

well. Where do the cuts come from the balance current spending? I have

just given you two, let's be very specific, Labour would be saying

today if it were our budget, that we would not have done the cuts to

corporation tax, that would have given us in year ?600 million, and

we would not have done the cut to capital gains tax, that would give

us another ?600 million. That nets off the PIP cuts annually, the ?1.2

billion, and there are other similar choices we could look at. We would

not have taken corporation tax back to 19%. We would have been taking

far more from large multinational companies than this government is.

So far you have given me 1.2 billion, but you have announced much

more than that in spending plans. So I am not quite clear how it is you

would balance current spending, because I think we can both agree an

extra 1.2 billion went to do it, will it? No, but a corporation tax

alone by 2020 would be giving us ?2.5 billion, if we were to revert

back to the April 2015 rate of 20%. We would still have a corporation

tax in this country that was 10% lower than Germany, 15% lower than

America, 10% lower than Australia. It would be an extremely competitive

rate of tax. I just highlight that ?1 billion example, ?3 billion

example, how we would make different choices. Right, but as I say, in

many of your spending plans you have already spent that sort of money.

You also talk about fair taxes, you would not cut the corporation tax

any further, what else to you mean by fair taxes? What would you raise

by fair taxes? As I said a minute ago, we can't for years out from a

budget before, a pre-election budget from Labour, tell you precisely what

all of our spending plans will be, I don't think that is a reasonable

thing to ask any opposition government to do but I think we are

setting very clear indicators about what we think the benefits would be.

Give us another example. It is reflective of our belief that those

who have the largest amounts of money ought to bear the largest

burden in our society. It is unclear whether that raises you very much.

The government's own analysis showed there was ?3 billion forgone in

cutting that top rate of tax. I now see they are trying to argue they

have somehow applied a famous curve and ?8 billion they have made. I

think corporation tax shows you very clearly, corporation tax receipts

have been flat, they have managed to cut from 28% to 20% in the last six

years, and the amount of receipts we are getting in has gone from 43

billion to 43 billion. Investment has decreased.

What are used to call sickness benefit comes to over 50 billion

pounds a year. You would leave it untouched? No, we want to reform the

system. Take for example, Iain Duncan Smith made a lot about

universal credit this morning. He has said George Osborne has stripped

out the guts of universal credit. I was asking about disability? Some

people who are disabled will be in receipt of universal credit. What

would you do about the disability 50 billion pounds annual budget? We

wouldn't be making the changes the current government are proposing.

They are lying to the British public about this, spending on the disabled

is increasing. If you take all disability benefits, I am publishing

figures today that say it has declined around 60% that the

government have already cut disabled benefits. -- 6%. That will not be my

target. Would you keep this increase in the threshold for people who

enter the 40% tax bracket? Yes, we would keep that. It is fair to say

the fiscal drag of people being pulled into the 40p rate has been

increasing. I think we will need to reform taxation much more

fundamentally. I still think the key thing today is we have got to

understand George Osborne is the man in the dock. I am going to have to

stop you there. We look forward to talking to you in the future about

your plans for tax reform. Now let's go to the Conservative MP who has

spearheaded the back bench opposition to George Osborne's tax

cuts. Was a Iain Duncan Smith right to resign? He was coming he had

reached a point where he had had enough of the purse strings being

pulled so he couldn't deliver the welfare reform he wanted to. He had

no option. Mr Cameron says he is puzzled by the resignation and the

position of the government on these welfare reforms and cuts had been

collectively agreed. I am learning, I am still a relatively new MP. You

can keep your powder dry for so long, you are convinced by the whips

that this is the right thing to do. Your conscience will kick in, it did

for me last year over tax credits. The rumblings are more open this

year than they were last year over tax credits. Iain Duncan Smith

looked around him and saw many MP is saying how unhappy they were and he

couldn't proceed any longer. Would you have been one of the rebels if

the government had proceeded with what was in the budget for the

disability payments? Absolutely, I would have been. Iain Duncan Smith,

perhaps under Treasury pressure over the years has presided over a number

of cuts to welfare. Now he is resigning over a cut that isn't

going to happen, as far as we can make out. What is the logic in that?

The first thing to say, I cannot say the certain it wouldn't have

happened. I have had no letter or e-mail coming from the Treasury

saying we will be looking at it again. A lot of what has been cut

from Iain Duncan Smith's point of view, so the tax credit taper rate,

universal taper rate, PIP, it has been coming thick and fast. He has

had to deliver what it was revolutionary welfare reforms. He

wanted to do them the right way. Everything I talked about in my

maiden speech about doing it gently and allowing the minimum wage to

rise. The Treasury whole the purse strings and they stopped him

delivering the policies the way he wanted to. Given what happened to

tax credits, which was a move to take away some welfare benefits from

the working poor, is it not puzzling the Chancellor then moved in to an

even more difficult group to deal with, in terms of taking things

away, into the disabled and seem to have learned nothing from the tax

credit U turn? I guess we will see in the days and weeks to come. It is

not just PIP, you will remember the extra payment given to claimants who

had been ill for a long time and were returning to work. I voted

against that also. I hope Stephen Crabb, the new Secretary of State

will have a conversation with the Treasury and this will be brought to

the table. We have made some poor decisions. Some of the areas of

taxation we have opted for instead, are wrong. It doesn't send the right

message that as a Conservative Party we can look after everybody in

society. It is only the Conservatives who can, because we do

need the strong economy to deliver any of this. But it has got to come

back to the table and we have got to start again. Is it your view it

wouldn't be enough just to tinker with what the government was

planning to do with the personal mobility independent payments and do

what it did with tax credits, which was to scrap what it was planning to

do and start again? I have spoken to a lot of disability charities. I am

putting myself through and Mark PIP assessment because I want to feel

what it is like. It just doesn't work that so many groups of ill and

disabled people. Tinkering with two tiny point isn't good enough. We

need to look at the whole process and start from scratch and work with

these charities, who understand the pressures put on these people so we

have a system that works for them. Your party is in open warfare this

morning, you have a resignation and people are referring to you as the

nasty party. How big a crisis is this for the Conservatives? I have

been thinking about this this morning. I am trying to keep my own

wooden spoon in my kitchen drawer. I think, in a funny sort of way,

because there has been so much focus on the EU, this might lead the sense

check we need. All MPs are good people trying to do the best they

can. This could be the slap to the face we all need that says hang on,

get back together and sort ourselves out. We are the party that should be

looking after people. In fact, I think it could bring us together. If

you are to be brought together for a fresh start from tax credit to

disability payments, is George Osborne still the right Chancellor

to do it? It depends how he responds to the challenge. I am hoping so.

The jury is still out? Yes. Are his chances to be Prime Minister below

the water line? Sometimes the strength of a man is how he picks

himself up from a fall. So let's see how he responds. If this is

attempted to be brushed under the carpet, I think his chances are

over. If he lets himself up and shows he is listening, making

mistakes is OK, providing you correct them before they affect

people. He did that with tax credits. Some ways it was a big

thing because it would have affected millions and millions of people. But

we need to wait and see what he is going to do with this. Your wooden

spoon is always welcome on this programme.

It's just gone 11.35, you're watching the Sunday Politics.

Welcome to Sunday politics Wales. On today's programme. On a momentous

weekend for Wales politics, Alun Cairns tells us how he's going to

run the show, and as the living wage comes in, some businesses say will

harm the Nick -- economy, not help it. But first, Wales has a new

Secretary of State, Alun Cairns joins after Iain Duncan Smith's

shock resignation. More on him later and a bit of trivia for you, Alun

Cairns is the 19th person to have the job. Our political editor caught

up with him on Barry Island and asked him what his priorities were.

Well, Stephen Crabb, when I worked closely with him,

our styles are very similar and he got the deal done in the City

Deal where many people predicted that wouldn't happen.

There is the same plan for North Wales, for the growth deal

and the Swansea Bay City Deal, but it's about delivering on that.

If we think back, the last major infrastructure project delivered

in Wales was probably Cardiff Bay and the regeneration of those areas,

now, I want the city deal to use be seen in that light and it's

about striking those deals and getting that economic growth

potential released around the Cardiff Deal that has already

been announced, but it's the same for North Wales and the same

for Swansea and other communities in Wales.

Now, one thing presumably you won't be grateful

to Stephen Crabb for is the mess that he's left you, which is the way

How are you going to deal with the real concerns

and criticisms of this Wales bills which including came from Welsh MPs.

Well, I work very closely with Stephen Crabb whilst

I was jointly working with him on it so I recognise challenges that

are there, but I want to get a deal that works for Wales,

that works for the communities in Wales, as well as for

It's about getting the thing that seats

businesses and the communities businesses across the whole of Wales

absolutely determined to do everything I can to deliver

Do you accept you got it wrong with the Wales Bill

and the Wales Office team up until this point because you've got

so much criticism from so many different people?

Well, I think that Stephen Crabb and I need to be saying

Anything constitutional is always hugely complex.

A draft bill was there, laid bare, so people

The direction of travel was outlined by Stephen Crabb and I'm

going to continue following that track so that we can work

on a Wales Bill that will work for Wales,

for the UK and the Welsh Government jointly.

It's about getting a deal that suits all concerned.

I accept that this is more a question for your predecessor,

Stephen Crabb, but you are going to have to

defend very controversial changes to welfare which are going

Iain Duncan Smith, the man who has just resigned,

the architect of many of those changes,

Well, welfare reform is an important agenda

We need to move away from the situation where people

Universal Credit has been transformational in giving people

that opportunity to get back into work, and there

are communities in society who are responding

There's an increase in budget for welfare.

It's moving from 15 billion to over 18 billion, but it's about better

Now, Stephen Crabb's approach has been pragmatic as Secretary

I'm sure he will be pragmatic as the Secretary of State for Work

and Pensions, but obviously, as Secretary of State for Wales,

I will be doing everything possible to insure that the particular

Unlike your predecessor, you have the benefit,

I suppose in terms of the relations with the assembly in the UK

Government, of previously being an assembly member.

How will you approach the relations between the two

Well, having been an assembly member I can understand the culture that

exists, but also the culture of the Welsh Government from having

seen them working together and working within the assembly,

and as it was originally established, as a corporate body,

how they work together on committees and so on,

so I hope that will give me an insight

to work closely with the Welsh Government.

I want to deliver for Wales, now, of course we can't

deliver for Wales without the support of the Welsh Government,

and I'd like to work equally closely with the First Minister.

I know him particularly well and I'm hoping that we can

build on that relationship for the benefit of Wales.

There was a very strange relationship towards the end

between Stephen Crabb and Carwyn Jones on the issue

How do you get on with the First Minister?

on with him very well on a personal level but of course politically

we won't always see I too and challenges will remain,

on with him very well on a personal level but of course politically we

but it's only by working through these issues

for the benefit of Wales will we all benefit and that will be

good for the Welsh Government as well as the UK Government.

More importantly, it would be good and better fork Welsh

I suppose the question to you is, how

hard are you prepared to fight for these infrastructures around

the Cabinet table where they will be many people fighting for that

for that shrinking pot of public money that is out there?

Well, if you think back to win the last major

infrastructure project took place in Wales,

it was a Conservative Government the delivered that around

We've announced major infrastructure investment earlier this week around

We want similar projects across North Wales, Krause --

It's in our blood that as Conservatives we want

to deliver growth, we want progress, we want to empower people and that's

where the UK Government agenda is going.

We want a package that works for Wales and I and determined to do

everything to work with the private sector, businesses but also

with communities and the Welsh Government

we will have more from Nick at the end of the programme. But first,

what does 50p mean to you? Well, that's how much more the new living

wage war pay every hour compared to the minimum wage. It's being brought

in in less than a fortnight and unions are welcoming it, but some

businesses say it could be difficult.

Since the 50s, Parsons Pickles has been bottling local cockles

and mussels to be sent all over the UK from its home

At the moment, many of the workers here earned close to

That's ?6 70 an hour for those over 21 years old.

But next month, the staff here will get a pay rise under

the new living wage when it is introduced.

That will take the minimum wage to workers aged 25 and over to ?7 20

an hour, 50p more than the current rate.

I think it will be good because it will help towards the cost of living

It's for my kids and everything in the future.

It's all going in the right direction.

How would you feel about the company, that it's putting

a little bit of extra strain on the company.

I do think 50p is not really that big a price hike.

Though 50p may not sound much, this company's wage bill is set

to rise by ?20,000 a year according to the managing director.

It's not just the ?7 20 that it's going up to,

obviously people who have sponsored ability and who are on that little

obviously people who have responsibility and who are on that

little bit more, or more again, we've got to put it up pro rata.

Whilst Colin says the company can cope for now, he believes future

increases to the living wage could force the company

As you saw in production, before, there's a lot of people

here where machines could take their place,

but we just haven't done it because it's nice to have a team

here and employ people, especially in a small village

Colin does agree that salaries need to rise,

but believes more should be done to help companies like he's coped

but believes more should be done to help companies like his cope

Its businesses like this where the work isn't particularly

skilled that are likely to be most greatly affected by the introduction

Hospitality and retail are other sectors that could well feel

the strain as well, though a greater proportion of Hotel and shop workers

are likely to be too young to qualify for that extra 50p.

The British Retail Consortium recently claimed that nearly

across the UK as a result of the pressures on businesses,

It estimates 74,000 shops will close and Wales will be disproportionately

affected compare to other parts of the UK.

The national living wage and it's introduction in Wales

is going to have a key impact, but it's worth outlining

that the retail industry is broadly supportive in principle

Our concerns lie in the fact that we believe the impact

on employment will be seriously underestimated.

Our own reports showing that we are seeing a potential lost

of over 900,000 jobs over the next decade across the UK,

but our remodelling has shown that that is most like dutiful in areas

like Wales, leading to a possibly economically

We are seeing accelerated rates of shop closures in Wales.

We're seeing higher rates of footful decline.

There are now calls for more support to be offered to Welsh businesses.

I think it's critical that we need to take action now to prevent

further loss of jobs and to also ensure that we have a supportive

environment and one which encourages investment.

So now is the time to see reform in areas such as business rates,

something that the Welsh Government has power over to do is.

something that the Welsh Government has power over to do.

We will be encouraging the next Welsh Government to think very

strongly about that radical reform via the business rates agenda.

In the meantime, Parsons Pickles and similar businesses up and down

the country face yet heavier burdens.

The national minimum wage for those below 25 years old goes up

in October, and the UK Government wants to see the hourly living wage

Now, in response to that report, the Welsh Government says that it was

supporting small businesses to reduce their rate bills, while the

UK Government said it created the living wage so that low paid workers

could share in economic growth. Now, this week we saw the report released

by Lady Justice Macur, a report into abuse usage care homes in North

Wales. Where does that leave us? Well, Sally Holland is the

Commissioner for children in Wales. Thank you for coming in. He said

that when you what the report you said you needed time to reflect on

it. There was a long-awaited report. There was very little information

about how it was progressing and when it would come out. It's finally

come out this week and it doesn't really take us any further in our

understanding in how we failed so many children over so many years, in

North Wales. What will happen now? Does it need further work? Another

commission? One immediate thing that would help would be some more

information about the process of reduction in the report, because

when you get into reading it, a lot of it is quite a difficult read,

especially about the cover-up of established -- establishment

figures. There are blanks all the way through that. It's a difficult

read. It's probably a because of legal proceedings, but I think it

would help people's confidence in the review if the UK Government acts

blame -- explain their ration now regarding that. Some who have been

abused have said they aren't happy with the finding of this report.

What next for those people who have clearly suffered terribly as a

result of what happened at those care homes. They don't feel they've

got justice? I think any enquiry, what we have learnt now, it has to

be more victim - centred. So far, with the Gothard enquiry, of all

institutional abuse in England and Wales, that is doing that, so it's

been advised by the committee of survivors of abuse, and the contrast

between that and the Lady Justice Macur review is quite significant. I

think an unredacted copy of that, it's a long process for these

survivors who waited so long for answers, but I think it's a very

different process with a debit -- very different feel. You, as a

commissioner, your result of that Waterhouse enquiry into thousand,

said they needed to be a children's Commissioner, do you think that the

existence of your role means there will be less likely that these

atrocities will happen again? I'm concerned about young children and

-- who may be experienced -- experiencing abuse now, we try to

provide helpful responses to abuse. We've moved a long way in the last

few years. There is a national plan, I know it isn't always the same as

action, but we are seeing a difference in how many children

police are actively identifying as at risk of sexual exploitation, and

they are bringing them into charities to help them work

constructively. How have you found it in your role? Do you feel you

have teeth when you make a report, published recommendations, they are

not binding? Do you need a muscular role in what you say needs to

happen? The legislation surrounding my role is quite complex, it

concerns full devolution. It comes from the Waterhouse review. I look

at complaints and advocacy for children, for example and

whistle-blowing. However, I think I should have the same teeth for

anything concerning the welfare of children. There is an election on

the way. There will be a new Government on the way. What you want

to see in terms of the focus on the next Government when it comes to

children? I've spent my first year left -- listening hard to children.

I've had really clear messages from that and that is that emotional

health and well-being, mental health really needs a lot of work in the

next Government and there are opportunities to do that. Is that

money? Legislation? New policies? What do you think needs to be done?

We've seen problems with our mental health services for children and

young people. There is money going into that, some really positive

plans, but we aren't yet seeing a difference for children. I will be

keeping a close eye on mental health. It needs to be more lordly

joined up with the curriculum plans that we have. The Donaldson review

puts children's well-being at the centre of education and what should

be provided for children. That's got to be planned when we look at how we

support children in this very complex new world. With their

emotions and mental health. What will happen in schools, with closer

to home and the smacking and, do you think there needs to be a renewed

focus in the next assembly? Yes. I stick up for children's writes and

that's one of the best situations to deal with that. If you hit a child,

you can see it was reasonable punishment. Can you imagine the

horror we would feel it somebody had hit an elderly or disabled person,

children deserve the same protection from physical banishment as adults

have. It's been discussed so widely, the democratic process has sort of

run its course there. What needs to change? I've had positive

discussions with all four parties in the assembly. I think there's an

appetite for change. Ireland change the law on this very successfully

and quietly with no fuss in January. I think Wales can easily do it. I

think we should be the first country in the UK to do it and I think the

rest of the UK will follow suit. It's been a busy week for Stephen

Crabb. He's been running the Wales Office but has now been employed by

the UK Government to go to Westminster. Some people say he's

one to watch. The PM thinks he might even have a future as a film star.

David Cameron said Stephen Crabb could be the next James Bond,

as he reminds him so much of Russell Crowe.

He certainly been known as a man of action.

Here he is, coasteering in his local constituency.

He's also a keen marathon runner and member of

But what perhaps makes a most interesting is his modest

Born in Inverness, he and his two brothers were raised by their single

mother in a council house, in Pembrokeshire.

First elected in 2005, he now lives in Haverfordwest

Many reacting to his appointment yesterday say he is a man to watch.

Some people even said he could be a future leader and Prime Minister.

But, for now, the would-be James Bond will be tackling

If he can leave tetchy Tory backbenchers neither shaken nor

stirred, maybe the number 10 would be a more important figure

Stephen Crabb for number ten, who can say? But now joining us is our

political editor. Hi, Nick. Looking at Stephen Crabb going from the

Wales officer to -- office to work and pensions, that is a massive step

up for exposure. He is entering the bear pit. Anyone who saw that

blistering interview that Iain Duncan Smith did on the Andrew Marr

show this morning, not only that, it seems that the department is at odds

with each other. Some supporting Iain Duncan Smith, and other junior

ministers, very critical of him. Is he ready? Certainly, he's been

angling for a position, certainly that he talks about welfare reform.

We talk about his back story. A single mother on benefits, council

house. A good policy is a good policy, no matter where you come

from and just because he's got that background doesn't mean he has a

monopoly on welfare reform. He engages with the welfare reform in a

kind of confident, unapologetic way that we don't see in other senior

Conservative politicians, even those from other parties. And he is going

to need all of that in the coming months, in this job, as he tries to

bring people with him, while at the same time dealing with the cuts

which George Osborne wants. So what about Alun Cairns? What will be the

main challenges for him? We were on the freezing cold Barry Island. It

was all about infrastructure concerning what he wanted to talk

about. Many people see the role of the Wales Office has depleted in

region -- recent years. He says it's become more important because of the

way George Osborne described -- distributes money across this

country, such as Sheffield, Leeds. You've got the added Government the

assembly, of course, so he's got to negotiate that. Then you've got the

Wales Bill. Being Stephen Crabb's number two will help, and he also

helped him with more recent issues. Alun Cairns does have an opportunity

to rearrange things. He does have an insight being an assembly member for

11 years. Will that hemp -- help or hinder? Allen has this hinterland

experience of politics. We have seen previous assembly members become MPs

become hypercritical of the assembly. They have strong opinions

about how it is run. It will be interesting to see which way he

goes, and see whether he becomes very opinionated about the way

devolution works. That's all we've got time for. You can follow us on

Twitter. That's all from me. extra cash. -- onto the consumers

will stop My thanks to Diane Abbott

and to Justine Greening. can David Cameron bring his

government back together after Iain Duncan Smith's resignation? What

happens to George Osborne's budget plans and what will the impact of

all this be on the EU referendum campaign?

So where does it go from here? I would suggest it gets worse for the

Tories long before it gets better. Yes, I think one thing David Cameron

and George Osborne might want to think carefully about is how they

manage Iain Duncan Smith, and the pretty hostile briefing against him

is only going to increase his ire. They should not forget that he has

quite an important weapon, the private conversation with primers

to's office in recent weeks, which show that the Prime Minister wanted

to much, much further than Iain Duncan Smith was willing to go. When

they say these were your ideas, why is it a problem, Iain Duncan Smith's

argument is yes, these were my ideas, but they were part of a

long-term sustainable plan. They were not about giving you, George

Osborne, money to cut taxes for the wealthy, which is what he did in

capital gains tax. So I think they probably need to handle Iain Duncan

Smith with care because he could be dangerous for them if he really is

on the loose. Is clear It already for every person

in Downing Street is briefing to have a go at Iain Duncan Smith,

there is someone ready to have a go at Mr Cameron and the government? I

cannot remember a time since David Cameron became leader of the

Conservative Party that discipline has broken down as it has in the

last 48 hours. It is hard to see how he brings discipline back in before

the referendum. His powers of patronage is limited, he doesn't

want a big reshuffle before the referendum, he wants to wait. There

is a feeling of open season. Is he on his way out? It is not in

Brexit's interest to whip this up. People will worry what a big leap it

is into the unknown if we leave. If they think we are voting for a total

change of government and Prime Minister, it puts the stakes of even

higher. We might see believe campaign's dumping this down a

little bit. The Chancellor, now among the walking wounded, has a

budget to get to the House of Commons which deals through money

matters. He needs a vote to cut the capital gains tax, cut corporation

tax, raise the threshold for the 40% taxpayers. There is a danger with

rebellion in the air and the Tory back benches rebel against one

thing, as they do on disability, they could rebel on other things? I

think he has two problems, the immediate is the legislated

challenge of getting the CGT cut and the threshold raised and everything

else through Parliament in the coming weeks and months. Then he has

to find the money he has just lost by reversing on the disability

benefit cut. He has already lost money from reversing the tax credit

policy. Which is why he broke his welfare cap. Exactly. Even if he

gets through this immediate challenge of getting the budget

through Parliament, his central purpose as a politician is to close

the deficit. He has made it harder for himself by reversing on some of

these contentious measures. It's not as if the problem ends in a few

weeks' time. Isn't it made worse by the fact this is taking place in the

midst of the EU referendum campaign, which had already divided

conservatives. It like pouring petrol on the flames? It is hard to

see anything other than another four months of mayhem. We don't know what

the results of the referendum will be. Probably a good deal of mayhem

after that. It is interesting how quiet Boris Johnson has been. I

understand he is away skiing, but we haven't heard from friends of his.

Maybe the lines are bad to the Alps. It shows you how serious his team

are, they are being smart and will not wade in. This has been a good

weekend for Brexit, because their most high profile member of the

Cabinet has resigned and appears to be a bit bullied, possibly by George

Osborne. He speaks from the heart of this because he had this visit to

Glasgow and got onto this issue. In that sense it is a good weekend the

Brexit. But the problem for them, you need to be talking about the

vision for the future of Britain. This is quite Westminster, inside.

Brexit need to counter the main argument that they are the biggest

risk. While there may be sympathy for Iain Duncan Smith, it is not

getting on their argument. The two leading spokesman for the remain

campaign on the conservative side the Prime Minister and the

Chancellor. The Minister has a civil war on his hands and has to be

careful he doesn't make it worse by some of the briefing Downing Street

is behind. The second most important man is among the walking wounded.

Why will people listen to him over the referendum. That is why it has

been a good weekend for the Brexit. But the most political force in this

country will make a big picture decision based on the big picture

arguments of what is the safest option and what is the riskiest

option. I am not sure this great excitement and eruptions in the

Westminster village, I am not sure whether they massively register with

the British people if they make a big decision are big issues. There

is concern over the Conservative Party and their brands. They work so

hard to detoxify themselves in the run-up to the last elections. It

wasn't convincing, they were in coalition and now they have the

smallest of majorities. Now it looks like they are the nasty party. At a

time when the home strategy was to move to the centre ground? It hasn't

worked. If I were a conservative strategist, I would concerned about

the catastrophic damage to the party's brand. The Prime Minister

keeps on making speeches, normally on Monday about the poor, about

racial discrimination, about equality. All designed to position

the Tories in the centre, even the centre-left ground, because they

think Labour has left that. But they can come up with the tax credit

fiasco and the disability fiasco. Who is running the show? It is hard

to close the deficit once you have ring fence the NHS and everything

else. But they make it difficult and provocative when they juxstapose a

cut in tax credits, with raising the threshold of in terrorist --

inheritance tax last year. Capital gains tax this year. They have had

to do it because it was in the manifesto, but it didn't have to be

in the manifesto and it is that juxtaposition rather than the cost

of welfare that appeared to be so incendiary. You say it has been a

good weekend the Brexit, and the domestic back drop will exacerbate

tensions between the remain and leave. But there is an international

guy mentioned to this. The EU in Turkey have come to an agreement, I

think it starts tonight. And here is a guess, I'd bet it starts to

unravel within 24 hours? It is the sort of thing that looks good on

paper. Refugees who come over arson back to Turkey and Syrian refugees

are sent to Europe. Looks great on paper. These are people who have

risked their lives, seen people drowned in the Aegean Sea. Lost

family members. They make it to Greece and you are going to say to

them, get back. And they say, fine, I will do that. It will be difficult

to do. UN agencies are saying they are not sure if it is legal. You

cannot treat a group of migrants as a group under the Geneva Convention,

they have to be treated as individuals. But this treats them as

a group. If you see more unpleasant scenes out of Greece, more of a

sense the European Union just hasn't tackled this problem, that all adds

to the leave campaign? Yes, it is a real source of alarm. The debate

about Turkey and the possible prospect of Turkey, in the

long-term, becoming part of the EU, is extremely toxic. The outer

campaign will be seeking to exploit every inch of that debate. It has

been a horrible week for the remain campaign, politically and

strategically. Ultimately, the decision by swing voters, people by

definition have no principled view on the subject, will be based on big

picture variables and factors. Would you rather have the Prime Minister,

still a credible, by all accounts a reasonably popular Prime Minister,

on your side? You would. It is a big asset than Iain Duncan Smith, Boris

Johnson Michael Gove. One of the big elements of the bigger picture is

the prospect of Turkey becoming a member of the European Union. I am

not sure I will be alive at the time Turkey joins the European Union.

That means the EU is basically lying to Turkey? The implicit thing about

the deal they have had is you make progress towards membership. I am

making progress towards becoming a millionaire, it is not going to

happen. I was looking to you for alone! I was in Luxembourg ten years

ago when those accession negotiations began. The Foreign

Minister of Turkey was made to wait in Ankara. He eventually flew

through the night when Europe eventually said yes, we will start

it. There has to be a referendum in France to allow them to join. The

French will not vote in favour of Turkey joining. I agree it is not

going to happen but it is a sleight of hand to imply to the Turks to get

them to deal with the migrant crisis. They use it to get the money

and sneak through various things. All Brexit has to do is create the

impression that it might happen sooner or later and bingo, you will

scare a lot of people. More worrying is how strategically depend on the

West is on Turkey. The Turkish government, is nothing like the

Turkish government than it was years ago. Which is why we are having to

shut up about domestic Turkish affairs because we are so reliant on

them. They are only closing newspapers. And locking people up.

We will leave it there. We won't be back next week, it is

Easter, but remember, if it is Sunday, it is the Sunday Politics.

Unless of course, it is Easter.