:00:37. > :00:44.Morning folks. Welcome to the Sunday Politics. George Osborne's fifth
:00:45. > :00:47.Budget will offer more tax relief for the lower paid but not for
:00:48. > :00:49.middle income earners being thrust into the 40p tax bracket. That's our
:00:50. > :00:54.top story. Ed Balls says millions of people
:00:55. > :00:57.aren't feeling any benefit from the recovery. We'll discuss the economy
:00:58. > :01:04.with big political beasts from Labour, the Conservatives, and the
:01:05. > :01:07.Lib Dems. Now that Ed Miliband has effectively ruled out an in/out EU
:01:08. > :01:09.referendum, how does UKIP deal with Tory claims that a vote for UKIP
:01:10. > :01:19.In the West: A special programme means no chance
:01:20. > :01:21.In the West: A special programme ahead of the European electhons from
:01:22. > :01:22.ahead of the European elections from Strasbourg. Can
:01:23. > :01:23.restoring confidence in the safety of cycling. The three areas of
:01:24. > :01:25.London getting a cash boost to try of cycling. The three areas of
:01:26. > :01:36.something different. And with me as always our top
:01:37. > :01:39.political panel - Nick Watt, Helen Lewis and Janan Ganesh. They'll be
:01:40. > :01:44.tweeting their thoughts using the hashtag #bbcsp throughout the
:01:45. > :01:46.programme. So, just three months after his last major financial
:01:47. > :01:52.statement, George Osborne will be at the despatch box again on Wednesday,
:01:53. > :01:55.delivering his 2014 Budget. The Chancellor has already previewed his
:01:56. > :02:06.own speech, pledging to build what he calls a "resilient economy". The
:02:07. > :02:09.message I will give in the Budget is the economic plan is working but the
:02:10. > :02:13.job is far from done. We need to build resilient economy which means
:02:14. > :02:17.addressing the long-term weaknesses in Britain that we don't export
:02:18. > :02:20.enough, invest enough, build enough, make enough. Those are the things I
:02:21. > :02:24.will address because we want Britain to earn its way in the world. George
:02:25. > :02:27.Osborne's opposite number, Ed Balls, has also been talking ahead of the
:02:28. > :02:30.Budget. He says not everyone is feeling the benefit of the economic
:02:31. > :02:37.recovery, and again attacked the Government's decision to reduce the
:02:38. > :02:41.top rate of tax from 50 to 45%. George Osborne is only ever tough
:02:42. > :02:44.when he's having a go at the week and the voiceless. Labour is willing
:02:45. > :02:48.to face up to people on the highest incomes and say, I'm sorry,
:02:49. > :02:53.justifying a big tax cut at this time is not fair. We will take away
:02:54. > :02:58.the winter allowance from the richer pensioners, and I think that's the
:02:59. > :03:03.right thing to do. George Osborne might agree, but he's not allowed to
:03:04. > :03:06.say so. That was the Chancellor and the shadow chancellor. Janan, it
:03:07. > :03:10.seems like we are in a race against time. No one argues that the
:03:11. > :03:14.recovery is not under way, in fact it looks quite strong after a long
:03:15. > :03:20.wait, but will it feed through to the living standards of ordinary
:03:21. > :03:24.people in time for the May election? They only have 14 months to do it.
:03:25. > :03:28.The big economic variable is business investment. Even during the
:03:29. > :03:33.downturn, businesses hoarded a lot of cash. The question is, are they
:03:34. > :03:37.confident enough to release that into investment and wages? Taking on
:03:38. > :03:40.new people, giving them higher pay settlements. That could make the
:03:41. > :03:46.difference and the country will feel more prosperous and this time next
:03:47. > :03:51.year. But come to think of it, it strikes me, that how anticipated it
:03:52. > :03:54.is, it's the least talked about Budget for many years. I think that
:03:55. > :03:59.is because the economy has settled down a bit, but also because people
:04:00. > :04:02.have got used to the idea that there is no such thing as a giveaway.
:04:03. > :04:07.Anything that is a tax cut will be taken away as a tax rise or spending
:04:08. > :04:11.cut. That's true during the good times but during fiscal
:04:12. > :04:17.consolidation, it's avoidable. - unavoidable. There is a plus and
:04:18. > :04:22.minus for the Conservatives here. 49% of people think the government
:04:23. > :04:24.is on roughly the right course, but only 16% think that their financial
:04:25. > :04:29.circumstances will improve this year. It will be a tough one for the
:04:30. > :04:35.Labour Party to respond to. I agree with Janan. Everyone seems bored
:04:36. > :04:40.with the run-up to the Budget. The front page of the Sunday Times was
:04:41. > :04:45.about fox hunting, the front page of the Sunday Telegraph was about EU
:04:46. > :04:50.renegotiation. Maybe we are saying this because there have not been
:04:51. > :04:55.many leaks. We have got used to them, and most of the George Osborne
:04:56. > :04:59.chat on Twitter was about how long his tie was. Freakishly long. I
:05:00. > :05:07.wouldn't dare to speculate why. Anything we should read into that? I
:05:08. > :05:14.don't know. For a long while there was no recovery, then it was it is a
:05:15. > :05:16.weak recovery, and now, all right, it's strong but not reaching
:05:17. > :05:22.everyone in the country. That is where we are in the debate. That's
:05:23. > :05:28.right, and the Conservative MPs are so anxious and they are making
:05:29. > :05:33.George Osborne announcing the rays in the personal allowance will go
:05:34. > :05:40.up, saying it might go up to 10 750 from next year, and Conservative MPs
:05:41. > :05:44.say that that's OK but we need to think about the middle voters.
:05:45. > :05:47.People are saying the economy is recovering but no one is feeling it
:05:48. > :05:52.in their pocket. These are people snagged in at a 40p tax rate. The
:05:53. > :05:56.Tories are saying these are our people and we have to get to them.
:05:57. > :06:03.He has given the Lib Dems more than they could have hoped for on raising
:06:04. > :06:06.the threshold. Why is he not saying we have done a bit for you, now we
:06:07. > :06:13.have to look after our people and get some of these people out of that
:06:14. > :06:16.40% bracket? Partly because the Lib Dems have asked for it so
:06:17. > :06:19.insistently behind-the-scenes. Somebody from the Treasury this week
:06:20. > :06:23.told me that these debates behind the scenes between the Lib Dems and
:06:24. > :06:27.Tories are incredibly tenacious and get more so every year. The Lib Dems
:06:28. > :06:32.have been insistent about going further on the threshold. The second
:06:33. > :06:38.reason is that the Tories think the issue can work for them in the next
:06:39. > :06:41.election. They can take the credit. If they enthusiastically going to
:06:42. > :06:46.?12,000 and make it a manifesto pledge, they can claim ownership of
:06:47. > :06:51.the policy. The Liberal Democrats want to take it to 12,500, which
:06:52. > :06:55.means you are getting into minimum wage territory. It's incredibly
:06:56. > :07:00.expensive and the Tories are saying that maybe you would be looking at
:07:01. > :07:05.the 40p rate. The Tories have played as well. There have been authorised
:07:06. > :07:07.briefings about the 40p rate, and Cameron and Osborne have said that
:07:08. > :07:11.their priority was helping the lowest paid which is a useful
:07:12. > :07:16.statement to make and it appeals to the UKIP voters who are the
:07:17. > :07:21.blue-collar workers. And we are right, the economy will determine
:07:22. > :07:25.the next election? You assume so. It was ever that is. It didn't in 992
:07:26. > :07:34.or 1987. It did in 1992. Ed Miliband's announcement last week
:07:35. > :07:37.that a Labour government would not hold a referendum on Europe unless
:07:38. > :07:39.there's another transfer of powers from Britain to Brussels has
:07:40. > :07:45.certainly clarified matters. UKIP say it just shows the mainstream
:07:46. > :07:48.parties can't be trusted. The Conservatives think it means UKIP
:07:49. > :07:50.voters might now flock back to them as the only realistic chance of
:07:51. > :07:54.securing a referendum. Giles Dilnot reports.
:07:55. > :07:58.When it comes to Europe and Britain's relation to it, the
:07:59. > :08:03.question is whether the answer is answered by a question. To be in or
:08:04. > :08:05.not to be in, that is the question, and our politicians have seemed less
:08:06. > :08:09.interested in question itself but whether they want to let us answer
:08:10. > :08:22.it. Labour clarified their position last week. There will be no transfer
:08:23. > :08:25.of powers without an in out referendum, without a clear choice
:08:26. > :08:30.as to whether Britain will stay in the EU. That seems yes to a
:08:31. > :08:34.referendum, but hold on. I believe it is unlikely that this lock will
:08:35. > :08:37.be used in the next Parliament. So that's a no. The Conservatives say
:08:38. > :08:47.yes to asking, in 2017, if re-elected, but haven't always. In
:08:48. > :08:50.2011, 81 Tory MPs defied the PM by voting for a referendum on EU
:08:51. > :08:53.membership: the largest rebellion against a Tory prime minister over
:08:54. > :09:04.Europe. Prompted by a petition from over 100,000 members of the public.
:09:05. > :09:06.The wrong question at the wrong time said the Foreign Secretary of a
:09:07. > :09:08.coalition Government including selfie-conciously-pro European Lib
:09:09. > :09:12.Dems, who had a referendum pledge in their 2010 manifesto, but only in
:09:13. > :09:14.certain circumstances. So we have the newspapers, and the public
:09:15. > :09:17.meeting leaflets. UKIP have always wanted the question put regardless.
:09:18. > :09:25.But Labour's new position may change things and The Conservatives think
:09:26. > :09:32.so. I think it does, because, you know, we are saying very clearly,
:09:33. > :09:37.like UKIP, we want a referendum but only a Conservative government can
:09:38. > :09:42.deliver it because most suffer largest would say it is possible in
:09:43. > :09:50.the first past the post system to have a UKIP government --
:09:51. > :09:58.sophologists. And then it's easy for as to say that if a UKIP vote lets
:09:59. > :10:04.in a Conservative government, then they won't hold a referendum. UKIP
:10:05. > :10:07.seem undaunted by the clarifications of the other parties, campaigning
:10:08. > :10:10.like the rest but with a "tell it how it is, just saying what you re
:10:11. > :10:17.thinking, we aren't like them" attitude. They seem more worried
:10:18. > :10:21.about us and what we want, and I don't see that in the other parties.
:10:22. > :10:28.In parts of the UK, like South Essex, it's a message they think is
:10:29. > :10:31.working. They are taking the voters for granted again and people have
:10:32. > :10:38.had enough. People are angry, they see people saying they will get a
:10:39. > :10:43.vote on the European Union, but then it just comes down the road. They
:10:44. > :10:49.were quick to capitalise on the announcements, saying only the
:10:50. > :10:55.Conservatives will give you say so does it change things? Not really.
:10:56. > :10:58.We have been talking about a referendum and having a debate on
:10:59. > :11:02.the European Union for years, and the other parties are playing catch
:11:03. > :11:06.up. They have a trust issue. Nobody trusts them on the European Union
:11:07. > :11:10.and that is why people come to us. Who the average UKIP voter is, or
:11:11. > :11:12.how they voted before is complicated, and what dent they
:11:13. > :11:15.might make on Conservative and Labour votes in 2015 is trickier
:11:16. > :11:23.still, but someone's been crunching the numbers anyway. We reckon it is
:11:24. > :11:27.between 25 and 30% of the electorate broadly share the UKIP motivation,
:11:28. > :11:30.so to top out at that level would be difficult. That's an awful lot of
:11:31. > :11:35.voters, but it's not the majority, and this is the reason why the main
:11:36. > :11:39.parties can't afford to just openly appealed to the UKIP electorate too
:11:40. > :11:44.hard because the elections are won and lost amongst the other 70%, the
:11:45. > :11:49.middle-class, the graduate, the younger, ethnic minorities. An
:11:50. > :11:52.appeal to the values of UKIP voters will alienate some of the other
:11:53. > :11:56.groups, and they are arguably more significant in winning the election.
:11:57. > :11:59.Whatever, the numbers UKIPers seem doggedly determined to dig away at
:12:00. > :12:02.any support the other parties have previously enjoyed.
:12:03. > :12:05.Giles Dilnot reporting. UKIP's leader, Nigel Farage, joins me now
:12:06. > :12:22.for the Sunday Interview. Nigel Farage, welcome back. Good
:12:23. > :12:25.morning. So the Labour Party has shot a fox. If Ed Miliband is the
:12:26. > :12:30.next by Minister, there will not be a referendum customer there's a long
:12:31. > :12:33.way between now and the next election, and Conservative party
:12:34. > :12:37.jobs and changes. We had a cast iron guarantee of a referendum from
:12:38. > :12:41.camera, then he three line whip people to vote against it, and now
:12:42. > :12:44.they are for it. What the Labour Party has done is open up a huge
:12:45. > :12:48.blank to us, and that is what we will go for in the European
:12:49. > :12:52.elections this coming year in May. I think there is a very strong chance
:12:53. > :12:55.that Labour will match the Conservative pledge by the next
:12:56. > :13:00.general election. There may be, but at the moment he has ruled it out,
:13:01. > :13:03.and if he does not change his mind and goes into the election with the
:13:04. > :13:10.policy as it is, the only chance of a referendum is a Tory government.
:13:11. > :13:14.If you think the Tories will form a majority, which I think is unlikely.
:13:15. > :13:18.Remember, two thirds of our voters would never vote Conservative
:13:19. > :13:22.anyway. There is still this line of questioning that assumes UKIP voters
:13:23. > :13:26.are middle-class Tories. We have some voters like that, but most of
:13:27. > :13:31.them are coming to us from Labour, some from the Lib Dems and a lot of
:13:32. > :13:37.nonvoters. But it come the election you failed to change Mr Miliband's
:13:38. > :13:41.line, I repeat, the only chance of a referendum, if you want a
:13:42. > :13:45.referendum, if that is what matters, and the polls suggest it doesn't
:13:46. > :13:48.matter to that many people, but if that is what matters, the only way
:13:49. > :13:53.you can get one is to vote Conservative. No, because you have a
:13:54. > :13:57.situation in key marginals, especially where all three parties
:13:58. > :14:00.are getting a good share, where we will see, and this depends a lot on
:14:01. > :14:07.the local elections and the European elections, there are target
:14:08. > :14:11.constituencies where UKIP has a reasonably good chance of winning a
:14:12. > :14:17.seat, and that will change the agenda. Every vote for UKIP makes a
:14:18. > :14:20.Tory government less likely. Arab voters are not Tory. Only a third of
:14:21. > :14:27.the UKIP boat comes from the Conservative party -- our voters are
:14:28. > :14:31.not Tory. -- the UKIP vote. It was mentioned earlier, about blue-collar
:14:32. > :14:34.voters. We pick up far more Labour Party and nonvoters than
:14:35. > :14:38.conservatives. On the balance of what the effect of the UKIP boat
:14:39. > :14:41.is, the Tories should worry about us, they should worry about the fact
:14:42. > :14:46.they have lost faith with their own electorate. Even if there is a
:14:47. > :14:50.minority Ed Miliband government it means no referendum. Labour and the
:14:51. > :14:55.Liberal Democrats are now at one on the matter. The next election is in
:14:56. > :14:59.a few weeks time, the European elections. What happens in those
:15:00. > :15:02.elections will likely change the party stands and position on a
:15:03. > :15:07.referendum. The fact that Ed Miliband has said this means, for
:15:08. > :15:10.us, our big target on the 22nd of May will be the Labour voters in the
:15:11. > :15:15.Midlands and northern cities, and if we do hammer into that boat and we
:15:16. > :15:24.are able to beat Labour on the day, there's a good chance of their
:15:25. > :15:31.policy changing. One poll this morning suggests Labour is close to
:15:32. > :15:38.you at 28, the Conservatives down at 21, the Lib Dems down at eight. You
:15:39. > :15:42.are taking votes from the Conservatives and the Liberal
:15:43. > :15:49.Democrats. We are certainly taking votes from the Lib Dems but that is
:15:50. > :15:55.comparing the poll with one year ago when I don't think most people knew
:15:56. > :15:59.what the question really was. You seem to be in an impossible position
:16:00. > :16:05.because the better you do in a general election, the less chance
:16:06. > :16:10.there will be a referendum by 2 20. No, look at the numbers. Only a
:16:11. > :16:16.third of our voters are Conservatives. When we have polled
:16:17. > :16:20.voters that have come to us, we asked them if there was no UKIP
:16:21. > :16:25.candidate who would you vote for, less than one in five said
:16:26. > :16:30.Conservative. Less than one in five UKIP voters would be tempted to vote
:16:31. > :16:36.Conservative under any circumstances so the arithmetic does not suggest
:16:37. > :16:39.we are the Conservative problem it suggests we are hurting all of the
:16:40. > :16:44.parties and the reason the Tories are in trouble is because they have
:16:45. > :16:51.lost their traditional base. Why do you think Nick Clegg is debating
:16:52. > :16:59.Europe? I think they are in trouble, at 8% they could be wiped
:17:00. > :17:04.out, they could go from 12 to nothing and I think it is a chance
:17:05. > :17:10.for Nick Clegg to raise their profile. They are fringe party with
:17:11. > :17:15.respect to this contest so I see why he wants to do it. One of our big
:17:16. > :17:20.criticisms is that we have not been able to have a full debate on
:17:21. > :17:25.national television on the alternatives of the European Union
:17:26. > :17:38.so I am looking forward to it. How are you preparing? I think you can
:17:39. > :17:44.be over scripted with these things. Are you not doing mock debates? No,
:17:45. > :17:48.I am checking my facts and figures and making sure that I can show the
:17:49. > :17:54.British people that in terms of jobs, we would be far better off not
:17:55. > :17:59.being within the European Union not being within its rule book, not
:18:00. > :18:04.suffering from some of the green taxes they are putting on the
:18:05. > :18:10.manufacturing industry. The idea that 3 million jobs are at risk I
:18:11. > :18:16.want to show why that is nonsense. Who do you think is playing you in
:18:17. > :18:24.their mock debates? They probably went to the pub and found someone!
:18:25. > :18:27.We will see. You have promised to do whatever it takes to fund your
:18:28. > :18:34.European election campaign, how much has been given so far? Just give it
:18:35. > :18:40.a few weeks and you will see what Paul is planning to do. He has made
:18:41. > :18:49.a substantial investment in the campaign already. How much? I'm not
:18:50. > :18:53.answering that for now. We are well on our way to a properly funded
:18:54. > :19:00.campaign and our big target will be the big cities and the working vote
:19:01. > :19:04.in those communities. Your deputy chairman Neil Hamilton is another
:19:05. > :19:10.former Tory, he says so far we haven't seen the colour of his
:19:11. > :19:16.money. Exactly two weeks ago, and things have changed since then. Mr
:19:17. > :19:25.Sykes has written a cheque since then? Yes. This morning's papers
:19:26. > :19:33.saying you will be asking MEPs to contribute ?50,000 each, is that
:19:34. > :19:39.true? Over the next five years, yes. Not for the European campaign. So
:19:40. > :19:45.lack of money will not be an excuse. We will have a properly funded
:19:46. > :19:48.campaign. How we raise the kind of money needed to fund the general
:19:49. > :19:59.election afterwards is another question. What is UKIP's policy on
:20:00. > :20:04.paying family members? We don't encourage it and I didn't employ any
:20:05. > :20:11.family member for years. My wife ended up doing the job and paid for
:20:12. > :20:18.the first seven years of my job She is paid now? Until May, then she
:20:19. > :20:25.comes off the payroll am which leaves me with a huge problem. In
:20:26. > :20:31.2004 you said, UKIP MEPs will not employ wives and there will be no
:20:32. > :20:35.exceptions. An exception was made because I became leader of the
:20:36. > :20:39.National party as well as a leader of the group in European
:20:40. > :20:44.Parliament. Things do change in life, and you can criticise me for
:20:45. > :20:49.whatever you like, but I cannot be criticised for not having a big
:20:50. > :20:58.enough workload. No, but you didn't employ your wife when you had told
:20:59. > :21:01.others not to do it your party. Nobody else in my party has a big
:21:02. > :21:07.job in Europe and the UK. We made the exception for this because of
:21:08. > :21:11.very unusual circumstances. It also looks like there was a monetary
:21:12. > :21:18.calculation. Listen to this clip from a BBC documentary in 2000. It
:21:19. > :21:24.is a good job. I worked it out because so much of what you get is
:21:25. > :21:28.after tax that if you used the secretarial allowances to pay your
:21:29. > :21:36.wife on top of the other games you can play, I reckon this job in
:21:37. > :21:38.Stirling term is over a quarter of ?1 million a year. That is what you
:21:39. > :21:45.would need to earn working for Goldman Sachs or someone like that.
:21:46. > :21:48.I agree with that. More importantly the way you really make money in the
:21:49. > :21:54.European Parliament is being their five days a week, because you sign
:21:55. > :21:59.in every day, you get 300 euros every day, and that is how people
:22:00. > :22:04.maxed out. The criticism of me is that I am not there enough so
:22:05. > :22:08.whatever good or bad I have done in the European Parliament, financial
:22:09. > :22:13.gain has not been one of the benefits. There have been
:22:14. > :22:18.allegations of you also employing a former mistress on the same European
:22:19. > :22:24.Parliamentary allowance, you deny that? I am very upset with the BBC
:22:25. > :22:28.coverage of this. The ten o'clock news run this as a story without
:22:29. > :22:32.explaining that that allegation was made using Parliamentary privilege
:22:33. > :22:40.by somebody on bail facing serious fraud charges. I thought that was
:22:41. > :22:48.pretty poor. You have a chance to do that and you deny you have employed
:22:49. > :22:53.a former mistress? Yes, but if you look at many of the things said over
:22:54. > :22:57.the last week, I think it is becoming pretty clear to voters that
:22:58. > :23:04.the establishment are becoming terrified of UKIP and they will use
:23:05. > :23:10.anything they can find to do us down in public. Is an MEP employs his
:23:11. > :23:16.wife and his former mistress, that would be resigning matter, wouldn't
:23:17. > :23:21.it? Yes, particularly if the assumption was that money was being
:23:22. > :23:28.taped for work but was not being done. Who do you think is behind
:23:29. > :23:34.these stories? It is all about negative, it is all about attacks,
:23:35. > :23:38.but I don't think it is actually going to work because so much of
:23:39. > :23:42.what has been said in the last week is nonsense. A reputable daily
:23:43. > :23:47.newspaper said I shouldn't be trusted because I had stored six
:23:48. > :23:51.times for the Conservative party, I have never even stored in a local
:23:52. > :23:56.council election. I think if you keep kicking an underdog, it will
:23:57. > :24:07.make the British people rally around us. Is it the Conservatives? Yes,
:24:08. > :24:13.and the idea that all of our voters are retired colonels is simply not
:24:14. > :24:22.true. We get some voters from the Labour side as well. Would you
:24:23. > :24:28.consider standing in a Labour seat if you are so sure you are getting
:24:29. > :24:36.Labour votes? Yes, but the key for UKIP is that it has to be marginal.
:24:37. > :24:43.Just for your own future, if you fail to win a single soul -- single
:24:44. > :24:48.seat in the general election, if Ed Miliband fails to win an outright
:24:49. > :24:53.majority, will you stand down as UKIP leader? I would think within
:24:54. > :24:59.about 12 hours, yes. I will have failed, I got into politics not
:25:00. > :25:04.because I wanted a career in politics, far from it. I did it
:25:05. > :25:07.because I don't think this European entanglement is right for our
:25:08. > :25:12.country. I think a lot of people have woken up to the idea we have
:25:13. > :25:19.lost control of our borders and now is the moment for UKIP to achieve
:25:20. > :25:25.what it set out to do. Will UKIP continue without you if you stand
:25:26. > :25:34.down? Of course it will. I know that everyone says it is a one-man band
:25:35. > :25:37.but it is far from that. We have had some painful moments, getting rid of
:25:38. > :25:41.old UKIP, new UKIP is more professional, less angry and it is
:25:42. > :25:47.going places. Nigel Farage, thank you for being with us.
:25:48. > :25:49.So, what else should we be looking out for in Wednesday's Budget
:25:50. > :25:51.statement? We've compiled a Sunday Politics guide to the Chancellor's
:25:52. > :25:54.likely announcements. Eyes down everyone, it's time for a
:25:55. > :25:58.bit of budget bingo. Let's see what we will get from the man who lives
:25:59. > :26:02.at legs 11. Despite some good news on the economy, George Osborne says
:26:03. > :26:05.that this will be a Budget of hard truths with more pain ahead in order
:26:06. > :26:07.to get the public finances back under control. But many in the
:26:08. > :26:10.Conservative party, including the former chancellor Norman Lamont
:26:11. > :26:13.want Mr Osborne to help the middle classes by doing something about the
:26:14. > :26:21.4.4 million people who fall into the 40% bracket. Around one million more
:26:22. > :26:23.people pay tax at that rate compared to 2010 because the higher tax
:26:24. > :26:28.threshold hasn't increased in line with inflation. Mr Osborne has
:26:29. > :26:32.indicated he might tackle the issue in the next Conservative manifesto,
:26:33. > :26:38.but for now he is focused on helping the low paid. It's likely we will
:26:39. > :26:43.see another increase in the amount you can earn before being taxed
:26:44. > :26:47.perhaps up another ?500 to ?10, 00. The Chancellor is going to flesh out
:26:48. > :26:50.the details of a tax break for childcare payments, and there could
:26:51. > :27:07.be cries of 'house' with the promise of more help for the building
:27:08. > :27:10.industry. The Help To Buy scheme will be extended to 2020 and there
:27:11. > :27:13.could be the go-ahead for the first Garden City in 40 years. Finally,
:27:14. > :27:15.bingo regulars could be celebrating a full house with a possible cut in
:27:16. > :27:18.bingo tax. And I've been joined in the studio
:27:19. > :27:21.by the former Conservative chancellor Norman Lamont, in Salford
:27:22. > :27:24.by the former Labour Cabinet minister Hazel Blears, and in
:27:25. > :27:27.Aberdeen by the Lib Dem deputy leader, Malcolm Bruce. Let me come
:27:28. > :27:33.to Norman Lamont first, you and another former Tory Chancellor,
:27:34. > :27:43.Nigel Lawson, have called in the fall in the threshold for the rate
:27:44. > :27:48.at which the 40p clicks in. I would have preferred an adjustment in the
:27:49. > :27:53.Budget but I agree with what you are saying, it sounds like the
:27:54. > :27:58.Chancellor will not do that. My main point is that you cannot go on
:27:59. > :28:02.forever and forever increasing the personal allowance and not
:28:03. > :28:08.increasing the 40% tax threshold because you are driving more and
:28:09. > :28:11.more people into that band. It is an expensive policy because in order to
:28:12. > :28:17.keep the number of people not paying tax constant, you have to keep
:28:18. > :28:23.adjusting it each year. When this was introduced by Nigel Lawson, it
:28:24. > :28:30.applied to one in 20 people, the 40% rate, it now applies to one in six
:28:31. > :28:35.people. By next year, there will be 6 million people paying base. Why do
:28:36. > :28:40.you think your Tory colleagues seem happy to go along with the Lib Dems
:28:41. > :28:55.and target whatever money there is for tax cuts rather -- on the lower
:28:56. > :29:01.paid rather than the middle incomes? They are not helping the lowest
:29:02. > :29:03.paid. If you wanted to really help the lowest paid people you would
:29:04. > :29:10.raise the threshold for national insurance contributions, which is
:29:11. > :29:19.around ?6,000. Is it the Lib Dems stopping any rise in the 40p
:29:20. > :29:25.threshold? We are concentrating on raising the lower threshold because
:29:26. > :29:32.we believe that is the way to help those on lower incomes. Whilst they
:29:33. > :29:35.haven't benefited as much as the lower paid they have participated
:29:36. > :29:39.and I think people understand right now, if you were going to prioritise
:29:40. > :29:44.the high earners, when we are still trying to help those on lower and
:29:45. > :29:48.middle incomes who haven't enjoyed great pay increases but have got the
:29:49. > :29:54.benefit of these tax increases, that is why we would like to do it for
:29:55. > :30:00.the minimum wage level. But the poorest will not benefit at all The
:30:01. > :30:05.poorest 16% already don't pay tax. Why don't you increase the threshold
:30:06. > :30:14.at which National Insurance starts? You only have two earned ?5,500
:30:15. > :30:18.before you start to pay it. You ve got to remember that the raising of
:30:19. > :30:23.the threshold to ?10,000 or more was something the Tories said we could
:30:24. > :30:31.not afford. Why are you continuing to do it? If you want to help the
:30:32. > :30:36.working poor, the way would be to take the lowest out of national
:30:37. > :30:40.insurance. The view we take is they are benefiting, and have benefited
:30:41. > :30:46.from, the raising of the tax threshold. You now have to earn
:30:47. > :30:50.?10,000, we hope eventually 12, 00, and that means only people on very
:30:51. > :30:54.low wages. If you opt out of national insurance, you're saying to
:30:55. > :30:59.people that you make no contribution to the welfare system, so there is a
:31:00. > :31:04.general principle that people should participate and paying, and also
:31:05. > :31:08.claim when they need something out. We thought raising the threshold was
:31:09. > :31:10.simple and effective at a time of economic austerity and the right way
:31:11. > :31:17.to deliver a helpful support to welcoming people. -- working people.
:31:18. > :31:21.With the Labour Party continue to raise the threshold, or do they
:31:22. > :31:27.think there is a case that there are too many people being dragged into
:31:28. > :31:31.the 40p tax bracket? If Norman Lamont thinks this is the right time
:31:32. > :31:34.to benefit people who are reasonably well off rather than those who are
:31:35. > :31:38.struggling to make ends meet, then genuinely, I say it respectfully, I
:31:39. > :31:43.don't think he's living in the world the rest of us are. Most working
:31:44. > :31:47.people have seen their wages effectively reduced by about ?1 00
:31:48. > :31:53.because they have been frozen, so the right thing is to help people on
:31:54. > :31:57.modest incomes. I also understand that if the 40% threshold went up,
:31:58. > :32:01.the people who would benefit the most, as ever, are the people who
:32:02. > :32:05.are really well off, not the people in the middle. The Conservatives
:32:06. > :32:11.have already reduced the 50p tax on people over ?150,000 a year, and we
:32:12. > :32:14.have to concentrate on the people going out to work, doing their best
:32:15. > :32:18.to bring their children up and have a decent life and need a bit of
:32:19. > :32:22.help. I think raising the threshold is a good thing. We would bring back
:32:23. > :32:28.the 10p tax, which we should never have abolished, and do things with
:32:29. > :32:31.regard to childcare. At the moment, childcare costs the average family
:32:32. > :32:36.as much as their mortgage, for goodness sake. We would give 25
:32:37. > :32:39.hours free childcare for youngsters over three and four years old. That
:32:40. > :32:47.would be a massive boost the working families. We are talking about
:32:48. > :32:50.nurses, tube drivers, warrant officers in the army. There are many
:32:51. > :32:55.people who are not well off but have been squeezed in the way everybody
:32:56. > :32:59.has been squeezed and they are finding it continuing. I am stunned
:33:00. > :33:03.by Malcolm's argument where everybody should pay something so
:33:04. > :33:06.you should not take people out of national insurance, but the
:33:07. > :33:11.principle doesn't apply to income tax. You can stand that argument on
:33:12. > :33:15.its head and apply it to income tax. Most people don't see a difference
:33:16. > :33:20.between income tax and national insurance, it's the same thing to
:33:21. > :33:22.most people. It is true that it isn't really an insurance fund and
:33:23. > :33:29.there is an argument from merging both of them. But we have
:33:30. > :33:35.concentrated on a simple tax proposition. Norman is ignoring the
:33:36. > :33:38.fact the people on the 40% rate have benefited by the raising of the
:33:39. > :33:41.personal allowance. To say they have been squeezed is unfair. The
:33:42. > :33:47.calculation is that an ordinary taxpayer will be ?700 better off at
:33:48. > :33:51.the current threshold, and about ?500 better off at the higher rate.
:33:52. > :33:56.It is misleading to say the better off we'll be paying more. I agree
:33:57. > :34:00.with Hazel, if you go to the 40 rate, it's the higher earners who
:34:01. > :34:04.benefit the most, and we won't do that when the economy is not where
:34:05. > :34:12.it was before the crash. How much will the lower paid be better off if
:34:13. > :34:16.you reintroduce the 10p rate? Significantly better off. I don t
:34:17. > :34:22.have the figure myself, but they'd be significantly better off and the
:34:23. > :34:25.Budget should be a mixture of measures to help people who work
:34:26. > :34:30.hard. That is why I think the childcare issue has to be
:34:31. > :34:36.addressed. ?100 a week of the people with childcare payments. It is a
:34:37. > :34:39.massive issue. We want the job is guaranteed to get young people back
:34:40. > :34:42.into work. There's been hardly any discussion about that, and we have
:34:43. > :34:46.nearly 1 million people who have been out of work for six months or
:34:47. > :34:53.more, and as a country we need to do something to help that. 350,000
:34:54. > :34:56.full-time students, so it is a misleading figure. It is not a
:34:57. > :35:02.million including full-time students. All parties do this. It
:35:03. > :35:05.sounds to me, Malcolm Bruce, you have more in common with the Labour
:35:06. > :35:09.Party than you do with the Conservatives. You want an annual
:35:10. > :35:14.levy on houses over ?2 million, so does Labour. A lot of your members
:35:15. > :35:17.want to scrap the so-called bedroom tax and so does labour. You think
:35:18. > :35:22.every teacher should have a teaching qualification, and so does Labour.
:35:23. > :35:26.Your policy on the EU referendum is the same. Let me go on. And you want
:35:27. > :35:32.to scrap the winter fuel allowance for wealthy pensioners. We want to
:35:33. > :35:34.make sure we get the public finances in order and we have grave
:35:35. > :35:44.reservations about the Labour Party promises. But they followed your
:35:45. > :35:48.spending plans in the first year. The point we are making is we can
:35:49. > :35:51.make a fairer society and stronger economy if you keep the public
:35:52. > :35:55.finances moving towards balance We don't think the Labour Party will
:35:56. > :35:59.take a stand that track. It is interesting that the Labour Party
:36:00. > :36:04.want to introduce the 10p rate that Gordon Brown abolished. We consider
:36:05. > :36:11.that before we can -- committed to the 0% rate -- we considered that.
:36:12. > :36:16.It makes a complicated system difficult and we think it's better
:36:17. > :36:20.doing it that way. As a fiscal conservative, why are you talking
:36:21. > :36:23.about any tax cuts when the deficit is over ?100 billion, and
:36:24. > :36:28.effectively, anything you propose today can only be financed by more
:36:29. > :36:33.borrowing. I totally agree with you. I said that this week. I thought the
:36:34. > :36:38.best thing would have no Budget The main thing is to get the deficit
:36:39. > :36:40.down. My argument is is that you have an adjustment in tax rates it
:36:41. > :36:46.should be shared between the allowances and the higher rate, but
:36:47. > :36:51.I don't think that the progress on the deficit is something we can give
:36:52. > :36:58.up on. This is still a very long way to go. We're only halfway through.
:36:59. > :37:01.Hazel, does it make sense to borrow for tax cuts? I am reluctant to do
:37:02. > :37:09.this, but I agree with both Norman and Malcolm. Malcolm Bruce wants to
:37:10. > :37:13.borrow for tax cuts. We absolutely need to get the deficit down and get
:37:14. > :37:17.finances on a strong footing. But we also have to think about having some
:37:18. > :37:21.spending in the system that in the longer run saves us money. We all
:37:22. > :37:26.know we need to build new homes I don't think it's necessarily the
:37:27. > :37:30.right priority to give people in London mortgage relief in terms of
:37:31. > :37:35.?600,000. We have to get the balance right. Sometimes it is right to
:37:36. > :37:41.spend to save. I'm afraid we have run out of time. There will be
:37:42. > :37:43.plenty more discussion in the lead up to the Budget on Wednesday.
:37:44. > :37:48.It's just gone 11:35am. You're watching the Sunday Politics. We say
:37:49. > :37:51.goodbye to viewers in Scotland who leave us now for Sunday Politics
:37:52. > :37:54.Scotland. Coming up here in 20 minutes, Frances O'Grady, the
:37:55. > :38:09.Good morning. Welcome to a special us discuss
:38:10. > :38:15.Good morning. Welcome to a special edition of the Sunday Polithcs for
:38:16. > :38:18.the West. We have left the West Country and come to the European
:38:19. > :38:24.Parliament in Strasbourg ahdad of the elections in May. Coming up
:38:25. > :38:30.inside the place where decisions are made, but could Britain dechded to
:38:31. > :38:35.waive this goodbye? Straight bananas and dangerous balloons, which EU
:38:36. > :38:40.laws are true and which are myths? And Nigel Farage last of crhtics who
:38:41. > :38:46.say his office is full of eccentrics. In two months, 400
:38:47. > :38:50.million EU citizens elect mdmbers of the European Parliament. Thd new
:38:51. > :38:56.MEPs will pass laws on the clothes we wear, the cars we drive, the
:38:57. > :39:03.hours we work and the food we eat. In our part of the world we have a
:39:04. > :39:07.small say in this. We have 6 euros MPs representing the south`west of
:39:08. > :39:12.England and, bizarrely, Gibraltar. To belong to the UK Independence
:39:13. > :39:20.Party, one is a Liberal Democrat and three are conservative. The amount
:39:21. > :39:24.of MEPs is being reduced to 751 from May. Let's begin by getting our
:39:25. > :39:30.bearings. I have been for a look around. We are gliding around
:39:31. > :39:35.Strasbourg, a town that has grown prosperous on the back of the EU, on
:39:36. > :39:38.trams that Europeans do effortlessly, but we are told are
:39:39. > :39:44.not affordable for us at hole in the West Country. Our destination is a
:39:45. > :39:50.chrome and glass building on the outskirts, the European Parliament.
:39:51. > :39:54.It is pretty much identical to the European Parliament in Brussels
:39:55. > :39:58.but, for some reason, MEPs `re obliged to spend one week hdre a
:39:59. > :40:06.month. Let's look at the agdnda this week. All sorts of debates going on,
:40:07. > :40:08.including the implementation of a single European sky and another on
:40:09. > :40:14.the eradication of world torture. Some people think this is vhtal
:40:15. > :40:21.Europeans talking to one another. Others believe it is the biggest
:40:22. > :40:28.non`job creation scheme. Sole nationalities take it seriotsly
:40:29. > :40:33.beaming back home earnest interviews with Euro officials that soletimes
:40:34. > :40:38.go on for four hours. TV vidwers in Britain are spared that orddal
:40:39. > :40:43.because it seems irrelevant to us. Are we mistaken? And independent
:40:44. > :40:50.commentator, American, think so Can you imagine this place without the
:40:51. > :40:57.British? Easily. It would cdrtainly be a huge loss if the UK were to
:40:58. > :41:02.leave, but in terms of the TK's influence, it punches way bdlow its
:41:03. > :41:11.weight. I think they do not play the game as well as some of thehr
:41:12. > :41:17.equally sized neighbours. The voting chamber is the giant hemi` cycle
:41:18. > :41:21.where 28 countries come togdther. This is a voting session and they
:41:22. > :41:25.are going through a series of motions, having just passed
:41:26. > :41:31.something about petitions. Xou can see the scale of it. The vast
:41:32. > :41:36.numbers and interpreters. It reminds me of something from a James Bond
:41:37. > :41:43.set. I am given a tour by a familiar face. This is the Labour MEP,
:41:44. > :41:48.Michael Cashman, who is standing down this election. He is known as
:41:49. > :41:52.an equality campaign and better known for playing a gay character on
:41:53. > :41:58.EastEnders. You are not standing again, so it is no skin off your
:41:59. > :42:04.nose. Can you convince me it is a worthwhile place and job? It is the
:42:05. > :42:11.most brilliant job imaginable. Does it make any difference at home? In
:42:12. > :42:14.terms of rights, there is a raft of rights David Cameron wants to get
:42:15. > :42:19.rid of in the workplace that prevents people from being
:42:20. > :42:25.discriminated against on grounds of race, religion, belief, the right to
:42:26. > :42:33.four weeks of paid holiday `nd maternity leave, paternity leave.
:42:34. > :42:36.Not everyone agrees. Nigel Farage is treated like a rock star by the
:42:37. > :42:43.European media, who have never seen anything like him. I caught up with
:42:44. > :42:48.him as newspaper reports at home alleged saucy carry ons at TKIP
:42:49. > :42:54.headquarters with claims and eccentric employee brought her cat
:42:55. > :43:00.to the office. Does one of xour senior officials bring her cat to
:43:01. > :43:04.work? Did once on the way to the vet, it is nonsense. This is not
:43:05. > :43:11.being written about other political parties. Sometimes it is sahd, after
:43:12. > :43:14.a day's work, UKIP staff go to the pub. Are we supposed to hang our
:43:15. > :43:23.heads in shame that we are normal people? Outside I bump into musical
:43:24. > :43:36.students from Slovenia, enjoying their status as young Europdans Yes
:43:37. > :43:41.or no, Europe? Yes! This st`tute talks about being at the he`rt of
:43:42. > :43:45.Europe. UKIP wants to put a dagger into Britain's membership. Duro
:43:46. > :43:51.scepticism is spreading across the continent.
:43:52. > :43:56.Among the 28 nations represdnted here, it used to be Britain who
:43:57. > :44:03.elected most sceptics, but that has changed and is expected to change
:44:04. > :44:08.more when by the end of May, people reckon the proportion of MEPs who
:44:09. > :44:14.are Eurosceptic could rise to 2 %. You can spot them by their flags.
:44:15. > :44:20.Alongside UKIP with the union Jack, there are others. They turn up to
:44:21. > :44:27.vote. The south`west's of MBP is said they do little else. Their
:44:28. > :44:32.performance is almost nil. They do not turn up to committee, they do
:44:33. > :44:38.not vote or ring gauge in ddtail scrutiny. They go to their hemi`
:44:39. > :44:43.cycle and they shout. He takes is to a committee meeting about product
:44:44. > :44:46.safety. He contends this is important and the UKIP group are not
:44:47. > :44:56.there. Persuading people it matters is not EC. The EU is running adverts
:44:57. > :44:58.to get us to vote. The decisions of the European Parliament are driven
:44:59. > :45:07.by N the thing that matters to you. The positive message makes little
:45:08. > :45:14.impact `` driven by everythhng. They want us to come out of Europe. `` I
:45:15. > :45:19.want to. I think we get a b`d deal. There is a lot of red tape `nd the
:45:20. > :45:25.facts they move between Brussels and Strasbourg is a nonsense. For other
:45:26. > :45:31.Europeans it can seem childhsh. Visiting a Bristol school is a
:45:32. > :45:37.French MP. She is horrified at the Eurosceptic tied. They could block
:45:38. > :45:44.the entire decisional process where we need more Europe, we need people
:45:45. > :45:48.to take decisions at Europe`n level, concerning employment, soci`l
:45:49. > :45:54.rights, climate change, banking regulation. It would be a
:45:55. > :46:01.catastrophe. I meet someone from the Green party. The voters havd to be
:46:02. > :46:07.taken seriously and they ard voting UKIP for a reason, not for what they
:46:08. > :46:12.say, because they do not provide solutions, they just providd an
:46:13. > :46:17.opportunity for people to bd cross. The biggest challenge may bd for the
:46:18. > :46:20.British Conservatives, who `re plotting tactics, sounding
:46:21. > :46:27.Eurosceptic but changing thhngs so that voters will not want to leave.
:46:28. > :46:30.I could not argue to stay in the European Union unreformed as it is
:46:31. > :46:36.now, particularly the financial side. That does not mean to say I
:46:37. > :46:43.want to throw the baby out with the bath water, there is good skeleton
:46:44. > :46:47.of good work. Probably only one third of British electors whll vote
:46:48. > :46:53.in May. The fear is that most `` those most likely to vote are those
:46:54. > :46:58.most hostile to the European Union. The people with the real power of
:46:59. > :47:03.the commissioners. They are not elected, but chosen by governments
:47:04. > :47:07.and they think up the laws that get voted on in Parliament. I wdnt to
:47:08. > :47:13.see a commissioner from Austria Could you for CNN European Tnion
:47:14. > :47:21.without Britain `` could yot foresee? I think it would bd a
:47:22. > :47:31.disadvantage for both. The TK is a part of Europe. I am convinced, I
:47:32. > :47:40.think positively, I am alwaxs saying I am a member of the glass half full
:47:41. > :47:46.party. I am optimistic that after an intensive information process, where
:47:47. > :47:53.people are discussing the pros and cons, British people will sde the
:47:54. > :47:58.advantages and I hope, I am sure, there will be a majority. If not, we
:47:59. > :48:08.have to live with it. You would say goodbye? Not goodbye, state
:48:09. > :48:13.partners. UKIP think we can leave but still enjoy the benefits of free
:48:14. > :48:21.movement and all of that. Is it the case? I do not think so. If you see
:48:22. > :48:24.the reaction of the European Community after the Switzerland
:48:25. > :48:34.referendum about free movemdnt, it was clear that you cannot continue
:48:35. > :48:40.cherry picking. In a family of 8, may be 30 in the future, thd
:48:41. > :48:50.willingness to allow exempthons becomes lower and lower. I think it
:48:51. > :48:55.would be a great misunderst`nding to believe one can get out and take
:48:56. > :49:01.good things with them. And leave the bad things behind. In that respect,
:49:02. > :49:05.I argue it is better to be hnside, to influence and participatd and
:49:06. > :49:18.contribute, and not to stay out having no influence.
:49:19. > :49:22.Whatever your views on the politics, there is no denying
:49:23. > :49:28.Strasbourg is a beautiful chty, dominated by the cathedral behind
:49:29. > :49:34.me. What about the apparently crazy EU directives? Are they fact or
:49:35. > :49:40.fiction? Robin back in Engl`nd has been trying to find out.
:49:41. > :49:44.We are bombarded by stories in the papers about how Europe is
:49:45. > :49:51.interfering with our lives. The classic is the ban on the bdndy
:49:52. > :49:55.banana, which had a grain of truth, but not all stories are trud. You
:49:56. > :49:57.are about to hear three that appeared in print. See if you can
:49:58. > :50:16.tell the fact from fiction. My name is Tim, I am a fruit
:50:17. > :50:21.wholesaler. In 2008, I was banned by Europe from selling 5000 kiwi fruit
:50:22. > :50:29.because they were one milliletre to narrow in diameter.
:50:30. > :50:34.I am John, I run a balloon shop I just could not believe it when
:50:35. > :50:41.Europe told us we were not `llowed children `` to let children under
:50:42. > :50:51.eight below `` blow`up balloons by themselves. I run a lighting shop.
:50:52. > :50:55.In 2008, the EU banned the hmport and manufacture of the incandescent
:50:56. > :50:58.light bulbs shortly after wd saw an increase in sales as the public
:50:59. > :51:04.rushed in to buy them worridd they could not get the much longdr.
:51:05. > :51:11.Brussels would be delighted to see signs in kilos. You have had the
:51:12. > :51:16.three stories. It was bluffhng? Unfortunately, I have to sax my
:51:17. > :51:21.story about throwing away khwi fruit is absolutely true. I am also happy
:51:22. > :51:28.to say that, since then, thd regulations have been modifhed and
:51:29. > :51:31.are now not so stringent. Mx story was overinflated. However, the story
:51:32. > :51:38.appeared in several national newspapers. Of course, it w`s a
:51:39. > :51:43.lie. Children under the age of eight can lower up balloons on thdir own,
:51:44. > :51:48.but they should have parent`l help. My lighting story is true. The EU
:51:49. > :51:53.did ban the incandescent light bulb. One lady bought 500 pheces,
:51:54. > :51:59.worried she would not be able to get them any more. Can you tell your
:52:00. > :52:05.apples from your bears? Consider it good training. We are about to be
:52:06. > :52:13.bombarded with facts about Durope and it will not always be e`sy to
:52:14. > :52:18.tell who is bluffing. Robin back in England. Next week,
:52:19. > :52:24.Nigel Farage and Nick Clegg will argue on TV. Ahead of that debate,
:52:25. > :52:30.we thought we would get in darly and I am joined by Liberal Democrat
:52:31. > :52:33.Graham Watson and Euroscepthc William Dartmouth. What would the
:52:34. > :52:39.United Kingdom gave if we are out? We would lose a lot. If we wanted to
:52:40. > :52:43.trade, we would have to do what Norway does. We would have to pay
:52:44. > :52:48.more for the privilege of trading ban if we were members but we would
:52:49. > :52:53.lose any say in the setting of the rules. You might be able to do that
:52:54. > :53:03.if you are a small economy like Norway, but not the United Kingdom.
:53:04. > :53:08.We only have 8.24% of votes. That proportion goes down as mord
:53:09. > :53:12.countries joined the EU. Yotr party and the establishment partids are
:53:13. > :53:18.cheerleaders for more countries joining and that means our hnfluence
:53:19. > :53:21.gets less will stop at least Graham Watson admitted, unusually for a
:53:22. > :53:26.Liberal Democrat, that tradd would continue if we left. The sc`re story
:53:27. > :53:32.put around by Nick Clegg and others is the implication that trade would
:53:33. > :53:35.cease. With the EU play hardball and say you will have to queue tp with
:53:36. > :53:42.the other countries and do business on their terms?
:53:43. > :53:52.This is my point. China does not have a trade agreement. The Chinese
:53:53. > :53:57.face tariffs to get goods on the European markets and that could be
:53:58. > :54:02.the case for us. Why is it that Toyota, Airbus group and others are
:54:03. > :54:08.saying, we have got to stay in. Because we would not be invdsting as
:54:09. > :54:12.much in the UK if we were ott. The chief executive 's of those
:54:13. > :54:18.companies are paid to consider what is best for individual comp`nies.
:54:19. > :54:23.That is their view which I disagree with. If you are a politici`n
:54:24. > :54:27.representing the south`west, you have to think of the interests of
:54:28. > :54:32.the people. One of the interests you must consider is the interests of
:54:33. > :54:38.the 95% of British businessds that do not sell anything to be xou. Are
:54:39. > :54:44.you conceding those chief executive say it will be bad for business
:54:45. > :54:52.That is not what they said. They denied they said it. I issudd a
:54:53. > :54:59.press release. There has bedn a string of companies saying ht will
:55:00. > :55:03.be bad for British investment. A whole string of companies h`ve said
:55:04. > :55:08.it will be bad. It is not only investment in jobs, and at ` time of
:55:09. > :55:17.coming out of recession, yot want to make sure this recovery is saved.
:55:18. > :55:24.But it is security, as well. Why are UKIP doing well in the polls?
:55:25. > :55:30.Because we have been in a ddep recession and we are looking for
:55:31. > :55:36.scapegoats. UKIP is essenti`lly an anti`immigrant party. We ard saying,
:55:37. > :55:41.wake up, people, this is serious. If we are outside the EU, we no longer
:55:42. > :55:46.get the security against crhme because of the way police forces
:55:47. > :55:50.cooperate, we do not get jobs and investment, and we do not gdt
:55:51. > :55:57.solidarity in dealing with global challenges such as climate change.
:55:58. > :56:02.UKIP is an internationalist party and you belong to a Federalhst party
:56:03. > :56:06.that wants the UK subsumed hnto a United States of Europe. Th`t has
:56:07. > :56:14.been your politics for 30 ydars which I respect. I do not rdspect
:56:15. > :56:19.when you deny it. We now have a seat on the UN Security Council which is
:56:20. > :56:24.under constant threat from the European Union and your Feddralist
:56:25. > :56:27.friends in the European Union. By staying in the European Union our
:56:28. > :56:30.membership of international organisations is threatened and
:56:31. > :56:40.influence would go down. Is he right? Are you an anti`immigration
:56:41. > :56:47.party? We do not think it rhght or in the national interest th`t
:56:48. > :56:50.millions of people from the other 27 member states have the absolute
:56:51. > :57:00.right to live, work and settle in the United Kingdom. I am a pualified
:57:01. > :57:05.chartered accountant and ye`rs ago there was a shortage of chartered
:57:06. > :57:11.accountants in the middle e`st. I worked in the middle east. H went
:57:12. > :57:15.there on a work permit. I h`d a two`year contract. When it was over,
:57:16. > :57:23.I had to come home. If this shortage... What would you say to
:57:24. > :57:28.2.2 million British people living and working on the continent because
:57:29. > :57:34.they have freedom of movement? Would you say it does not matter to us if
:57:35. > :57:40.they send you home? Are we crazy to pay for all this? We are and we
:57:41. > :57:44.would both agree we should have one seat of operation and if it's had
:57:45. > :57:49.not been for John Major who wrote it in to the treaty, it would have been
:57:50. > :57:58.easy to change. Now time to look at the rest of the
:57:59. > :58:03.political news in 60 seconds. As we were returning from Strasbourg
:58:04. > :58:08.the sad news broke that the former Bristol MP Tony Benn had passed away
:58:09. > :58:12.at the age of 88. He was a popular speaker, writer, anti`war c`mpaigner
:58:13. > :58:19.and held the seat of Bristol south`east for over 30 years. People
:58:20. > :58:23.remember him as a case workdr, a man of Bristol who fought passionately
:58:24. > :58:28.on behalf of Bristol. Wherever you go, people still talk about him and
:58:29. > :58:32.remember him. Many disagreed with his left`wing views, but those on
:58:33. > :58:37.the right praised him to sthcking by his principles. We talk abott
:58:38. > :58:43.politicians and people say xou are all the same. Then they say I wish
:58:44. > :58:47.we could have more like Tonx Benn. You say you are conservativd? They
:58:48. > :58:53.say yes, but he believed in what he said. We will have more on the life
:58:54. > :59:05.of Tony Benn in next week's programme.
:59:06. > :59:11.A taste of the political news back home in the West Country. You join
:59:12. > :59:16.me again in France, at the crossroads of Europe, and the final
:59:17. > :59:23.word goes to our political dditor. He is in Germany. Can you hdar me?
:59:24. > :59:30.Hearing you loud and clear on this side of the border. What is at stake
:59:31. > :59:36.in the European elections in the South West? Lets remember the
:59:37. > :59:41.impetus behind the creation of the EU was to bridge the gap between
:59:42. > :59:46.these two nations and others. What became a common market we joined in
:59:47. > :59:51.the 1970s has grown in size and scope. That is where the controversy
:59:52. > :59:57.comes in. People might have thought they were joining a trading market
:59:58. > :00:05.but it has become bigger th`n that. Are these elections a mini
:00:06. > :00:13.referendum about being in or out, in a sense? Officially, no. But the
:00:14. > :00:17.reality is that that is how most voters will see it. The
:00:18. > :00:23.Conservatives will try to sound sceptical about Europe, votd for us,
:00:24. > :00:26.you will get a referendum in a few years time. The Liberal Democrats
:00:27. > :00:30.and Labour will be saying there should be changes made, but broadly
:00:31. > :00:41.they are happy with Europe `nd they would like to stay.
:00:42. > :00:46.Thanks. And that is it from us. We are back in the studio next Sunday.
:00:47. > :00:50.If you would like to follow us on Twitter, we have put up somd
:00:51. > :00:54.pictures of our adventures hn Europe. And if you would like to see
:00:55. > :00:55.the programme again, you can see it on the eye play.
:00:56. > :01:01.industrial action is a sign of failure marked success. -- not
:01:02. > :01:13.success. Andrew, back to you. Has George Osborne got a rabbit in
:01:14. > :01:17.his Budget hat? Will the Chancellor find a way to help the squeezed
:01:18. > :01:25.middle? And how do Labour respond? All questions for The Week Ahead.
:01:26. > :01:29.And joining Helen, Janan and Nick to discuss the budget is the general
:01:30. > :01:34.secretary of the Trades Union Congress Frances O'Grady. Welcome
:01:35. > :01:37.back to the programme. I know the TUC has a submission, but if you
:01:38. > :01:43.could pick one thing that you wanted the Chancellor to do above all, what
:01:44. > :01:47.would it be? We want a budget for working people, which means we have
:01:48. > :01:53.to crack the long-term problem of investment in the British economy.
:01:54. > :01:59.Certainly I would like the Chancellor to merit that title they
:02:00. > :02:02.want of the new workers party, and take action on living standards but
:02:03. > :02:12.if they're going to do that it's got to be about unlocking investment. In
:02:13. > :02:15.the period where the economy has been flat-lining there has been
:02:16. > :02:19.little business investment, but there are signs towards the end of
:02:20. > :02:25.last year that it is beginning to pick up. But a long way to go. The
:02:26. > :02:28.problem is we have key industries like construction and manufacturing
:02:29. > :02:34.that are still smaller than they were before the recession. The
:02:35. > :02:40.government itself, of course, has slashed its own capital investment
:02:41. > :02:43.budget by half. There is plenty of good and important work that needs
:02:44. > :02:49.to be done from building houses to improving the transport system, to
:02:50. > :02:54.improving our schools. And the government really needs to pick up
:02:55. > :02:58.that shovel and start investing in our economy to get the decent jobs
:02:59. > :03:03.we need, the pay increases we need, and that in itself will help
:03:04. > :03:09.stimulate demand. It was Alistair Darling who cut in 2011, and it s
:03:10. > :03:14.interesting that Ed Balls in his plans for the next parliament would
:03:15. > :03:17.run a current budget surplus by the end of the parliament as opposed to
:03:18. > :03:22.George Osborne who would have an overall budget surplus. That gives
:03:23. > :03:25.Ed Balls or -- more wriggle room to do what you talk about, but he is
:03:26. > :03:28.reticent to talk about it. He does not want to say that he has an
:03:29. > :03:32.opportunity to spend on investment because he fears if he says it he
:03:33. > :03:35.will be attacked by the Conservatives for being
:03:36. > :03:42.irresponsible. Why is business doing this? The recession was deeper than
:03:43. > :03:48.any since the war and the recovery was slower than almost any since the
:03:49. > :03:53.war. The lag, the time it takes to get over that is longer than anyone
:03:54. > :03:57.expected. I read the same evidence as you towards the end of last year
:03:58. > :04:02.pointing to money being released, and it depends what it is released
:04:03. > :04:06.on, whether it is capital investment or bringing in people on higher
:04:07. > :04:11.wages. The one surprise in the downturn is how well the employment
:04:12. > :04:14.figures have done, but they have not invested in new capacity and they
:04:15. > :04:19.are sitting on a lot of dosh. I looked at one set of figures that
:04:20. > :04:24.said if you took the biggest company in Britain, they have about 715
:04:25. > :04:29.billion pounds in corporate treasury -- the biggest companies. I think
:04:30. > :04:35.it's reduced a little but they are sitting on a mountain in dash of
:04:36. > :04:39.skills. Yes, but they're not investing in skills, wages, or
:04:40. > :04:44.sustainable jobs. The new jobs we have seen created since 2010, the
:04:45. > :04:49.vast majority of them have been in low paid industries, and they are
:04:50. > :04:52.often zero hours, or insecure, or part-time. So it's not delivering a
:04:53. > :04:58.recovery for ordinary working people. Government ministers, as you
:04:59. > :05:02.know when you lobby them, they are anxious to make out that they know
:05:03. > :05:07.the job is not done and the recovery has just begun, but the one bit they
:05:08. > :05:12.are privately proud of, although they can't explain it, is how many
:05:13. > :05:16.private-sector jobs have been created. A lot of unions have done
:05:17. > :05:19.sensible deals with employers to protect jobs through this period,
:05:20. > :05:25.but it's not sustainable. The average worker in Britain today is
:05:26. > :05:32.now ?2000 a year worse off in real terms than they were. On a pay
:05:33. > :05:40.against price comparison? It doesn't take into account tax cuts. The
:05:41. > :05:47.raising of the personal allowance is far outweighed by the raising VAT.
:05:48. > :05:50.Does the raising of the threshold which the Lib Dems are proud of and
:05:51. > :05:55.the Tories are trying to trade credit for, does it matter to your
:05:56. > :06:00.members? -- take credit for. It matters that it is eclipsed by the
:06:01. > :06:03.cuts in benefits and know what is conned any more. We're going to hear
:06:04. > :06:09.a lot about the raising of the allowance, but as long as the real
:06:10. > :06:13.value of work, tax credits, things like that, people won't feel it in
:06:14. > :06:17.their pocket, and they will find it harder and harder to look after
:06:18. > :06:20.their family. When you look at the other things that could take over
:06:21. > :06:25.from consumer spending which has driven the recovery, held by house
:06:26. > :06:28.price rising in the south, it is exports and business investment and
:06:29. > :06:32.you look at the state of the Eurozone and the emerging markets
:06:33. > :06:36.which are now in trouble, and the winter seems to have derailed the US
:06:37. > :06:43.recovery. It won't be exports. Indeed, the Obie Eich does not think
:06:44. > :06:48.that will contribute to growth until 2015 -- OBI. So the figures we
:06:49. > :06:55.should be looking at our business investment. And also the deficit.
:06:56. > :06:59.The deficit is 111 billion, and that is a problem, because we are not at
:07:00. > :07:03.the end of the cutting process, there are huge cuts to be made. I
:07:04. > :07:06.understand we are only a third of the way through. That will
:07:07. > :07:10.definitely affect business confidence. It is clear that the
:07:11. > :07:14.strategy has failed. Borrowing has gone up and it's not delivered
:07:15. > :07:21.improved living standards and better quality jobs, so cutting out of the
:07:22. > :07:24.recession is not going to work. The structural budget deficit was going
:07:25. > :07:31.to be eliminated three weeks today under the original plan. They missed
:07:32. > :07:36.target after target. Every economist has their own definition of that. I
:07:37. > :07:41.think Mark Carney is right when he says that fundamentally the economy
:07:42. > :07:45.is unbalanced and it is not sustainable, growth is not
:07:46. > :07:51.sustainable. But if it clicked on, it would be more balanced. It is not
:07:52. > :07:55.just north and south and manufacturing a way out with
:07:56. > :08:01.services, but it is also between the rich and everybody else. What do you
:08:02. > :08:03.make of the fact that there will effectively be another freezing
:08:04. > :08:11.public sector pay, or at least no more than 1%? Not even that for
:08:12. > :08:16.nurses and health workers. But they will get 3% progression pay. 70 of
:08:17. > :08:20.nurses will not get any pay rise at all. They get no progression pay at
:08:21. > :08:26.all. I think this is smack in the mouth. Smack in the mouth to
:08:27. > :08:31.dedicated health care workers who will feel very, very discontented
:08:32. > :08:36.about the decision. Danny Alexander, I saw him appealing to
:08:37. > :08:42.health workers do not move to strike ballots and said they should talk to
:08:43. > :08:48.their department. But about what? Is that real pay cut has been imposed,
:08:49. > :08:54.what are workers left with? So do you expect as a result of yet more
:08:55. > :08:59.tough controls on public sector pay that unrest is inevitable? I know
:09:00. > :09:04.some unions will be consulting with their members, but ultimately it's
:09:05. > :09:08.always members who decide what to do. It does seem to me insulting not
:09:09. > :09:17.to at least be honest and say that we are cutting real pay of nurses,
:09:18. > :09:20.health care workers, on the back of a ?3 billion reorganisation of the
:09:21. > :09:28.NHS that nobody wanted and nobody voted for. Their long-term changes
:09:29. > :09:32.taking place here that almost talks about -- there are long-term
:09:33. > :09:39.changes. It is how lower percentage wages have become of GDP on how big
:09:40. > :09:44.the percentage of profits is. It seems to me there is a strong case
:09:45. > :09:49.for some kind of realignment there. The biggest event of my life, in
:09:50. > :09:52.this world, is the entry of a couple of billion more people into the
:09:53. > :09:56.labour supply. At the end of the Cold War, India and China plugged
:09:57. > :10:00.into the global economy. If there is a greater supply of that factor of
:10:01. > :10:05.production, logically you conclude that wages will fall or stagnate and
:10:06. > :10:08.that has been the story in this country and America and large parts
:10:09. > :10:12.of Western Europe in the last generation. What is not possible is
:10:13. > :10:16.for governments to do much about it. They can ameliorate it at the
:10:17. > :10:19.margins, but the idea that the government controls living
:10:20. > :10:22.standards, which has become popular over the last six months, and the
:10:23. > :10:28.Labour Party have in establishing that, and I don't think it's true.
:10:29. > :10:32.George Osborne's options are astonishingly limited compared to
:10:33. > :10:37.public expectations. If wages have reached a modern record low as
:10:38. > :10:43.percentage of GDP, who is going to champion the wage earner? We have
:10:44. > :10:48.lost Bob Crow, Tony Benn passed away, so who is the champion? The
:10:49. > :10:53.trade union movement is the champion of ordinary workers. We need those
:10:54. > :11:00.larger-than-life figures that we will mess. Have you got them yet? We
:11:01. > :11:05.have a generation of workers coming through. One thing about the loss of
:11:06. > :11:08.Bob Crow is that the whole union movement has responded strongly to
:11:09. > :11:12.that, and we want to say that we are strong and united and here to stand
:11:13. > :11:16.up for working people and we will fight as hard as Bob Crow did.
:11:17. > :11:20.Whoever replaces Bob Crow or Tony Benn, we can be sure they will not
:11:21. > :11:24.come from Eton because they all have jobs in the government. I want to
:11:25. > :11:26.put up on the screen what even Michael Gove was saying about this
:11:27. > :11:40.coterie of Old Etonian 's. He's right, is he not? He's
:11:41. > :11:46.absolutely right. We have the idea of the manifesto being written by
:11:47. > :11:53.five people from Eton and one from Saint Pauls. A remarkable example of
:11:54. > :11:55.social mobility that George Osborne, who had the disadvantage of going to
:11:56. > :12:04.Saint Pauls has made it into that inner circle. Here is the question,
:12:05. > :12:07.what is Michael Gove up to? If you saw the response from George
:12:08. > :12:10.Osborne, there was no slap down and they know this is an area they are
:12:11. > :12:15.weak on an David Cameron will not comment on it. If this had been a
:12:16. > :12:19.Labour shadow minister making a similarly disloyal statement, they
:12:20. > :12:22.might have been shot at dawn. But there is a real tolerance from
:12:23. > :12:26.Michael Gove to go freelance which comes from George Osborne. It's
:12:27. > :12:30.about highlighting educational reforms that he wants to turn every
:12:31. > :12:33.school in to eat and so it won't happen in the future. But it's also
:12:34. > :12:37.pointing out who did not go to Eton school and who would be the best
:12:38. > :12:41.candidate to replace David Cameron as leader, George Osborne, and who
:12:42. > :12:45.did go to Eton school, Boris Johnson. Michael Gove is on
:12:46. > :12:52.manoeuvres to destroy Boris Johnson's chances of being leader.
:12:53. > :12:58.It's a good job they don't have an election to worry about. Hold on. I
:12:59. > :13:01.think they are out of touch with businesses as well as working
:13:02. > :13:05.people. You ask about who is talking about wage earners. Businesses are.
:13:06. > :13:10.They are worried that unless living standards rise again there will be
:13:11. > :13:16.nobody there to buy anything. We are running out of time, but the TUC,
:13:17. > :13:21.are enthusiastic about HS2? We supported. We think it's the kind of
:13:22. > :13:25.infrastructure project that we need to invest in long-term. He could, if
:13:26. > :13:30.we get it right, rebalance north and south and create good jobs along the
:13:31. > :13:36.way -- it could. Thank you very much tool. I have to say that every week
:13:37. > :13:40.-- thank you very much to you all. That's all for today. I'll be back
:13:41. > :13:45.next Sunday at 11am, and Jo Coburn will be on BBC Two tomorrow at
:13:46. > :13:46.midday with the Daily Politics. Remember if it's Sunday, it's the
:13:47. > :13:49.Sunday Politics.