19/11/2017 Sunday Politics West

Morning everyone, and welcome

to the Sunday Politics.

I'm Sarah Smith.

And this is your guide

to all the big stories that

are shaping politics this weekend,

and a few of the smaller ones too.

Philip Hammond is getting ready

to deliver his latest Budget

on Wednesday and he's not short

of advice - to spend more,

show restraint, even

to stop being an Eyore -

but can he change the direction

of the country and his government?

Conservative Party darling

Jacob Rees-Mogg has

some advice of his own.

He thinks the Chancellor

is being far too gloomy about Brexit

- he joins me live to explain why.

The former Leave campaign leader,

Gisela Stuart, will be here debating

with pro-EU campaigner

Alastair Campbell, after taking

a trip to her native Germany

to speak to businesses

about Brexit.

And, as we wait to find out what's

on the menu for this week's budget,

we're in a diner off

the A1 in Peterborough,

finding out who people most trust

with the economy -

Philip Hammond or John McDonnell?

In the West: A hand

up or a hand-out?

Foodbanks say they're

expecting a busy Christmas -

but is the Government's new benefit

system making things worse?

All that coming up in the programme.

And with me for for all of it,

three journalists who've promised

not to show off like Michael Gove

by using any long economicky words -

although I'm not sure they really

know that many anyway -

it's Tom Newton Dunn,

Gaby Hinsliff and Iain Martin.

Let's take a look at the big

political stories making the news

this Sunday morning,

and as you might expect there's

plenty of speculation

about what might or not might be

in Philip Hammond's Budget.

The Chancellor is promising a big

investment in new technology,

including driverless cars -

which could be on the road by 2021.

He's been interviewed

in the Sunday Times,

where he talks about plans to reach

the target of building

300,000 homes every year,

or the equivalent of a city

the size of Leeds.

That paper speculates that he's

attempting to turn from "fiscal

Phil" into "hopeful Hammond"

as he tries to set out

a vision for the country,

not just a list of numbers.

The Sunday Telegraph thinks that

Mr Hammond is planning to offer

a pay rise to nurses as part

of a bid to take on Labour.

But that hasn't impressed

Shadow Chancellor John McDonnell.

He's spoken to a number of papers

and is calling for an emergency

budget to invest in public services

and help struggling households.

So that's a taste of what you might

hear on Wednesday and Mr Hammond

and Mr McDonnell have both been

appearing this morning

on the Andrew Marr Show.

I think Britain has a very

bright future ahead of it,

and we have to embrace

the opportunities that

a post-Brexit world will offer.

They will be opportunities that

are based on huge change,

huge technological evolution.

It's not always going to be easy,

but the British people have shown

time and time again that we're up

for these challenges.

For many people out there,

this is a depression.

We've had people whose wages

have been cut by 10%.

Nurses, for example.

We've had people who are now...

1.25 million food parcels handed out

in the sixth richest

country in the world.

That's what I call a recession

for large numbers of people.

We will be talking about Labour and

their economic policies in a moment,

but let's start with what we might

expect from the budget. We will talk

to our panel of political observers.

Philip Hammond is under pressure to

set out a bold vision and reset the

government's programme. Can we

expect that?

No, we can't. We have

heard enough from the Chancellor

across various broadcast and his

article in the Sunday Times. I think

we will not be getting a bold

budget. His precise words short... A

short time ago were a balanced

budget. Some Tory hearts will think.

They desperately want something to

go out and shout about, something to

capture people's imagination, and do

big and bold things, like how on

earth are they going to build those

new 300,000 houses a year? There are

good reasons why he has chosen what

appears to be a pretty staid,

Conservative budget, and that is

that they are probably unable to get

anything bold through Parliament.

His capital is so low among Tory

MPs. If you have a minority

government, it is tricky.

We have

seen ministers on programmes like

this in the last few weeks putting

in the bids for what they would like

spending on, whether it be payment

for nurses or parliament. Would he

struggled to get something radical

through the Commons?

Big ideas cost

money. That's the problem. Bold

ideas are controversial. In some

ways, Tory MPs are asking their

Chancellor to do the impossible.

Government is already doing

something big and bold, which is

Brexit. That has implications for

how much money is available, how

many risks you want to take with

everything else. What is crucial is

that he demonstrates a reputation

for competence. The reputation that

the Conservative government has for

economic competence, that many

people prefer them to Labour on the

issue of economic competence. The

worst thing he could do is come up

with a big, bold idea that

unravelled quickly. What they

absolutely don't want is to come up

with an exciting idea that falls

apart three days after the budget.

He is under pressure from

Brexiteers, who are suspicious of

him. Does he have to offer them

something?

Part of his problem is he

has to offer so many different

people different things. This is

Philip Hammond trying to be and

dynamic.

It is hard to tell

sometimes.

At least in theoretical

terms. His longer-term difficulty is

that, if you look at the economic

cycle, we are getting to a point

where we are probably overdue, if

you put Brexit to one side, overdue

some kind of correction or downturn,

if you look what has happened to

asset prices globally. What will be

worrying for the Treasury is, just

as everyone is saying we should turn

on the taps and build this or that,

we might be at the top of a cycle,

and the Treasury will want to lose

something in the armoury in terms of

probably growing the deficit if

there are economic difficulties in

the next two years, and then there

is Brexit as well.

It sounds

impossible.

I think so. Talking to

his friends and colleagues over the

last few days, he had to make a

call, which was precisely how much

can I get away with, with my

political capital being as low as it

is, with the mixed problems he had

at the last budget, and a lot of the

party disliking his approach to

Brexit. He is damned if he is,

damned if he doesn't. Universal

Credit, we are expecting a reduction

in the time it takes to wait,

business rates, affected by high

inflation... I think we will see a

problem fixing budget which will

probably do quite a lot of important

spadework in many areas.

We will

pick up on some of this later in the

programme.

Let's speak now to the Conservative

MP Jacob Rees-Mogg, this week

he helpfully launched an alternative

"budget for Brexit" and advised

the Chancellor to be less gloomy

about the consequences

of leaving the EU.

Thank you for joining us. Your

alternative budget is pretty

radical. Almost half corporation

tax, Cap Stamp duty to help the

London market. It seems you are

advocating the opposite from what we

will hear from your Chancellor on

Wednesday.

There are two parts to

the proposals I suggested. One is

that we should show that after we

have left the European Union, the UK

is open to the rest of the world. It

is about opening up to the rest of

the world. Secondly, looking at the

modelling that has been done by the

Treasury and some other forecasters,

which has been so comprehensively

wrong. The forecasts made about what

would happen after Brexit have

turned out to be hopelessly false.

The team at Cardiff University have

done some modelling based on the

classical economic principles and

what happens if you move to free

trade that would be very positive

for the economy.

You are predicting

a Brexit dividend of £135 billion,

which sounds fantastic. Why are you

right, and everybody else, including

the Bank of England and the

Institute for Fiscal Studies, why

are they all wrong?

It depends on

the type of modelling. The modelling

that have been done by the Treasury

have been based on gravity models,

which work on the basis of the

nearness of the market and the size

of the economy you are trading with.

These have been wrong in the past.

They predicted that if we joined the

euro, trade would grow by 300%. That

was then revised down to 200%, but

it is fantasyland. The model I am

working on, by Sir Patrick Minford,

who has a record of getting these

things right. He was right about the

exchange rate mechanism, right about

the euro.

Being right in the past

doesn't mean you are right about the

future. Why do you think the

Treasury will not pick up the same

numbers, if this is so obvious to

you?

I think the Treasury was

humiliated by the errors in its

forecast prior to Brexit, and is

trying to defend its position. The

short-term economic consequences of

a vote to leave was one of the most

dishonest documents to come out of

the Treasury, purely a piece of

political propaganda. They are

wounded by that and sticking to the

same script, rather than looking at

other forecasts and other experts.

You think the governor of the Bank

of England is an enemy of Brexit,

and it sounds like you think the

Treasury is opposed to it. As the

Chancellor fallen under their spell

as well, and been persuaded to be an

enemy of Brexit?

I have admiration

the Chancellor, but George Osborne,

his predecessor, was the architect

of Project Fear. He was too close to

the Bank of England and lost his

independence. That is what needs to

change. It is an opportunity in the

budget for Philip Hammond to show he

is putting aside the Treasury's

mistakes in the past. It is very

encouraging what he is saying this

morning, about a more positive

approach to Brexit.

Lord Lawson has

accused Philip Hammond of being very

close to sabotage on Brexit. He says

we need a can-do man at the Treasury

and not a prophet of doom.

I think

that Philip Hammond is an

exceptionally intelligent man, a

very thoughtful man. It is not a bad

thing to have a Chancellor who is

serious minded and steady, rather

than one who is a showman and uses

the Exchequer to interfere in

absolutely everything.

I have a lot

of confidence in the Chancellor.

When you launched your budget for

Brexit, you said the government has

to deliver the £350 million for the

NHS that was delivered during the

referendum, even though you didn't

think that promise should have been

made. Is that something they now

need to deliver wrong?

It is. This

only happens once we have left.

Politicians have to recognise that

voters don't look at the small print

of electoral policies. If you put

£350 million on the side of a bus

and say it may be available for the

NHS, it is reasonable for people to

think that is a promise. Brexit was

won by the Leave campaign, so it it

is important that they deliver on

that promise. Politicians must keep

faith with voters and deliver on

implied promises, as well as ones

that are set out in detail.

The

Cabinet will move on to talk about

the Brexit bill this week, and we

understand they may need to come up

with more money to satisfy EU

demands. The more money spent on

that is less money available for

things like spending on the NHS. Are

you worried about the size of the

exit bill?

You have your finger on

the important point. The government

will have to choose whether to give

lots of money to the European Union,

or whether to spend money on UK

public services, and that will be

part of the negotiation. On all

these issues, it comes down to

choice is the government makes. I

would encourage the government to

choose our own domestic public

services rather than expensive

schemes in continent or Europe.

Why

are you advocating that the

government should spend up to £2.5

billion on a no deal scenario?

It is important that we are ready to

leave in the event of no deal. If we

left with no deal we would on

current figures still be saving the

remains of 18 billion so we would be

saving 15 and a half billion against

paying for the financial framework.

To show we're ready on day one would

be money well spent and most would

be needed any way. We need to have

new customs arrangements in place

even if it is not for a no deal

situation.

There are suggestions

that the Government might back down

on the idea of putting the time and

date of leaving the EU on the face

of the bill. Would you be Exxon

certained if that was -- concerned

if that was remove prd the bill?

It

is in Article 50, unless Article 50

is extended by the Council of Europe

we leave on 20th March 2019 and it

makes accepts that should be the

same in -- sense that should be in

same in domestic law. But that is a

secondary concern from my point of

view. It is important that we leave

on that date.

Stay there if you

would.

We're joined in the studio

by the former minister

Stephen Hammond.

He's no relation to the Chancellor,

but he is a member

of the Treasury Select Committee

and he's one of the Tory MPs named

as "Brexit mutineers"

by the Daily Telegraph

this week - lucky him.

I'm assured you're no relation to

the Chancellor. Let's just pick up

on what Jacob Rees Mogg was saying.

How important is it to you as a

rebel that the Government does put

the date on.

I agree with Jacob it

is in the Article 50 process, the

key reason it is important is the

negotiations look like they're going

to be tricky and longer than we

expected and it may well be that we

are still negotiating up until March

2019. We could have a short couple

of weeks period of extension. Why do

harm to the economy by falling out

on a precise time? If those

negotiations need to be extended.

They won't go on for more than a

couple of weeks, because there will

be elections in Europe in June 2019

and there is no chance of a new

commission or Parliament dealing

with this. Giving it flexibility and

with this flexibility the government

said it wants flexibility in

negotiations, why give all the

advantage to the other side? Part of

that was evidenced yesterday by

somebody suggesting they will ask

for the Margaret Thatcher rebate to

be suspended. That is as a result of

putting the date on the bill.

You

did not agree with the Brexit

committee and think it is important

that we set the date and time?

I

think it is perfectly reasonable to

set the date and time and I think

these negotiations fill the time

available. The United States and

Australia agreed a free trade deal

between April 2003 and February

2004. These things don't need to be

interm Knabl if both sides want to

agree. I think the British

electorate would be very concerned

if nearly three years after the vote

to leave, we still hadn't left. I

think most people expected that we

would have left by now. The

negotiations realistically to get

through the approval of the European

Parliament and so on need to be

completed by at the end of next

year, going up to the last minute I

don't think is real is tick.

To move

on to talk about a trade deal and

getting that done, the EU need to

agree to move on and we need to

settle the divorce, cabinet are

going to be talking about the amount

that needs to be spent on that,

Stephen what manned, are you happy

for the Government to offer more?

I

hope that the Government will stick

to the Florence speech in terms of

ensuring that we fulfil our

liabilities and obligations. I'm not

clear exactly whether that is 20

billion or 40 billion and I'm not

sure the government is. If part of

the divorce bill is then some

settlement for getting the trade

deal, we will need to examine that

carefully.

Jacob Rees Mogg, is this

that might spark another war in the

party if the cabinet suggest they're

prepared to pay more?

I think we

need to go back to what you said,

that the - the EU said they want us

to settle the money first. The

Government doesn't need to follow

that. They need our money. If we

don't pay any money for the final 21

months of the framework, the EU has

about 20 billion pounds gap in its

finances and it has no legal

requirement to borrow. So it

insolvents or the Germans and the

others pay more. So our position on

money is very strong and we

shouldn't fall into the trap of

thinking just because Mr Barnier

said it it is as if he has received

tablets of stone like Moses, he has

not.

There is a sense that the

Government feels a mo generous offer

would set a good tone, the kind of

approach that Jacob Rees Mogg

suggests would not make for smooth

relations.

It probably wouldn't. But

we have to be clear what we are

paying for and what we are getting.

No one is suggesting we should hand

over money without proper scrutiny.

It may be appropriate to put money

to facilitate international trade to

secure jobs. We have to be careful

about the analysis about what the

scale and size of Brexit dividend is

and the size of payments will be.

You mustn't confuse gross and net

and there is disagreement about some

of the numbers.

On that, Jacob Rees

Mogg in his budget for Brexit

suggests in five years time we would

have a 135 billion Brexit bonus. Do

you think it is real is tick.

He is

using some analysis that has some

flaws. It is predicting a price drop

in the United Kingdom of 10%. Tariff

drops will only be 3 or 4%. It is

predicting huge productivity gains,

the likes of which we have not seen

in 20 years. Thirdly, despite his

view on modellers there is evidence

that they weren't and if you go into

the detail of the analysis, some of

the data is 14 years out of date.

Jacob Rees Mogg, you're being

hopelessly optimistic?

I don't think

that right. I think the fall in

prices comes because you make the

economy more competitive and you

take away tariffs which reduces the

price of food by 20%. That is a big

reduction. Bear in mind that the

biggest tariffs hit food, clothing

and foot wear that, harm the poorest

in society the most. The gains from

productivity come from is in

additional tariffs. Leading to other

saving and further investment I

think the modelling done by the

professor is as good as modelling

can be. That doesn't mean it is

infallible. The failure of gravity

model is well known.

Michael Gove

was accused of auditioning for the

job of Chancellor by using long

words. Do you know any good long

economic words?

I don't think that

we want to get into this type of

business actually. I think all

Conservatives and Steven and I very

much agree on this, want to show as

united a front as we can manage.

There are differences on some

aspects of policy, but in terms of

individuals we want to stand

together and support the best

interests of the government.

Thank

you.

Brexit Secretary David Davis

was in Berlin this week trying

to win the support of business

leaders there for a comprehensive

free trade deal with the EU.

He warned them against putting

'politics above prosperity'

and reportedly got a bit

of a frosty reception.

Well, the former Labour MP

Gisela Stuart was one of the leaders

of the Vote Leave referendum

campaign.

We travelled with Gisela to Germany

to meet the business leaders

she says will help secure a good

trade deal for the UK.

Here's her film.

I was born and brought up

in this part of Germany,

and although I've lived in the UK

for the past 40 years,

and represented the constituency

of Birmingham and Edgbaston for 20

years, my family still live here,

and I've kept many links.

I was chair of Vote Leave,

and together with only a handful

of other Labour MPs,

we campaigned to leave

the European Union because we

thought the country would be

better off outside.

It's hard to remember now, but back

in the 1970s, when we joined

the European Economic Community,

people thought that by joining

the club we would see the kind

of economic miracle Germany

experienced in the '70s back home.

The "Deutsche Wirtschaftswunder"

would come to Britain.

But, of course, it didn't.

Within a few short years

of the devastation of World War II,

Germany had emerged as

the largest economy in Europe.

Germany's extraordinary

success is down to

the pragmatism of its business.

German Mittelstand is family

dominated, forward-thinking,

long-term thinking, reliability,

are very important values.

Changing moods on a political

landscape and changing frameworks

are toxic for our way of doing

business, and we want

that to go away.

German business is not given

to making big political statements

out of step with government policy,

but talk to those in decision-making

positions, and it is clear

that they want to secure a good deal

with the United Kingdom.

BMW employs almost 90,000

people here in Germany,

and exports just under

1 million cars annually.

The UK is a vital market.

What we are really seeking right now

is more clarity, more certainty,

because in our cycle of investment,

cycle of development,

it's about a seven-year or so period

that we look at,

but we are now, of course, starting

to think about what comes next,

and what we need to see now

is what is going to be

the trading relationship,

how are the logistics going to look,

what is going to be

the requirements for people

moving across the continent?

Because all of these things

are important to us today.

And, by the way, they will be just

as important tomorrow.

Berlin is well aware that

if the European Commission

is allowed to put up trade barriers

against Britain, it will be

German business, German consumers

and German employees

who will suffer.

TRANSLATION:

I think it's very

important that we complete

the first phase successfully.

The first phase of the negotiations,

which looks at the financial

consequences of Great Britain

leaving the EU.

And then it's not a question

of punishment payments.

It's about when you are part

of a multilayer, contractual

obligation and you want to leave

that, then of course it takes

a whole lot of obligations

which you have to deal with,

so both sides are satisfied and can

live with the consequences.

It isn't everyone's interests

for the UK to part on good terms.

Of course there was going to be

upset when the UK voted to leave,

but creating uncertainty over

the terms of UK's exit will simply

have a disruptive effect

on exports to UK markets.

Far better to have a sensible,

amicable negotiation that results

both sides being able to trade

together and work

together post-Brexit.

Markus Krall is managing

director of Goetzpartners,

and heads the Financial

Institution Industry Group.

Is it true to say that,

if we negotiate Brexit well,

then a good Brexit can actually

strengthen the United Kingdom,

the European Union and Germany?

It's absolutely true.

I think that this

is about two things.

One, about proving that

free trade is possible

between a European Union that is

smaller and a former member country.

If you don't prove that free

trade is possible there,

then the question becomes,

what is Europe standing for?

Number two is, I also

believe the free trade,

free market and democratic and less

bureaucratic approach that Britain

has chosen as the path

into the future is a role

model for Europe.

The time has come both

for the United Kingdom

and for the EU to be more clear

about what kind of

deal we can achieve.

Both sides need to be bold.

As long as we remain open to free

trade and sensible co-operation,

we can arrive at something that

will benefit both sides.

But one thing's obvious -

if we are an open and free trading

economy, we've got one big

cheerleader on our side,

and that is German business.

That was Gisela Stuart

setting out her case

and we'll be hearing

from the opposite side

of the argument in the coming weeks.

Gisela Stuart joins us in the studio

now, as does Alastair Campbell.

He used to work for Tony Blair

in Number 10, set up

the New European Newspaper

to campaign against Brexit,

and is so pro-European that at this

year's Labour conference

he was heard playing Ode

to Joy on the bagpipes.

Welcome both of you.

We will start with your point in the

film, that you think the German

business once the EU to offer the UK

a generous deal because it is in

their interests, yet the president

of the German equivalent of the CBI

said that defending the single

market must be the priority for the

EU, and another says that the

cohesion of the remaining member

states remains the highest priority.

The president of the CBI just after

the referendum said that it would be

in nobody 's interest to introduce

tariffs and trade barriers. On the

UK side, I don't think there's a

full understanding that economic

interests are incredibly important,

that they are trying to cover

economic interests on the cohesion

of the 27. I think different

economic interests will raise the

head of different countries. The

German auto industry is as important

as the financial sector is here. The

banking crisis is far from over, but

the big riffs which were going on is

that the E U is losing its second

biggest net contributor. Countries

like Germany want a deal with the UK

that is a free open market. There

are other tensions in the EU that

wants to become more protectionist,

and that is a bad thing.

Looking at

the film there with the Jacob

Rees-Mogg interview. No matter what

side of leave you are, it is

delusional and all driven by wishful

thinking. You could find a

businessman who says Brexit will be

good for Germany. The vast bulk of

British businesses think this is a

disaster, as do the vast bulk of

European businesses. One of the

delusions on which they ran their

campaign is the idea that they need

us more than we need them. That is

not true.

Be you self about £80

billion more in goods and services

into the UK than we do to them, and

Germany has one of the biggest

deficits. It is in their interest.

Of course it is, but it is a myth

that they need us more than we need

them. The damage that will be done

to us, even with a good deal. Let's

be frank, where these negotiations

are, Theresa May is either going to

end up with a bad deal and dumber or

no Deal. A bad deal is bad, and a no

deal is a catastrophe.

You are

setting up ideas that which were not

there to begin with and knocking

them down. Delusional.

35 billion,

the Brexit bonus.

If we had a

referendum, it was a democratic

decision. I know you don't like it

and that a lot of business would

have preferred to stay with the

status quo. We have had the

referendum. Undermining political

institutions is in no one's

interests. It is functioning

democracies which lead to economic

stability.

Theresa May fought an

election Inc on a hard Brexit that

was rejected.

As we heard from BMW,

there is uncertainty for business.

There will be elections, European

elections, in 2019. There will be a

change of the Commission and the

parliament. We have a narrow window

to implement the mandate for the

referendum which Parliament voted

for. So rather than you undermining

this country, why don't you work

together to get the best deal?

Because we totally disagree.

You

don't want a good deal?

I'm in

favour of a good deal, and I could

give them some advice as to how they

get a good deal. First, you have a

cabinet that has an agreed strategy.

18 months in, they don't have that.

I am not undermining a deal. I am

continuing to pose questions about

what they are trying to do and how

they are trying to do it. This is

democracy. Democracy is the ability

for Parliament, which is not doing

its job properly, and the public, to

keep scrutinising, and if they want

to change their mind, having the

right to do that.

You were trying to

encourage the Taoiseach yesterday to

play hardball with the UK.

I am on

the side of the UK, and I am worried

that if we go down the path that we

are being taken down, and Theresa

May and Boris Johnson and the rest

of them, this shambolic path, we are

going to do fundamental, lasting

damage to the country we love. I

don't care about the Civil Aviation

Authority. I care about Britain. --

I don't care about the European

Union. If every lorry going into the

UK today was stopped for just two

minutes, we would create an instant

17 mile traffic jam. These people

just don't care...

I am not these

people! Let us not conflate... You

either decide that you are

implementing a democratic decision

of a referendum that was called and

over 17 million voted.

You will not

stop me debating it. Just as Nigel

Farage...

Stop talking about Nigel

Farrell Raj. Vote Leave was not

Nigel Farage. There is no desire in

Germany to punish the United

Kingdom.

They are behaving

reasonably.

There is a battle of

protectionism and free market going

on. If we implement this properly,

give businesses the kind of

incentives they want, we can get a

good deal. So you want a bad deal?

You are driven by wishful thinking.

Gisela Stuart, you are saying that

business will intervene to prevent

things like tariffs being put in

place? They are leaving it a bit

late to put pressure on.

You will

find that business is laying out the

kind of things they need to get

those deals. I can find as much

fault with the speed of the

progress, but what I really do

resent is that you are actually

encouraging other countries to

undermine...

Know I am not! I spoke

out in support of the Irish

Taoiseach because I spent a lot of

time with Tony Blair and his team on

the Good Friday Agreement. The

people who are driving this hard

Brexit without thinking it through,

still no answer on how you do Brexit

in our island without a hard border.

I think the Irish Taoiseach is right

to call out the government on the

incompetence and the fact they have

not thought it through.

You accept

the result of the referendum and the

fact that we will be leaving the EU?

I accept the result of the

referendum, but I do not accept that

the country will definitely leave,

because the country is entitled to

change its mind. As the chaos and

costs mount, the public is entitled

to change its mind and will change

its mind.

There is no evidence at

the moment.

Come out with me!

Allow

me to finish the sentence. There is

a changing of mind happening, a

crystallisation. Unlike you, I have

fought five elections and I have won

five elections. I have probably

spoken to more people like you.

You

may do, I'm just saying, come out on

the road with me...

40% of the

population in the middle just want

us to get on with it. What that film

showed is that if you want to make

it a self-fulfilling prophecy that

it's a disaster, which I don't. I

want to implement a deal that is

good for British jobs. The rest of

the world is changing in terms of

technology. Currently, Germany

hasn't even got a government, and

nobody is laughing about that.

And

they are stable without a

government!

Let's leave it there.

It's coming up to 11.40,

you're watching the Sunday Politics.

Coming up on the programme,

we'll be looking at the latest

opinion polls and we'll bring

you the results of our moodbox

asking whether Phllip Hammond

or John McDonnell should be running

the economy.

Good morning and welcome

to a live edition of

Sunday Politics here in the West.

Coming up: To fund or not to fund?

Austerity has meant big

cuts in grants for local

arts organisations.

But should our taxes be

funding the arts at all?

I'm joined by two politicians

who have promised dramatic

performances this morning.

They are the Conservative MP

for Salisbury, John Glen,

and the Labour MP for Stroud,

David Drew.

Welcome to you both.

First, the papers are full

of all sorts of speculation

about next week's budget.

And the Chancellor was on the Andrew

Marr Show this morning.

He seemed to drop big hints

that he will announce

new measures on house-building.

To start to make inroads on the

affordability problem, we've got to

be sustainably delivering around

300,000 homes a year on average

across the housing cycle. That's a

big step up from where we are now.

There is no single magic bullet and

it's certainly not just about

putting money in because if you pour

money in without fixing other

elements of supply, you will lead to

inflation which makes the problem

worse, not better.

John, what is the average price of a

house in Salisbury?

Too high, too

high for young people to get on the

ladder and that's a challenge across

the country and I'm glad the

Chancellor seems he is going to

include it in this budget.

a

beautiful area, would you welcome

new housing estate in Salisbury?

It's a difficult issue and lots of

people campaign about where new

housing needs to go but the

Chancellor said the issue is not

just about more money it's about the

processes and there are large

numbers of permissions granted

across the country and houses aren't

being built.

Stroud isn't cheap

either, is it? Do you think the

Government can actually deliver and

build houses?

It can, but it can

help local authorities. I have asked

the Government, we have bought our

stock from the Government and we now

have Stroud district council

completely owning the stock. We need

the Government to get off our backs,

allow us to borrow and stop taking

70% from their council houses sold.

We want to borrow to build council

houses goes we need affordable

social housing, not more executive

housing. . We need cheaper houses

for people to rent and buy from the

council but it's got to be at the

lower end of the market. We do not

need more executive housing. That's

the problem.

They make a profit.

Of

course they do, and that's why we've

got to change it.

It's about houses

for young people, lots of young

people are desperate to get on the

ladder and it's about making sure we

put the right incentives in place.

There will always need to be some

council housing. In Salisbury we

have seen new council housing. Quite

a lot. I don't know the exact number

but we have seen more council

housing. It's about a pragmatic

solution, not an ideological view,

and each area has a different

challenge in finding the right site.

I know the Chancellor will know

about the processes as well as the

money.

John Glen, what could

the Chancellor announce that

would help your constituency?

You could get off our backs -- he

could. We want more affordable

social housing and that's where the

pressure has got to be, the state

has got to play its role but we've

got a job house-builders -- we've

got to tell the house-builders.

I

think it is fixing the issues were

permissions granted for planning and

people aren't building. He has to

deliver on that.

Take the land away

from them if they don't use it?

Use

it or lose it. I have been looking

for permissions so that people are

under obligation to build the houses

they have planning permission for.

We need radical solution because

this problem has gone on far too

long.

There's speculation the Government

may be forced into making changes

to its new benefits system.

Universal Credit is presently being

rolled out across the West country.

But in areas like Somerset,

which went first, people say

they have to wait 40 days before

they receive their money.

Here's Paul Barltrop.

In a prosperous town

in one of the world's

wealthiest countries,

a sign of poverty.

At Taunton's foodbank,

they're about to open the doors.

If they have got benefit

changes on their vouchers,

could you just ask them what benefit

they are on and what their date

is for Universal Credit to start?

Staff are all too aware

of the Government's new benefit.

This young family have applied

for it, but it may be six

weeks before the first

payment comes through.

Right now we're trying to get

by because we've just

got Universal Credit,

we've just done all the meetings,

I got one more meeting to do

and then I go to wait at least 40

days is just getting by those

40 days will be hard.

Unemployed Andrew Harvey

is about to be transferred

onto Universal Credit.

It means I've got an extra month

to survive and I may have to survive

at least six to eight weeks before

I have any money to buy any food

or pay any bills and stuff,

which is paid fortnightly.

Will that be difficult?

It will be absolutely

difficult, yeah.

Universal Credit came

to Taunton a year ago.

Since then, the foodbank's seen

the number of people

seeking help jump by half.

We were shocked, actually.

We had an idea that Universal Credit

was coming to the Taunton area

so we were prepared for a small

increase, but nothing

like the figures we've seen.

Personally, it's very difficult

to see people at such a loss of not

knowing what to do and that such

a low ebb, really.

The 50% rise recorded in Taunton

is one of the biggest.

At Bath's foodbank, the year

on year increase is 39%.

Nationally, the Trussell Trust say

they're seeing an average surge

of 30% after Universal Credit

starts rolling out.

That compares with a 12% increase

in areas where it's not yet arrived.

Visiting Bath on Tuesday, the former

Prime Minister Gordon Brown spoke

out not just about how

Universal Credit's being handled,

but also wider cuts

in welfare spending.

They simply have not put

the resources in to do it

and worse than that,

they're cutting £3 billion out

of the amount of social security

expenditure available for poorer

people and therefore it is bound

to be a disaster and it

already is a disaster.

It's been raised

repeatedly in Parliament.

On Wednesday, Labour

again went on the attack,

though the Prime Minister's defence

wasn't quite as robust as before.

There have been concerns raised

in this house previously

over the issue of people

managing their budgets to pay rent,

but what we actually

see is that over...

We see that after four months,

the number of people

on Universal Credit in arrears has

fallen by a third.

Some struggling

claimants end up here.

The roll-out of Universal Credit has

just started in Stroud.

The local Credit Union

is already giving out loans

to tide people over.

But one recipient tells me,

delay aside, the new system

is an improvement.

For me, going on to Universal Credit

is completely changed

my life for the good.

It put the focus of my finances

on myself and I was in control

of what I had to do,

and it's a much more simpler system.

I haven't got six different

benefits, you've just got one

where you pay once a month and,

to me, that is a godsend.

It's so much more simple.

There's been ongoing

controversy since the national

roll out began in 2015.

It's not due to be finished

for another five years.

John, most people seem to agree

Universal Credit will be beneficial

to most people but getting on it,

there is this painful gap of 40

days. I couldn't manage without

money for 40 days, could you?

We got

to remember everyone moving on to

Universal Credit also has access to

emergency payments to tide them over

to when they get that first payment

and I think the Government are

looking at it and is a lot of

speculation.

they seem to have dug

in.

We've got a recognised the

massive advantage in the film said

about having a single payment.

People are very frustrated to see

Gordon Brown back from his demise

talking about more benefits. It was

them that created such a complex

system that left people in a very

difficult circumstance.

Did you cope

without money for 40 days?

That is a

mechanism... I have in the past, I

have struggled, I have had times in

my life, is not ideal and

unsympathetic, we've got to sort it

out but the Government have ruled it

out over a long period to try and

get it right -- rolled it out.

Across the political spectrum,

people think Universal Credit is

beneficial so it has got to be

rolled out somehow, hasn't it?

DS

but it's got to be pulled out

property and the difficulty is it's

a loan. It's a loan shark. For all

the complexity of tax credits,

people were substantially better

off. Now they're not. The child

poverty action group brought out a

report a week ago that showed this.

Google is the benefit into one but

two goals less benefits into one --

it rolls less benefits into one but

it rolls less benefits into one. We

found I guess today there because

December is a five-week month, we've

now got the ludicrous situation that

thousands of not millions of people

could be forced off the Universal

Credit for a period of time and then

have to reapply, it's madness. We

have to get it right then we will

join with the Government and see how

it could work properly.

What would

you do?

Posit, get it right, stop

the misery.

how would you get it

right?

The migration of people is

where the real issues are going to

come. Housing benefits are going to

be a nightmare.

I think you've seen

thousands of people move on to

Universal Credit. It can be a

difficult transition but when that

transition is made, people value the

fact they got a simpler benefit

system. It incentivised as... Work

and fewer people are likely to be an

job-seeker's allowance.

Gordon Brown

said the benefits budget is less

than they used to get.

I don't think

there is a great public appetite to

be increasing benefit payments.

We've seen a record number of people

over the last seven years in

unemployment. We've got the lowest

unemployment. We need a benefit

system that looks after the most

vulnerable but also create

incentives to get into work.

John, the Trussell Trust is based

in your constituency.

Why do you think more people

are using food banks?

When I looked at this on an

all-party basis a few years ago. We

found a number of the people using

foodbanks had a number of issues in

addition.

you haven't got any money

coming in, you have to use it.

The

tip of the iceberg, there's lots of

complexity in people's lives that

makes them happy Woodruff the bank.

I acknowledge there are challenges

with the delivery of benefits in

some circumstances and I think the

Government is working hard to

address it. We may see some

announcements next week.

We should

posit and then all work together to

get the system working together. It

is too important that we don't drive

people into poverty.

They say all the world's

a stage and we are all

players, coming and going.

But in Britain, we are pretty good

at strutting our stuff.

Britain punches above its weight

in film, television and the arts.

But funding at a local

level is being reduced.

Martin Jones has been

getting a fix of culture.

It's called the most popular

art exhibition ever.

A landmark show at Bristol's

Arnolfini by Turner Prize

winner Grayson Perry.

And it's relied on public funds,

despite its popularity.

I do the kind of art that people

like to come and see.

It's got lots of man hours in it,

it's pretty, it's got relevant

issues that they're interested in.

It's bang on, so no

wonder it's popular.

200,000 people can't be wrong!

This will be the last exhibition

here at least until next spring.

Arts Council funding has been

generally steady in the West,

but Arnolfini has lost its grant.

It means the future

is somewhat fragile.

Another source of funds has

seen a dramatic decline.

Our local councils gave grants

of just under 23 million in 2010.

That was down by over

40% last year to 13.5.

Many have made further

cuts since then.

At the Rondo Theatre in Bath, then a

final rehearsals for a new play by

Pippa Thornton. The Rondo used to

get about 8000 a year from the local

council but there have been huge

cuts to its arts budget and they now

get nothing. Acting workshops,

writing classes and afternoon

concerts for older people have all

taken their final bow.

It's not just about giving money

to luvvies to prance

about on a stage, it's

about supporting local art so that

new work can take place so that Bath

doesn't just become a monoculture

of heritage wonderland and local

pubs and restaurants get the benefit

from our passing customers.

Support for funding the arts from

the public purse has been dwindling.

Why should I be forced to buy art

that they don't want? It could be

that you positively disapprove of

it. Art isn't like other goods in

that it can be more controversial,

it has ideas and values associated

with it. I don't make the idea of

the state having a role in

determining where the money goes in

art because they are all too

inclined to use it to peddle a

certain ideological agenda.

And you

couldn't accuse Grayson Perry of

that.

Somebody said to me, what do

you feel about the fact that public

money is going on that nobody likes?

My responses, a lot of my tax money

goes on weapons I don't like so I

think it is small fry compared to

aircraft carriers.

It is a

polarising debate. To fund or not to

fund? That is the question.

We can survive without acting

workshops.

Now we can't. The arts are part of

our culture and we need to fund

them. It's a difficult time because

austerity has had this area harder

than anything else because it was

always discretionary in terms of

local authority payments and sadly

we are now seeing is going backwards

to where we were a generation ago

and there are lots of things that we

support and is -- it's wrong to

say... They make their case as we

funded.

You're competing against the

big departments need money for

housing and for defence and

education and the NHS. Where do you

come down the pecking order?

I think

we recognise as a Government that

the arts are critically important to

people's well-being, sense of place,

and we also see a combination of

funding sought sometimes you see the

local authority coming in with a gun

from the Arts Council and in the

South West we have had more money

this last year from the Arts Council

than in the previous year and we are

seeing more money coming out of

London across the regions from the

Arts Council, that is direct

Government funding, so I think we're

seeing people moving together,

combining their arts offers. In

Salisbury and Bristol bid is a large

number of artists seeking funding --

there are a large number of artists

seeking funding. There are

challenges to funding but the impact

in terms of the economic impact of

investing in the art is very

positive.

When you add in Downing

Street and saying this to the

Chancellor, what does he say to you?

Is very sympathetic. If you look at

the South West and the Government

money that comes through the Arts

Council it has gone up in the last

year sought is not as bleak as you

suggest about 13 million from the

previous year.

Is there any public

spending that you wouldn't approve

of?

Trident, I think that is

unnecessary. I know it's Labour

policy but some others disagree --

some of us. The reality is we need

debates on this whole area of what

the state should be involved in. To

my mind, the state coming out of a

steady which I hope we will do under

a Labour Government, we've got to

prioritise spending on education, on

health and on benefits because our

people are suffering and we want a

strong economy, but it can only be

strong with decent public spending.

If that means tax rises, so be it?

With the opposition, it would be

nice to know what happens on

Wednesday whether the Government go

for a tax rise. I suspect they will

because they know we've got to fund

the health service more, we've got

to get education funded because our

schools are broke.

We don't want to

get into a situation where we spent

500 million on interest payments.

Viewers will be interested to know

that over 500 billion over the last

seven years has been spent on debt

interest. The previous Labour

Government run that up.

The bankers

miss performed.

Next week I hope we

will see a budget that takes

irresponsible line investing in

economic growth, investing in young

people, investing in housing, but we

also need to invest in our public

services so I hope the Chancellor

will be able to find some money for

the NHS and the hard-working people

who have struggled for several

years. It's not as simple as one

thing at the other, we need

responsible investment and we can't

get into a situation where we are

spending 10% of our expenditure on

debt interest payments.

Does that

mean higher taxes?

It means a

balanced approach in the long term.

Let's take a look at the rest

of the week's political

news in 60 Seconds.

Bristol has declared

war on litterbugs.

Council patrols fined more

than 600 people for dropping

rubbish in just one week.

But is it environmental protection

or an easy way to raise money?

If they don't give the correct name

and correct address,

then they are liable to be taken

to court for prosecution.

300 jobs are to be cut at Bath

and North East Somerset

Council to try to plug

a £16 million funding gap.

The council will also ask

the Government for extra cash.

Councillors in Swindon

have given the green

light to a new ice rink,

cinema and hotel.

They'll be built around the town's

Oasis leisure centre.

It should certainly make a splash.

And there were pro and anti-Brexit

marches in Stroud yesterday.

One group said Brexit means exit,

another waved EU flags.

The two sides don't agree on much -

they even argued on Twitter

about how many people turned up.

That's all from us this week.

My thanks to my guests,

John Glen and David Drew.

Don't forget you can follow us

on Twitter for the latest updates.

And you can watch the show back

on the iPlayer, too.

But for now, it's back

to London and Sarah.

Philip Hammond will deliver his

Budget on Wednesday -

he's moved it to the Autumn

if you remember - and he'll be

hoping it can help re-define

the Government in the eyes

of the public.

But when it comes to

the economy, do people trust

the Conservatives, or Labour?

Here's Ellie Price

with the moodbox.

MUSIC: The Road to Nowhere

by Talking Heads.

All eyes will be on the Chancellor

this week as we find out

what he has been cooking

up in his Budget.

So we have pulled off the A1

near Peterborough to ask people here

who they trust with the economy -

is it the Chancellor,

Philip Hammond, or is it

Labour's John McDonnell?

No 7.

Which one's Tory?

I voted Conservative

for the last two

elections, don't feel very confident

now, so I'm going to swap.

If I said to you which

of these characters

would you trust with the economy,

what would you say?

The one who's currently

running it, because they

seem to be bringing

the deficit down.

Labour.

Why?

Because I'm an NHS worker.

For me, it's just about

spending, public spending.

Labour always overspend.

John McDonnell, I think

capitalism as we know it is tanked

and I think we need

a radical re-think.

Broken his egg, who do you trust

more on the economy?

No one.

Why?

Because they never come up trumps

with anything that they

reckon they're going to do.

If I had to make you

choose one of them?

The man that's there, Hammond.

I wouldn't trust

Philip Hammond with a

bag of marbles or a plastic ball!

Hello, Bob.

Oh, hello.

Who do you trust

more on the economy?

Oh, the Conservatives.

Do you?

Why's that?

I just think they're better

for the small businessman.

We need a Maggie or

a Winston Churchill,

somebody in there with

balls to say, right,

that's the direction

we are

going in, that's what

we are going to do.

I've got balls!

What are you doing?

Putting balls in holes

by the look of it!

I suppose the lesser of the two

evils is anything but Tory,

but I say that without a great

deal of conviction.

Having grown up in the '70s

with all the rubbish on the

streets, the strikes, the unions.

Re-nationalisation and they're

going to spend a lot of money

and increase taxes and it will pull

the country down.

I've seen an awful loft of all-day

breakfasts today, but it

is clearing up time here

at the diner and time

to reveal the Moodbox.

Take it away, Tim.

As you can say it was

a close-run thing, but

like any fiscally responsible

Chancellor, I've done my maths and

counted and Philip Hammond got six

more votes than John McDonnell.

Oh, chip, thank you very much!

That was Ellie and the entirely

unscientific Moodbox,

at the Stibbington diner near

Peterborough.

But for a slightly more scientific

understanding of how the public view

the parties on this and other

issues, let's have a look

at some recent polling.

Here's where the Conservatives

and Labour stood on the economy back

when the Prime Minister called

the snap election in April,

when the Conservatives had a big

lead, as they did in many

other areas.

The most recent poll by the same

company reckoned Labour had narrowed

the gap significantly,

as they have in other areas,

although they're still 10 points

behind the Tories on this issue.

And there was another survey much

discussed at Westminster this week,

showing that while the gap

between Theresa May

and Jeremy Corbyn has narrowed

drastically since that pre-election

period, Mrs May is,

despite her many problems,

still pretty much level-pegging

in polling terms or

even slightly ahead.

And when it comes to how

people intend to vote

while the Tories are behind,

there's no sign of a

big Labour lead yet.

Tony Blair thinks that,

given the current "mess"

inside the Government,

Jeremy Corbyn's party should be

10 or 15 points ahead.

Well, many in Labour will find it

easy to dismiss both Tony Blair

and the opinion polls, as they both

called the last election entirely

wrong, so what if anything do

these polls tell us?

Let's turn to our expert panel.

Labour are now eight points on the

economy, according to a poll. Why is

there a gap between Labour and the

Tories?

There seems to be a

deep-seated reservation in the minds

of many voters. They look at Jeremy

Corbyn and John McDonnell and

imagine them in charge of the

country, the finances, national

security, and think... It is

unfashionable to point out in many

circles that Labour did not win the

last election, and it didn't win it

for that kind of reason. Jeremy

Corbyn is very good at attracting

and inspiring young people and

people who had not voted before. We

underestimated his capacity to do

that. But he wasn't great at turning

Tories to Labour, or sealing off

those final reservations. The

government have had a shambolic few

weeks. We are tripping over

resigning a cabinet ministers. They

are fighting like ferrets. A lot of

people are having a really tough

time and looking at the government

to help them, and are unimpressed

with what they see. But there seems

to be a final fence that Corbyn does

not seem to be able to get over.

Isn't Tony Blair right, that Labour

should be 15 or 20 points ahead?

I

think he's completely wrong, and is

revealing he is out of date. I think

Labour are in a really good

position. If you look at what they

have achieved in the last year,

going into Christmas 2016, Corbyn

had just managed to avoid, had to

re-fight Labour leadership contest.

They were 20 points behind. Theresa

May was at the top of her game.

Through the general election and

beyond it, they have continued to

build their movement. They are very

effective on social media. I think

they are in a strong position, and

they need about 60 seats to win the

next general election. They will

probably start with 25 of those. The

fact that they are closing the gap

on the economy suggests that a lot

of voters are now giving them a

chance or a hearing, which they

certainly were not getting a year

ago. I think they have done very

well.

Can they be confident with a

slim lead against the government?

I

am slightly more with Tony Blair

than with Iain. This goes back to

that very general election result. A

huge turnout for Labour for Jeremy

Corbyn. If you asked that same 40%

of people today, do you want Jeremy

Corbyn to be Prime Minister? Where

you really voting for Jeremy Corbyn

to lead the British governmentanswer

is no, because Theresa May still,

despite the fact she is presiding

over a shambolic cabinet, she has

the most support for Prime Minister.

The last general election may have

just been a giant by-election,

because everyone was so short that

Theresa May would get in.

The

Chancellor Philip Hammond gave

Labour a bit of a gift, when he

said, there were not any unemployed

people in Britain. A slip of the

tongue. Was that damaging?

You have

to look at the context he was saying

it in, which will not be the context

of the Facebook meme you will get

shortly. He was asked about future

unemployment, and he was saying that

when technological advances came,

unemployment didn't materialise.

They would not be able to use that

against him so easily if it didn't

have something that people think

about the Conservative government,

which is that they are out of touch,

they have no idea about some people,

that they refuse to see what they

have done. People have that idea

about the Conservatives, so to drop

a bit of a clanger in that regard...

The budget is on Wednesday, and also

this week, the Brexit committee will

be meeting. What will they be

talking about and why does it

matter?

What Stephen Hammond said to

you a few moments ago was

fascinating. Tomorrow is going to be

the big meeting. It is the

negotiations committee. Nine or so

ministers have recently been

included in that, like Michael Gove.

They are going to be talking about

the money, precisely how much they

offer in two weeks' time to meet

this deadline in the December

council for phase two. Michael Gove

and Boris Johnson want to add in

conditions. They want to say, we

will give you this as long as we get

that. What was fascinating with

Stephen Hammond just now was that he

revealed that it wasn't just the

Brexiteers in Cabinet who want a

more precise definition of what we

are going for, it is the remainers

as well.

In the heart of the

government, David Davis is trying to

keep the bill as low as possible,

possibly around 30%. The divorce

Bill and future liabilities. Some in

the civil service have suggested

that it has to be 40 or above. What

it reveals to me is really, it's

another function of Britain not

really having a proper Prime

Minister. In normal circumstances,

of course the Cabinet is divided. A

strong leader would say, right, this

is what is happening. This is where

we are going. We will call it 35 or

40 billion. We will save to the

European Union, there is the check,

but it will not have a signature on

it until we are satisfied with the

next

stage. The government is hampered by

the lack of a strong personality who

could do that, make a political play

with other European leaders that

might break the deadlock.

Presumably

that is why the full Cabinet have

not discussed what the future Brexit

deal will be.

That is the

astonishing thing. There has been no

sort of vision of what Britain is

going to look like after Brexit. We

have got down in what the

negotiation position for tomorrow

will be. What does it look like in

terms of immigration, trade with the

rest of the world, what life will

look like for ordinarily... Ordinary

people?

There are visions for this,

but they will not agree on one. Is

there such a thing as a Tory Cabinet

Minister who could have one single

vision without them all ripping each

other's heads off? Probably not.

Thank you.

That's all for today.

Join me again next Sunday

at 11.00 here on BBC One.

Until then, bye bye.