27/11/2011 The Andrew Marr Show

Good morning, some excellent news in the paper - conditions are so

good, food is so plentiful, that the British are having larger

families and looking ahead with increased optimism. Sadly this only

refers to British bluetits who have been loving this remarkably warm

autumn. If only this week's autumn statement really was what it

sounded like - "season of mists and mellow fruitfulness", announces

Chancellor "butterflies surprisingly plentiful" - but it

ain't and anyone of a sensitive disposition should probably skip

the newspaper front pages, where most economics editors explain with

And joining me today for our review of the Sunday newspapers are the

other Blair, Lord Blair, former head of the Metropolitan police,

the columnist and broadcaster Mary Ann Sieghart, and Max Mosley, who

was among the first witnesses at the Leveson inquiry on press

standards. The chancellor, George Osborne, makes his speech in

parliament, second only to the Budget each year, against a

thunderous, stormy sky. Bad news is expected on growth, jobs, how long

it will take to pay off the deficit. And with the entire Eurozone - our

biggest market - making splintering and cracking noises, the focus has

turned to urgent plans to keep our economy moving, with announcements

expected on everything from rail fares and bank taxes to help for

small firms. The chancellor George Osborne joins us to explain more,

ahead of what - with, let's remember, a national public sector

strike called for Wednesday - is beginning to feel like the most

important week for the Coalition government since it was formed.

We're also joined by Mr Osborne's number one critic, Ed Balls, who

has consistently called for less in the way of cuts, more borrowing, a

Plan B for growth. But would Labour really do things so very

differently? Wouldn't they be making the same kinds of unpopular

cuts as the coalition? Also this morning, we'll be going back to an

earlier period of austerity Britain, as the Oscar-winning actress Rachel

Weisz discusses her latest film, Terence Rattigan's The Deep Blue

Sea. That might cheer you up. If it doesn't, we'll have some soothing

music, played by the bright new talent of the violin, Charlie Siem.

All that's coming up, but first over to Susanna Reid with the news.

Good morning. A rescue operation is under way to try to find six people

missing after a cargo vessel got into trouble off the north coast of

Wales. Eight people were on board the ship, which is thought to have

suffered from a cracked hole. The ship was grounded off the coast of

Cornwall last year. Details are emerging of a package

of measures which the Government hopes will boost growth, and ease

the pressure on family budgets, amid fears that the economy will

deteriorate next year. The measures, to be outlined by the Chancellor in

his autumn statement this week, are expected to include more spending

on infrastructure, a possible freeze in petrol duty, and lower

increases in rail fares. Billions of pounds will also be made

available in government-backed loans to small and medium sized

enterprises, as our business correspondent Joe Lynam reports.

Britain may not be in the eurozone but the crisis which is swallowing

up the Continent threatens to engulf the UK as well. The

government is worried that bank lending could seize up entirely. To

prevent that from happening to ordinary British companies, the

coalition is to set up ambitious lending programmes to make sure the

engines of growth do not stall. Known as credit easing, the first

scheme would see the government using guarantees to reduce the cost

of credit firms turning over less than �50 million. The second

programme would see the government taking a stake in investment forms

which provide credit or loans to medium-sized companies, and thirdly

hoping to create an alternative to traditional bank loans, by

encouraging companies to sell bondss to the markets. The

Chancellor says that none of the credit easing schemes will drive up

the already massive deficit. A further 100,000 jobs could be cut

in the public sector, according to an independent forecasting group.

The Ernst and Young Item Club says the Government has been too

conservative in its estimate of the number of job losses required to

meet spending cuts. It expects around half a million public sector

jobs to be lost in the next five years, instead of the 400,000,

predicted in March. Pakistan has shut down NATO supply

routes into Afghanistan after NATO helicopters and fighter jets

attacked two military outposts on Pakistani territory. 25 Pakistani

soldiers were killed in the incident, in Mohmand near the

border with Afghanistan. The US has apologised to Pakistan for the

attack. Police investigating the fatal

mugging of an elderly woman in Greater Manchester are now treating

her death as murder. 79-year-old Nellie Geraghty was found with

serious head injuries in an alleyway in Oldham. She'd

apparently tried to resist robbers, who stole a bag containing cash and

the ashes of her late husband. That's all from me for the moment.

I'll be back with the headlines just before ten.

Thank you, Susanna. I did mention the front pages are pretty gloomy

this morning. Here is a flavour on the Observer. The Sunday Times has

a great headline - Britain faces six years of misery. Lucky us. The

Express - starving Britain, saying thousands of farmers are relying on

food parcels and even road kill. The Independent on Sunday has

people trying to leave Britain for Mars. Ed Balls - I have sympathy

for the strikers. A strange front page here - the Mail on Sunday, Lib

Dems: we should be more like Oxfam, suggesting many would be queuing up

to give old clothes to the Liberal Democrats. Why?! Mary Ann Sieghart

and Max Mosley, thank you for joining us. You're starting with

the Autumn Statement. The big political story Of the Week are the

Autumn Statement and the public sector strike the day after. It is

a classic in politics. One news story which you are completely in

control of, another which you have no control over whatsoever. In some

senses, it is quite good for him because he can get the good news

stories out in advance so we have the Sunday Telegraph talking about

help for the squeezed middle, lower fuel duty rises, and lower train

fare rises. On Wednesday itself, all the bad figures are coming out,

and that is on unemployment, lack of growth, and the fact they

haven't managed to cut the deficit as fast as they had hoped to. There

is one story about support and opposition for the strike. 43% are

opposing it, only 39% supporting it, but a plurality blame the

government rather than the unions for the strike, and 65% disapprove

of the way David Cameron has dealt with it. So the politics are still

pretty unclear. Lord Blair, you have a story in the Independent.

Yes, and this leaves on from that, because it is the way it fits into

the public mood. Most of it is about not really wanting the

strikes, but the last two paragraphs say the problem with the

government's response is they have failed to convince many people we

are genuinely all in this together so they should be doing things

about the bankers and the rich. Another of the big stories, Max

Mosley, was the one you were involved in in the Leveson Inquiry.

The slight backlash, some pupils saying it has been taken over by

celebrities. I don't know what you think about that. I don't think it

is true. The people who have really made the impression, they are the

ones who are illustrated what can happen to ordinary people. Then

there are other celebrities, and whoever you are, when people start

invading your private life it is intolerable. How do you define

celebrity? JK Rowling is a celebrity in the sense she is

famous, but she is famous for having written successful

children's books. When you sit and writer book for children, you don't

make a forced to -- a Faustian pact. She has not like Jordan selling

herself because of her celebrity. Do you think we are after tipping

point? I hope we are. The trouble is there have been a lot of so-

called tipping point over the last 20 years, when very little has

tipped. Diana, Princess of Wales, David Mellor, and not much has

changed. I think in this case it is the Milly Dowler moment that

changed the entire mood. I think people were seeing the phone

hacking as a kind of celebrity meets politicians discussion.

Suddenly, one Tuesday afternoon, that discovery changed everything.

I entirely agree. Until then, it was them, not us. Then, when the

Milly Dowler thing happened, people realised that could happen to

anybody in the country. One of the most disturbing things surely it is

the involvement of the police in a lot of these. Quite clearly,

relations between the tabloid press and the police have been far too

close. Money has been changing hands and story -- stories keep

appearing. You are right, it has been a far too close relationship.

I don't know about the money changing hands, I feel it is more

about influence and getting the police's position right. Clearly

there is skulduggery and that has got to be wiped out. The other

interesting thing is the way journalists are responding to this.

There are two moods. One of them is saying lot of us. This one - why I

am proud to be a British journalist - it has been a long time coming,

the admission that there are some very bad journalists, people who

have been behaving very badly, which must have been known about.

To be fair, some people wrote about this before the Leveson Inquiry.

What was very noticeable was the Guardian was going on and on, then

we had the New York Times, and the rest of the paper and these

wonderful up standing journalists did not write one word about it. It

was kept secret until it became impossible to keep the lid on it.

Lord Blair mentioned the word skulduggery, and there is a

fascinating piece of skulduggery surrounding Dominique Strauss-Kahn,

and how much of this was a set-up. This is fascinating because I am

not a believer in conspiracies, but here there are so many elements, so

many things that happened, that when you read the story you think

it is just possible this whole thing was set up. There is an

allegation for instance that staff in the hotel were seen during a

victory dance once Dominique Strauss-Kahn was grabbed and

arrested for this alleged assault. Then, allegedly, the chambermaid

when repeatedly into the room of a mysterious man who has not been

identified during the period between the incident and the arrest.

There are endless elements. I think it might be the Mail on Sunday that

suggested this might have all been set up by Nicolas Sarkozy's people.

If that is the case, what a wonderful story that would be.

would be an amazing story but I think we should pause for a moment.

I seem to remember there was a victim with serious injuries

floating around in the middle of this, so whatever happened, it is

still a great difficulty with Strauss-Kahn in terms of who he is

and how he behaves. He was unwise, to say the least. There does seem

to have been a pattern of behaviour as well. Let's stay abroad because

one of the other stories is Egypt, where things are falling apart at a

terrible rate. This is, to me, the biggest story in the world at the

moment. In terms of what has happened this year, the Arab Spring

is the greatest story, and Egypt is the most significant of those

countries. We have a position here which is very well put in the

Observer again. The most difficult one is at the bottom, there is a

phrase that there is an alliance between the Muslim Brotherhood and

the generals which has put the revolution in peril. They are

suggesting that the army moving towards elections has been

supported by the Muslim Brotherhood against the secular do, which was

so significant in Tahrir Square. This might seem trivial against the

Arab Spring, but this is about parking. London is in uproar,

because this is not just a London story, but in London Westminster

City Council has decided that in the evenings and on Sundays they

are going to carry on charging for parking until 1 am and are not

going to allow you to park on a single yellow line. This is

disastrous for people working in the West End. If you are not a

highly -- if you are a highly paid -- not a highly paid waitress, you

can park your car and drive home safely, but now you cannot do it.

But for those of us who want to go to the West End to see a film or

have a play or have supper, we cannot afford to do it. What is so

frustrating is there is nothing we can do about it because we do not

have votes in Westminster. Local democracy? Local democracy does not

even work, because the people who live in the borough of Westminster

will not mind because they have parking permits. The businesses

will mind, but they have a -- do not have a vote and those of us

outside do not have a vote. To move from people worried about parking

to people who drive a little faster. The last day of Formula One. The

headline about how the season has gone? The number one thing is that

nobody gets killed or hurt and that has happened. A boring championship

because Sebastian Vettel was so much better than everyone but on

the other hand there have been many exciting races and one cannot ask

for more. The bottom line is, did anyone get hurt? It is a dangerous

sport. Nobody did, so no one was hurt in the making of this

newspaper review either. Thank you all very much. Now to the weather -

it's been very windy, the leaves are coming off the trees, and in

the North of Scotland gale force winds overnight. In the south,

however, we're still waiting for the cold to set in. Can this mild

autumn go on much longer? Bluetits are glued to their screens waiting

for the answer, so over to Darren It has been very windy and I think

the winds have peaked and it improves through the day with more

sunshine coming through and the winds easing off. Still blowing a

gale in Scotland and the showers will retreat to the West with some

snow over the mountain. The odd shower for Northern Ireland but for

England and Wales it dries up and more showers coming through. It

will probably feel colder today, particularly across the North. This

evening, with the clear skies and light winds, the temperatures will

fall away and for Northern Ireland and western Scotland a freshening

breeze would increase the cloud but away from here it will be cold and

there will be a widespread ground frost across England and Wales and

in rural areas temperatures will be close to freezing. The story

through tomorrow is one of a freshening up south wind which will

increase the cloud and bring patchy rain to the west, whereas East it

is likely to be dry and there will be sunshine, but after a chilly

start the temperatures will struggle to double figures.

Temperatures will be nearer 12 degrees. For any blue tits watching,

nothing particularly cold over the weekend, but it does stay unsettled

and we will have showers or longer spells of rain and it looks like it

spells of rain and it looks like it For months, the Shadow Chancellor,

Ed Balls has been telling the government it needs a plan B, a

plan for growth. Well, during the week, we had a flurry of

announcements - on house-building, tackling youth unemployment and so

on - so does he see plan B taking shape in front of his eyes? If

Labour were in government, it would presumably be cutting too by now -

and having to deal with the backwash from the eurozone crisis.

So what would Ed Balls really do differently? He's with me now.

Welcome. Before we turn to the Autumn Statement, let's talk about

Wednesday's strike. Is this something that you would urge the

unions to call off even at this late stage? I would urge the

government to get round the table and give some ground and sort this

out. I don't think anybody wants to strike on Wednesday and will be

hugely disruptive for families but I also have sympathy for the low-

paid public workers and we are talking about dinner ladies,

teaching assistants who are paid under �15,000 per year who are

being hit hard. The government has to give ground and so do the Joep -

- unions. There has to be two sides to sort this out. The two is

probably fair to say you have more influence on the unions than the

government, so would you learned -- urged the union leaders to give

enough ground and perhaps delay this or call it off? I would urge

the union leaders to give ground and talk. I think Ed Miliband was

right to say it was the wrong thing to do to strike in June when the

government were talking, but they made clear two weeks ago they would

give no more ground. Even John Hutton said it was risky, the 3%

contribution rise, and also deeply unfair. And in the circumstances

there are lots of low-paid workers, 750,000 low-paid workers, paid

under �15,000, predominantly women, who will be retired on pensions of

�4,000 per year and will be hit really hard. I think people do not

think it is fair. I have to say, David Cameron and George Osborne

have always been clear in their minds that they wanted this

confrontation. But both sides are quite close to agreement in

different areas. Their unions and employers and different government

departments coming-together and a lot of people would say it is

inevitable, even a Labour government would have to deal with

the cost of public sector pensions. It was never going to be easy, it

was always going to be painful, but there has to be a compromise and

striking does not help. A Labour Prime Minister would have had to

sit down and negotiate. The trade unions would have had to give some

ground. But David Talib -- David Cameron said to the Daily Telegraph

he was privately delighted that the trade unions had walked into his

trap. No Labour prime minister in the last 13 years sat around saying

he was delighted about private -- confrontations and strikes. It was

deeply irresponsible and the disruption on Wednesday to families

and businesses could be avoided if David Cameron decided he wanted to

act, and he hasn't. It is his intransigence and, I think, his

opposition to progress which is causing the problem. Let me put a

proposition to you about the Autumn Statement and the argument around

it, which is that if you look at a lot of the things the government

has recently announced and looks likely to announce this week, they

are not so different from the kind of things that Labour would be

doing when it comes to youth unemployment, and try to get some

money into struggling small and medium-sized businesses, when it

comes to helping commuters. And when people look at the exchanges

in the House of Commons, including between yourself and George Osborne

and there is all this shouting and finger stabbing, things are too

serious for that and it would be welcome to have the opposition say,

do you know what, or all of these measures, we agree. These are the

kind of things to do and we will get them through the House of

Commons quickly. I would love a consensus on the way forward with

George Osborne, David Cameron and the Liberal Democrats, and it would

be better for Britain. You are completely right. Nick Clegg is now

announcing the reintroduction of the future jobs funded or smaller

form it should not have been abolished in the first place. And

they are saying put back 10 % of the housing spending they cut,

saying put back some infrastructure, do more for small firm lending,

building on something Labour did which they should have done Allah -

- earlier. But fundamentally there was a big day issue, -- Bedi issue.

We disagreed months ago and they said if we went fast on deficit

reduction, �40 billion of cuts, the fastest cuts of any country, they

said it would lead to private sector jobs, growth, confidence,

falling unemployment and the hasn't worked. We are in economic troubles

at the moment. If their deficit reduction system has not worked,

why is it that the British government is able to borrow money

at 4.5 % below what it is costing the Spanish and the Italians and

others. Britain has a triple-A credit rating. And our

international reputation seems to be pretty strong and the government

will say it is down to their deficit reduction plan and sticking

to it. They would, and that is the fantasy they have peddled for the

last year. Taking the points in turn, first of all, they say we

have low interest rates because of deficit reduction but it is

fundamentally because we are not in the euro and have low growth. In

America, America had their credit rating downgraded and their

interest weights did not go up. They say they have credibility with

the financial markets because they have the deficit reduction plan,

but you talk about me advocating more borrowing, and George Osborne

will borrow billions and billions of pounds more than he planned

because unemployment is going up because the plan has failed.

truth is that the difference between the is now infinitesimally

small. It is a third of 1%. If you are still sticking to the original

Alastair Darling plan, and you suggest you laugh? Yes, of course.

So the difference between what you're doing is not enormous. It is

not the difference between slump and prosperity. I am sticking to

the plan in the sense that we would have done that plan in government.

George Osborne didn't. He ripped it up and went �40 billion faster,

including VAT rise which hasn't worked and he is trying to blame

the snow or the euro and it was his decisions that slowed down the

recovery. The IMF said a few months ago, who George Osborne used to

boast about supporting him, they said if the economy undershot the

growth plans and it wasn't growing, the sensible, balanced thing to do

was to slow the pace of cuts and reversed and do some tax cuts to

get the economy moving, boost the growth in jobs and get unemployment

and the deficit down. The IMF is right and dieback them in their

proposals. George Osborne doesn't. If he moves to a balanced but we

will support him. If he doesn't, I am deeply fearful about what this

will mean for the growth, jobs and deficit reduction. What you would

do that is different is that she would reverse the VAT rise -- you

would reverse -- and reverse the cuts? That cost you a lot of money

straight away, so where do you find it? It is a five-point plan. You

mentioned two elements, repeating the bank bonus tax for you to jobs,

but we would agree with the IMF. is said that you have spent nine

times the bank bonus tax on different projects.

Conservative Party say that, but it doesn't make it true. It is a lie.

The only proposal would have made to spend the bank bonus tax was for

use jobs, with a five-point plan which the IMF was saying that if

there was no growth we should slow the pace and move to a balanced

plan. George Osborne said it would lead to more borrowing and it would

be irresponsible. In the next five years, he will borrow, according to

his own forecasters, over �100 billion more than he planned. He is

borrowing for unemployment and failure. I say get the economy

moving, get some help for families and businesses, which will get

growth in jobs moving and get the deficit down. It is a very big

choice and it is not just trivia and inconsequential. Realistically,

you would both be borrowing a great deal and faced with the same

extremely difficult international situation and you would both have

economic plans for growth which are not the same, but they are not a

million miles apart. I just asked again whether the heat and

aggression between the parties at this time of national crisis is

appropriate? I think it is fundamentally necessary. When a

government is making a catastrophically wrong decision and

people are fearful and angry, the opposition has to stand up for the

alternative, as happened in 1929, 1930 and 1931 in a similar

situation after a financial crisis. I have been on this programme and

you have said to me that what I am proposing would be irresponsible.

You cannot now say it is the same as George Osborne's plans. There

was a big choice year ago. We were out on a limb in advocating a

different approach. Actually, increasingly, the IMF and business

organisations and Conservative MPs are saying that the George Osborne

and David Cameron plan has not worked. We need a different course.

So if we seek the credit easing plan for small companies that we

are reading that we will see, will you back that? That is presumably

something you would be pleased by. If there is a credit easing plan,

that is a good thing. If they reintroduce a future jobs fund,

good. If they do not go ahead with the freeze in fuel prices in

January, that is good. They should delay temporary cut in VAT. If they

do more to get down child poverty, we will support that. We will look

at the details, because I don't know how it will work yet. But it

is very similar to the small firms guarantee scheme which had been

around for years. The issue is, why he's our economy not growing? Why

are firms not borrowing? Why is the economy slumping? Because the

fundamental strategy is not working. George Osborne will want to placate

here and push this aside on the bigger issue he is totally in

denial and until he gets his head out of the sand and sees that it is

failing. His head will be out of One of Britain's finest playwrights,

Terence Rattigan, was out of vogue for decades but in this, his

centenary, Rattigan's work is back with a vengeance. His masterpiece,

The Deep Blue Sea, has been filmed by Terence Davies and stars the

Oscar-winning actress Rachel Weisz. She plays a judge's wife in torpid

1950s London who breaks free from her marriage with tragic

consequences. Weisz is on a peak professionally and personally right

now. She's shooting the next Jason Bourne action thriller, while

enjoying domestic life with new husband James Bond, or Daniel Craig,

as he's also known. When I met her this week, Rachel Weisz told me

about working with Terence Davies, and his style of directing. There

is a certain feeling of repression and that comes from having to

remain within Terence Davies' frame, because it will not follow you

everywhere. I have been shooting the Bourne films, and the camera

moves a lot, you can move everywhere and the camera will

follow you so you have 2011 freedom. Tell me about your character,

Hester. She is very sophisticated and kind, but her marriage is very

boring. A occasionally play a game of

canasta. That is boring, I am into sport. I have always thought of

sport as one of the more pointless human activities. That was almost

offensive. At that point in the 50s, Terence

has told me people simply did not get divorced, no one got divorced.

Nothing could be done. He said the only people who got divorced were

movie-star has, but they were not people, they were Demi gods at that

time. Elizabeth Taylor got divorced but no one did, so you just stayed

in your marriage. My character meets a younger man, and ex-RAF

pilot. He has been emotionally damaged by his experiences in the

war, he is unreliable but she falls head over heels in love with him.

Freddie, darling, would you come home with me, please? No, I will

not. You will start talking and bleeding. No, I won't. -- talking

and pleading. I won't even talk if you don't want me to. Trust me, I

swear. She leaves this safe and

comfortable marriage for him. At that time it was a shocking thing

to do. She moves out of her home in a bedsit in Ladbroke Grove. A am

not giving anything away to tell you that she tries to kill herself,

because that is how the film starts. It is an eye-opener. You work in

Streetcar Named Desire, and there are obvious similarities, breaks

throughs in society, and I wonder having done a film like this if you

still have ambitions to go back and do some big theatre roles. I would

love to. It's funny you mention, because I am not clear about the

connections between Terence Rattigan and Terence Davies, but

the characters felt like cousins of each other. When I read about

Hester, I thought this is Blanche's English cousin. They are trying to

find their place in the world at a time when the roles they were

allowed to fit into were very limited to them. The biggest

breakthrough was the constant Gardner, that was the Oscar moment.

A lot of people have said it is a game Changer, something that allows

you a bigger stage to play on, in terms of the Rolls you can take

afterwards. Is that true? Yes, definitely. It means more

interesting directors of the you more interesting script and you

have to audition less often. It does change your career and

visibility, Forshaw. Everybody in the movie business is of huge

interest to millions out there, and yet you are human beings come you

have lives to live, which are private, and in this country we are

thrashing through what is appropriate, right and fair when it

comes to people in the public eye. What would your take be on that?

don't think it is a public interest, I don't think it is important for

people to know about what is in the rubbish bin of famous people. I

think people should be allowed their privacy. I have never

experienced it, so I have never had the direct experience of being

terrorised, as some celebrities seem to have been, but it seems

there should be some laws in place to stop it from happening, that is

my knee-jerk reaction. So you will be rooting for Hugh Grant, when he

is out fighting for this? I think so, I thought he was rather

impressive. He is certainly a man with a mission, isn't he? Yes, the

problem is I think people feel like celebrities lose the right to

privacy by being out there, but I understand the train of thought and

I don't agree with it. You have this great body of work now, which

you have won awards for, I suppose the next question is what is next?

What are your next ambitions? learn how to cook. Very

passionately, I really need to. The time is now. I know a few dishes.

Shrimp. Just trimmed by itself? With rice noodles. I would love to

be able to be creative in the kitchen. Will we be seeing you with

Mr Rachel Weisz in a film together, do you think? It is a lot of action

in one family now. We haven't got any plans to do that, but it would

be nice. Why not? Do you watch each other's films? Do you critique each

other? We have not caught up with all love each other's films. Some

would have been hard to not notice over the years, but yes. Thank you.

The actress Rachel Weisz. So Tuesday is the big day for the

Chancellor George Osborne - his autumn statement will give the

Commons all the figures for how the economy is performing, and the

outlook for the months and indeed years ahead. And as we've heard all

is not entirely tickety-boo. Mr Osborne is with me now. Good

morning. Can I start by looking at the deficit reduction plan, which

has been at the heart of your purpose in government? It is no

longer the case, is it, that you will be getting rid of the

structural deficit by the end of this Parliament? I would not say

that was the heart of our purpose in government. The heart of our

purpose is to get the economy moving. That is crucial, and to do

that you have to command confidence in the world in your ability to pay

your debts. We have got a deficit reduction plan that has brought us

record low interest rates, that has earned a good credit rating, and we

will be sticking to that plan because that is helping Britain

through the debt storm and lay the foundations of a stronger economy.

A you said you would get rid of the structural deficit by 2014. Is that

still possible? We set up two rules, one is that we

would get debt falling, one to get rid of the deficit. We will be

judged on that by the Independent office for budget responsibility

that we have set up. I am trying to calibrate how

serious the situation is that the country is facing, and I put it to

you that you will not managed to get rid of the structural deficit

by 2014. Unlike my predecessors, I have set up an independent body

that studies whether what I am saying is true, whether I have met

the targets I set out. I am confident we will meet the targets

we set out, the fiscal mandate, but the judgment about whether we have

or not is made independently of me by the Office for budget

responsibility so you don't get Chancellor's fiddling the figures.

I'm not suggesting you would. is different now. We have been

independent body. I am clear the government will do what it takes to

meet its fiscal mandate, to meet its debt target, that Britain will

show the world it can pay its way and keep those very low interest

rates, without which families watching this, businesses, would be

in real trouble. That body which you talked about, the Office for

budget responsibility, its figures will come out on Tuesday. To cut to

the chase, these figures will be pretty dreadful. If you look at

independent forecasters, they have clearly told us what we already

know, which is the economic situation facing many countries at

the moment is very difficult. It has clearly had an impact on the UK,

on our growth prospects, it is a challenge for public finances, but

frankly you could get any finance minister in the Western world to

sit here today and they would say something similar. What I am saying

is different, that our plan has commanded confidence. We are taking

Britain through a very difficult international situation, we are

also dealing with Britain's legacy. You have just had Ed Balls in this

chair, when he and his colleagues run up enormous debts, and paying

off that debt is of course a challenge. Do I wish we were not in

a situation where we had enormous debts were had inherited, we had

the eurozone creaking on our doorstep, of course! But I have got

to deal with this to keep Britain's safe in these difficult times.

Growth, which was predicted that 1.7% this coming year will be 1% or

below, isn't it? Independent forecasters have a range of

estimates around the number you have said. You are not going to say

they are wrong? If you want to see the Independent forecast, let's

wait until Tuesday. International bodies, forecasters in the private

sector, they are all saying the same thing which is the British

economy has slowed, by the way so has the American, German and French

economy. I am not using that as an excuse, I am using it as an

explanation for why this is a difficult time. What is almost

unique about the crisis we face at the moment is that we have a

slowing economy, a slowing world economy, we have this financial

crisis brewing in Europe, and at the heart of this is a concern

about the Government's ability to pay its debts. You can't just turn

on the borrowing taps because there is not necessarily anybody in the

world ready to lend to you. The British government will be selling

its debt over the next week, but we are not facing the same kind of

debt strike that you get in other European countries at the moment,

including some not in the euro, and that is because of our credibility.

In essence, what became called Plan A, if you got credibility the

private sector would produce the jobs, and the problem you have got

is the second bit is not happening - true? The first plan is all about

credibility on Britain's large budget deficit. Alongside that, we

have to lay the foundations of economic success in the future and

move away from the economy based on the success of one sector, the city

of London, to a more balanced economy where we invest in our

infrastructure, education, we have a welfare system where it pays to

work. We will be setting out these measures on Tuesday to get the

private sector enjoy a more competitive place so that British

companies can compete now against companies in China, America and

India as well as European counterparts. So there is a problem

with getting the private sector moving again and you will try to

address that this week. Can I go through some of the measures

discussed? Perhaps most importantly, this idea of credit easing or

getting cheaper money directly to small and medium-sized businesses

for whom that would be an enormous thing. As I understand it, the plan

is to underwrite cheaper money, which will then go via the banks to

The basic idea of the National Loan guarantee Scheme is we can borrow

money more cheaply so businesses can borrow more cheaply so we can

underwrite the loans we make two small businesses to cut the

interest rates that small businesses pay which will help with

cash flow and to retain their workforces and help them expand and

invest. We are using the fact we have earned the low interest rates

as a government with the difficult decisions we have taken on spending

to get lower interest rates for business is up and down the country.

How much money will be available in the scheme? We are making �20

billion available for the scheme but it sits within an envelope that

could be as large as �40 billion. These are guarantees. We are not

borrowing the money to ourselves, we are underwriting the loan. We

are using our good name and are credit worthiness. There are many

governments who could not operate the scheme because they would not

be worthy enough in credit to do it. It is using the hard decisions we

have taken to benefit small businesses. On behalf of tax payers

up and down the country, a note of caution. If banks get into trouble

and businesses who have taken the money get into trouble, in the end,

the taxpayer is standing behind it. So this is not a decision without

risk. Of course, we make a balanced judgement about the risks we take

in the economy. I think this is relatively low risk for a

government given the strength of our balance sheet and low interest

rates and the credibility we haven't the world. We are

underwriting the Loans the banks make to the small businesses so the

banks are not carrying a credit risk for the small business and we

have worked with the banks to make sure it is a sensible scheme. It

means if you are a small business borrowing money at 5%, we might be

able to reduce the interest rate to 4%, so that costs by a 5th the

interest your pain. You would have -- the interest you are paying.

What we can do with our credibility with small businesses is to offer

something similar on mortgages for first-time buyers and new-build

homes to help the construction industry to get the homes built and

create demand for new homes and help families who can't possibly

afford the deposit to pay for one. In all sorts of ways we are trying

to not deliberately borrow more money to reset the low interest

rates and the credit rating, but we will use every other tall at the

disposal to get the economy moving to pull us out of the situation

that many countries find themselves in at the moment. Asking about

another of those things in the tool box, the notion of bringing forward

and boosting the infrastructure spending. And getting pension funds

to pay for it. Given that they do not want to take the risk of

getting into the big schemes, how will you tempt them? British

pension funds have not been investing the savings of British

people in British infrastructure and we are totally going to change

that. We have signed an agreement with the big pension funds which

will see them investing British savings in British infrastructure,

building an economy based on savings and investments rather than

on debt and that the same time, overhauling Britain's and equip --

antiquated road network and energy systems and actually building the

things we need to have a more balanced economy. The City of

London are behind us with this tool box. The City of London have done

well in the last 10 years and financial services are important to

the country, but be on the City of London we have to get the rest of

the economy moving -- beyond the City of London. Are you going to

bring in a further bank tax? will set out any tax measures on

Tuesday. But I am clear that the financial sector has had to make a

contribution and we have introduced a permanent bank levy, each and

every year, seen the banks paying the tax they never paid in the past.

We are in this together, all parts of society. All parts of the

industry are contributing to recovery. A lot of people have been

ahead to the strike plan on Wednesday, people at the bottom are

making a disproportionate sacrifice. And the better-off are still not

doing their share. I have attracted a lot of criticism for suggesting

that child benefit should be taken away from higher rate tax-paying

families. I get a lot of letters from people and I understand it is

a difficult decision, but I did that that those measures... Father

Richard better off? I don't think those with the child benefit would

regard themselves as rich but they are better off than other parts of

society. It was a difficult decision but I'm trying to be fair

in a very difficult place where Britain has borrowed far too much

money and has to pay back their debts. In the end, the money has to

come from the British people and from a growing economy. You are

having, as at a government, an argument with the trade unions, but

do you personally have sympathy with those really quite poorly-paid

public sector workers who will have to be paying more and working

longer for a much poorer pension in some cases? I think there is a lot

of misinformation around. Ed Balls was on this chair a few minutes ago

saying that people earning under �15,000 will have to pay more. We

have explicitly excluded people on low salaries from paying more

contributions for their pensions. I think what is on offer is a good

deal. I use sympathetic to public sector workers who were angry or

not? -- are you sympathetic? I am trying to give them a decent

pension for many years to come, better than you could get if you

are in the private sector these days. We have the last Labour

pension Secretary, Lord Hutton, to come in and do a report and we are

using the report as the basis of a deal that is fair to the taxpayer

but also fair to the public sector. In many cases they will get a

bigger pension than they have had before. Yes, they will have to

retire later or pay more contributions, but will have to do

that because the society is older and the country is in debt. I have

to try and asked you about the Eurozone before we finish. Do we

face the danger of the country's leading the Eurozone or the

Eurozone itself beginning to break up? Of course countries like

Germany and France have openly asked the questions whether Britain

can stake in the euro -- they can stay in the euro. If you want a cop

-- microcosm of my life as a Chancellor, on Tuesday we are

talking about the statement for the British Parliament, then I have to

get on a train to go to Brussels to talk about the Eurozone. It is

having a hugely chilling effect on the British economy. And you have a

plan, do you, and I presume you do, for what we do if the Eurozone

collapses completely? We have contingency plans for all

situations. We have obviously stepped up contingency planning in

recent months, and you would expect us to do that, but that does not

mean that we predict any particular outcome, we are ready for whatever

the Eurozone throws at us. What would it do to the country here if

the Eurozone collapse? Give would have a massive impact on the UK if

it were a diesel -- disorderly class. One in �7 of exports goes to

Ireland, Italy, Portugal, Spain and Greece, just those countries. So it

is a very important part of our economic strategy that we get the

Eurozone moving as well. Thank you very much indeed, Chancellor. Here

The Chancellor has admitted he expects official figures to show

that economic growth has slowed. He said Britain was facing an

exceptionally difficult time but insisted the government would do

what it takes to deliver its plan for bringing down the deficit. On

this programme, George Osborne gave details of a 20 billion pound loan

guarantee scheme for small and medium-sized businesses. The shadow

chancellor Ed Balls said Labour would look at the detail of the

plan to boost lending to companies before deciding whether to support

it. A rescue operation is under way to try and find six people missing

after a cargo vessel got into difficulty in rough conditions off

the coast of North Wales. Eight people were on board the ship which

is believed to have suffered a cracked hull. Two people were

rescued from the water. The ship was grounded off the coast of

Cornwall last year. That is all from me for now. The next news on

Well, the Chancellor is still with me, and we've been joined again by

his Shadow, Ed Balls. And we also have with us Charlie Siem, who's

been hailed as one of the most exciting young violinists around.

Charlie will be playing this out with a slightly unfamiliar piece of

music. It is by a Norwegian composer. Ole Bull, a distant

relative of mine, and a colourful character from the 19th century.

wrote some cracking music and you will be playing it on an

extraordinary violin. This is from 1735, played by the Great Yehudi

Menuhin. A one of his favourite violins. It is a great honour to be

able to play it. We are looking forward to that. Maybe you should

go and get ready and I will ask these two gentlemen to talk us out.

You famously tear up, I read, when it comes to Antiques Roadshow. I

think we should have an emotional moment between the two of you

because you shout at each other all the time and I wonder what makes

the Chancellor T Iraq. -- tear up. I have never cried watching

Antiques Roadshow. I am watching the Killing, a Danish crime

thriller. It is absolutely brilliant and there are moments

there, mainly in the early episodes, so don't tell me what happens, but

with the loss of the child and the grieving of the parents which are

very, very hard to watch. Is there any chance of the two of you sort

of standing shoulder to shoulder at this moment of national crisis?

Earlier wrong, people watching a very scared now -- early on.

believe Ed Balls has good motives and I hope people think I do. We

both want to get the British economy moving. He has different

views about how we do it but we would not question each other's

motives. We question each other's policies. And we both are

completely clear together that Britain didn't join the single

currency and that was one of the most important decisions of the

last 20 years. We have a debate about the strategy on deficit-

reduction but we both want to do the best thing by Britain. Do you

think he is the brightest they have got? George and I have got on quite

well always. He is good at his job, is a good politician, but has made

one big judgment wrong and that is what we are debating. We both agree

that we cannot play the violin like Charlie. On that note, we can all

agree. Thank you very much to both of you. That is all we have time

for. Thank you to the Chancellor, the Shadow Chancellor and all my