07/10/2012 The Andrew Marr Show

Good morning from a sunshine splashed Birmingham, where the

Conservative Party is gathering for what will be the last major party

conference of the season. It has not been -- it has been a hard year

for the country. The economy is flat on its back, debt rising and

many self-inflicted wounds by ministers. There was a time when

David Cameron was able to surprise Britain. He badly needs to do it

If you could take advice and cash it in at the Bank, the Conservative

Party would never have to tap a rich donor again. It is pouring in

from all sides. But there are basically two themes - those who

say, be more intensely conservative, tough on immigration, squeeze more

tightly on spending, give the country a vote, and those who say

no, stick as near the centre as you can and don't let Ed Miliband Owen

that phrase, "one nation". David Cameron's job is easy to describe

and harder to achieve. He has to we inspire his party and reassure an

increasingly sceptical country that Britain is on the right track. We

will hear from the Prime Minister later. Acres of coverage of the

challenges facing him in today's papers. The writer and broadcaster

Sandi Toksvig and the Daily Mail columnist Andrew Pierce have been

digesting it all for us. Also this morning, Lord Justice Leveson has

finished taking evidence about how journalists go about their trade,

but what will you recommend and what will his plan B? Former News

International journalists are awaiting their court cases to start.

Meanwhile, those who have been hacked want assurances that if

Leveson wants statutory powers brought in, the Government will do

it. I will talk to Hugh Grant later. And a musical treat - and I have a

bin talking to Pete Townshend about the early years of The Who, his new

book and some of his classic songs. Lots coming up. First, the news

from Sally Nugent. The Chancellor, George Osborne, has

ruled out a new tax on expensive properties as a way of boosting

government revenues. His decision comes as Conservatives gather in

Birmingham for the party's conference. Mr Osborne will also

announce a freeze on council tax bills and a cap on train fares.

Who is the party of One nation now, Prime Minister? Barely out of the

car, and the questions began for the Prime Minister. David Cameron

arrived in Birmingham last night, well aware that he has had it a few

months. Gloomy opinion polls, Labour upbeat after their

conference and above all, a struggling economy. But senior

Conservatives are defiant. They insist that their ideas will work.

We have a plan to get Britain back on track. It is starting to work.

The economy is starting to heal. No doubt about how tough it is, but

there is no other option. This cannot be solved with more spending,

more borrowing and more debt. focused this morning is on ideas to

help keep our bills in check. Firstly, council tax bills in

England will be frozen again next year. And many rail fares will go

up by no more than 1% above inflation. There is also a promise

to say no to the next long-term budget for the European Union if it

is too high. All our ideas designed to be popular, but cheap, and

strike a chord with people. Senior figures in the party are aware that

times are tough for many in the country, and times are tough for

them politically. They will want to emphasise throughout this

conference that they get that, that they get fat activists needed

reassuring and people want to be certain that they have a credible

plan for getting the economy going again.

Celebrities including Hugh Grant and Charlotte Church have written

to the Prime Minister, urging him to keep an open mind on regulation

of the press. The letter comes in the wake of the Leveson Inquiry,

where Grant was among those giving evidence. It has been signed by 60

victims of phone hacking, including people involved in the bomb attacks

on London in 2005 and the Hillsborough Justice Campaign.

Andrew will be speaking to Hugh Grant live in the studio about this

in a few minutes. A procession and a church service

is being held this morning in the town where five-year-old April

Jones went missing last Monday. A 46-year-old local man, Mark Bridger,

was charged with her abduction and murder yesterday. A search

operation is continuing around the town of Machynlleth in mid-Wales.

The radical Islamist cleric Abu Hamza made his first appearance in

an American court, charged with 11 terror offences. He was one of five

suspects to be extradited from the UK after a long legal battle.

Abu Hamza is now being held in New York, at a maximum-security cell

next to the court where he appeared briefly. Two other men extradited

with him pleaded not guilty to charges relating to the 1998 US

embassy bombings in Kenya and Tanzania. Abu Hamza's grey hair and

beard were neatly trimmed, but he was without his hook checked

prosthetic hand. The judge read him his rights and outlined the counts

he will face when he is formally charged and asked to enter a plea

on Tuesday. Abu Hamza is facing 11 charges in total, relating to

hostage-taking, conspiracy to establish a militant training camp

and calling for a holy war in Afghanistan. The terms of his

extradition mean he cannot be given the death penalty. Abu Hamza's

lawyer asked the court to return his prosthetic hands immediately so

that, she said, he could take care of his daily needs in a civilised

manner. She also asked for a medical examination because he was

suffering from high blood pressure and diabetes. The judge remanded

Abu Hamza in custody. I don't think it will take long, probably a year

or two before they get to trial. Abu Hamza has alleged that he has

medical and mental issues. I am sure they will try to drag it out.

In the 1990s, Abu Hamza used London's Finsbury Park mosque as a

platform for his messages of hatred. At first dismissed as just a

troublemaker, is angry sermons went on to inspire acts of violence. For

years, Abu Hamza has been the face of Britain's battle against

extremism. Now it is America which seeks to bring him to justice.

In Formula One, the defending world champion Sebastian Vettel has won

the Japanese Grand Prix. The wind takes Vettel within four points of

the Formula One championship lead. After his rival Fernando Alonso

crashed out of the race at the first turn. More headlines just

before 10 o'clock. Now to the front pages. The

Observer has got the celebrity phone hacking story, already

accusing the Prime Minister of betrayal. We will talk about that

later. There is a great deal in the papers also about the appalling

Jimmy Savile allegations and the pressure on the BBC. De Independent

has full coverage of that. Cow all was a good class Coward, says

somebody in the Sun, and who are we to disagree? The Sunday Times has

got the Conservatives will win embattled strivers. And there is

another version of the same story in the Mail on Sunday. Osborne: my

tax gift to middle England. I will be asking the Prime Minister about

that later. Meanwhile, Sandi Toksvig and Andrew Pierce, welcome.

Andrew, as a seasoned political observer, let's start with some of

the huge amount of politics in the papers today. David Cameron, after

the successful Lib Dem conference and Ed Miliband doing much better

than expected, will really have to deliver next week. According to the

Daily Mail on Sunday, he will have to echo Margaret Thatcher and there

will be no few terms, because that could land Britain in the same mass

as countries like Greece and Spain. If you go to the Sunday Mirror,

they have identified not one, but 30 U-turns since David Cameron

became prime minister. There were the pasty tax, the caravan tax, VAT,

selling off the forests. It is difficult, because we actually like

you turns. If it is a policy that is not working, it is better to U-

turn than crashing to the wall. They did a U-turn on the trains as

well. It is a fantastic story. I never thought I would see a story

in the Sunday Telegraph that says we should a re-nationalised

railways. They got their sums wrong by 410 million, quite a lot. It is

all to do with passenger numbers and inflation and things you would

think were fundamental to a franchise. They talk about we

nationalised its East Coast Main Line. Last year, it enjoyed better

punctuality than Virgin bus stop satisfaction is up. More seats,

more passengers and a new destination has been added. They

added more than �350 million to the taxpayer. Ed Miliband went on about

an incompetent coalition government. 24 hours later, we have huge

incompetence on an epic scale. is great for the political

satirists. Speaking of satire, some political fund. The Tories have a

new blonde bombshell called Boris Johnson. The Observer is looking at

his poll ratings. He has 51 to David Cameron's 29, George Osborne

a mere 11. They are asking which Tory could bring over wavering

voters? Cameron gets 16, Osborne gets two, Boris Johnson 62. Boris

is the big show in town on Tuesday. The Observer are wondering what

they do with him. He is their greatest asset? There he is as

mayor of London, not in the House of Commons. He is no doubt hugely

enjoying it, but is he a real threat to David Cameron? Or a, he

does not have a seat. Zac Goldsmith said he might. He would have to

work hard for a nice seat that he wants, like a Kensington & Chelsea.

But one must be careful about the fool who everybody thinks that is

dismissal. Ronald Reagan, when he announced he was standing for

President, everybody thought it was hilarious. Speaking of fools, this

is almost too easy for me, Jeremy Hunt. He always makes me think of

the child that adults have allowed to sit at a grown-up table, and

then he does not behave. I would have thought that just before the

conference starts, that bringing up the subject of abortion would not

be everybody's pet topic. He has said he would like the time to be

reduced to 12 weeks, despite there being no medical evidence

whatsoever for this being a good idea. No improvements have taken

place below 23 weeks. He is not the most popular person. He is one of

those people who is failing upwards. A Gill, the writer, said that all

his life, he had failed upwards. He was the first person to use the

phrase. It applies to many people. After Jeremy Hunt's problems in the

Culture Secretary, perhaps Rupert Murdoch suggested the abortion

angle. Moving on, the Conservative Party. Lord Ashcroft has written a

dowry. He is a former deputy chairman of the party and was a big

bankroll of them. He says he was summoned by Grant Shapps, the

chairman, to see him. I wonder what it was about. Was it questioning

the reshuffle, panning the strategy for attacking Ed Miliband, pointing

out that a third of Tories say they might vote for someone else? Grant

Shapps then cancelled the meeting. To be a fly on the wall when that

takes place. And that is from the loyal paper. And not as many Tory

MPs turning up this year as you thought? I think a massive number

of Tory MPs aren't coming. It is too expensive, many are

disillusioned. It will be a case of Hunt the MP this week. Well, Jeremy

Hunt maybe the only MP. American politics has so much more

razzmatazz than ours. The last time Mitt Romney tried to get the

Republican nomination, he spent $40 million, �25 million, of his own

money. It is astonishing that everybody agrees that the wives are

much more popular, and they wish they were the candidates. And you

think, well, why aren't they? Anne Romany is managing to depict

herself as some kind of woman of the people. She has a stable of

dressage horses, four houses, one of which is being fitted with a car

lift. Surely you have a Khalid? Obviously, just to get in the car!

It is extraordinary. I did quite like Michelle Obama, but she goes

to the gym every day at 4:30am. That is not right. Deeply wrong.

What time do you go to the gym? don't go at all. I take pride in

this. Hugh Grant, who you will be talking to later, was at the Labour

Party conference, taking his campaign for statutory regulation

for the media. In the Mail on Sunday, we have his fourth campaign

for ethics and good conduct rather unravelled in the bar late at night

at the Labour Party conference, when he got into a spat with

Harriet Harman's assistant, and there was a four-letter to rape,

but he has apologised. Not the best way to conduct business for --

there was a four-letter tirade. We must get on to the coverage of

the Jimmy Savell. I like this one, they have discovered a literary

gene. My father and grandfather were writers. Is it Alec Reid gene

or simply good practice in the home? You're surrounded by people

writing and so you start writing yourself. Karl Marx would say it is

your cultural capital. Independent on Sunday have done a

big investigation. Asking why it has taken so long for this story to

come out and that people have known for a long time. Calling for a

serious inquiry. A leading figure is behind this inquiry but it is

interesting to ask why it did not come out before. This is an

astonishing cover-up in my opinion. Should it be referred to the

Leveson inquiry? In the 1980s I had to say that things were different.

I was once unpleasantly groped whilst I was broadcasting by a

famous individual foot shall remain nameless. When I told the staff

what happened afterwards everyone thought it was amusing. This was in

the early 1980s. So I have to say that there was a kind of shrub to

shoulder approach to the whole thing, so that does not surprise me.

I had also heard those stories when I was working at the BBC.

Kershaw says that she was also groped was she was on air. Well it

has been said that there should be a full police inquiry. But it was

not something that anybody talked about. So many people are coming

out and saying it happened to them. There was a culture of young girls

being seen as acceptably easy prey by rock stars, by people in

television, it seems. Since then we have had Childline and there has

been a cultural change. This is not just about groping, these are very

serious allegations. I'm not sure that it has changed completely, if

I'm honest with you. There is still a sense of the very famous thinking

they can get away with all kinds of things. Nick Ferrari in expressed

writing saying that he used to call Jimmy Savell on a regular basis and

used to answer with the line, she told me she was 16. Shocking.

Let us find something else to talk about was stop this is a positive

story about the Army bomb disposal year-old, it has taken him three

years. He was given at 10% chance of survival and he is now starting

to walk with prosthetic limbs. have written a play about the

mental impact on returning service people. I even feel passionate

about it. We can see the person who has physically been very injured

but it is the person who is shattered in side who I am

extremely concerned about. The people applying for stress related

conditions has risen by 10%. And unafraid it is a ticking timebomb.

David Cameron wants to announce an increase in the number of

reservists but they are almost twice as likely to suffer from

depression after they have been out because they do not have the

support of constant contact with their fellow soldiers or mental

health support teams. But the mental health teams that were

promised have not yet fully materialised and we must get that

sorted out. Have we run through all the stories? We must finish on this,

do not sell jam in recycled jars. Another edict to ignore.

Birmingham is looking absolutely gorgeous in the autumn sunshine. I

wonder how much more of that they wonder how much more of that they

is to come across the country. Another lovely autumn day for many

and we continue with plenty of sunny weather to enjoy. Elsewhere

across the Midlands and across East Anglia we have some pretty dense

fog patches this morning and they could linger until the end of the

morning. But once those lift temperatures will begin to rise.

The cloud the thickening in the south-west later and a few showers

in the north-west of Scotland. But it may feel a bit warmer event

yesterday. Tonight we see that cloud moving north, leading to some

heavy patches of rain. Some fog around in central Scotland on

Monday morning. It will be a wet start to the rush hour on Monday

morning in the south-west of England. But the rain easing off in

the afternoon. And it will be another find date with some long

another find date with some long spells of sunshine. -- fine day.

Not so bad then. After months of taking evidence from celebrities

and other victims of phone hacking, Lord Justice Leveson is pondering

his recommendation. Campaigners against media intrusion hope he

will call for independent body to regulate newspapers and punish

wrongdoing. Newspaper editors are alarmed by the idea of the state

interfering in what we choose to read. The actor Hugh Grant has

become a leading figure in the Hacked Off campaign for tougher

regulation and he joins me now. Good morning. He appeared in the

Mail on Sunday as we just heard this morning, can we agreed that

people from well known and perhaps behave slightly foolishly in public,

deserved what they get? On the whole, yes. I have no problem with

that piece of tittle-tattle! question here, you are concerned

about how the Prime Minister is going to respond to whatever it

Lord Leveson suggests? In the middle of that great public outcry

about what happened to Milly Dowler, the Prime Minister quite correctly

set up a huge public inquiry. We heard at that inquiry an avalanche

of really terrifying evidence about the hacking of phones of murder

victims or victims of the London bombings or of the families of

soldiers killed in Afghanistan. Orders mandarin of people who died

at the Hillsborough disaster. And people think how can they get away

with this? The answer turned out to be that the police had been

somewhat compromised, that money had changed hands. And the

government had turned the other way while this was going on because of

fear for their votes, they did not want people turning against them.

And in some cases, personal fears. The newspapers had portfolios on

individual ministers. So the Prime Minister then came to the inquiry

and again quite admirably is said he was appalled by what he had

heard. In the end any new system of regulation to deal with the press

has to satisfy not politicians and their friends in the media but has

to satisfy victims, ordinary victims, forget the so-called

celebrities. It has to satisfy ordinary victims of these crimes.

That was terrific. But then it suddenly a few weeks ago we start

to get strange rumblings from ministers, it saying that the

Leveson inquiry was a waste of time. We get these odd articles in the

Times as saying close sources, reliable sources at Number 10 say

the government has already decided not even to listen to the Leveson

inquiry and to go with yet more self regulation of the press. The

system that has been proven to fell for 50 years and which the victims

have all rejected. Including the family of Milly Dowler. There are a

couple of likely possibilities. One is what newspaper editors want, a

form of self regulation. A new form of regulation with tougher

penalties and all the rest of it. And the other is the possibility of

something backed by legislation. Years but the Prime Minister last

year about this, and you said, when you as Prime Minister undertake to

implement whatever Leveson asks. That is correct. He said if it is

not crazy, I will do it. That is why these articles in the Times,

political experts say it is impossible that they could exist

without a nod and a wink from Number 10. And that is so worrying

to people who signed up to this letter. What do you say to the

newspaper industry has say, terrible things have happened, but

the danger of politicians being able to regulate what people can

read in the newspapers is a real one and something we have resisted

throughout our history in this country and we must not take that

direction. There is no one who has any intention of State regulation

of the content of newspapers. That would be apparent to me and to any

of the victims. All that may come out of the Leveson inquiry is the

suggestion that instead of the press regulating themselves, a

system that has proven to have failed, for there to be an

independent regulator, independent of the newspaper industry but also

of government. So the only bidder statute but might be required would

be to set the thing up in the first place. It is the way that

solicitors and doctors are now regulated. And they are not

complaining. It is the tiny statute required to set this up. Otherwise

the danger is that newspaper editors will say, what is this new

body, we're not doing what you say. Soap you just need that tiny

statute to set the thing up. I do not see the slightest danger to

freedom of expression, freedom of speech from that. A lot of people

would say, this is not a tiny piece of legislation. This is a big move.

Because once politicians become involved in setting something up,

the next time and newspaper does something infuriating to them,

perhaps gets hold of a disc on expenses, there will be calls to

tighten up the regulatory system. And you are setting down on a

slippery slope. A dangerous path. do not think anyone really finds

that credible as a concern except the newspaper executives themselves.

That is an important distinction. I say executives because it is only

executives, the people interested in making money from journalism,

from newspapers, that are worried about this. Journalists themselves

share our concerns. Will working journalists are terrified in their

newsrooms. They're not allowed to write what they want, they would

have a big corporation bearing down and then asking him to write about

how terrible Muslims are. Thank you very much indeed. A my be

the? Only a tiny bit! -- am I a bleeding?

So there's an example of the kind of conundrum that arrives on the

prime minister's desk almost every week. Once Lord Leveson reports,

David Cameron must decide. Aside from the Jubilee and the Olympics,

it's been a tough year for the country. Mr Cameron told us that by

now the pain of austerity would have produced some kind of economic

reward. But it hasn't. Debt is going up, and there's no sign of

growth. Meanwhile noises off, from the health secretary on abortion,

the chief whip on the police and Boris on almost everything, can't

have helped. This week my next guest really has to catch the

country's attention. And in the words of one Tory MP, bring some

sunshine back. I should probably start by asking you about your

branch. You told him that if what Lord Leveson suggested was not

crazy, you would implement it. Is that still the case? Absolutely. We

have to remember why this was set up in the first place. If you read

the evidence from the family of Milly Dowler or Madeleine McCann,

it truly is shocking. The status quo is not acceptable. That is why

the inquiry was set up. But I don't think we have to wait for Lord

Leveson to produce his report. But I'm clear that we must deal with

the situation. We need a regulatory system that works. That works for

ordinary people can get caught up in this world and are treated very

badly. To be crystal clear, if Lord Leveson suggests something that

requires a statute, a new piece of legislation, that will happen?

must wait for what Lord Justice Leveson says. I do not want to

prejudge it. If it was not crazy, it will do it. It is unlikely to

see him coming up with something crazy. But if it means to go

through Parliament, you will stand by that pledge was MAC we have to

wait until he produces his report. No point asking someone to set up

this massive inquiry. I'm sure you're debate brings up many of

these issues, how to get the balance right. We do not want

heavy-handed state intervention. The press must be free to uncover

wrongdoing, to follow the evidence and do the job in our democracy

that they need to do. But on the other hand people have been abused,

people's lives have been torn up by press intrusion. Let him do his

work. I think this goes right across the parties. We all want to

put in place in sensible regulatory system. We are hoping that Lord

Justice Leveson will crack this problem for us. But we must let him

On the Jimmy Savile affair, if there are questions which should be

pursued by the police, everybody has to ask themselves the question

as to whether there is new evidence that need to be looked at. But from

what I have read, just as a consumer of the media, shocking

things have been said. Let's turn to the most important issue, the

economy. It has been flat on its back. Debt is increasing. As the

former prime minister Sir John Major said on this show a while ago,

do you think there are signs of growth out there? Has the darkest

hour passed? These are tough times, no doubt about it. This government

has had to make tough decisions, which have meant the deficit we

inherited, one of the biggest anywhere in the world, bigger than

Greece's, we have cut by a quarter in two years. I am not an economic

forecaster, so I can't tell you exactly what is happening in terms

of the day-to-day growth. But our economy is rebalancing. We

inherited an economy that was too reliant on debt, too reliant on

government spending, too reliant on immigration and housing booms, and

did not have enough jobs in the private sector. In the last two

years, we have seen 1 million net new jobs in the private sector.

Companies like Jaguar Land Rover, here in the West Midlands, are

expanding. We are now making and exporting new things. We are seeing

sectors like aerospace, life sciences, things where Britain has

an advantage and great talent expanding. Last year, more

buildings were -- businesses were set up than any year in our history.

That is the best long-term hope for the British economy. There is a

global race going on. Some countries will make it, and some

will not. I am determined that Britain will make it. We have had

three-quarters of recession in a row, when plenty of other countries

are growing, however slowly. We have a terrible unemployment

situation still, and because of that, government debt is going up.

The very thing you said you would come into power to get down is

going in the opposite direction. When will you get on top of debt?

We have cut the deficit by one quarter in two years. We inherited

a budget deficit of 11%. It is down to 8%. Deficit is the annual

overdraft, and we have cut that by a quarter in two years. It is too

early to say where this year's figures will end up. It is a

challenging situation. You only have to switch on your TV and look

at what is happening in the Eurozone. These are difficult times.

But the key thing is that the economy is rebalancing. We have

seen 1 million net new jobs and new businesses being created. Last week,

with Labour, they had nothing to say about the deficit. This is the

central question of British politics, how we get out of debt

and get growth. Let me pursue you on that one. Nick Clegg, at his

party conference, said that whoever came into power in 2015 would have

to introduce another tranche of austerity - more squeezers, more

cuts because of the size of the problem. He is right. And it

happens before that, because we have to find �16 billion of

spending reductions of before the year 2015. It starts before the

general election. I want us to be the party that levels with the

British public and talks plainly about what needs to be done. We

have to find those spending reductions. If we want to avoid

cuts in hospitals, schools and the services we rely on, we have to

look at things like the welfare budget, where we are still spending

�80 billion on working-age welfare. That is not the disability benefits

or the pensions, but working age welfare. So you need to squeeze

welfare before the general election? We are looking at what we

can do to make sure that welfare is helping people into work. When we

came in, there were some families who were getting up to �60,000 of

housing benefit per family. We have stopped that in the teeth of

opposition from the Labour Party. We have kept welfare, but we need

to go further. When you say we, you mean the coalition government. Nick

Clegg has said he will not allow a squeeze on welfare and more

austerity unless people at the top pay more. I was coming to that. As

we make these changes, it is important not only to recognise

that if you don't deal with pay, welfare and pensions, you will

always have to cut department spending, and that hits schools and

hospitals and things we rely on. Secondly, you have to make sure you

are seen to be fair. Under this government, we have always done

that. The top ten % in this country have paid ten times more towards

reducing the deficit down the bottom 10%. Looking forward, when I

said to Nick Clegg, are you really suggesting that a Conservative-led

coalition can bring forward new measures to further tax the people

at the top?, he said yes. I said, will you persuade George Osborne

and David Cameron? He said yes. Are you going to bring forward measures

of any kind, a mansion tax, a wealth tax, an increase in council

tax bands, to hit wealthier taxpayers? We will make sure the

rich pay their fair share Thunderbird and is probably shared.

Yes, we cut the last top rate of tax, because it was uncompetitive,

but we raised four times as much from the richest in our country by

putting extra stamp duty on expensive houses, by pursuing tax

evasion and aggressive tax avoidance by capping the number of

reliefs people have. We will take further action to make sure the

richest people in our country pays a fair share towards deficit

reduction. I will not announce George Osborne's budget in advance.

Give us an indication. I do not believe we should be a country

where if you work hard and saved and buy yourself a house and try

and pay down the mortgage, I don't want to be a country that comes

after you every year with a massive tax. By that, you in a mansion tax?

But when people buy a very expensive properties, I will not

announce the measures here on your programme, but we will always be

fair and be seen to be fair. Without asking for the measures,

people who are the wealthiest, people who have the broadest

shoulders, will pay more tax under this government, and it will happen

before the next general election - yes or no? Yes, and it is happening

already. The richest 10% in our country are not already -- not only

paying more income tax, they are paying a greater percentage of the

total income tax take than they ever did under Labour. That top

rate of tax had to go because it was higher than France, Germany and

Italy. You cannot run an enterprise, free market economy where you want

investment, jobs and growth, if you have a top rate of tax that is

completely uncompetitive and raises virtually no money. The Government

believes in being fair and will make sure the broadest backs bear

the hardest burden. Presumably, we will not see it going down to 30p,

as some of your members would like? Taxes are a matter for the

Chancellor. Let's move to what you were saying about welfare. A lot of

Conservatives feel that the Government has not done enough to

look at what the state does, and trinket in a more radical way than

you have done so far off. Some people are talking about ending

universal benefit. People who are pretty well off perhaps should not

get all of the kickbacks from the state that they get at the moment,

be it help with child welfare or whatever, but they should be an end

to universalism and a new look at the welfare state. We will look at

all of these issues. You can judge the Government by what it has done.

We have said to better-off people, we have to take away your child

benefit. Unpopular, but necessary. We looked at tax credits, which

when we got him, Members of Parliament were getting tax credits.

We have stopped that. We also looked at things like housing

benefit, where bills were just going up and up. We have control

that. Further steps need to be taken and we need to look at the

choices we make. Take young people. You leave school, go to college,

work hard, get a job. You don't have any chance of having housing

benefit. You probably live at home with mum and dad, often into your

thirties. If you don't go to college, signed on, don't get a job,

get housing benefit, and if you get a job, you probably used for

housing benefit. We need to look at the signals we send in welfare. You

should recognise the welfare cap we put in place, showing that no

family should be better off in welfare than in work. That was a

sensible and popular thing to do. There is more to be done, but the

promise I made at the last election to Britain's pensioners, when I

said we would not take away their winter fuel allowance, free TV

licence, free bus pass, that promise stands. Doesn't sound like

you will do much with the welfare budget, then. We have done a huge

amount. Judge us by what we have done. People said for years, you

cannot cap welfare. We did. Pippa said you can't reform public sector

pensions. We cut costs in half. We are a radical government that

recognised that Britain is in a global race and countries that

succeed will be the ones that deal with their bloated welfare systems,

reform education. There is something more vital, which is that

the countries that succeed will be the ones that realise that you have

to unlock the aspirations of all the people in your country, those

who want to work hard and get on and what that first home, that

first flat, that first job. What will you do for the hard-pressed

middle? The hard-pressed middle include many of those people.

First-time buyers, if you don't have the Bank of mum and dad, you

are probably in your thirties. You have to save for years. Welfare?

Today, we have announced that we build capped the increase in

welfare -- the increase in rail fares to 1% above inflation. If you

have worked hard, page your income tax, your national insurance, you

have got your take-home pay and then there is a massive bill from

the council, we have kept it for three years in a row. Turning to

Europe, a lot of people at this conference are very confused as to

whether you really want a referendum on Britain's future in

Europe or you fundamentally don't want one. Europe is changing. The

single currency is integrating rapidly. This presents a great

opportunity for Britain to get the sort of deal we have always wanted.

Let's be at the heart of a free- trading open-market Europe, but we

don't want endless political integration. The opportunity will

open up over time to get a new settlement. When we get that after

the next election, we should have new consent for that settlement. It

will either take place through a referendum or at a general election.

New settlement, new consent. wonder how much that new settlement

will re- right where we are at the moment. Theresa May has said this

morning that she would like to see the whole question of Inter Europe

migration, people who are part of the EU, looked at again. Not those

who are part of the system, but the freedom to work and travel across

Europe. She thinks that needs to be put back into the pot. I agree.

That is why we are having the balance of competences review. We

will go through all the things we have in our relationship with

Europe and work out what is good for Britain and where we need to

change. I believe in the single market and free movement. Two weeks

ago, I visited two factories in a week and asked the question, how

many people do you employ from other EU countries? In one, it was

60%. In the other, it was 50%. We have so many unemployed people in

our country that we want to train and educate and get people back

into work. We have to do better on welfare reform. Can you really

reopen something as fundamental as the free movement of people across

the EU? It is absolutely right to go through every topic and see what

is in Britain's interests. We have already capped immigration from

outside the EU. We are shutting down the bogus colleges that Labour

allowed to go on for a year after year, when people were just coming

to work. This is a radical government, acting on the things

When you have the single currency there will, time when you need to

have to a European budgets. One for the single currency because they

will have to support each other much more. And perhaps a wider

budget for everybody else. We will not achieve that this time but it

is an indicator of the way that Europe is going. Before that

happens, the European budget is set to rise considerably. Would you try

to stop that happening? necessary, yes. There are annual

budgets and last year we achieved something that was in real terms

big freeze. We said we cannot go on pouring money into the European

Union when we're cutting budgets at home. And the next thing is a

multi-year framework for the European budget that Texas from

2014 for five or seven years. That is something all European countries

have to agree on. My approach is that if we cannot get a deal that

has proper control of that budget, I will not agree. Would you veto

any increase in the Budget? I will not lay out my Nicosia in strategy.

But people in Europe know I mean what I say. I sat around that

country, as said that is not in the interests of Britain and I'm not

signing. They know I'm capable of refusing. That is as clear as we're

going to get on that one. Returning to the referendum question, you

said there would be a new settlement and when that happens

you would take that to the people. That does not sound as if you are

in favour of an in or out referendum by the Nile or in the

future. I think the problem with that, as straight yes or no, I'm

not happy with the status quo so I do not want to say yes to that.

Byatt also believe it would not be a good idea to leave Europe, are

businesses badly need that a single market. I think UKIP is a complete

waste of time. But most people in our country to not actually want to

leave the European Union, they want to change it. I want to change it

and a Conservative only government could go and change it, could have

that we need Association. Especially as you see Europe

opening up in all the ways I have explained. Let me ask about

Afghanistan. It has been a long time since the House of Commons had

a proper debate about the war in Afghanistan. In terms of the dead

and wounded, psychologically scarred British soldiers coming

back, it has been terrible. It was always sold to this country as

worthwhile because we were training up an Afghan national army and

police who would within a couple of years be ready to take over the

country. Instead, these people are killing our people. I put it to you

that the strategy has failed and it would be honest to accept that.

think about this more than anything. I feel deeply responsible for the

young people we send out there. The level of loss is extremely

upsetting and heartbreaking for the whole country. But I think we have

to be careful about what is actually happening. We are training

up Afghan police and soldiers and they are increasingly capable. I

was in one of the three areas we control and I sat down with the

colonel with his meant and he showed me patrol base after a

patrol base that on previous tours were occupied by British soldiers,

now occupied by Afghan soldiers. These so-called green on blue

attacks are hideous and we need to do everything we can to stop that.

But we are actually on track to deliver an Afghan army and police

capable of doing the job we are doing now. We will not leave behind

some perfect country with a perfect government. But we can't leave

behind and it Afghanistan that is strong enough to stop it once again

becoming a haven of terror. In your mind, is there a hard, final date

for the exit of British troops? Absolutely. By the end of 2014. The

question is between now and where we need to be, what is the pace of

handing over to the Afghan army. That is things discussed and a

short we can come up with a sensible set of steps to see those

numbers reduced. A lot of people say this is the problem. If you are

the Taliban, the bad guys, you only have to hang on until 2014 and then

you can come back again. And it is impossible to win this kind of war

to a deadline. I would put it completely the other way round. The

Taliban would most like as to say that they would be -- that we would

be there for ever. That is their recruiting staff. What the people

there want is to hand over to an army that is capable. Let us talk

about walk local issues. There has been an huge flurry of fascination

with Boris Johnson. How long he is going to be here. He's not going to

be listening to Europe speech. You have had this fantastic summit over

a pint in some pub. How do you regard him? He is a man of enormous

talent but he also has flaws. Give us your opinion of Boris? I think

he is a fantastic mayor of London and an enormous credit to the

Conservative Party. I like having other people in the party who are

popular, who get out there, who explain our vision and values. And

Boris Johnson is fantastic at that. People warm to him and it is great

that we have figures like that in the party. I have said to him, when

you have done your job as London mayor, do not think your job in

politics is over. That would not have occurred to him for a second!

I think he has a huge amount to offer and I would encourage him to

do that. Let me ask you about Jeremy Hunt to raise the question

of a radical cut in the term of abortion. He was asked a question

because the previously voted for 12 weeks limit. He said that he stuck

with that opinion. Would you welcome if fresh vote in the House

of Commons on this issue. You made it clear it would be a free vote.

Is it time to debate this again? The government does not have plans

to bring forth legislation. We do have a vote from time to time about

these issues. Under this government will now have the ability of

Parliament to decide what it wants to vote for. My own opinion is that

a modest reduction from 24 weeks, I would vote for that. I voted

against told weeks. But it is a vote of conscience issue. And the

health secretary is entitled to have his own opinion. But it is not

the government's you. Last week Ed Miliband by common consent did well

in terms of his party speech and so on. What would you say to those

people the say that Labour cannot win under Ed Miliband. That is not

true, is it? I have never taking anything for granted and I never

would. The central question of British politics right now is how

do we get out of the difficult straits were in, how to deal with

the debt and the deficit, grow the economy, the Conservatives are

talking that language and taking that action. I did not hear

anything from the Labour Party on any of those issues. So it is not

the speech that matters of what you're going to do. This week in

Birmingham you will hear in huge detail how we get the people who

want to get on and make something of their lives, that is what it is

about. Now for the news headlines.

David Cameron has said the government will make sure the rich

pay their fair share, paying a greater percentage of their income

in tax. But he indicated that a mansion tax would not go ahead. Mr

Cameron also said the government must find more spending cuts to

would just the budget deficit and said he would love again at the

free movement of migrants from other European countries.

Celebrities including Hugh Grant had written to the Prime Minister

urging him to keep an open mind on regulation of the press. The letter

comes in the wake of the Lord Leveson inquiry. Speaking on this

programme Hugh Grant said he was concerned there was pressure from

within government to prevent tough regulation. That's all from me for

now. Back to you, Andrew. On Sunday Morning Live up to nine

out of 10 of us believe we should stop people spending their benefits

on drink, drugs of gambling. Is it time to reduce the limits on

abortion? And what kind of Leader Plus modern Britain what. Join us

at 10 o'clock. Just before we go this morning, a

sneak preview of a big interview coming up in next week's programme.

Among the rock legends who burst onto the scene in the 1960s, they

don't come much greater than Pete Townshend, the guitarist and

songwriter for The Who. Hits like My Generation defined the era and

have become classics. In his only television interview, to coincide

with the publication of his autobiography, he talked candidly

to me about the rock and roll lifestyle, his guitar-smashing

stage antics, and how he came to be on Britain's register of sex

offenders. But most importantly, of course, about the music, and what

it means to him. And he even gave us an exclusive performance.

Songs do sometimes reveals something that you do not intend. I

wrote this song about a villain. It was a project called Life House

which was on the radio as a play. The villain at the end of the piece

sing this song about the fact that he feels he has betrayed his

friends and the people around him. It is as simple as that. When I

played it once in Germany, I realised that in a sense it was a

song about being white and blue eyed. And wrong! It is also of

course a song about me. And about the fact that three members of the

band have blue eyes. # No-one knows what it's like to be

the bad man, to be the sad man, behind blue eyes.

# No-one knows what it's like to be hated. # But my dream's still as

empty as my conscience seems to be. Whenever I sing it I think that I

wrote those words about everyone else. But it is kind of about my

own life, who I am perceived to be. It does perform that function.

Pete Townshend. And you can see the full interview next Sunday, when

we'll be back in our regular studio in London. But at the slightly