27/11/2011 The Politics Show North West

And what the Chancellor's Autumn Statement on Tuesday, we examined

the state of the region's economy. And revealed just how much has been

Apology for the loss of subtitles for 2016 seconds

Welcome to a special Politics Show in the north-west. Today, it is all

about the economy. Is the government on the right track? Our

panel of experts will decide. And still with the financial theme

that - council cuts. We revealed just how much has been sliced off

the north-west's budget in the past year.

This week we are at the Royal Exchange in Manchester. Today, it

is a busy theatre. But 200 years ago, it was at a financial heart of

the city's cotton industry. At one point, Mancunians boasted it was

the largest trading floor in the world. That was in the 1870s, and

then Britain was booming. But fast- forward to today, and it is a

different story. 18 months of austerity and cuts. The coalition

says it has to be done, but do people agree? The cost of living is

too expensive at the end of the day for normal people. I am concerned

about the number of young people unemployed and the fact that small

businesses are not getting loans to start up. I am in recruitment and

the way the market is going at the moment, they are a lot of people

out there and not a lot of jobs. There is no support for businesses

to develop and progress. I think David Cameron is doing a great job.

As good as possible. It will get better, we just have to be patient

and work hard. Well, with me to discuss whether

the chancellor's got it right or not - Frank McKenna, the chairman

of regional networking group Downtown in Business. Cathy Elliott,

the chief executive of the Community Foundation for Lancashire

and Liverpool, a charity which works to promote the big society

and philanthropy. Steve Stott, the regional manager for public sector

union Unison. And Councillor Michael Ranson, the leader of

Ribble Valley Council. If I can start with you, Steve Stott, this

autumn -- this autumn statement is not meant to include new policy

announcements, but what would you like to hear from the Chancellor on

Tuesday? An apology. An apology for the fact that these cuts are too

deep, too fast, and they are affecting ordinary members of

society in a significant way, which means that people are uncertain

about their economic futures. Household incomes are plummeting

and there is no guarantee about future jobs, growth and development.

And now they are attacking our pensions. So we want to see an

apology for those policy decisions and some changes in the way in

which they tend to deal with the deficit. Frank McKenna? I think

we're looking for signs that there will be more support for businesses,

particularly small and medium-sized enterprises. There is no question

the economy has stagnated since the summer. The eurozone crisis has

said that as -- put us in another area of uncertainty. I think

Cameron has to start looking at the tax regime and cutting bureaucracy

and red tape. We year the government talking a lot about that

but we haven't seen as much action as is necessary. As far as general

cuts are concerned, I don't think they have much room for manoeuvre

to be fair. The deficit has to be reduced. I would argue against the

disproportionate nature in the way those cuts have been introduced. In

the north-west, we have suffered far more than elsewhere in the

country. But other than that, I don't think there is a case to be

made that we should cut back in terms of looking at extra

expenditure. I don't think we have that sort of security. Cathy

Elliott? There has been some support for the voluntary sector in

this time of transition. Infrastructure charities will hear

about that in January, but not all charities will benefit, so it would

be good to hear more about what support can be given. I appreciate

it has to be a short time thing as we look towards sustainability. The

other thing is, the government is asking for philanthropists to step

up at this time. I think so more support for them would be helpful.

As a Community Foundation at work, we are organising an endowment

scheme, but so more support would be great. And finally, Michael

Ranson? The government has to help small businesses, because that is

where the growth it will come from. We look to see improvement of

infrastructure, but we are in a very difficult decision -- position,

and we have been struggling with the eurozone crisis now for a few

months. I think we have to look at it and say, if the Chancellor had

not done what he did 12 months ago, we would have been in the position

of Spain, Portugal, France. There is very little room for manoeuvre

in that respect. And it will not get an awful lot easier, but it is

something we have to continue with. I will stop before the moment

because, obviously, it has been 18 months of austerity and cuts in the

north-west. We thought we would add up exactly what council has done

what. Our political editor has the Official figures show that in the

north-west, the number of people in local government has reduced from

222,000 to 204,000. That is a cut of 18,000 full-time jobs, or about

8% of the work force. Meanwhile, some councils have changed

conditions of employment. For example, one has stopped extra

payments for and sociable hours. -- four hours which are not sociable.

Many of our staff been less than �17,000 a year and they are facing

a thousand found -- a �1,000 pay cut. We find ourselves in a very

difficult financial situation throughout the UK and it is

important we reflect that. course, it is not just jobs, but

services as well. Here are some examples. Bolton council stopped

providing free bags the dog to. Borough Council's reduced opening

hours for its Docks Museum. And herein Lancashire, they are

proposing to close four out of 19 household recycling centres,

including this one in Colne. I was surprised, in this day and age,

when a cycling is so important for them environment. -- recycling.

asked each council how much money they have lost from annual budget.

The total came into at three- quarters of a billion. In cash

terms, the biggest loser is Manchester City Council which has

lost 25% of its budget. There is a sort of feeling in government that

you can reduce the amount of expenditure by simply being more

efficient. But there comes a point where, actually, efficiency gains

don't give the the level of reduction they are looking for. So

you're talking about actually reshaping it into a different kind

of service. And unlike everything here, those jobs, budgets and

services are unlikely to be recycled. They are probably gone

for good. We move now to Preston, to Lancashire County Council where

I'm joined by the Conservative leader. Councillor, we have seen

are the fact you are closing four recital in centres. Do you accept

that because of the cuts there are services which you would like to

keep but which have to go? That is inevitable. Back-office cuts take

up less than 10% of our budget. If we have to lose 25%, it is

inevitable we will luck -- look at frontline services. We are closing

four recycling centres so we can protect services to the more

vulnerable people in Lancashire. And have you been able to do that?

Well, yes, we have. We are in a good place and we are in a position

where we can invest more in services for vulnerable people. For

example, as you know, we have done a three-year budget and we are

ahead on some of the savings. have got rid of about �80 million

so far, is that right? Yes, we had to do that as part of this year's

budget. But we are ahead on next year's predicted figures. So we

have been able to invest more in respite services for kill children,

for example. -- for Sick children. These are one-off savings. Yes, so

we must invest them in one of issues, rather than on going.

think you are there any council in the north-west that implemented a

three-year budget. Has it worked out? Yes, it meant we could make

the reductions in a considered way, without having to panic and make

last minute measures. It also meant we made the savings for the three

years. Some are not yet implemented but we know what they will be, so

that gives certainty for the people of Lancashire who receive our

services. And for our staff as well, so they are not looking over their

collective shoulder wondering what is going to happen next. Thank you,

councillor. Cathy Elliott, you work with the

third sector. Council cuts have hit this sector quite badly, haven't

they? They have. The voluntary sector at the moment is looking at

the effect of that and we are behind every other sector, because

we are waiting to see what happens. Donations are down and funding from

public services is down as well. So they are charities which will close

down and have done already or will do in the future. But what the

sector is doing at the moment is reorganising itself, working a lot

more in collaboration, considering mergers. The council, the CBS have

come together with members of the community to continue to put the

sector in the needs of the community as well. I imagine when

you hear it charities are having to merge to keep themselves going,

does it make your heart sink? course there is a place in society

for the third sector. But again we have to get to the point that, in a

modern society, public services are crucial. Well, it your members are

going on strike, and some would say that will cause more damage to the

economy. Our members are really going on strike because this

government has decided that people should work longer, pay more and

get less in terms of pension provision going forward. That is a

legitimate concern that people have, and they have decided to vote for

industrial action as a way of showing to this government, and to

our communities at large, the importance of the work that our

members do, the necessity of that work, and that we cannot allow the

situation to deteriorate any further. There are lots of ways in

which existing pension schemes are financially sound. This is not

about making those pensions seem sound a, it is about paying back on

the deficit. The deficit, which I repeat, has not been caused by

union members or public sector employees. From the private sector

perspective, there may be more sympathy with the public sector if

they were looking at different issues. I think pensions is the

wrong issue to go on. What should they be looking at? Well, I think

if you were to say that Manchester, Liverpool and other parts of the

north-west have undertaken cuts that are far over and above what

other parts of the country had seen, and think you would get private

sector support. We would never want to see industrial action, but the

idea... But this isn't just pensions. Pensions is the headline

issue. And I have to say, if you look at what has happened to

private sector pensions during the same period, they have been

absolutely decimated. Similarly, if you are looking at a population

which is ageing year on year, none of us, thankfully, are living at

last, so inevitably there will be an impact on how we can pay those

pensions. Let me bring in Michael, because you are leader of the

Ribble Valley council and you have not had to make any redundancies

and you have managed to freeze council tax. Howard you done that?

First of all, I hate the word "cuts". It is restructuring. Local

government is in a major need of restructuring. It had gotten quite

a bloated in the past 10 years. You can look at the amount of people

that they can let go, and in fact the services have not been badly

affected. One local council, they had six directors paid over

�120,000 a year. They have got rid of four of them and I don't think

they have noticed! So when I say restructuring, I really do mean we

have to look at what everybody is doing. As far as Ribble Valley is

concerned, we looked at this before the last election and decided that,

whatever would happen, whichever government was in power, we would

have to reduce our costs. So you would say you were more prepared

than other councils? I think we had about 20 or 25 people who left and

we never replace their jobs. Because we knew that it was

unsustainable. Steve, can other councils do what they did here?

councils are having to look at the way in which they operate. All

councils about responsibility. The trade unions are working with those

councils to ensure services are provided and the cuts that ochre

are ameliorated as much as possible. -- the cuts that happen. But it is

the work force that has to pay for this mess. We say that there are

alternatives, and some of the alternatives that are being put

about now are quite sensible. For instance, looking at the way in

which the VAT increase last year has had an absolutely detrimental

effect on small businesses - we should look at that and maybe a

review that and reduce it. Let me bring in Frank McKenna. Vat, are

you worried there could be another increase in that? I don't think

there will be another increase. The problem with the changing VAT on a

temporary basis is it often causes more businesses more hassle than it

is worth. Small businesses want finance the most. Banks have

stopped lending. They all say they are open for business, but the

reality is different. The Chancellor has to come up with some

practical help for businesses in terms of finance. The other thing

is red tape and bureaucracy. You know, around issues such as

employment law and tax. Eight m r I a more aggressive now in terms of

chasing small businesses and they have ever been. -- HMRI. I think

councils such a big -- such as Liverpool have been terribly

creative in how they have handled all these cuts. They are working

with the unions and with the private sector in those cities to

actually continue the economy moving forward. But, as I say, what

we all want is the is compromised negotiation. And I am afraid strike

action does not help in that regard. I understand and appreciate it is a

last resort. I don't think we're there yet. Cathy, let me bring you

in their. What we're trying to do is making sure the needs of the

community is met. -- are met. What we always want to do in the

voluntary sector is benefit the people in the community. It is

about thinking of new ways in which we can work together. OK, thank you

for joining us. Now with a look at this week's

events, here's Gill Dummigan. The Employment Minister was in

Liverpool this week talking tough on benefits. Chris Grayling says

he'll do more to help the unemployed to find a job, but they

have to do more to help themselves. We want to help you get back into

work, but if you don't accept that help, you can't expect to keep

claiming benefits. In the week that the High Pay

Commission found some executive pay packets increasing by 4,000 percent

in the past 30 years, one North West MP is calling for it to be

given more clout. Manchester Central MP Tony Lloyd wants a

permanent commission with added powers. He says the current pay gap

is bad for the morale of the whole country. This kind of pay gap is

very socially divisive. That is not good for any of us.

And, after months of wrangling, it has been confirmed the Liverpool

Coastguard station will close in 2015. It is part of a re-

organisation of the service, which will see the closure of eight

stations. However, a rescue team is being kept on Merseyside.

That is just about it for this week. Just to mention that we can

officially call ourselves the award-winning North West Politics