Middlesborough cited by David Dimbleby as a place high in unemployment, where a lot of people are employed by the Public Sector, and were likely to feel the brunt of the Comprehensive Spending Review announced yesterday. Will Osbourne's plan be the path to salvation or ruin?
Members of the Panel:
George Pascall Watson
Former Sun Political Editor, key in switching the paper's support to the Conservatives
[GPW]
Polly Toynbee
The Guardian Columnist (front-page article in the paper today)
[PW]
Phillip Hammond
Transport Secretary
Architect of the Conservative Economic Policy
Conservative MP for Surrey
[PH]
John Denham
Shadow Business Secretary
[JD]
Caroline Lucas
Leader of the Green Party
[CL]
General Sir Richard Dannet
Former Head of the Army, and advised David Cameron for a time.
[GSRD]
From the audience's Left to Right:
GPW, PT, PH, David Dimbleby, JD, CL, GSRD
Q: Can cuts be justified in 'fairness' when it will devastate the unemployed, sick, and poor?
CL: No. IFS (the Institute for Fiscal Studies) say the poorest 10% will pay more.
Caroline Lucas came across very well.
An audience member brings up and accuses Phillip Hammond of 'Tax avoidance' as suggested by a Channel 4 'Dispatches' programme. Something about transferring funds into his wife's account, so it's not affected. He doesn't do well to dispel the allegations, which are technically legal, but morally shady.
PT: With all this talk of 'Broken Britain' she associates the cuts with 'Breaking Britain'. Quotes statistics, facts and figures from Middlesborough College (apparently across the road from the studio) - which gives off the impression that she's done her research on the area prior to coming on to the programme. Makes her more engaging. It's easy for her to fall into defending the previous government, where she stops herself and says she'll leave that job to John Denham. When questioned by Dimbleby as to what she would do, she says she would have gone 50/50 on Tax and Cuts. She admits that for herself personally, she would not be affected by the decisions. But those who are less well off would be.
GPW: Further confirms that he helped to persuade Rupert Murdoch, who has publicly endorsed the cuts and proposals. GPW is asked on his take on 'fairness'.
JD: Says that this Coalition Government made a choice, to have the neediest areas have the deepest cuts (Area Based). With a tendency to blame the deficit on the Labour government, he tries to frame and contextualize this. Explains that part of the deficit came from a World Banking Crisis, that they injected money into the banks to help them, an action that the Conservatives opposed. Says that Labour would have made cuts, but that they would be done at the right pace, approximately half. Cites the OBR (Office of Budget Responsibility) and the IFS predicting "slower growth".
CL: Says that Osbourne is closing his eyes, and hoping the Private Sector will bail them out. She accuses the Coalition Government of deficit-blaming (on Labour), and compares the Chancellor's handling of the budget like a housewives' budget, instead of a National Economy. Caroline Lucas is really coming across well.
Will Middlesborough be brushed over the precipice?
GPW: Admits that the plan is a gamble, and an experiment. He asks everyone to hope it works, to gather support, because all our destinies fall on it. [Receives some applause]
SGRD: From his personal experience of troops from this part of the country, he says that Middlesborough thrived on private investment before, early in it's history, and hopes that it will be able to again. Because money's not coming from government.
Dimbleby asserts that half of the population of Middlesborough are employed by the public sector, as there are visible resounding nods from the audience.
Audience member says that the economic drivers for boosting the economy specifically for the area are just "wooly rhetoric". There needs to be more black and white clarification. Leads neatly on to the next question:
What are the economic drivers for Middlesborough?
PH: Is talking, but not answering the question...
JD: Pointing attention to in the last week, the week that cuts to be made are announced, the Coalition government gave the go-ahead for eight Nuclear stations to be built in the UK, but with steel work to be imported from North Korea and Japan.
PT: Appreciates the question, Where does growth come from? She talks of the Conservatives as having a 'mystical belief' in their proposals. The shrinking of the state is for ideological reasons, and they're hoping for something magic to happen.
There's mention of the fact that two aircraft carriers have been given the go ahead to be built, but they won't be used for British aircraft. Last week's SDSR (Strategic Defence and Security Review) is referenced.
GPW: Puts a good spin on the seeming lack of logic. Says that cancelling projects is a lot more costly, and is really a mixed blessing...
JD: Says that the whole thing was not really a comprehensive Strategic Defensive Review, but rather "a cuts excercise that fits a Home Office budget".
PH: Blames the aircraft carriers on Labour.
What will be the nature of the bank's contribution?
In light of the £2 billion levy on banks.
PT: It's not enough. She proposes the 'Transaction Tax', a so-called 'Robin Hood Tax', where a tiny proportion of every single transaction made would contribute.
PH: A 'Transaction Tax' is problematic. Osbourne has set up a 'Code of Practice' where 4 of the major banks have signed on to comply. The remaining ones (2 more) are under pressure to conform and sign.
An audience member says that we're too dependent on the banks. Consequently, we can't tax them, otherwise they would leave for overseas. We'd effectively lose British banks.
GPW: I personally feel this guy's a politician in the making! Says whatever your views on the banks, all the customers here are part of the solution. The people are the seedcorn for which the banks exist.
CL: Mentions being offset by 'Corporation Tax'...
Audience member says that she has a business in Stockton, that started this year, and was dependent on public finances. In light of Public sector cuts, and virtually no help from banks, the politicians in favour of the proposals are over-optimistic that this scenario is going to change anytime soon...
Stuff I didn't get and had to look up:
Quantitative Easing (QE)
Randomly occurred to me, and not really used in the context of this debate. A monetary policy used by some banks to increase the supply of money by increasing the excess reserves of the banking system. It has been termed the electronic equivalent of printing money.
Area Based Grants
A general grant allocated to local authorities as additional revenue funding to areas.
Apparently cut in June 2010 by the Coalition government.
Sources: An article from the National Housing Federation, an article in the www.communities.gov.uk website.
SDSR - Strategic Defence and Security Review
The last SDR (as it was called) was in 1998. This one is overseen by the newly formed National Security Council, standing alongside a new National Security Strategy.
Source: An article from the Library of the House of Commons
Corporation Tax
Levied in the UK on profits made by companies, and the profits of permanent establishments of non-UK companies and associations that trade in the EU.
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