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tv   On the Move  Bloomberg  April 14, 2015 3:00am-4:01am EDT

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denies the country is preparing to the vault area negotiations with the eurozone continues. u.k. inflation. inflation data is due out in 19 minutes time. consumer prices are expected to stagnate. in just 30 minutes, keep her right here on bloomberg for the u.k. election. from the british museum is coming right up ahead of the open. we are a little bit weaker. a little bit weaker yesterday on the ftse. we traded lower. it was i we will try to lower. manus cranny has a pretty -- it looks like will trade lower. manus: these equities have had the best quarter since 1998. slightly lower open as equities are any seven-year high. china lowered money market rates. i had the gdp figures tomorrow. will the u.k. dodge the inflation bullet?
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the index is expected to come in and 0.0%. the director said he thinks i should give it a negative. but of course at a 0% or deflationary restoring in the united kingdom would add credence to the bank of england leading rate unchanged well into next year. you are right, nokia have confirmed they are in talks with the whole of intel. that is what is going to really address here. we have an opening print on nokia. a little bit more talk. i will not go through it and much more detail. nokia is down 3.7% freedom without they might go up. neither is a possibility and they will -- start negotiations. they are buying the business of what would you do when you get
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your hands on it? lvmh is virtually flat. the equities market despite prices rising by 16%. you will spend a little time with andrew in paris. bouldering watching -- bulgari, watching. those are the three stocks to watch. on the currency front, one thing that caught my eye. a straight hits to the pause -- australia hit to the pause button in terms of not intervening and manipulating their currency even further. central banks all on the pause. jonathan: thank you. where a look at the nokia deal. they're in advanced talks to buy alcatel. they would need francois hollande's seal of approval. manuel, the question is why
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now? manuel: that is a good question. now we have two companies that are more streamlined we have really good financing markets and on top of it, we have nokia stock which is doing very, very well. it is the perfect time for nokia which has been streaming in the business in the past few years and focusing more on actually take that the step of offering alcatel. jonathan: nokia is known for the handset and they got rid of that business and they want to concentrate on making the road and said the cars they go on it. for you, aren't they growing? manuel baigorri: actually, they are. they trend the business.
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the mobile handset units was sold to microsoft a couple years ago. it was a major transaction for nokia. it helped them in raise cash and focus their strategy on what they believe it will be going forward in the next few years. they are actually growing and they see the combination of nokia and alcatel a matter of when instead of if. and this whole industry. jonathan: what about nokia going to china? manuel baigorri: their main customers are european and asian. they have a little bit in the u.s., but i think the combination with alcatel will provide a huge market shell -- share in the u.s. as well. jonathan: a lot of people looking at this and thinking what is going to happen with the mavs business? manuel baigorri: exactly. we were reporting on this story. nokia was selling the maps.
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a very interesting markets. one that has been struggling for the last few years. it is competing with the likes of google. it is really hard for them to actually make the business profitable and they decided they have come to a solution to focus on the main area of them. jonathan: in terms of the pricing what kind of price are we looking at? varoufakis manuel baigorri: -- manuel baigorri: i guess looking at the industry, we could be looking into maybe 30%-40% premium. it seems nokia have the capacity to do it. its stock is done very well recently. and also, that have a really strong cash position. on top of that, you potentially the maps down the road doing very well to serve nokia to achieve. jonathan: manuel baigorri thank
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you for joining us. another stock another corporate top story, lvmh sales. a little bit of a euro tailwinds. the stock is little weaker down by 0.6%. the rest of the european indices on record highs on friday. he came back it the yesterday on the ftse 100. a little lower 0.2%. the stoxx's hundred meter fresh all-time high but lost her this morning. -- of the stocks made a fresh all-time high but lost some this morning. the dollar m a record -- the dollar-lira a record high. elections in turkey. the turkish lira is showing weakness. the singapore dollar, that climbed higher as the authority in singapore holds off on adding more stimulus. stronger yen against the euro.
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up next, we'll talk about greece in denial. the government denies report they are preparing for default. if it is no the table, then what is klezmer we will discuss that next. -- if it is not on the table, then what is? we will discuss that. ♪
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jonathan: good morning and welcome back. i am jonathan ferro. about 10 minutes into the session. the stoxx is down. a little bit of weakness.
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let me bring you up to speed with some of the top stories. the u.s. and israel criticizing russian decision to lift a ban on delivery often air defense missile system to iran. it as string to nuclear talks. russia's self-imposed embargo against selling the system was put in place in 2010 print the singapore dollar climbed after the central-bank kept policy unchanged. the government also announced growth of -- beating estimates. that what you call a low bar. a 16% increase in first-quarter sales. the largest luxury maker, the euro has weakened. lvmh shares selling lower. and greece has denied reports in the financial times it is preparing for a data the fault unless more aid is dispersed from creditors. let's go to host nichols.
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look, it is stating the obvious. -- let's go to hans nichols. what are you going to prepare for. greece needs the money, how badly do they needed and how quickly will they run out? hans: today, they will be rolling over 1.4 billion in t-bills and april 17, another one million in t-bills. most of your box by greek banks. there should not be a huge high risk. the biggest issue in may and i believe may 12, 700 million euros in special drawing so approximately 770 million euros due to the imf. what are the core of the report is saying is that there is not a deal by april 24, that's when finance ministers meet to have should this out, greece will be left with no other choice but to default. the government last night has denied at every opportunity given. the greek government has denied
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in this report which is citing people familiar with at the thinking of greece's government. unclear if the sources are inside or elsewhere. we should really note that greece is denying this report at the same time, we heard from the defense minister of greece. he spoke in a local interview and said greece will not sign a new memorandum that includes austerity. it is quite a bit of wiggle room on what is defined as austerity. and it is important to note that a lot of times with that other ministers, the defense minister speak on economic matters when the economic matters are not really done inside of their ministries sprint let's see if this percolates out and is repeated by someone of more like mr. tsipras or mr. varoufakis. this increases pressure for the april 20 for the meeting. i think i will be heading there. it'll be a late friday night.
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jonathan: i suspect you to be there. my question is you say a lot of pressure on the meeting. with this report a little bit of leverage on the greek side of things -- hans: the idea that the greek is prepared to default and they are comfortable with that could potentially strengthen their position. we have heard him as a mirror image from the german press were germany could live with a greek default. both sides are staring down each other anonymously in papers saying we could live with the default. and then the value, the strategic example is somewhat muted. i would be very suspect if anything in general until we hear officially from mr. tsipras and that includes things to come out of mr. varoufakis free if we learned anything is that member of -- mr. varoufakis can sometimes be contradicted if not
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contradicted undercut by mr. tsipras. a lot of the finance ministers when they meet in brussels they prefer to deal with mr. tsipras because they think yes the final word. -- they think he has the final word. jonathan: let's bring in stephanie flanders. stephanie, great to have you with us. my colleague compared this to getting wet when compared in the rain. prepared for default. it's kind of obvious. stephanie flanders: i am surprised that the markets moved print it would be bizarre if they were not making or thinking about it. i'm sure other people should at least be thinking about it. a point i find interesting is that when the new election to happen in in greece, a spike of concern around greece leaving the euro.
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we are still talking about that. the mood in general is it is less likely. i do not think there are even further away from a default or exit since the day after the election. somehow we decided it will not happen. jonathan: the broader point, as we came in to the 20 15th everybody rough riding for democracy and they were right on that. it has pretty much have next to no impact at all on european markets. has that been a surprise to you? stephanie flanders: it is one of those things where we are in a good news and bad news world or bad news is bad news. i see it in europe that has this good news of economy but markets have also been responding to constant easing and what has been happening with the euro. those are big drivers. quite a lot of good economic news. that is the main thing for
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people focusing on a more optimistic view of europe rather than thinking about the politics in a spanish election at the end of the year. the hope is you have enough of a feel-good factor toward the end of the year that some of it will end. we certainly are seeing objectively an improvement in economic conditions. jonathan: we are. i look across the asset classes record high in the equity markets. a weaker euro, qe. we could talk about a low bar. consolidation, number four, i know you're thinking about. when is the earnings story confirmed where the markets are trading that? stephanie flanders: if you look at the recovery in european markets, some good news attached to the economic news. not a lot a big improvement from the corporate earnings side to justify that increase in market. what we are looking for the
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second half of the year is you have to see more buyback. even a reaction to the weaker euro given the dependency of european companies on exports. we have seen the weekends in the u.s. and we should be getting some plus side. if we don't, investors would have to question if they were right to build so much future growth and to market value. jonathan: a decision to make. look at the 10 year. you look at markets for you it seems like a no-brainer for the rest of the year at the same time kind of disconcerting. what is your position? stephanie flanders: we would hate to use the word "no-brainer" because we always say you should diversify. probably more port and now than ever before. you have a lot consists in markets. lots of things that people know for sure. like we knew bonds were going to go up last year and it didn't.
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you are looking at a world where it you do not have to buy some of these core fixed income products. a lot institutions are being pushed into it. you have to say enemies tilting toward the riskier assets in an environment where you have these policies from both sides of the atlantic. and the world where the central banks do not see enough growth. just a pain you are going to stay with us. you are what to focus on the u.k.. -- jonathan: you are going to stay with us. -- and are going to focus on the u.k. in a little over an hour, the latest reading of u.k. inflation. set to stagnate for a second straight month. we will get the conservative manifesto at 11:00 a.m. we will discuss that and more. ♪
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jonathan: welcome back to "on the move." i am jonathan ferro. a busy day in the u.k. hu jintao want to miss at the bloomberg's business debate -- you will not want to miss the bloomberg's business debate. at 11 5 a.m. the conservative party's manifesto. for more, we are joined by bloomberg intelligence and still with us is stephanie flanders of jpmorgan.
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a question for you both, hedge fund. if i took you from mars and you do not have a clue of what was going on and i ask you will rates were, you probably would not, with 0%. unemployment around 5.5%, gdp running at 3%. cpi core at 1.2%. is that new? stephanie flanders: you cannot strip out what happened. you look at the economy in any normal time and you see interest rates should be higher than they are. but that core inflation rate, we are in a world where pretty much the holder developed world has below target inflation. and i do not think the kind of growth with had and economy, the u.k. economy is smaller now than
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it would be if we just carried on. there is an enormous shortfall will never seen in history between where we are and where would normally expect to be. of course, you are right. we are really in an unusual world in the u.s. a u.k. and central banks are trying to work out what to do. reporter: broadly speaking, a feeling that long-term rates are lower than it was before. that has distracted from the cycle of the longer-term kind of picture which is linked to productivity and growth and also the bank of england emphasis on the idea that the leverage in the part of withstanding higher rates. another inference there that indian inflation rate -- inflation rate should be lower. stephanie flanders: we have a
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higher stock of debt and will be more sensitive to rate rises as they happen. and also regulatory changes which mean a bigger gap between what the bank of england charges and no banks charge ordinary people and businesses. and all of these, you take at least a couple of percentage points off on the right. just of band how do they change in the no inflation -- jonathan: how do they manage the no inflation? now we're and 0% on the headline number and possibly go negative is that something you can get to obsessed with? jamie murray: if you look at the services inflation numbers, that is running at roughly the same level as it was six months ago or even longer. and so definitely with no wage growth is weak. that's the thing preventing the bank of england from lifting. the unemployment figures and
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they have to wait until they see more inflation there. stephanie flanders: you were right about the point about core inflation. it could be below target it is clearly much stronger. what you are seeing in the u.s. and the bank of england, they want to look through this big impact on inflation of the oil price. if you look at the u.s.' fed 42016, they have not changed but gone up slightly. even though the inflation rate has gone down to zero, they expected that to come straight back up. the bank of england is hoping as well. they are look at that wage data. the second half of the year will be a story about looking at the labor market and keeping an eye in the u.s. and eu k and that will guide to the bank of england. jonathan: we bring the political situation, a big difference but 20 a messy quarter around the u.k. election and that is
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derailing the recovery. do you expect the recovery to be derailed by what is happening politically? stephanie flanders: i do not. i was highlighting a year ago that we have three elections in one way or another. the referendum and you have to be aware of this free if you look at the u.k., what is really important? long-term productivity growth. why is is so slow? membership in the eu. most importantly, how far the world is growing? none of those things will really be decided in this election. they will keep their eye on the prize as they look at the end of the year. the government will have one the major parties probably in charge even if it looks a bit different and economy will probably be quite stronger then neighbors. i do not inc. that is short term. you while volatility. jonathan: stephanie flanders
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more optimistic. thank you for joining us. jamie murray a bloomberg intelligence. a few minutes away from the british museum, you do not want to miss that. good luck for the rest of your day. ♪
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anna: welcome to the business and debate, i am anna edwards. over the next hour and a half we will discuss business with three men who want to shape business after the may 7 general election. we are joined by the bulls -- nick bowels and thence from the
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liberal democrats. i should point out -- vince from the liberal democrats. we ask others to join us but they were not able to provide anybody to take part. to kick things off may i first welcome sasha romanov which -- sasha romanovich. sasha: welcome to the debate for election 2015. i am ceo elect of grand thorton -- grant thorton i will be taking on the reins in early june, 2015. not long after and maybe before the next government is formed. today's debate is focused on
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business growth in a global economy and i am delighted that this morning we are joined in the room by businesses that generate a combined turnover of 370 billion pounds to the u.k. economy. they deployed over one million people in the u.k., and importantly what the guys sitting here they contribute over 35 million pounds each year. british business and businesses in the room are actually critical. it is important that business has a voice and politics and policy so that we are able to work together to create a vibrant economy in which everyone can participate. a vibrant economy that relies on trust and integrity in the market. that has infrastructure and allows his and communities to
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thrive and policy and regulation that allows companies to innovate create and really compete in the global environment. today's debate is quite important. an opportunity for business leaders and politicians. we had the labor manifesto yesterday and the conservative manifesto launch. we are midway through the election campaign. today the opportunity is to get into the detail and really explore the issues that will create a thriving vibrant britain. i am really looking forward to debate. i know we have had some and testing questions in advance but for now i will hand over to ona nna. let the games begin. anna: thank you to everybody
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joining us in the room and everybody watching on bluebird television or announcer: bloomberg.com /live. i will invite each of our speakers to first address the audience here in the room, and a television, to outline their business plans. first, let's start with neck -- nick. nick: thank you for inviting me here today, we want to continue to implement the plan turning britain around. the country is back on track and we have created 1.85 million more jobs in the last five years 750,000 more businesses and we're one of the fastest growing companies in the european union. that doesn't happen by chance it happened as we had a plan and we want to stick to the plan. we want to continue to invest in vital infrastructure like
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crossrail, hs2 and eight london expansion. we want the conservative party to invest in another 3 million apprenticeships. we want to continue to have one of the lowest corporation tax rates anywhere in the world. we brought it down every single year of this parliament. we want to continue to back research, innovation and universities. it is a plan that is working and we do not want to go back to the bad ways that got us into trouble in the first place. anna: thank you, vince? vince: one of the very best programs that we run that i launched a few years ago was the growth accelerator which you run on our behalf and it is a great success. in terms of my pitch, three
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things from the record and three for the future first let me say the signature state and that we participated in progressing from rescue to recovery amid all the indicators and the highest level of van purchases for the last 30 years, all the indicators are that we are on the right track. secondly i launched with support across the government an industrial strategy. we have plans with creative business ease and services thinking a run skill, long-term innovation, supply chains and so on. sorting out the problems with the banking system and the reason we are in this mess still is because of the banking collapse.
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we're fundamentally restructured. investment banking has happened and one of the things i am unable to launch lending platforms, startup loans, long-term capital, we have been able to get on top of that. so i would emphasize productivity without rising efficiency in the economy there is no way to increase real wages. this is partly a question of the skills revolution. as nick mentioned, i launched the big expansion of the apprenticeship five years ago it happened and doubled the numbers and we now need to improve not just numbers but quality. higher end apprenticeships and particularly the crossover
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between universities and locational trade -- vocational trade. one of the things we launched was the successful catapult program. the third thing i would stress is the importance of having an open economy. we depend on an open trading system and that is why it would be totally wrong to reopen all of the issues around membership of the european union and although we have to have control of migration, we have to be pragmatic and recognize the key skills with students making positive contributions to the economy. >> thank you very much and thank you to grant thorton for organizing this. just to start off with, in terms of what we are about, we are called the labour party and we are about jobs and that is why
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we were established many years ago and we recognize that it isn't government create jobs that is why we want to see better pay, more secure jobs that pay a wage people can live off and we will be backing people like you who are creating them. we launched our manifesto i just want to give you three key pints of that manifesto before making a concluding comment on my overall approach. the linchpin -- there is nothing progressive, i am a progressive politician and spending more on debt repayment than you do on housing or infrastructure. we have to deal with that. every single commitment is fully
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costed. no commitment entails any additional borrowing. we want to reduce the deficit year on year. the second key part of the economic and business strategy and policy is to make sure that we keep this country in a european union. not to maintain the status quo, but to lead europe which has been our traditional role. it would be a disaster in that context if we exited the eu. not just because it is our nearest and dearest marker -- market but also because it is the key to unlock the door and other markets. i often reflect on how we have a risk of getting out but at the same time he is trumpeting the potential benefits that you could all derive from the treaty partnership tween the eu and the
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u.s. once it has concluded. the third part of the plan is to make sure that we do very practical things which you say you need to expand your businesses. vince already mentioned skills and there isn't a huge or france and the overall approach but there is in the details. i am not -- a huge difference in the overall approach, but there is in the details. i am not -- we have to make sure we maintain the quality of vocation as people are doing. we have to sort out the financial services sector which means not just in banking but to banking. we have to and the dithering delay, i will go into the issues in the q&a. i am not interested in terror not stuff just because these guys put it in place -- tearing
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up stuff, just because these guys put it in place. if we want to see more long-term business, then we have to build business and put to the side the ridiculous punching judy we see too off it -- often that stands in the way of the long-term investment decisions. anna: thank you for those opening remarks. just a point out the representatives from ukip and the green party were invited but were unable to do so. we do have a statement from ukip a prerecorded statement from stephen wolf who is the spokesman on migration and financial affairs. wolf: i apologize for not being with you this morning, however i am in brussels. as the coordinator on the economic affairs committee i am
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reviewing the hundreds of eu regulations coming down the line that will affect british business. i also wish to thank bloomberg for allowing me to set down economic olive sees in this election because like you, five years ago i would've been set in the audience listening to what mp's tell me what their vision would be. unlike them and like you, i have been in the financial services sector for 18 years. i have been a cf10, cf 11 and cf 4. i have had to give advice on the myriad of revelations that have cost us billions over our time in europe. if it wasn't for the alternative investment fund directive causing so much damage, i would not be in europe today i would be sat in the audience with you. that is why first and foremost i believe it is better for europe's interest to the out of
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the european union. we can create more jobs at lower cost with a greater freedom to trade if we were not hamstrung by what is happening in europe. many will say, or be afraid that we won't have an impact but i can tell you that being over there we already have no impact. we are not in a free-trade arrangement we already have a tarriff. it is the annual cost of regulation. you know that yourself by the risk offices and models that we have to create that create so much more cost for business. also, 90% of our business and less of our services trade is with europe. so to be out of the union we would make sure that business can grow with less regulation. less regulation is lest cost and that makes us more competitive. it isn't just about regulation
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it is about how we present our tax policies. we believe that no one up to 13.5 thousand pounds should pay taxes at all. we have to be fair to people on the lowest income. those struggling brought into the higher tax rate should have help. we believe in a new tax rate at 35% and thereafter it will be at 40%. we believe that if you stave -- save hard and work hard, you should not have to pay inheritance tax. that will be abolished. in three minutes i cannot give justice to all of ukip's economic policies that we believe in britain and we believe in you. anna: the green party manifesto will be released later this morning and we will have coverage on bloomberg television. some of the green party policies as they relate to business and
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the economy include a great deal of focus on climate change, an and to austerity, creating one million jobs paying a living wage and reintroducing a higher top rate of income tax. if you want to get involved in any of the conversations we are having, you can. use twitter #bbgpolitics. we will take a short break here at the debate from the british museum. coming up just a reminder of what else you can see on the bloomberg politics front. our coverage around bloomberg on the u.k. election continues into the week. later this morning, we will be talking to leanne would of plaid cymru. later this month, we will be hosting a debate which sees all
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of the parties represented in northern ireland taking to the stage to talk about what they would do or business. -- for business. we will be on bloomberg television until 9:30 and will have the conversation longer than that and you can watch us on the lifestream on bloomberg.com/live. it live after a short break. ♪
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anna: welcome back to grant thorton business election debate. live from the british museum here in london. we heard the platforms being set out by three of the business spokespeople on the stage and we heard from ukip and highlights from what the greens are doing. you will also hear highlights from plaid cymru and the est. before we get to some questions, we have had some great questions from people in the audience. we are in the middle of manifesto mania. this is a room of people who
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know fiscal responsibility. we have ceo's, cfo's, people who managed as this is day in and day out -- businesses, day in and day out. maybe i can come to you, we have seen the labour party announce your manifesto this week. bloomberg has been running some numbers on what kind of our owing we might see from the labour party as opposed -- borrowing as opposed -- we could see 150 billion more pounds of borrowing under the labour party as opposed to the conservatives, is that a number you would recognize or feel comfortable with? umunna: it is not a number i recognize. there are three ways in which you reduce your debt and deficit. it is an important part of our
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manifesto. one way is to make sure we get our wages up. we rank fifth in terms of incidents of low-paid work. the office of budget and responsibility was very clear that a large part of the reason the government has failed to read its target of balancing books in the current parliament is because wages have been stagnating. so income tax receipts come in lower than expected. getting the minimum wage up and and sent allies in employers to pay -- incentivizing employers to pay a living wage. and people who are earning to make a bit more of a bigger contribution to help reduce the deficit and there are going to be efficiencies and cuts that will need to be made. the big factor in this as well
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i imagine there will be a degree of consensus, is that the rate of growth will impact on overall revenue. that will have an impact on how you need to fix the deficit over the course of a parliament. anna: so what does -- increasing amount of tax and that do you accept you will be borrowing a great deal more than your opponents? umunna: i don't necessarily accept that what i can be clear about is that in the manifesto there are no commitments at all, capital or otherwise that entail additional borrowing. all the things whether further funding for the nhs, introducing a startup tax, reducing business rates for small businesses, all are fully funded and fully costed. of all the parties, we have costed and identified how we
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will pay for things more than other parties. we are bringing out the manifesto tomorrow and they might change but that is what has been said so far. anna: the conservatives launching their manifesto today and one of the key planks will be around the right to buy. is that fully costed? some suggest that it will cost more than the four point philly -- 4.5 billion pounds you will raise. to instigate the plan. are you confident you have the amount of money you need to implement this extension of the right to buy scheme? boles: the truth is what we will be requiring his counsels to sell off their most expensive properties. it doesn't seem sensible to hold onto properties that have become very valuable. to sell those off every year and that will generate the funding
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for the right to buy in certain tenant and housing associations. it was based on a policy drawn up several years ago by policy exchange. this has not been cooked up overnight. this is a policy with some background. umunna: on fiscal responsibility it was going to get political at some point. anna: you said there was consensus. umunna: we have had around 20 billion pounds worth, it is a fair question that you asked. we had 20 billion pounds worth of unfunded commitments made. 1.8 billion on rail a .5 billion on the nhs and -- 8.5 billion on the nhs and so far we have no idea how it will be paid. cable: i demonstrated that fiscal responsibility can be
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done. i inherited a department where we had to make 25% cuts in spending. it was difficult and cost us political support that it had to be done. and the outcomes were we have more people going to university and more people with a disadvantaged background have a fair repayment system. there were areas where we may have cut too much, but nonetheless we made deep cuts and have shown we can do it. in my department i oversaw cuts of 40%. we have demonstrated in practice that we can deliver financial responsibility. looking forward, one of the things missing from the argument, these aggregate borrowing numbers, what the coalition has been committed ot to is to reduce the structural deficit we inherited from the financial crisis. what remains of that is 2.5% of
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gdp and any government will deal with it. it doesn't mean there will be tight control of public spending. over the next few years, we have argued it could be done within three years but our government has shown that you have to be flexible. what is missing is a recognition that borrowing has two different purposes. borrowing for an overdraft is not sensible. we have been having to do that but art reducing it. -- are reducing it. borrowing to get total aggregate numbers doesn't make sense. as business people know, at the moment the cost of capital is virtually zero. the government could be financing significant infrastructure expansion alongside the private sector. anna: why have you not been taking advantage of such cheap borrowing rates?
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boles: we have been and most the time the noises we hear are criticizing us for our commitment to hs2 and exploring options for hs3, and for continuing with crossrail at a time when we had to cut budgets elsewhere. anna: why haven't you plan to get rid of the deficit including capital spending? why not as the labour party suggested get rid of the deficit that still spend on capital investments? boles: because that money has to be paid back and we don't think you should be saying to a generation who are facing a competitive world who are unlike most of us having to come out with a certain amount to pay back for the university education, the previous generation just filled its debt to build project.
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like crossrail and like hs2 we will invest in those. that is why we are pleased it is falling. umunna: we didn't have the debt situation coming out of the crash because of the infrastructure, schools and hospitals. we have that because of a global financial crash which precipitated a recession which led to a massive fall in tax receipts. that -- let's be clear about that. five years ago alastair darling was criticized heavily and said he would bring chaos on the country if he sought to halve the deficit but that is more or less what the government has done.
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there's a reason he proposed going for the rate reduction over the time period and not the one proposed by george osborne. anna: doesn't mean you like it? chuka umunna: i would not go that far. it is worth reflecting on what is projected. . if he manages to implement what is proposing is the imf in terms because an expenditure and we're looking at something twice as deep as anything that it happened in any parliament. what a that will mean for public services and all of the things that this is want to invest in life skills and infrastructure and where it will be achievable. anna: that has us falling us nicely. we have fiscal responsibility something people and it is obvious know a lot about. tax is something people know about.

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