tonight we go to newcastle to see first hand some of the problems solved and created by the new system. i hid in my bedroom for nearly two weeks. i only went out of the bedroom to go to the toilet. my children went to stay with my parents for a little while. purely because i didn't have the money to feed them. all of this makes next week a make or break week in politics. we'll discuss it all with our panel of pundits. good evening. the budget is normally a big eagerly awaited affair, but this year next wednesday's speech almost got lost in mountain of problems facing theresa may — from sexual scandals to lingering questions

over her foreign secretary. the president of the european council told her there had to be "much more progress" in brexit talks, before any discussions on a trade deal. meanwhile, the chancellor is beavering away, trying to make sure he avoids a repeat of the humiliating u turn after the march budget and hoping to shore up his own position, with cabinet colleagues breathing down his neck. but with fellow cabinet members including michael gove and amber rudd breathing down his neck, he'll also be thinking about making a splash — in a good way — if such a thing is possible. i have not got money to buy a house. when do you reckon you will be able to buy? about ten years. working as a nurse for 26 years, do the tories expect our support in the light of another 1% pay increase ? there isn't a magic money tree we can shake to provide for everything people want. indeed there was no magic money tree for the nation. but are the tories about to unveil

a more modest, magic money tap? no, they don't have an overall majority at this stage. on that grim mid—summer night for the conservatives, they lost seats in their natural territory. anxious younger people lay at the heart of that story as voters in their 20s, 30s and 40s preferred labour. it is philip hammond's challenge in this budget to reset his party and the relations with those younger voters. at the june election, we lost among all age groups up to the age of 49. and that is a terrifying position for the conservative party to be in. so i do think that the party is very, very focused. in the feverish atmosphere at westminster, there has been an intense internal debate

in the treasury about how to pitch the budget. should the chancellor be bold and allow spending to flow, or should it be a case of steady as she goes with spending restraint? i am told one senior aide advised the chancellor to throw caution to the wind to make sure he leaves a memorable legacy. this could, after all, be your final budget if theresa may finally snaps with you. other friends say this most cautious of politicians is not about to change the habits of a lifetime. i understand the budget will contain both elements of that internal treasury debate. the chancellor will turn on the tap. it will be more than a dribble, but we should not expect a gush. every penny is accounted for by the man known as spreadsheet phil. no doubt labour will say it's all just an illusion. one of the chancellor's oldest

friends believes he will spend some of his so—called headroom or war chest, even though it is expected to be below the £26 billion he identified in march. so i think what the chancellor is saying is, look, it will be silly to throw away all the good work we have done in getting down the deficit level, about to turn the corner on debt. of course i am listing and in my autumn statement i created headroom. i'll look at other ways in which the headroom can be used to attack the problem so many people have spoken to me about. i am convinced he will be looking at some housing ideas. there are some really creative ones about looking at loan guarantees for small builders and things in that era. but also he knows that we need to build more social housing

and affordable housing and he'll be looking at ways to encourage that. the astonishing fact is the difference in the likelihood of someone voting conservative, whether they've got a mortgage, own their own home or are in private rented or socially rented accommodation. the difference is dramatic. i know that every single conservative mp is very focused on that fact and on the reality, which is that if we do not do something about this over the next three to four years, before the next election, then we will be writing ourselves out of the electoral script. we can expect a united cabinet front next week. but not since the blair—brown wars has been such a poisonous atmosphere ahead the budget. one person told me borisjohnson and michael gove are leading

the internal charge against the chancellor, because they fear that the treasury has grabbed hold of brexit policy. nick is here now. next week is going to be a busy one for the nation's political pundits. he kept on saying headroom. it has picked up in recent weeks and he will want to address those areas, especially health and housing that caused the tories such grief in the general election. what's interesting is the assumption that that headroom would be used solely by the chancellor to help him navigate through what he expects to be a bumpy brexit. government sources are saying, no, it is there to help you when you have a slowing economy and that is what we have

at the moment. talking about loan guarantees and so forth, for small builders, it's not exactly splashy stuff. no, but remember, with philip hammond, he has built his entire career... he's not an accountant, but he behaves like one. he's an incredibly cautious person. he does know that when, as nick bowles, we may have heard him, we may have not, every age group under 49 voted for the labour majority and not the conservatives. this government has got to be addressing their concerns. philip hammond understands that. we will see the war chest being dipped into. but he still believes you have to be cautious and he will be sticking by the fiscal rules for a moment. thanks very much. we will be coming back to you later on. next week is going to be a busy one for the nation's political pundits. i'm joined by rachel shabi, ian dale and simonjenkins. first of all, on the question

of whether philip hammond will be safe or bold, will it be maybe his last budget? does he have to get something big out there? every chancellor has to be a legacy. but not an increase in national insurance? i wouldn't have thought so. expectations on housing had been raised through the roof, namely by his cabinet colleague making the speech yesterday. there's no way that whatever he announces will not be enough for people like nick bowles, who want to see lots of progress on housing. all the talk on this intergenerational fairness, that actually something has to be taken to the younger and taken from the older tory voters. i think that's true. i also think you buy votes from young people by appealing

to their pocket. the problem he has isjeremy corbyn gave away the biggest election bribe in history by offering half the age cohort £50,000 for the university education. you can't beat that. that was gigantic and irresponsible, but massive. i think that is what moves them rather than housing. with the polls being neck and neck, you would expect the polls to be better for labour, if there was a decent offer on housing, maybe stamp duty, a holiday forfirst—time buyers, it might send a signal actually that they are looking after younger voters rather than the wealthier, older voters. no, no. this tinkering at the edge isn't going to cut it. he can't do it. he can't do it politically because of the divisions and chaos in government. he can't do because it is not in his dna, nor the government's dna to try to understand the economic crisis. they can't even grasp the causes. that it's a systemic crisis.

they do not understand the effect it is having on people's lives and hardship it is causing. how can they have any solutions? they are part of the problem, they can't be part of the solution. you have someone like sergei javits saying we need £50 billion extra to build houses. the housing figures this year are the highest for some time. 217,000. but what it needs to be is 400,000. there are all sorts of creative solutions to get there, but i'm not sure any of the parties have the answer. can hammond deliver that, especially in the fiscal rules? well, i really think housing is a mess. you don't build houses overnight. you can affect supply, the private rented sector. i think young people would appreciate more social housing. the real problem is homelessness in cities. as the word crisis implies.

there is this assumption that you can throw money at young house—buyers and somehow help them. all it does is increase house prices. do you think labour has outflanked the conservatives? are they offering more to younger people, more than the question? this was massive. every student i have spoken to has said they were bowled over. they were offered £50,000. that is serious money. it is not. i'm not underplaying this. housing is a massive crisis. student debt is a huge issue. but there's a bigger picture here, which is about having a vision. let's talk about that. the whole question is, will this be the end of austerity? you've got a public sector pay freeze, the nhs needs to suck in a lot more money now. i don't think they can do it. ijust don't think they can handle it. they don't have the kind of solutions that we're going to need. we're looking at productivity rates

which are flat—lining while people are working longer hours for less pay and working conditions with living costs rising. it's a system that's failing. and tinkering around with things like stamp duty isn't really going to cut it. there is a big thing that he has to go through the big boost of spending on infrastructure. that'll provide jobs and perhaps boost productivity. they would say they are doing that already. the road building programme at the moment is the biggest for many years. we can go down the road that john mcdonnell wants to go down and spend £17 million on all sorts of things. we all want more money for the health service and education. but in the end it's got to be paid for. labour so far if they have not explained how they would pay for the massive splurge of spending. no—one believes it! he does, he says spend it. anyone can do that. the real problem is the one that nick identified. he wants to appear responsible without making a silly mistake like over national insurance.

to do that, you need to form a very fine judgment as to how much you give away and how much you do not. the politics is he has to appear to be giving something away. the key word is austerity. it affects everyone. it isa it is a word that strikes home. finding a way of appearing to be a generous chancellor. we know he is going to do something bold. presumably something theresa may agrees with. we don't know. we're really arguing in a vacuum. in the end, all politicians are elected to government to decide how to cut up the public spending cake. they're judged on that. i think in this budget most people are expecting a lot of money for the nhs. but if he says we're going to put

in an extra 2 billion, rachel will say, that is not enough. we should put 4 billion in. whatever the chancellor is going to do he will be criticised. what i am saying is we need to get beyond this thing that there is only so much money. actually, you konw, this is out of kilter with what most respected economists around the world and even those famous marketers at the imf are saying, which is that you have to invest in an economy. that is where you generate growth. you should borrow when there is low interest rates. what would you like to see that public requirement going into? when the labour party talked to businesses and representatives about this, they say, you are right, we do need this investment. we need infrastructure and skills. if we look at this as a very particular budget, happening at a time, i would not say brexit stasis,

but theresa may has been chided by donald tusk, and you have phillip hammond laying out his stall but he does not know what party it will be at or the end journey? he has to be a chance for all time, he cannot pretend this is my only budget or this will come to an end in one year. it is very difficult but the problem with journalists as we're in a state of perpetual hysteria. i think we're all quite calm! i have lost track of, she survive... until christmas, now. prime minister tend to survive and chancellors as well. they tend to not get on very well. this is normal. would anything break this christmas not until there is a better alternative. we are in a situation where phillip hammond is determinedly soft as a brexiteer and there is a difference of opinion as how this is being handled and brexit

is a huge focus, people don't know what is happening but there is more focused than the budget? i would agree with a lot of what simon said, apart from the last bit, i don't think he is safe, if she carries out a major reshuffle in january or february, she may be forced into a reshuffle before then... what do you think the impact of brexit is on the chancellor's thinking? this budget is short—term because we don't know exactly what the brexit outcome will be so it is very difficult for him to plan. he has to keep back some money in case we have no deal, very relu cta ntly. i think he is looking to the short—term rally than long—term on wednesday. stay there. we're going to hear more on brexit.

two interesting developments, donald tusk has essentially said to theresa may, you need to put more money on the table within two weeks, there is already 20 billion euros, they want 60 billion, they want a bigger indication and the significance of the next two weeks is donald tusk once that before the european council on the 14th of december, where eu leaders might say, yes, we can move onto the next stage and talk about trade and transition. david davis was tickling that up? he did a speech in berlin and he said, we will be doing something in the next few weeks. he did not want to be specific and was clearly indicating that britain would like to say it at the council and not beforehand. the taoiseach has also been pretty vocal today. leo varadkar has said

that britain has to put in writing that it will ensure there is no hard border in ireland and that has to be done to ensure that he will agree to move onto the next age at the european council. interestingly, no member state has a veto over the article 50 process. but there are three areas, northern ireland, citizens' rights and money and it is ireland's moment in the sun and it is difficult to see how donald tusk could move on without the agreement of ireland. one area where the chancellor is widely expected to make an announcement in the budget is the rules for the government's flagship welfare programme, universal credit. labour forced a vote yesterday in the commons on cutting the initial waiting time for universal credit from six weeks to four. it won, though conservative mps abstained and the government has yet to respond. critics argue that the inequalities and delays in the system have created new hardships for people.

newsnight filmmaker stuart denman went to newcastle, one of the trial areas, where he spoke to three people who say it doesn't work for them. he began his quest at a food bank. 13 weeks, it was. it was eight weeks and then it was another five weeks. you just had to try to pay what you needed to pay. but you weren't paying rent or council tax. i'm getting my money every month now, the same date. it's just the amount you get. it was bad enough when i was on the... it was £102, i think. it was bad enough then but now it is £72 a week. you cannot do it, it's impossible. it really is. ian has been on universal credit for about six months. he says he has not been under pressure to look for work, which he thinks is down to poor health. i have met you here at a food bank. how often do you come here? once a week. and what do you do for the rest of the week for food? i get food out of the bin now and again, which i did

a couple of days ago. sandwiches. how old are you, ian? 54. did you imagine life to be like this at 54? not as bad as it is, i don't think. i knew without a job it was going to be really, really difficult but i didn't think it was going to get as difficult as it is. it's getting out of hand now. if you're not in a family you may as well not exist. if you can't buy your own house you may as well not exist. ian later tells me he will be receiving an additional allowance for caring for a friend so he is now more optimistic about getting by on universal credit without work. but what if universal credit is actually putting you off finding work? i have been on the universal credit system as a carer, which means i don't have to actively seek work at this point in time because my daughter receives a disability allowance. i have received my first payment in july. it went as smoothly as it could apart from the fact that i didn't get the amount

i was expecting and also i subsequently found out that, despite keeping them informed, i had a legacy debt that has accrued by having claimed tax credits. how much is that debt? £2800. in 2012, lynne was made redundant from a well—paid role in the public sector. she was able to find short—term consultancy jobs but increasingly had to depend on benefits to get by. she sold her two—bedroom flat to make ends meet and now she and her two teenage daughters live in privately rented accommodation. the option is to either go back into well—paid work, which isn't necessarily available, or in terms of downsizing or trying to manage within the benefits system, then that is not going to be possible under universal credit. lynne feels it would be too

complicated to accept ad—hoc consultancy work while on universal credit. it's too unstable. if you have high peak months, like seasonal, or you get a contract that is three months but you don't work for two but you earn that amount, you are going to be in and out of the benefits system. you can't wait six weeks every time. i am an extremely resourceful person and now i am in the position where, through the austerity measures that the government have implemented and the system of support has left me in this situation more than i have left myself. i would be better off handing my taxi badge in and going and signing on. i would get more money by not working. which i can't understand at all. robert is a self—employed taxi driver. when he applied for universal credit, an appointment was arranged for him to prove he was self—employed.

but on the day of the interview he was offered a fixed taxi fare of £90, which he took instead. the appointment was eventually rescheduled but he missed that one, too. you missed two appointments? yeah. but that was to take work? yeah. part of your claimant commitment is you can't refuse paid work. but you must attend all interviews. how can you do both? you're desperate for money. that's the option you're going to take every time. robert's payments started eventually, which he combined with his taxi earnings. but in september he was thrown by a much lower payment than he had expected. it tipped him over the edge. unable to pay the taxi company he was working through, they parted company. robert was suddenly unemployed. i hid in my bedroom for nearly two weeks. and i only went out of the bedroom to go to the toilet. my children went to stay with my parents for a little while.

purely because i didn't have the money to feed them. because they weren't there, i got more depressed. i didn't open any of my mail. i wasn't answering my phone. adding to an already bad month, rent arrears that predated his time on universal credit were about to become a problem. he visited his gp one day. when he returned home with a sick note and antidepressants, he found that the locks had been changed. i had been given seven days to remove my possessions and to leave the property. and the seven days were up. that's why they sent the bailiffs round and changed the locks and everything. but you didn't know that, you hadn't been opening your mail? no. robert discovered that september's low payment was because of problems with something called the minimum income floor, which is an assumption about a self—employed

person's monthly earnings. as a primary carer of two children under 16, robert's calculation should have been based on a 25 hour working week, meaning they would expect him to earn about £800 in a normal month. but instead, they had used a 35 hour week and assumed he would earn more than £1000. because the error meant they expected him to get more in earnings, they paid him less in universal credit. they said, don't worry, we will fix the mistake. they put the wrong postcode on the letter or something. it cost me my livelihood. robert received a letter admitting the mistake and his monthly payment was adjusted. but in reviewing his case, they also calculated that in the initial months, he had actually been overpaid by... £717.59. and a request to make an arrangement to pay it back. it's one mistake after another. robert is now taxi driving again.

unsurprisingly, he has no faith in universal credit. he takes particular issue with the minimum income floor, which doesn't recognise that sole traders may end up earning less than the national minimum wage if they have a bad month. if i don't make that minimum income floor, i don't get any extra money, any help at all. when universal credit came to newcastle, it promised to bring fairness, simplicity and an incentive to work. and it has, for some. but for others, it's yet to prove that it has brought any one of these things, let alone all three. stuart denman there. we did ask the department for work and pensions tojoin us on the programme tonight but no minister was available. in a statement, the department said universal credit lay at the heart of the government's commitment to help people improve their lives and raise their incomes. they said the vast majority of claimants are paid in full and on time and that support is available for anyone

who needs extra help. well, rachel, ian and simon are still here. rachel, it is fair to say that the government and the opposition believe universal credit is the right thing and is here to stay? i think universal credit should be stopped until we get rid of this government, frankly. they cannot handle it. they are still defending universal credit despite the fact that everyone who has anything to do with it, claimants, local authorities, food banks, the church, says it is plunging people into poverty and debt. if you talk to jeremy corbyn and john mcdonnell, they think the principle is right to incentivise people so the phillip hammond does something in the budget about the delivery of that? that would be a good thing? perhaps the principle of simplifying it is a good thing but i am not sure, that might be an illusion. but in any case, the

government have had so much evidence that it is not working so we're left with two possibilities, either they are indifferent to the level of suffering they are causing orjust clueless and i don't know what is worse. is it fair to say it was rolled out to some? is it fair to say it was rolled out too soon? it is a disgrace that there isn't a government minister on the programme to defend it and i will not on that role. whenever you introduce a complicated system, even if you think you are simplifying it, there will inevitably be teething problems but they have had time to understand those problems and the six—week period, everyone would agree, needs to be shortened. i think they will probably shorten that in the budget to five weeks and it should be four. i don't agree with pausing this because the film had three people... we know that 80% of people...

it still leaves 20? i'm not saying that is not a bad thing and i have conducted hours of phone—ins on the subject and when you have three people in a row crying down the phone to you, you can be a hardened thatcherite and you will be affected by that. just a second, will phillip hammond address this on wednesday? yes, i know he will. whether he does it as ian suggests, i don't know. it is incredible, people are in favour of the principle. what is extraordinary is this six—week delay intended to get people used to being paid in arrears as if they were then work demonstrates such a failure of the psychology of people in difficulty. thank you. that's all for this evening. but before we go, have you ever wondered what it's like to enter mars' atmosphere at twice the speed of sound attached to a parachute? nasa has released a point of view

footage of the parachute. goodnight. slow motion, in video originally shot at 1000 frames per second. but played back here at 30 frames per second, we see the initial suspension lines pulling out of the pack and taking the parachute backwards, where it will ultimately inflate in merely half a second.