[captioning performed by the national captioning institute] [captions copyright national cable satellite corp 2008] >> we have tight limits on spending because we don't have the constitutional restraints that apply in the u.s., there is a limit of about $30 million on spending by each of the main parties during the actual period running up to the campaign including the campaign itself. that peanuts to the american

official campaign. >> these are produced by the parties and the may national broadcasters are required to provide radio and tv time for free. here's a look at the broadcast released earlier this week. >> what time are you picking him up? >> 5:00. >> you do have to eat. get ready for school. >> yep. >> he just told us they are cutting the child tax credit. >> but that's not fair. that's not fair. >> within a few weeks of being

elected, the conservatives will stop child tax credit payments to luns of thousands of families on middle and modest incomes. >> why are you doing this? >> we have to make some changes. [crying] ed [laughing] >> within a few weeks of being elected, the conservatives would stop baby bond payments for families with incomes over $16,000 pounds.

>> yes, how can i help you? what do you mean? >> the conservatives would end the right to see a cancer specialist within two weeks of referral by your g.p. >> i done have weeks or months. the torris don't want you to know what they would cut if they win on may 6. there is only one way to protect your tax credit, your child trust fund, and your right to see a cancer specialist within two weeks. vote labor on may 6. >> you are watching the british

political party election contest. in britain, the parties agree on an allocation of air time that is free. david cameron released this broadcast earlier this week. >> this is a party election broadcast from the conservetive parliament. >> today sees the dawn of a new era in britain. >> we, the hung parliament party, aim to change the very face of politics. we listen to the hard-working people of this party. we feel the disillusionment so many of you feel with party politics. we want to do away with the old convention and set out a new vision for britain. it is time for real change. >> we are going to bring

behind-closed door policies. >> we want an end to transparency. una hung parliament government where no party has a majority, under the table deals will be the order of the day. >> party wrangling will be the order of the day. >> and those more interested in serving their careers rather than the country. >> pledge two, indecision and weak government. at a time when our country is crying out for clear leadership, we, the hung party, promise -- >> we guarantee more dithering policies from the real party which means no change for under-performing schools, no change to the n.h.s., and no change to the violent crime rate that bli can ght our streets. our third pledge is to paralyze our u.k. economy. we can promise this because we

know 2/3 of business leaders are concerned about the impact of the hung policy -- parliament on policy. finally, we pledge to hold a new electric within the calendar year. we promise you, the voter, another chance to be faced by the same problems and hear the same arguments all over again. what's more, we will waste tens of millions of pounds of the taxpayers' money doing it. this is our mission for britain. we hope we can rely on you to create a brave new world of economic stagnation and dithering. a vote for anyone other than the conservatives should do the job.

>> during the british campaign there is usually one broadcast aired each day except sun. here's a look at the liberal democrat contest that aired this week. >> broken promises. there have been too many in the last two years. too many in the last 30 years. in fact, our nation has been littered with a trail of broken promises. better schools. a process broken.

cleaner politics. a promise broken. i believe it is time to do things differently. i believe it is time for fairness in britain. i believe it is time for promises to be kept. britain is a strong country. despite everything we have going for us, life is too unfair for too many people. people like you who have made the nation we are today, and you deserve fairness more than anything. putting fairness back into our society, for ourselves, and for our children, is, in my view, the single biggest challenge we face. but we can do it if we do it together, and here's how. fair taxes. under the liberal democrats, no one will pay any tax on the first 10,000 pounds they owe. just imagine what that means. it means 7 hookup hundred pounds back in the pockets of almost everyone. it means tax freedom for millions of people on low pay

and low pensions. now everyone knows that money is tight. you have to sort out the mess in the government finances, but we can pay for fairer taxes by closing the huge loopholes that only benefit the very wealthy and making sure the polluters pay for the the gentleman that they have caused. a fair start for all our children. cutting class sizes in primary schools to just 20, investing in catch-up classes in our secondary schools so no one is left behind. imagine it, opportunity for every child. that's fairness. imagine, too, a fair and sustainable economy. let's break up the banks and make sure that they pay for the damage that they have caused as well. and let's invest billions in new green infrastructure, affordable housing, green renewable energy, high-speed rail to build a new economy beyond the city of london with jobs that last for everyone in every part of the country. that's fairness.

and finally, fair politics. if your m.p. is corrupt, you will be able to sack them. there will be no more dodgy donations to political parties, and we will fix the system so that your vote will count no matter where you live. that's the way to put fairness back into politics. this election is different from every other election. the trail of broken promises can come to an end, and a new road can begin, a road into the future, opportunity, and fairness for everyone. we can say good-bye to broken promises and welcome back to home. we can make britain the fair country we all want it to be. so choose fairness. choose real change that works for you. choose the liberal democrats.

>> you can see these three political election broadcasts again at our website, c -span.org. the british election is may 6. british parmtri elections depsh parliament ri elections are may six. for the first time, the british indicates are facing off in u.s.-style election debates. this debate will focus on domestic policy. participating are prime minister and labor party leader gordon brown, conservetive leader david cameron, and liberal democrat, nick clegg.

>> welcome to our third and final divide here in birmingham, england. our three indicates are gordon brown, david cameron, and nick clegg. tonight a large portion of the debate about be on the recession, unemployment. the issues many people will

decide this election. our audience here is representative of this area. we have also selected some questioners from the thousands of e-mails we received at the bbc web site. the leaders, of course, haven't been told the questions. in any case, we start with brief opening remarks from each of them. first, david cameron. >> good evening. our economy is stuck in a rut. we need change to get it moving. let me tell you what i would do. first, we've got to reward work and tackle welfare dependencey. second, we have to fix our banks, tax them to get our money back, regulate them properly, and get them lending again. third, we've got to start making things again in this country. it is no policy to just borrow from the chinese and buy goods made in china. fourth, we actually have to get value for money in our public services. i want good public services for everyone. we can only do that if we save

and stop the waste. let me tell you one thing i wouldn't do. with greece so much in the news, i can guarantee you i would never join the euro and i'd keep the pound as our currency. that's the change we need, and if you vote conservetive next thursday, we can start to get to work next friday. >> mr. clegg, tonight's debate is about you. about the -- >> mr. clegg. >> tonight's debate is about you. about your families. about the economy. the way they got us into this mess is not the way out. we need to be frank about the cuts that will be needed so we can protect things like schools and hospitals. we need to break up our banking system so irresponsible bankers can never again put your savings and businesses at risk. we have to rediscover our passion for building things, not

just putting bets on the market. and we need tax savings so you don't pay income tax on your first $-- first 10,000 pounds. they will tell you these things cannot be done. i say we have to do things differently to deliver the fairness, prosperity, and jobs that you and your family deserve. >> thank you mr. clegg. gordon brown. >> there is a lot to this job. as you saw yesterday, i don't get all of it right, but i do know how to run the economy in good times and in bad. when the banks collapsed, i took immediate action to stop prices becoming calamity and to stop a recession from becoming a depression. as a result of that, britain is now on the road to recovery. as we meet tonight, economies in europe are in peril, and there is a risk of dragging us into recession. so i'm determined that nothing will happen in britain that will put us back in that position. i want to set out my plan and

why this year it is so important. support the economy now, and you will ensure that there are jobs and a recovery, and ensure that we can have the resources for deficit reduction. shrink the economy now as the conservatives would do and risk your jobs, living standards, and tax credits. it is not my future that matters. it is your future that's on the ballot paper next thursday, and i am the one to fight for your future. >> mr. brown, thank you. now we take our first question of the night. it comes from nadine aufsauzen. >> we all know there will be spending after the general election after who wins. why can't you be honest and tell us. >> nick clegg. >> we have set out in our manifesto. you can have a look at it. we set out numbers right there specifying the savings we think should be there. we set it out in much greater detail than any other party, 15

million pounds in savings which are up-front payments to deal with this huge black hole we have in our public finance. what are we talking about? things like scrapping biometric passports. saying that the top 20% of recipients of tax credits shouldn't receive those tax credits so they can be targeted elsewhere. and saying no to things like the multibillion pound euro-fighter typhoon project, a defense project. those are the big decisions you need to take. what you can't -- and this is why i disagree with david cameron and gordon brown -- is just saying efficiency savings are enough. you can't fill the black hole with just a few papererclips. >> we set out a four-year reduction plan, and that starts in 2011, and it is designed to have tax rises that are fair, spending cuts that are equityable, and at the same time

growth that is necessary. we take away pension tax release for those above 100,000 at the highest rate and the national insurance rise. it also includes spending cuts in key areas. we have one principle we are adopting, and it is clear. we are not going to allow the frontline national health service or schools to be cut. we will find the cuts in other areas as we set out, including in public sector pay and pensions and including the restructuring of government. but i do say one thing that is absolutely crucial -- don't believe we can fail to support the economy this year. if we fail to support the economy this year, we risk a double-dip recession, and that's the problem with the conservetive policy. >> david cameron. >> well, nadine, you are quite right. we were the first to say that cuts had to be made. i really want to say to people,

if i were your prime minister, i would do everything i can to protect the front-line services. i want to see the police officers on the beat, the money in our children's schools, the money on the ward in the hospital. that's absolutely essential. now, we do have to say some of the difficult things we are going to do. we have done that. we are not just relying on waste. we said, for instance, there will have to be a public sector pay freeze for one year from 2011. that's not popular, but it is the right thing to do. we've said that people are going to have to retire a year later, starting in 2016. these are difficult decisions. i believe also we've got to get our economy growing. we've got to get it moving. and that's why we say start now with efficiency savings to stop the jobs tax next year. let's get employing people in britain again. let's get the economy moving again to help us with the deficit. >> well, those are the opening statements. we all know there are going to be spending cuts after the general election. why can't you be honest and tell

us, and i think it means, tell us about all the cuts you might make. nick clegg you have a chance to respond to what the others have said. >> one thing i have to say it this. you are quite right that none of the political parties have spelled out all the details. some of them are not possible to spell out now, but clearly more work will need to be done. we have gone further than others, but clearly more work needs to be done. something i think would make a huge difference to us all as we try to balance the books is to for once get the politicians working together on this. and i suggest -- whether or not david cameron or gordon brown will take part in this, without the -- wouldn't it be a good idea to get the parties all together with the head of the financial services authority simply to sort of be open and be straight with you about how big this black hole is and roughly how long it is going to take to deal with, so we are all

speaking from the same script about how big this problem is. i think politicians for once putting the country before themselves would be a good thing on this issue. >> gordon brown? >> from 2011 there will be cuts in spending other than the n.h.s., other than schools, and other than policing. but we will make the commitment to maintain these front-line services and build on the improvements that we have made. once you have built a school and hospital, as we have done, you don't have to build it again. public sector pay will not rise as it did in previous years, and public sector pensions are being reformed. i had to say one thing, it is absolutely crucial to the time that we are in at the moment in this uncertain and dangerous world, david is proposing that there be cuts in public spending now, 6 billion, and that will shrink the economy at a time when we need to support the economy. we cannot afford to lose jobs and businesses and lose growth now. we must maintain the recovery and support it.

and please let us not make the mistake of the 1930's and the 1980's, and the 1990's, and let us support the economy until the recovery is assured. >> your response, david cameron? >> let me respond to this point about the six billion pounds as directly as i possibly can. 6 billion pounds' savings this year that means one out of every 100 pounds that the government spends. that is the glossy leaflet that comes through your door. that's one in 100 pounds. it's a fact that managers in the n.h.s. got a pay raise this year. that's one in 100 pounds. we have the leaderships of britain's most successful businesses, the steel makers, all saying that the risk to the recovery is not cutting waste. the risk to the recovery is putting up national insurance on every job in the country, which is what labour proposes.

so we are saying let's save the waste where we can to stop the taxes. >> david has it wrong. he wants savings without putting the money back into the compli. you go to america, look at france, look at germany, look at the other countries, they are saying as all the other international institutions are doing, don't withdraw the support from the recovery until the recovery is assured. what david would do in an emergency budget in a few weeks' time is for ideological reasons take six billion out of the economy and put our economy at risk. the time to do the reduction is when the recovery is assured. david, you just have it wrong economically. it is the same mistake the conservatives made, the same old conservetive party of the 1930's, 1980's, and 1990's.

>> every business leader thinks we have it right. let me tell you where i think we should start. we should start with welfare. under this government there are five million people out of work and related benefits. there are people who could work who would train and offer work. we should say if our country, if you don't accept work, you can't go on claiming bits. that's something labour has left us with this terrible amess. as we try to get public spending under control, let's start with people who can work, who are offered work, but who don't take it. >> let's move beyond political point scoring. >> we are not as a nation be able to balance the books. we are not going to be able to fill the back black hole in our public finances unless we do it with fairness. people aren't going to accept these difficult decisions unless we do it fairly. that's what i think acome anying the difficult job of actually filling the structural deficit, we also need to introduce a big

tax switch so that people on ordinary income or low income get a tax break back in their pockets so they don't pay an income tax in the first 10,000 pounds they earn by closing the loophole so people feel while difficult decisions are being made, at least the tax system is on their side. if you don't have fairness at the heart of everything you do, it will be difficult to see us through thees difficult decisions in the times to come. >> david, you are not addressing the question we face now. if you shrink the economy now, if you contract it, if you make the mistake of the 1930's, you lose jobs, you lose growth, you lose businesses. we have to support the recovery until it is fully established, and then my deficit reduction plan, which is a four-year plan, comes into place. but take money out of the economy now, and you put the recovery at risk. i do fear an imaginary tori budget in a few weeks' time putting the work we have done to

restore the country in jeopardy, and no other country in the world is willing to do that now. >> what labour seems to confuse is they confuse the economy with the government. we're saying save government waste to put money back in people's pock etc. you think about this. saving one out of every 100 pounds, that is something many small businesses and many families have had to do in this country many large businesses. government is saying, in a way, let me go on wasting your money, so i can put up your taxes next year. it is taxes on people making 20,000 pounds, these are not rich people. they shouldn't have to pay pay for the mistakes of government. >> gordon brown talks about a plan of the future but has no details on it. david talks about a plan but makes no details on t i think we

should have a council on economic stability so the politicians are finally up front with you, straight with you about how bad this problem is and how long it will take for us as a country together to deal with it. >> we have a number of questions to come on the economy. let's move on to a second question. it is from adina wright. >> the taxes are taking more and more from the average worker. if you were elected, what would you do about taxes? >> over the past few years, the tax taker has taken more and more from the average person in taxes. what would you do, gordon brown? >> i admit it has been tough in these last few years. what we have tried to do is provide tax credits. a half million people have gotten tax credits when they have been on short time and trying to get through the recession. we brought down the basic rate of taxes from 23 pens to 20

pens. we raised the top rate above 150,000 pens to 50 pens so that is spared to ordinary hard-working citizens. one thing i don't believe in is the conservetive plan that would cut child tax credits but at the same time give an inheritance tax to the 3,000 richest people in the country of 200,000 pounds. that's not fairness. that's the same old conservetive party. tax cuts for the rich and cutting the child tax credits of the others is simply not fair. >> the government has spent more and more and has been more careless. we see waste all around us and the government has done so little about it. obviously with the terrible situation we have in our public financing, with the mess left by gordon and labour where one out

of every four the government spends is borrowed, even if it were a lovely thing do do, you can't do it. we've said let's try to stop the one tax that will hit the lowest paid people, and that's the national insurance tax i was referring to earlier. we can't stop all of the other taxes, the top rate in taxes, the extra tax on the pension. labour had put up taxes something like 178 times. we are going to stop that one tax that will hit the lowest paid the hardest. let me say this about tax credits. they will stay under a conservetive government and gordon brown has got to stop misleading families in this country like he's been misleading all the people and cancer patients as well. -- older people and cancer patients as well. >> nadine, i think you are right. after 30 years under labour who would have believed it that you would have a tax system where a