the only useful thing washington might do is require honest reporting of unsafe schools. but they can't be made safer unless you want to start deploying troops in them. . is that because washington it would not do it very well or it is not the responsibility of washington? >> both. i am sure you could generalize it under the general welfare clause, but it is no appropriate responsibility for washington. >> the title of our overall gathering is so clue -- is so crucial -- less of washington, more of ourselves. i guess i in washington, d.c., food programs are close to being sacred cows. if we are going to ask more of ourselves, my question is what

poor parent cannot rustle up a bowl of cereal? i do not get white millions of school children qualified for school benefits unless we have eight major widespread problem with child neglect. in so many parents are in capable of pulling together a bowl of cereal and a banana, we have problems await bigger than those that cannot be solved with the school breakfast. yet that is the kind of program that has a huge bipartisan support, but very little thought about why we are feeding children. talk about a fundamental par ental responsibility. >> a twist on your various

comments on regulating food consumption is obesity. what would say that obesity is a substantial national problem. the federal government should have nothing to do with it. i can and as in various local initiatives that i would not object to it if i were on a town council. but it is largely cultural. >> there is a lot of talk about some sort of federal response to the very real problem of obesity. >> i think that is where it comes from. there are any number of small groups in america who are dealing with these problems in an adequate fashion. part of the debate is so skewed in part because there are only two sides. either you or for fighting these

problems or against fighting these problems. we need to articulate a solution, which is along these lines -- these are problems were fighting. here are when does a terrific examples of folks who are fighting these problems in a successful fashion without massive government legislation and without massive government regulation. this is what lamar -- lamar was looking at homeless shelters, training centers in east los angeles for people who were not english-speaking and yet were being trained and getting jobs. the whole point of senator alexander's "we know what to do" is that we do have these answers. they are nine federal answers, but we need to become much more adept at the national level of diverting the conversation into

those alternatives. let's talk about some of those local answers to the problems which come in on this diversity. they are not legislated in one comprehensive bill. they take an infinite variety of forms, but they all address the problem in a successful way. one of the waste that those of us who are enthused about -- this isxander's where he started. this is where his politics is grounded. it is grant -- it is grounded in declaration.e it pointed to local wisdom as a solution. i do not hear a lot from today's national politicians. i hope we see more of that. >> conservatives should not just

say that they cannot afford to do certain good things. there are some things the federal government should not do. some of them are a moral hazard of the federal government stepping in. you do new not know what would happen at the state level until it gets out. i do not think that should be a precondition for moving against some of the things the federal government should do. i would not reject your economic and fiscal arguments. it is a practical matter. it is hard to make a case against certain programs until they start bankrupting the country or until they are manifestly inefficient are counterproductive in their effect. people are more practical than

at the levels would like to be. they want to see that something is or is not working. we have trillions of dollars of debt and a trillion dollar deficit. this is a prima facie evidence. there are all kinds of other distortions in terms of the federal government taking away the citizen's actions. what was the key party? the tea party was ultimately resulted in a declaration of principle. the constitution embodies a whole new structure of government. the reason beat the party

through the tea in the water was a part of self-government. it was an oppressive tax. it was part of a series of oppressive taxes. i think the trick is turning the fiscal complaint into a constitutional complaint. i think some of that is happening. lots of new candidates for office or heartened by the sense that we cannot have such a big deficit. that is an indicator that something else went wrong.

you start to think about what went wrong, you go backwards historic fleet and upwards intellectually. you think more structurally about what is wrong with the whole modern welfare state. we're talking about this before the panel. the perverse kind of federalism we now have creates all kinds of perverse incentives. it creates more big government than checking big government. it is really somewhat pernicious i think.

people talked about the early reagan administration of sorting out dysfunctions and giving functions to the state. medicaid is a case where this could be done. i think it would be a healthy development. it is fiscally kind of necessary today. the federal government would have a clear sense of what its responsibilities are. we could learn much more from the state competitions. it would be a much better solution. it would lead to a sorting out the responsibilities in a way that is structurally healthier for our economy and our politics. that is what conservatives have to think through. >> i do not disagree at all.

the fiscal crisis does provide that opportunity. but when it becomes an obligation or opportunity of the next two years for the majority of the house to articulate rather than implement, i think it is really important that they be articulating this return to constitutional limit argument that i think the most active parts of the republican base. i think it resonates with others, too. this self-governing people should not have their lightbulbs taken away from them. the government is supposedly is subservient to us. it certainly feels that way.

first it was toilets. now light bulbs. they are going for a shower heads. [laughter] as a good conservative, i say get them back in the bedroom where they belong. [laughter] we are ready to take questions from the audience. we have time for a few. please let me know who you want to direct them to. at the very end? excuse me. hold the microphone as close as you can, please. >> i would like to ask a question about the mad hatter's tea party that you are describing that takes place in the high levels of leadership in washington. i would like to ask you, wine,

the you think the entire culture in america has radically changed within the last 10 years that would support the concept of the federal government giving breakfast to children, the topic you're starting? does it reflect a complete transformation of traditional american values in the era of ralph waldo emerson to taught people to be self-reliant? >> if i understand the question correctly, i do not think there has been in a bundle -- any fundamental shift in the public's typical relief in self- reliance and individual responsibility. we have some taking charge of

more and more aspects of our lives. in a very constructive way, i think, substituting government for what really belongs to parents -- a responsibility of parents. government is taking over more and more practice and responsibilities from where it should rest with respect to children. i do not think that reflects a major change on the part of the american public, though, just the kind of creeping big government we have. >> this seems to me there is some epistemological confusion against creating programs and dismantling programs. when you dismantle a program you are going back to status quo.

i think there is some danger in doing a lot of things -- people are looking for significant change. if it is not delivered in a couple of years, it seems nothing has been done. >> i take the point to a degree. big government programs have been going for 30 to 70 years. when i came here to work for bill bennett in 1985 i was sort of continuous with people who resisted school choice, especially middle-class families. breaking up the power of the unions, breaking up the power of the administrators, introducing competition for the poor students are getting such a bad deal.

you start to think a little bit more intelligently. a lot of people were very hard and by a house where there is a good public school system. it is not fair to have contempt for them. the situation was set up for an awful long time. i went to a lot of effort to give my kids a good education. you guys to resist the white school choice -- you guys who resist school wide -- a one likes them as somehow selfish or a parasite of the state. people had made investments and have lived lives and have certain expectations. dismantling them is sometimes

complicated. it is not like the dismantling of the incandescent light bulb situation or the dismantling of npr. i could make some jokes about that, but i will not. major programs do require thinking through them. some are trying to think through how to reform health care. they take things seriously. longevity is up. a lot of diseases are cured. how do we get from here to there without reform without attending one could roll back the clocks and do away with things?

>> that is widely obama care thing is so critical. it's deployment is a 10-year program. once it is deployed, people's expectations will be fundamentally changed. the possibility of getting to a much better system is going to be severely compromised. i think that is why people are focusing on obamacare. it is one thing to think comprehensively as lamar alexander noted himself. >> you point to certain programs like social security and medicare that conservatives spent a lot of time and ammunition attacking over the years. the american people have come to think of those as programs in

which they had personal accounts. we all understand it is a myth, but that does not change the fact that the man on the street thinks is his money or her money in social security, medicare, and so forth. i think that is what the interesting developments that began in 1994 with this focus on a new promise of american life. the president of hudson at the time said this would be a good target. it is that comprehensive, intellectual vision that we know what you do. this is a program that can be imposed on people who are otherwise foolish and benign. that suddenly became the target of wrath from the 90s on and certainly the target of wrath in 2010. not so much the new deal or the

popular programs -- programs that people have come to have tangible, personal stakes. i think we have learned a lot about who the real bad guy is since 1994. it is this progressive vision going back to the beginning of the 20th century much more so than fdr's new deal. >> i want to thank senator alexander for his closing remarks. -- i want to bring it up senator alexander for his closing remarks. >> i want to ask you to give the panel a hand for coming today and for their remarks. [applause] you do not know how much a big treat this is for me. i admire them and their thoughts ended attitudes. i had known them for ever. we were on the nixon white house

staff in 1969. we were all in our 20s. bill and dinette in the '80s. kate is a much younger, but we had known each other for a good long time. it has been a treat to hear what they have said. in a careful notes about what has been said. i have these thoughts on kate's point. i went to see president reagan when i was governor in 1981. i proposed to him something that was mentioned. i asked them to swap medicaid for secondary education. take medicaid and get out of my hair. i will take all of elementary and secondary education. the reason for that was not much

money, although it should have been for medicaid. it seemed to me that having that much responsibility for what children learn in class in washington shifted the spotlight from where the spotlight ought to be. that was an example. a smaller example would be gun- free schools on act of 1995 which i campaigned against. if there was ever an example of washington sticking its nose into something it could not do, which was made the area around schools safer. someone said wal-mart was the party before tea party was cool. it reminded me of the phrase " arrogant empire." i thank you for reminding us how much it really goes on in communities. we do not do much of what goes

on in the united states here. if it goes on in the community. it is not on the homeless shelter in dallas, it is not on savannah, it is on something else. we watch this and we forget about them. we know they are the places where things could be pointed exactly right about regulation. we talk about too much of this and too much of that. i voted against the higher education act because i sat on the senate for all of the regulations that had been promulgated and it made a stacked taller than i am. the new reauthorization is for the higher education act would make it twice as tall. just that caused me to vote against it. i think a two-year budget is a good antidote to it. it means that every other year congress could vote to repeal

oversight, deregulation, all of those things instead of appropriations. all like to conclude by commending on the example of what you do about education. do you eliminate the department of education? i think both of us have at about every position possible. i know that i have and i think that they have. i have been for swaps. i have been for eliminating the entire department. i have been the secretary of the education. we have experienced all the possible views on this, but what you do about "no child left behind?" i think you fix it. . .

i criticize thinking - president obama fetus so many of his advisers were schooled at the elite universities where they can come up with these comprehensive ideas. so was i. and the entire panel. that is a danger with these smart people. they say, we can do this and that, but they do not know anything about what is going on in all these places. remember the billboard is think globally, act locally. >> i think perhaps it

perhaps it would be enormously on wives -- unwise not to think about the framework of their action. if you want to get something done, you are much more likely to fix no child left behind than you are to abolish the department of education. your comprehensive attitude might be the latter, but if you want to end two or three years with a result it will be the former. this has been a fascinating opportunity for me. i thank the hudson institute and thank all of you for coming. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute]

>> next, a speech by russian president, dmitri medvedev. then the future of the start treaty and the british chancellor of the exchequer talks about the future of that nation. >> the c-span network provides coverage of public affairs and american history. it is all available on television, radio, online, and social media networking sites. find are content any time on c- span digital library. we are bringing our resources to your community. it is washington your way. the c-span and networks are now available in your home. >> on saturday, the senate voted not to advance two democratic amendments to extend the bush

tax cuts. no official action this week. the senate convened for general speeches with no votes expected. on tuesday they will take up impeachment proceedings against judge party as it -- porteous, and a measure to give senior citizens a cost-of-living adjustments. live coverage on c-span 2. at his annual state of the nation address in moscow, medvedev warned of a new arms race if russia and the u.s. failed to reach an agreement. this 70-minute speech begins with a review of the state of the russian economy and outlines

the government's domestic and foreign agenda. >> translator: the president of the russian federation >> the president of the russian nation, dmitri medvedev. >> please be seated. >> translator: dear citizens of russia, esteemed deputies, and members of the counsel of the federation. it was a year ago in this very room that i present as my

political strategy. the idea was to rely on the values of democracy and modernize the economy and create inventives for progress in all areas to create a generation of individuals who would be free, educateed, and thinking creatively and create a economy of a new level to reestablish russia as a modern world power that has achieved successes based on innovation. these processes and modernization in this country began amidst a difficult period of time for the whole world. it was a time when the world was struck by a global crisis, and also last year, who were in the middle of an unprecedented heat wave and forest fire, and yet despite all the difficulties, we on the whole have been able to

do quite a lot, and i'm here to thank everybody who made a contribution to the rejuve nation of our society. we were able to stabilize our economy following a significant decline, and this year, the economic growth will amount to 4%, although the prices are food, unfortunately, the world over, the prize of food has risen and prevented inflation from increasing rapidly, the three year goal is to reduce up flags to -- inflation to 4% a year in order to mitigate the consequences, almost 150 million riewg les were allowed and to establish this important area in the rural areas and improve the living in the regions from falling, and i will keep an eye permly how --

personally on how that is going. we have unemployed individuals, 2 million fewer than at the crisis which in itself is a significant achievement. the sovereign debt is minimal. the current level of russia's international reserves, and that is almost $500 billion is considerably higher than in late 2008. following anticrisis measures that were unprecedented, we are now transitioning to what is now a more balanced budget policy. regrettably, the budget deficit still remains high. we will reduce it. all the leading world nations have taken on identical commitments and obligations. of course, the economy remains

complicated, and some of the consequences of the crisis have not been overcome yet, and this has to be said directly for what it is. however, we will comply with our social obligations in an unconditionble manner. the real population income over the last few months have grown by roughly 5%. for the next year, the wages of individuals employed in budget funded areas will be increased and targeted programs to provide housing to veterans and the military are being executed. we're finding opportunities to annually increase pensions, and the stated goal, goals that was stated by me to make sure that all pension is receiving titles that are at least as high as the assessment that is civil.

that goal has been accomplished. .. we have been dealing with the negative consequences. i have made the following decision -- for a small business that is operating in the production or social area, and a two-year transitional period will be provided where the contributions of the health system will be affected at a lower rate of 26%. during this year we have been working to implement profits in

what are the main areas of technology organization. our goal is to increase energy efficiency by 40% by 2020. this is feasible and realistic. oal is feasible and realistic. i have no doubt about that. what it will do, it will reduce the industry expenses and save the personal funds of the individuals in the first place which could be the most important thing in terms of paying for housing and utility bills. and we have discussed this issue and reached the main conclusion. in order to prevent continued deterioration of the utilities and at the same time to more effectively use energy, private capital needs to be engaged more actively in the housing and utility sector. i have issued appropriate sections. i would like to say we have scored certain successes in the

high-tech area. the nuclear power industry is now once again building on a regular basis and annually putting into operation facilities. currently nine energy units are being built in the country. and russia is implementing projects in india, iran, china, and other countries. over the last three years, the contracts with the nuclear power industry with the machine building industry have increased by a factor of 10, and compared to 2005, a factor of 25. that is a very nice number. [applause] > translator: that of course also means budget director and employees for the industry. another subject. as far as the world rating, the so-called top 500 of the super computers, currently comprises 11 russian systems. next year, the productivity of the domestic super computer will

increase by over 150%, making it one of the most powerful computers in the world. before the end of this year, the group will be completely formed and over the next two years, the construction of the principal digital navigation maps will be completed and the systems -- systems satellite navigators will be applying and available. over the next year, digital access to the mandatory tv networks will be made available in most borderline areas. we have the broadcast network. this year we have taught the worldwide web to speak the russian language.

it's important for the country, the rf domain is open and increasingly popular. quickly so. also we have started implementing a new strategy in the russian pharmaceutical industry. during the next few years, the share of domestically manufactured pharmaceuticals are -- is to be increased from 20 to 50%. whereas innovation medication -- innovation-based medication will increase to 60%. it will make medications more accessible to the public. i hope that the exports of pharmaceuticals will become an important revenue item for the country. the most well known innovation project is the caucasus center. the project is already becoming reality. there's a -- there's a management team. there's also a special note that has been passed which is unique preferences for those that are

part of the project. there are proposals from private and government companies who are ready to start working at early as today. i'd like to emphasize the text benefits and breaks and the government funding for research should be made available to any and all who have ideas and who meet the established criteria. in addition, over the next three years, we are planning to spend about 30 billion right els along with industrial companies. it is not small potatoes. in the event of success, we will need to increase the funding for the program. another project that's important, is the project that involves turning moscow into a major international financial center. responsibility for! -- for implementing this project sits

with the federal entities, and the new mayor of moscow. the work is already being contributed to by the major russian and foreign financial institutes. i am positive here too we stand a good chance of success. also, the benefits of having an effective financial market will be obvious for both the public and the companies who will be able to take advantage of the entire spectrum of modern financial services. obviously for the whole country of russia due to the flow of capital in taxes received as a result of expanded economic activities. indeed, a great deal has been done. if, of course, we look at it from the perspective of just one year. i hope that everybody understands that we are still at the very beginning of the road. the resources that we have available to us have to be used not to patch up but to modernize

the economy, to create new, competitive goods and services, to create millions of new jobs, to create a demand for innovation to promote, to expand professional and social prospect of our people. i'm instructing the government to spend at least half of the saved expenses, as well as part of the additional revenue in the federal budget to support modernization priorities. [applause] >> translator: what i'm referring to are the well known increase in the energy efficiency of this economy, the development of new energy information telecommunications, and medical knowledges. it is on the success of all of these projects that the quality of life of our people depend on. dear colleagues, everything that

i have just been talking about, modernization, it is by no means an end in itself. it is nothing but a tool. a tool using which we will be able to solve long standing problems in our economy and in the social area and to support those who need that support more than anyone else. and to create an environment in which the talents of those who we are pinning high hopes on, that is our children. our young people. afterall, modernization is being pursued for them before anybody else or anything else. and we should not be ashamed for what country we'll turn over to our children and grandchildren. however, it is just as important in who's hands the future of russia will end up. 26 million children and teenagers who currently living in russia must be able to grow healthy, happy, and as full

fledged individuals and to become decent and worthy citizens. this is priority number one for all of us. [applause] >> translator: thank you. taking care of the future generations is something that represents and has the most reliable, smart, and noble investments. a society where in real fact the rights of children are protected, and his or her personal dignity is respected. the society is more kind and humane, but also society can develop faster has a favorable and more predictable future ahead of it. i believe that what we need dramatically is an effective government policy in the area of childhood. a policy that would be modern, a policy that would meet the interest of national development. and that is exactly why in this address i will give the largest

amount of attention to this subject. and i will dwell on what, in my view, requires new solutions and new approaches. first on how to improve the demographics. compared to 2005, russia has increased by 21%. this is among the best such indicators worldwide. infant fatality has dropped by a quarter. last year for the first time in 15 years, we were able to actually see an increase in the russian population. largely, this, of course, is the result of the workings of the so-called maternity capital, or payments to the new mothers of the national project health and other measures of social support for families. we have sunk our teeth in the demographics problem in the most earnest way. we have to understand though, over the next 15 years, we'll still be living through the

consequences of the democratic define in the 1990s. however, the number of woman who can still bear children will significantly reduce over the next 15 years. this is a serious threat, this is a challenge entire nation. what must be done? we have to make more accessible and of better quality both medical and social assistance for mothers and children and to develop the birth certificate program and treatment for children under three years of age for newly borns with small body weight. we also have to increase support for treating childlessness, including using invitro semination techniques. we need to modernize children's outpatient and inpatient clinics to improve the training of the personnel. as soon as next year, significant sources will have to be channeled.

at least 25% of the funds collectively allocated for modernization of the public health system will have to be used to build up the children's public health system. this is a great amount of money. in practical terms, it may amount to 100 billion rubles in the course of two years. today, almost 1/3 first graders have identifiable health issues. even worse is the stats when it comes to teenagers. 2/3 of teenagers have health issues. starting in 2011, i'm issues an instruction to conduct an in depth health checkups for teenagers. especially importance needs to be given to vaccination, to accessibility for children and teenagers of high quality medical preparations and early diagnostics in them of tb, and other dangerous ailments.

these purposes -- these programs also need to be adequately funded. the third and highly important question is that of support for new and large families. one of the most acute problems and it remains that way is housing. starting in 2008, the law has allowed to use the use of maternity capital to repay mortgages which has been signed up until december 31st, 2010. that is before -- that is without having to wait until the child turns three. this has been taken advantage of by almost 1/4 million of our citizens, whereas the housing market has been given an incentive, has been given a boost. which is important in the postcrisis period. i believe that starting next year, this regulation has to become permanent. number four, in expert opinion, the main path of overcoming the crisis is to increase the number

of families that have three or more children. recently, i saw an interesting bit of information on the internet that concerned the all high territory where they were holds was an interesting social advertising campaign. it's a simple idea. but one that i think is very attractive. that is to tell the public which of our famous russians happened to be born as child number three. among them are antoine, nicholas, and without the great individuals, without their creativity, and without their achievements, this world would be a different place. humanities would be poor both morally and in a culture -- and from the perspective of culture. therefore, i believe that large families the most favorite nation regime has set up in certain regions when a family has a third child. the decision has been made to provide to them free of charge a

plot of land so that they can build a country house or primary residence. this is, i believe, is an appropriate measure and also example for other parts of the country to follow. i believe this practice should be rolled out nationwide. [applause] >> translator: i'm also instructing the government jointly with the regions to work through the procedure of providing free plots of land for the construction of the first residence for a second home when a family has a third or a next child. of course, this rule could be phased in on the gradual basis given the specifics of the territories. in the region other forms of support for large family that can be taken advantage of. in the liana region, a 1,000 google certificate is issued to new families when they have a

third or fourth or separate child. i suggest all of the parts think the regional maternity capital. this measure, obviously will cost money. it depends on how the things are in specific parts of the restoration. but the results are worth it. number five, there should be additional tax references. specifically, the tax should be 3,000 rubles a month for every family starting with child number three. i'm instructing the government to prepare the appropriate proposals and increase the tax deductions for all families with children while reducing the so-called standard deductions which for the majority of the citizens of this country have simply acquired a symbolic nature. number six, many foundations, the mass media are organizing direct collection of funds for children suffering from grave diseases. they are also individual

businessman who without advertising themselves, which is especially important, or supporting orphanaging, and investing in childrens recreation and sports. we have been improving legislation on charity. however, the problems remain. for instance, a repeat charity action with respect to the child, even a child who's suffering from a grave disease is nevertheless includes in his or her parents taxable base. this is unfair. funds received to support children sent by charity organizations must be completely eliminated, removed from the taxable income. i am counting on this state to pass an appropriate piece of legislation a.s.a.p. according to the applause, this is what is going to happen. number seven, an issue that is extremely sensitive for new families that which concerns preschool establishments and

kindergartens. wherever i go in this country, i'm almost always in meeting with local residents and asked this question. as of years beginning, a 1,0 -- 1,674,000 are signed up for kindergarten. often the parents put their list before the child is born. it's because there's not enough vacancies that young families delay having children or limit themselves just to one child. here's what i suggest needs to be done. a program, a nationwide program, programs in every region should be established to rebuild the old kindergartens or build new ones that would meet the modern requirements or provide appropriate premises for them. and such requirements must be both well grounded and feasible.

i already said they should not be gratuitous. second, alternative force of preschool education to be given support. in particular, a system of nongovernment children establishments and family kindergartens and to consider reducing rent and establishing tax benefits on property tax for children who do not go to kindergartens, preschool groups in general education schools need to be established. dear colleagues, for two years now, we have been awarding the order parental glory. it's an order that was established my initiative among those rewarded are fathers and mothers of biological and adoptive children. we take -- we chose to take pride in such families. i have to tell you that frankly even just talking to them makes

me extremely happy. when they come here to the kremlin to be given their state awards. unfortunately, in this country, to this day, 130,000 children are parentless. they don't have parents, they don't have guardians, they don't have families. they are deprived of what is the main thing for them. family. and a great deal has to be done with the very notion of quote abandoned children unquote to become an an acronym. we must find foster families for children. there must not be quote nobodies children unquote in the country. [applause] >> translator: a serious problem is the correctional orphanages. they work to isolate rather than

to create them and make them part of society. that's why what is happening there is something that both the government authorities and civil society must keep an eye on. custodial awards need to be established at every orphanage at every correctional facility and those custodial must work in an open manner. also we need programs and social adoptation to company those who go to orphanages and then graduated. it's not enough to educate and feed children. we have to bring them into the new adult life and prepare and have self-confidence. this is not just something that teachers need to do and the local authorities. the local authorities, for instance, could pay for those who just left orphanages to undergo training within the system of secondary and higher professional education. our childhood policy is based on

universal international standards, the declaration of the rights of children adopted by the u.n. assembly declares that the humanity must -- that humankind must give the children the best of what it has. whereas the childrens right convention has established the priority of the interest of children before the interest of society and the government. in 2009, under the president, the institute of the commissioner for the childrens rights was established. and his work is cut out for him. last year, there were flagrant violations of safety norms in children's summertime facilities which resulted in children getting sick and sometimes dying. it's necessary to prevent the repetition of this. both local administration and supervisory authorities must in advance, now, start preparing for the next summer season. these are matters that have been

to be the responsible for both the issues of children's rights, and there are those in already 58 regions of this country. by the way, i believe this institution could be established in virtually any constituent part of this country. about federation. horrendous problem is violence against children. according to the official data of the minister of interior, in 2009, over 100,000 childrens and teenagers were victims of crimes. just think about this real hard. many facts turned inside out. children, mostly orphans, children from families that are not doing well are being dragged into substance abuse, drug use, prostitution, and other criminal endeavors. and the jerks that are doing

that must be punished in the harshest of manners. [applause] >> translator: last year we provided for harsher punishment for sex crimes against pre-age people. however, preventing such crime is just as important. i believe that once and for all, access must be closed to educational establishments to those who have ever been found guilty of any violent crime or dragged children or teenagers into criminal endeavors. such individuals should not be allowed to be close to children under any circumstances. [applause] >> translator: an appropriate craft with editions to the labor code has been submitted to the state, and i hope will be passed before the years end. members of the council have took

into consideration to take care of the life and child is the direct responsibility of his or her family. it's more heinous when violence occurs in the family. it is known that cruelty generates reciprocal. then they use it in their own lives, schools with armed forces, and in their own families. it's the duty of the entire society to create an atmosphere of intolerance towards any cruelty against children, to identify and cut short such occurrences. i note that in our region, crisis center have been set up to provide assistance in case of family violence and such experience has been amassed in st. petersburg, and in the direct, and must be rolled out elsewhere in this country of ours.

there's another problem that i cannot be silent about. we virtually don't have any infrastructure to support the lives of people with disabilities or grave diseases. there's no way to say how hard it is for school. it's torture to find a bus that's equipped to carry wheelchairs for children with muscular skeletal symptom disorders is a problem. and navigating around buildings or offices in wheelchairs is often just impossible. although i have to say that new houses that are being built, already built to new standards. and yet i have to say that people with health problems and restrictions nevertheless achieve very high results in sports. of course, what our pair -- para

lympics have achieved, creating full fledged environment for disabled children must become a priority in implementing a new government program called an enabling environment. [applause] ! >> translator: raising the future generations is linked with the assistance of modernizing the education system. as part of our initiative, the standard of early school has been renewed and centers for the high school has been changed as well. it's important that now in the middle of what is known as the teachers year, that new qualification requirements for teachers have been published. in addition, teachers must be given opportunities to undergo

advance training in the best schools and in the best educational establishments. in 2011, 2,000 rubles were dedicated. however, authorities must provide finance towards these purposes to school teachers have power that prime ministers can only dream of. that is what winston churchill said once. said this power must be targeted in a way as to open up the talents and capabilities of every individual child and to prepare him or her to choose the profession. that he or she will have. and for this purpose, first and foremost during 2011 for every school, a project of the school of the future must be prepared. the vision of how school can develop. developing this project is, of course, something that teaches me to do both current and former pupils and the parents. but i believe the regional

authorities could develop a mechanism for their implementation by engaging business entities if and when necessary, second. it is necessary to complete creating the national system for identifying and supporting talented children. it is important to be able to develop ones talent at an early age and everybody must have the opportunity, irrespective of where the children live. i'm instructing the government to take it into account as it produced new educational standards and to develop a rule for per capita financing for paragoge call and gifted children. :

teachers must know about th. raising children is something that needs to be done by both the educational system and culture and the society at large. we must create new qualitative -- qualitatively new and high quality films, movies, that will be of interest to modern children. let us remember what impact was

made on entire generations by fascinating science fiction. we all read it that inspire children and urge them to fix their own discoveries an entire generation grew on those sci-fi books. more attention has to be given to the patriotic education of the young people. yes, it is necessary after rejuvenate this effort by serious efforts by patriotic games, smart demand. they helped inculcate with strong character and teach skills that acquired the most complex conditions, and i would like to note the importance of the operations and that identify the names of those who died during the war and in such expeditions young people in the or acquiring the skills and patriotism not patriotism for

short, but genuine patriotism. i spoke to the government to deliberate the observations and to update the monuments and everything is great in the area but i believe all levels of government must be doing it, not just on the anniversary year like this one. number six, the strategic priority for the policy is to create and promote healthy lifestyle values. naturally this is not just concerned children. we must lead by example. elbridge entire society must get over infantile approaches when it comes to a healthy lifestyle. without educating oneself, it is difficult to educate one's children. that is what was once said, in the meantime, 80% of the russians do not engage in any kind of a fitness or sport. we are talking about for a five

people. also, this country suffers from one of the highest levels of tobacco smoking in the world, and people are taking a both tobacco and alcohol at an increasingly young age and those alcoholic beverages to those that come of age must remember that they will be sanctioned, including the go to jail for committing a crime. [applause] i hope the support you just shown me that provides for the responsibility for such sales which is currently will soon become law. the elimination to him on -- dependent what national legacy's we need despite the unique features and the nature.

today it is not in the best of shape and the problem can only be solved by setting up a modern and effective environmental conservation and management system. the following has to be done in the short term. the tradition of the territories must be delegated and this level must be seen as a benchmark, as a baseline in order to implement programs to minimize the negative impact on the environment and the previous environmental damage. certain experts also believe that is necessary to conduct the so-called environmental amnesty provided that a company undertakes very harsh obligations as far as environmental rehabilitation of production and the territory which it is based on and affect spirit i believe this is a reasonable and some idea, not just to repair those programs with those that actually implementing such programs and investing money in such programs. they should not be harassed with

fines which will make it difficult for them and the mechanisms should be taken full advantage of private estate partnership. also, the government must work out norms for the call the environment that might be specific attributes of the territories. this is the foundation for the activities of the national authority and the would be a very clear benchmark for the citizens and partners from other countries. number three, crucial principle role in the protection of the environment must be played by the civil society. i have heard more than once that environmental thinking does not take on, does not stick in this country because our society's aren't prepared for it. well, i guess perhaps that is partially true. that is why as mentioned before how great importance is the role

of environmental the education and upbringing and that too must be taken into account and to do educational standards. the environment must be one of the key indicators of the quality-of-life and one of the key indicators of the socio-economic of a limit of the territories and appropriately and must be seen as a criterium against which to judge the effectiveness of the work of local bodies of government and the heads of the editors of the federation are thereby instructed to annually report on the status of the environment and their regions and of the population of those regions must be fully and completely reliable informed as far as the non-governmental entities. those who are in real terms working to maintain the natural environment given the production and infrastructure must be engaged in a dialogue and

acceptable solutions must be found by summing up this particular subject i would like to empathize childhood and the ten years the period of time when his or her future is defined. , people open things for themselves, when they are not of it for anything, the immigration, the design to something new, the audacity of thoughts. these are all things this country desperately needs right now and we are counting heavily on the energy and ambition of the young and on their wish to work jointly to gather for the goals stated. members of council and federation, modernization creates a smart economy, but modernization requires a smart policy, one that ensures condition for comprehensive rejuvenation of the life of society. what we need is new standards in

the operation of the government and the provision of public services, high quality of the work of the traditional and the law enforcement system and more interaction between the citizens in the developing of their communities and the greater impact on the activities of municipalities. for this i am proposing the following steps. first, we have to achieve transparency and simplicity in the every day relationship between the state and the citizen. and i repeat, every day relationship. understanding of the fact that bureaucrats serve the people, rather than determine the people's states is the foundation of the space system. to the citizen, steve is a bureaucrat, a specific bureaucrat who has come to see, a judge who has passed a ruling and this is a case, a tax inspector or local policemen. anybody come any bureaucrat who is empowered to solve his

problems, all as present in this room. the activity of -- activities of all officials such that must not disavow the state. their job is to improve the quality-of-life of people. the standard of living. we are optimizing the system of providing states. even today, many regions of the country without the fee leaving your house you can electronically file for new passport [inaudible] amount that has already been accumulated conduct, to obtain a driver's license. so part of the news is already in effect. although -- and i will not hide it because people are writing to be -- the way the system works is that something people still have a lot of problems with. it has to be made to work better. the remainder of the rules will

be effective this year. the most important of them is the principal of the one-stop window. people don't have to run around all kind of establishment and get the pieces of paper. as parents have to do, who have to take advantage of measures of support for their children that are provided for the law. it is necessary to legislatively and make individuals who are officials responsible for violating the periods of time during which they are expected to provide government services, and i have instructed the government to provide such proposals within four weeks. second, modernizing the system of government of public service must be given to the public. i believe that we should more accurately involved in the provision of such services, non-profit organizations often in the field are better than even the coeditors and experience and they are helping people who find themselves in difficult situations. i believe the involvement of the

nonprofit organizations can make social services more specific and more targeted and what is more important, it will reduce the level of corruption in the big government. the federal agencies must come up with a clear and transparent system of selecting nonprofits for reforming such functions and selections should be made of organizations that have already -- that already have a good record and that enjoy -- that want trust among the public have been working for a number of years and who are based on organizations that have relevant experience. i am telling the government to finalize the legal framework for the involvement of the noncommercial organizations in the system of providing government social services and to use tenders to a greater extent in financing them. in every region, they're must be coherent program adopted to improve the climate and to create new highly productive jobs on the basis of the

so-called best regional office. such include the reduction of the period of time, which is taken up by the issues of crime is required to start a business to create preparing industrial sites and other measures. on the whole, we must encourage rather than discourage and support the regions that have been able to increase their own revenues. and to take this into account, as we distribute federal subsidies. however, even this is not enough. the government must prepare proposals to change the current proportion of the distributional revenue between the different levels as the result of such measures the role of the regions and municipalities in solving ki socio-economic tasks must increase. the bulk of the responsibility

for the future or a region that fits with the governor. how successful his or her work is will be based on how much investment he has been able to correct and how many new jobs especially in the commodities have been created. and the personnel decisions have to be related to that. number four, the bodies of government must get rid of property that is not directly linked to their direct conferences. always seems that there is no such thing as unnecessary or excessive property. in fact, managing excess of property requires a lot of strength, come investment, and everybody's here to know about that, a lot of funds which is the worst part. at because it often generates corruption. this year i have signed a decree to reduce by 80% of the

strategic companies. my instruction to government has come up with a large plan to privatize large companies. the main goal of the privatization is to increase the efficiency of the companies and to bring to the economy additional investments and serious investments, whereas the privatization proceeds will be used primarily to modernize this economy. appropriate decisions must be made the what the regional and local levels. the law on the general principles of organizing the bodies of of doherty of the constituent of the federation defines that property of the regional authorities can comprise property that is necessary for them to perform their functions and powers, therefore, other facilities and other pieces of property must be privatized. bodies of government must not own plants, newspapers and ships. everybody must do what he or she decide to do. [applause]

five, modernization will only provide the expected effect when the society has fair laws, and ferre laws they're actually working when the independent and respected courts and law enforcement agencies are functioning. those that in july true respect on the part of the citizens. all these links undoubtedly, of course all are linked among ourselves closely and the entire system of the reform of just individual institutions. that is why, along with developing the legislation of the judicial reform, which is something that we have been doing and are doing, we are reforming the minister of the interior and the legislative level creating an environment in which to improve the quality of the work of the investigative authorities and the prosecutor's office.

to this progress, i have submitted to the state, to the draft legislation on the police and on the investigative committee of the federal and the regional and municipal leaders must prepare to effectively implement these new acts. indeed, they have a lot of new things, and not to hide in their offices and watch criminal operators increase their activities and feel like they can get away with anything in their territory. they must do everything to make sure that people who live in their territories are not worried about their own lives and the lives of their families are not afraid to lose their health, property and human dignity. recently unfortunately a number of tragic events have taken result as which our citizens have come have been murdered. the of the reasons among others are the sloppiness of law enforcement authorities and the other bodies of government, and

oftentimes, they're direct merger with criminal entities with regard to one such episode i have a decision to relief from his position the head of the department of the interior of the territory, whereas if the general for the office, the efforts of the investigative committee have been instructed to make proposals regarding holding why of all individuals who worked in those individually areas of responsibility that were supposed to ensure enforcement. number six, in my previous address, i talked about the need to improve the criminal legislation, and that this legislation must be tough but at the same time modern and humane in the reasonable sense of the word, whereas restoring justice by way of the courtroom and for justice and the protection of the rights of the victims must

not result in building up the criminal world with new blood. i will emphasize one more time, punishment for significant crimes to the extent this possible must not involve the provision of freedom. this is relevant in the situation when we talk about young people, teenagers, first offenders. today i will submit to the state which will enable the court to apply a differentiated approach in assigning punishment in a number of different trends the lower limits of the sections will be eliminated and courts will have an opportunity to more broadly use such alternative measures of punishment as fines and community work. the main thing is the insistence of the lower limit of criminal

sanctions of court should not see the upper limit as the only benchmark as the same punishment. the strength of the court is not as in the toughness of the punishment, but in the fact that punishment is irreversible and inevitable. whereas the mission of the justice is not just to punish, but also to rehabilitate. number seven, our crucial goal is to continue to fight corruption. i believe the decisions have already been made are being executed and to keep moving ahead. experience indicates that even 12 years, 12 years behind does not seem to be enough to prevent people from giving bribes. on a number of occasions economic measures can be more productive, therefore the commercial bribery, the giving and the receipt of a lot can be punished with fines in the

amount of up to 100 times the amount. in fact, the kind of criminal behavior has occurred as mediation and bribery of other courts and other government bodies and the revenues it perfectly well there are a lot of scumbags who assure that they know how to take care of any particular court case and who and how much needs to be given to take care of that business. i believe that bribery mediation as well as many fines are to be made part of the criminal law. number eight, another subject that i would like to raise, i will not not demonize number 94 that everybody knows about. it has been criticized in a blanket ways to save the situation has reached the work

of what is reasonable, and the goal stated in the mall unfortunately to what extent have never gotten off paper. nontarget expenses including the direct effect kickbacks and misuse of funds amount to at least a thousand billion unfortunately, therefore we have to start working on a new edition of the law of government procurement. one that will be better fought through. [applause] i also believe that the plan there must be a special internet web site that will preliminarily publish information that will have feedback opportunity for companies regarding their enforcement in the tenders and expert opinion about the extent to which such plans meet this

requirement and are in sync with the current crisis situations, so the next three years the forecast plans for the procurement of the state of that equipment and medication and high-tech products on behalf of the government and large state-owned companies and subsequently and forecasting should be extended five to seven years in which case both investors and researchers will know exactly the product of the work will be in demand. for increasing demand of the year if technology can be accomplished for the modernization of the forces would you like it or not but in different periods of history science and technology were pushed ahead specifically by the defense means and the government in the new technical solution in the area of defense. the recurrence is facing the fundamental goal of creating the new high-tech and what we are

going to do is to spend over 20 trillion rubles towards those services. this is a lot of money and such investments will pay for themselves and be twice effective is that the end of the day to give us the use of the technologies, thus helping us to modernize production and develop the fundamental and applied research and university research. that is why we are setting up a special entity whose job will be to identify and develop breaks of technologies for the defense industry. such entities are in other countries where many of them will find a use in everyday life and most indicate to call the of life is the quality of the political system to improve it as the federal and the regional level in number of decisions have been made. as i stood up this very place back in 2008, i formulated to in

positions and in 2009i formulated yet another ten positions which are involved in and purpose in the political system a democracy once again i would like to thank everybody who was involved in this discussing those initiatives and the members of the council of the federal. at the self-government we need additional steps to be made local, self-government, an important element and the majority is virtually nonexistent as the local level of all the parties are functioning on the little old organizations and my proposals to make it mandatory to use proportionate to the electoral system after the elections of representatives bodies and in the municipal municipalities for the number of deputies at least

20. we set out to deeply modernize the forces. we have already updated the forces and the system of combat readiness and we also started conducting my regular basis war games. next year the special focus has to be given to boosting this aerospace defense of this country and of modern russia definitely and it also needs to shed goals and functions that should not be performing. also, we are not just building of our armed forces but to some of the national cooperation in the security area. russia is prepared with the country to work on enhancing mechanisms of current directing recently at a russian major summit in lisbon i shared my consideration regarding the possible architecture of about a

european abn system which would make use of the potentials of the north atlantic alliance and what put you up against missile strikes. our alternative is either we agree on an anti-missile defense and create a joint mechanism for the cooperation were a spiral of the arms race will begin and we will have to make a decision on deploying new strike capabilities. it is completely obvious that this latter scenario would be very brief. in lisbon the decisions were made to build a modern partnership, a partnership based on the principles of indivisibility of security and mutual trust country's currency and predictability. we have determined how we will work and how we will work on the creation of a single space of

peace and security in the region. this gives of some cautious optimism if you will in the prospects of working on the russian initiative concerning a treaty. we have to build up economic diplomacy correlating its results with practical outcomes for modernization and the foreign policy must be expressed not only in missiles but also in specific and clearly understood achievements by citizens in the creation of russia are joint ventures and mentions of high-quality inexpensive goods and the increase of number of jobs and i should say that this approach has understanding and our partners and i believe that we should work of a targeted manner with countries and companies that are prepared for

that thinks to the professional interest we already are she made up modernization partnerships with germany and france, great potential in the building of inhibition component of the cooperation with china, india, brazil, republic of korea, singapore, italy, and several other countries in such partnerships will seek to accomplish the release of russia's technological modernization. the substantial reserve for reaching those goals i see an expanding the cooperation with the union and the united states of america and the mechanisms of the russia u.s. partnership must be used to establish full still economic consolation and improve the investment climate and ensure interaction in the high-tech area. the agreement between russia and

the european union partnership for the modernization and that is an idea that we formulated its ackley a year ago must work on. first, it involves the natural extension technology, harmonization of technical norms and regulations, practical assistance of the european union as far as russia's exception to the wto. second is a simplification of the visa regime with its complete elimination in the short term and third, considerable expansion of professional and academic changes. it is in this regard next week i will engage our partners in brussels that of russia european union. extremely relevant is the task of the regional integration and economic space of the asia-pacific. active use not being made of the

potential participation in the forum and other forms which takes place expanding the relationships between the countries in the region requiring the strategic character and that is something that is borne out by the example of the relationship with china and unprecedented level of cooperation projects partnership internationally and in turn is also helping increase the prestige and influence of such entities. serious reserve is available in terms of developing a long-term mutual beneficial cooperation with latin american and african nations of special priority importance with what his course and our foreign policy the cis and thus es keogh entities that are operating. we have set up a customs union and are creating the only single

economic space within the year of sector framework. we are flying out new integration schemes and at the end of the day we should work towards building a single economic space stretching from the arctic to the pacific that will take up the entire territory of eurasia. [applause] number eight, as it relies on the experience, technical and resources, russia can become the initiator of a global system of fighting merchants. effigy 20 summit i launched the initiative concerning the modernization efforts to preserve the marine environment from oil spills. now we have to tackle our main goal, the change of the best practicing in this area and prevention or liquidation of consequences of the oil spills.

international flight to piracy must be made more energetic. we have lost initiative to the mechanism to try pilot. we believe it will help bring pilots to create responsibility. after all it is the fact that they can get away with it that remains as an incentive for them. i am expecting the foreign policy agency to come up with specific results of work in all these areas. defense. together we have to implement the plans that have no point today. i have not the slightest doubt the world of great job at that. i would just add a few more words now, words that are normally not in official documents, but they could be the most important.

we are rejuvenating this country. we are rejuvenating were society. we are changing our life, and we ourselves are changing. and everything we are doing we are doing for those who are left more than anyone or anything else by our children. because we wanted them to live better than us. we want them to be better than us. we wanted them to be able to do things that perhaps we won't have time to do. so that out of their successes, a successful future of our great russia will come together. i am positive that this, indeed, will be the case. [applause]

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>> we have a very good panel. we have discussed these issues before publicly. we discussed these issues with you this morning. i am delighted to see everybody here is struggling back after a thinks giving weekends. i think you -- i think we can formally mark the end of the redskins season. we await the return of the senators and members of congress for the rest of the lame-duck session. the new start treaty is on the agenda up -- agenda. we will run down the line with presentations of about 8-10 minutes each. we're talking about the new

start treaty, recently signed this year and awaiting senate consideration. we will be talking about the future of nuclear weapons. you are invited to raise whatever parts of the broader subject you like in discussion. sitting to my left is my colleague here at brookings and one of the nation's export negotiators and practitioners as well as academics on nuclear arms control. he is a former member of the state department and worked a great deal on the inside process during his time in government. he was also the u.s. ambassador to the ukraine. i will briefly take the [inaudible] we're not quite there yet. much of today's discussion will be on a new start. i think as people make a case

largely in support of the treaty. keith payne is the ceo and the author of the great american gamble. he is the foremost expert on nuclear arms. he is a member of the congressional commission on the strategic posture of the united states. i was honored to be part of his working group last year. he is extremely thought- provoking and will raise some different points of views on arms control. tom donnelly is that the american enterprise institute. he is a distinguished author u.s. written a number of books on ground forces and conventional combat. all the more reason why it is very important to have tom on the panel because he brings a perspective on the

interrelationships between different military forces, different military capabilities. forthcoming paper is strategies and forces for the third nuclear age. his most recent book is "lessons for a long war." i will briefly mentioned that my most recent book on this general subject is called "a skeptic's case for nuclear disarmament." they have articulated a world sunday free of nuclear weapons, whether that would be a good thing, if feasible thing, or in any way relevant to the issues today. let me briefly remind you that

this new start treaty that is now being considered by the senate would lower our overall deployed strategic forces by 10-30%. it depends on how you do the counting and on how the two countries would posture their courses. it would not affect tactical nuclear weapons. it would not affect surplus nuclear weapons, weapons that are in a stockpile. or missile defense, even though there has been a great deal of controversy about even the mention it -- missing to the possible association between a missile defense and arms -- offensive arms. there are no binding restrictions whatsoever. there is no differential or distinguishing between a nuclear arms long-range missile and a

conventionally armed one. for those people who are interested, there is no particular allowance for that. if we do that, it counts against your treaty limits. these are a few of the points that will come up in discussion. we are looking at 10-30% reduction in deployed strategic forces. that is the basic immediate issue, but we will be talking more generally about everything that is under the sun about nuclear. >> thank you. about what thelk next step is. let me remind you about the three basic limits. the united states and russia would be limited to no more than 1515 strategic warheads.

each heavy bomber would count as one. there is a set limits, at each cycle can deploy it no more than [inaudible] ballistic missiles. a non deployed launch europe would be a ballistic missile submarine it tube with no missile in it. typically, they are in long-term overhaul with no missiles on board. they would count as non deployed launchers. let me talk about why the u.s. start treaty is in our interest. first of all, it will reduce and cap the level of russian strategic nuclear forces. i do not lie awake at night worried about a russian attack.

but i think that americans are more secure if the russian forces is limited. the new treaty it contains a wide range of verification measures, detailed informational exchange. it will give the u.s. military a lot more information about russian strategic forces than the u.s. military would otherwise have. that means that we would be in a position where we can avoid assumptions. the military could make smarter decisions. the third, it will require some reductions on the u.s. side, the result would be a u.s. strategic deterrent that is very agile and robust. it would be capable of defending the united states and american allies. bringing the new start treaty is going to strengthen the u.s. in

terms of raising the -- the assault against abrasion. we have already seen over the last 15 months as -- you see a better relationship with moscow. russia has provided more access to provide supplies to american and nato forces in afghanistan. russia has taken a much tougher attitude toward iran and the nuclear question. that flows from the recent that has been driven by the new start treaty. i do believe that the new treaty is going to be ratified in the end. the arguments in its favor are compelling. it is difficult for me to see how serious republican senators can justify opposing the treaty that has been supported you guessed it -- unanimously by the

joint chiefs of staff. by every senior serious republican statesman, every former secretary of defense, and national security advisers. i am optimistic regarding the ratification. i do not know whether it will happen in the lame duck session or sometime in 2011. i hope it will happen sooner. the transparency of measures will begin to give us information about russian strategic forces that we have not been receiving for the last year. in december of 2009. i think that when the treaty comes into force, there is a question of what comes next. president obama has said that he envisions a step-by-step process in reducing nuclear forces. i am not enthusiastic about

further cuts, but they have had a step-by-step process. when you get into that, you have to look at a number of questions that may arise. what would be the level of strategic warheads under a new tree? do we go below 1550? how far? would you also want to reduce strategic vehicles, at strategic launchers below the 708 hundred limits. going beyond that, i think we are going to get into some new territory. when president obama signs the treaty this year, he said the next round will address nonstrategic and non deploy strategic weapons. that will again have some new territory. it is not going to be easy for a couple of reasons. the russians have a large numerical advantage. when you have this kind of

disparity, moreover, because the russians perceive that their conventional forces have disadvantages through nato and china, the russians that adopted the nato nuclear strategy now is the technical -- tactical nuclear weapons as a disadvantage. that will complicate non- strategic forces. moreover, you will have a new verification challenges. a lot of the verification measures centered on the go ahead with intercontinental ballistic missiles. you are likely to talk about weapons that have been -- we are seeing them somewhere in bunkers, and that will approach to verification challenges that the united states and russia have had to grapple with before.

it will likely be an area of u.s. numerical advantage. the united states plans to achieve most of its limits by down lading missiles, taking more heads off. it will carry three warheads and will be -- will be deployed. they will be stored somewhere, they won't be in the immediate future. it would give the united states the potential should the russians put those warheads back on. the russians appear to be reducing their forces by eliminating missiles and keeping their residual missiles with full war headsets. they will not have that capability. in terms of non and deploy strategic warheads, there might be a bit of bargaining on the russian advantage from the tactical side.

the russians i suspect will raise missile defense again in the next round of negotiations. there is potentially limit for the administration because the russians will seek some kind of constraints with missile defense and i don't detect any interest on the part of the administration in negotiating missile defense. i think they also understand that any treehopper will contain how meaningful restraint and will be done arrival at goes to the senate for ratification. there is this potential box here. many have articulated about engaging and when the russian president met with leaders and expressed interest in working towards cooperation on missile defense. if you could adopt a genuine cooperation between the united states, nato, and russia for missile defense protection, it might change the whole dynamic surrounding the missile defense

question. another issue that might come up is the question of third country nuclear forces like britain, france, and is tied up. the greater the pressures will be to bring other countries in. my sense is that the u.s. administration folks would like to have one more negotiation that will focus mostly on u.s. forces before you got into the much more complex of bringing in other countries and in bringing those -- making those negotiations multilateral. one thing that we'll mention either now or for early on the web site, the paper also talks about what might be a u.s. position for the next round. what i suggest is looking toward the 2500 total nuclear weapons counting everything except those weapons that are in hot the queue for dismantlement.

it would include strategic, tactical, and within that 2511, there would be a supplement for strategic correspond to the start treaty. it would allow a trade-off. the russians might have an advantage of tactical weapons in the context of overall quality. i should add that in that kind of limitation regime, he would likely have a verification system in which you would have high confidence in your ability to monitor the limits on deployed strategic warheads in you have much less confidence in your ability to monitor limits on capitol warheads. i think in the end, even though it is a verification scheme, there is some monitoring on the

constraints on russian tactical weapons, and hopefully, as you go through that verification scheme, you get the expertise that would allow you to form a smarter verification system for later on. this kind of agreement and will help reductions on the russian side and also to maintain a robust deterrent. and i think at that point, you get a little bit of stress on the triad and it will make decisions that will be a bit painful. all of this is the next step in the immediate future, the ratification of the new start treaty. >> it is a pleasure to be here this morning. how to thank them for the invitation to speak. as the academic, i usually look

out 50 years in my discussions and writings, but because it is an immediate concern, a subject of immediate attention, of like to comment on the process that has gone along with a new start in washington because in this case, the process has been important to the substance of the debate. the obama administration efforts to garner support for ratification of this newfie have met greater than expected resistance. this resistance follows primarily from concerns about the various loopholes in the trees and limits on forces, the narrow but explicit limits on missile defense and nonnuclear strategic missiles. and those of the strategic weakening of the verification provisions. it might well be that the opposition in this resistance

that we see has as much to do with the administration's mode of promoting the treaty as it does with the substance. senior members of the administration have contributed to skepticism about a pattern of this characterization and misdirection about a tree while simultaneously being dismissive of reasonable concerns identified by knowledgeable commentators. for example, even before president obama signs the treaty in april of 2010, some commentators expressed concern that the administration would agree to limits on missile defense. they fan the flame by frequently claiming that the treaty would in the limit u.s. defenses. in response, the administration assured that there would be no

such limits whatsoever. the start was to be a treaty on strategic offensive forces and not on the offensive forces. during april 29 press conference to explain new start, the secretary of state for arms control and international security stated that the treaty has nothing to constrain missile defense, is about strategic weapons. there is no limit or constraint on what the united states can do. further, there are no constraints to missile defense. the actual text of the treaty shows russian commentators and u.s. skeptics to be correct. it explicitly limits and u.s. missile defense options. the treaty establishes some bilateral commission where a missile defense can be the subject of further ongoing secret discussions and possible limitations.

the administration has repeated the false claim of no limits on missile defense so often and so definitively that the claim continues to be erroneously presented as fact by journalists and commentators. several u.s. commentators expressed concern that the administration would allow russia to gain limits on prospective strategic forces under a new start. senior military commanders have pressed for nonnuclear strategic forces for prompted global strike, and specifically warning against such limits. it assured that there is no affect for -- it doesn't have any constraints to it. posted on march 26, the long-

range conventional strike capabilities. this carefully nuanced statement is precisely correct. it would have been impossible for profs capabilities of the strike -- explicitly constrains options for these prospective weapons for strategic nuclear warheads, on deployed nuclear warheads and launchers. the pattern of this characterization is not limited to -- and several commentators observed an old russian

favorites and were not specifically defined as they had been in previous agreements. this raised the concern that the mobile icbms -- the supporters in general who dismissed to this concern. when the demand, the tree does -- is stated that such a u.s. claim can tell them to stop action on the treaty. he noted that the americans are trying to apply the new start treaty to icbm rails if they are built. this problem identified early on was not so outlandish.

new star will reduce the number of warheads by about 30% below the 2002200 maximum. however, the specific terms of the treaty preventing number of weapons to move higher than the 2200 under the previous moscow treaty. despite the claims of 30% reductions, new start would have an increase because hall of the weapons would count as only one warhead. even though some are capable of carrying many more. and nuclear-armed cruise missiles would not be captured at all.

the russian strategic expert described as this sleight of hand has nothing short of fraudulent. aa nevertheless, the universe 0 -- nevertheless, the universal talking point is that it would be by 30%. not only nuclear warheads, but in the number of strategic launchers. the fact that the administration has typically been left and sen -- as presented in the oakland russian press, russia is already well below hot climates and is

headed lower. with or without the treaty. in short, the strategic water limits imposed reductions only on the united states. the department immediately responded with a continuation of this characterization and misdirection. the treaty does not force the united states unilaterally. the administration rightly claims that new start mandates commendations on watchers. it erroneously denies the fact that number of launchers trying to meet those. and you have to build up its forces to do so. the administration claims that the lame-duck senate must ratify a new start immediately.

for u.s. national security would be seriously endangered. secretary gates has stated repeatedly that russia poses no military threat to us or our allies. so why the urgency? this of illogic remains unexplained. it remains hot overstatement and hyperbole. perhaps the administration's apparent treaty as characterization and misdirection will be left -- if it is not so frequently -- there are numerous illustrations of this behavior. for example, an assistant secretary of state observed that no one with any pedigree has raised concerns about new start.

this dismissive characterization manages to be simultaneously insulting and arrogant and nonsensical when notables whole raised serious concerns about the treaty. in addition, the undersecretary of furred concerns about the trees as red herrings. in the testimony before the senate, hillary clinton suggested that those expressing concerns just don't believe in arms control treaties at all. and from my perspective, are unfortunately slanting a lot of what they say. so dismissing skeptics concerns has been the administration of's -- the administration's

mode of operations. it is cause for bipartisanship. as the president harry truman famously observed, if you can't stand the heat, -- advanced arms control, even its current mode of operations had engaged in concerns about the tree be seriously and thoughtfully. thank you. >> over to tom. >> he very kindly set aside the heart of the long term, so i will take that as my team.

but before i do that, i have two words to say on starts. there is conventional military power as opposed to all things nuclear from the congressional staff and a political hack who can count votes and read the constitution recently. i am also painfully aware of the senate. i want to talk about the politics of the start to deal. as a way of suggesting why a there is unlikely to be a vote during the lame duck session. i think the administration could have had and ultimately will get sent ratifications of the tree because they have not

seriously engaged in making any concessions are any deal making particularly with senator john cabell who is a man with a pedigree when it comes to nuclear issues and the leading figure in opposition to the treaty as it currently stands. he signaled, and i think certainly the senator himself and the representatives have suggested in particular on upgrading missile defense investments and making a serious investment in the modernization of the nuclear infrastructure, not just for the purposes of the tabling a test ban, but actually modernizing the infrastructure in the event, i think it is a

reasonable price. but the obama administration having governed keeping 60 senate votes in mind up until this point has reached the juncture where it needs 67 votes and cannot get them. senator kyl is likely to have more influence to get more of what he wants in the coming session of congress. i would say there is very little incentive for senator kyl to reach an agreement unless the obama administration is willing to move the needle pretty substantially and make more commitments, and the president himself is going to engage in these negotiations or deal with it at a much higher level. the president's priorities have been elsewhere. it is sort of like an expanded

version of the courier free trade deal in this is that you can't get there from here in the time remaining. having that would be the one note that i could contribute about the current debate. if we look a little bit more at the larger picture, the connection between nuclear issues and the larger questions of international politics and military correlations as we used to say are coming much more interrelated than they have been. certainly during the later years of the cold war when it was the presumption that nuclear weapons were qualitatively different. it is what they enjoyed during the salad years, quite capable of eradicating all life on the planet.

those days are gone. that is also the case that the sort of by polar international system of the nuclear balance was a reflection and also a thing of the past. why are we negotiating with the soviet union? they are totally unlike the united states except with the amount of nuclear weapons that it has. there is a demographically collapsing state, a politically imploded empire. they are highly unrepresentative, and the economy is a resource extraction ha ha ha larger scale, but not quantitatively different.

by contrast, the world that we see coming in the twenty first century that everybody talks about features most prominently the rise of the people's republic of china. is that behind that, the rise of india. but with many other factors that complicate national politics. the administration felt right rightly and spends a lot of time talking about proliferation and and the proliferation efforts to keep it out of the hands of terrorists and other non-state actors again. it is a terrifying prospect. the sensible american which stand against that.

this has nothing to do with that. it is the rise of other was weak and a second-rate powers with iran and north korea had been the leading edge examples of aspiring in a small nuclear states the constantly have larger arsenals, the efforts to contain north korea oppose the program as we have heard in recent weeks has not been successful. likewise, it is highly unlikely that any effort to prevent iran from obtaining nuclear weapons -- and obtaining a militarily significant arsenal not measured in the thousands or tens of thousands of warheads, but certainly measured in dozens if not low hundreds over the course of time.

those points, those facts are creating uncertainty and instability and new questions about the need for nuclear weapons among not only adversaries of the united states such as venezuela, but also america's friends. the conversation that we have thed as the story's over weekend suggests, the prospect of an iranian bomb is believed to aerifying to the persian gulf region, and long-term strategic partners. secretary clinton i think quite

rightly but without much discussion extended an offer of deterrence to the gulf states about 15 months ago, and the pressure is likely to expand. demand for american security guarantees in the face of proliferation is already increasing. finally, as i suggested, the competition will inevitably have wheat to modernization and expansion of small arsenals that we see in china and india and pakistan for example, if not all three categories were played out, pakistan would be subject for yet another panel. this is an entirely

different feature that our cold war past. all of these things that we told ourselves were stable and predictable, who do not obtain any future. what of the great debates in the negotiating committee is when you expand the realm of negotiations to include certain parties? an interesting question, but as he suggested, and much more complex set of negotiations. it will make our cold war and ongoing negotiations look like child's play. there is no consensus for nuclear disarmament.

that is the only way you can explain the behavior of those that feel threatened by american powers and those that have their own regional ambitions or own domestic regimes abilities-north koreans do. if we are so uncertain about what the future is going to be like except to say that it will be deeply on like our past experiences, it continues to be locked like to scorpions in the bottle. we don't know what is coming, and that is exactly the point. we don't know what kind of arsenal we will need, although we do know that we need to respond to very different nuclear crises and nuclear use in the face of very different nuclear threats.

why should we continue to go down this road with the russians? even if the treaty itself is ultimately ratified, it doesn't really address the most pressing nuclear questions. we will face this now and we will face this in the future. and we don't know what kind and what are re of nuclear capabilities we will need, but it is almost certain that we will need some form, probably more varied forms of nuclear weapons ourselves. now is a good time to open the aperture and ask ourselves not what deal we can reach with the russians, but what set of deals and what kind of arms control agreements will actually secure

americans in the future, and what kind of arsenal do need to respond to the future that is almost impossibly different from the past? >> we are anxious to get you involved in the discussion. i will use my will presentation to make some comments in support, and we will engage you in that conversation. as i expected, there have been some comments from various participants on this issue, and i think that senator kyl is being entirely sincere in serious -- and serious. republicans have proven that they are willing to be supportive of president obama on

foreign policy issues and the policies have largely been relegated to domestic matters. it is a little bit of an affirmation of the old adage that politics should stop at the water's edge. i have been struck by how much in the past two years we have had a bipartisan accord on issues like iraq and afghanistan, and i will come back to that in just a second. i think his arguments that he has the kind of questions on his mind, as opposed to wondering whether this is the moment to give the obama administration a political boost or not. let me make some arguments in favor of new start. the obama administration is correct, it has helped improve u.s. strategic cooperation in general on other issues.

while it can be critiqued here and there, he has done a very good job on specific points. it is generally solid and tough that i don't worry about the loopholes allowing one side to increase their forces and not worried about how one particular way could be constrained because the overall possibilities are generally run wide open for american and russian consideration. i am interested in seeing that u.s.-russian relations are much improved, and this is not a critique of how u.s.-russian relations were handled under george w. bush. i agree with president bush about his approach to arms control, to say that the strategic details shouldn't matter anymore the way they used to. let's do a treaty and agree among inhuman to reduce forces,

we don't need to verification, we don't need the lengthy consultations. unfortunately, it did not really seem to work in the sense that it improve the relationship dramatically. and also felt it was losing a little bit of clout internationally. the bush administration was controversial in other ways, leading to a situation where russia wanted to resume a classic form of arms control. i see no harm in it, i think the treaty is generally sound, and let me quickly itemized where i think it has actually improved security. it has fostered a spirit of cooperation on the northern distribution network shipping supplies into afghanistan where

we don't want complete dependence on pakistan for the war effort that involves hundred and 45,000 foreign troops to require an enormous number of supplies. in much of the early years of the war, russia either opposed or tried to interfere with the shipping of supplies from its own territories where the soviet republic. now we have seen a mellowing of that to the point that depending on which supplies you're looking at, 30%-40% is not just important numerically, it is important because it may also strengthen our handle the to remind pakistan that, in fact, we don't depend on them exclusively entirely likely once might have thought. this is important as we seek to pressure pakistan to work harder against the insurgents.

we have come a long way, and linkages we are -- real. we have seen benefits because of this generally improved relationship which is partially due to giving russia what it asked for. just mention one more issue, in the spirit of bipartisanship or nonpartisanship the of the present across the entire panel, it is a very serious substantive argument. i think that in their earlier years, not only did they have a very reasonable approach towards trying to limit offensive arms in a way that is consistent with our interests of the day of american interests in general,

in fact, russia was putting greater pressure -- began to impose some of the un sanctions and informal cooperation is starting to improve during the 2007-2008 time period. putting pressure on iran, a high-technology, some of this was not officially, some of it more unofficially. it has accelerated under president obama. we have seen more u.n. resolutions, more u.n. sanctions and more international cooperation, including russia and stopping the shipment of advanced surface to air missile

batteries to iran partly as a result of this improve u.s. russia relationship that is helped along by the start treaty. i don't want to get into the details any more that i already have on the specifics of the treaty. not to say that we should side of that treaty to do good things elsewhere, but even the midsized flaws that might have, the stipulation that might not be as quiet as ideal, it is generally solid and it allows us to do everything we need to win a nuclear, conventional, and other defense forces. it helps strategic relations on other issues that are more pressing and will get to the matter is that we were talking about with other countries. and how we can work together to deal with those. i look forward very much to the

conversation with you all on any other issue in the future of nuclear deterrence, so for the benefit of the tv cameras in your fellow members of the audience, identify yourself and wait for a microphone. please post a concise question. we will begin in the front row and moved back to the third row. >> i am from the center for american and arab studies. this seems to me that the nuclear clock expanding lately and the prospect of the expansion on the horizon. even the issue of iran probably going to end up guiding the arab states and other states to renew

their efforts to establish their nuclear programs. the question is, what is this -- [unintelligible] to get rid of nuclear weapons and weapons of mass destruction. it seems to me that in particular, i sense that he is looking into new forms of nuclear weapons for the united states to introduce more weapons and stability. the question remains for the rest of the world, how do we get rid of the weapons of mass destruction and why don't we go through the issue of nuclear freezes for each continent.

we look at this goal and everything will be measured toward that goal. >> that is the topic of my book. i would quickly say that i don't think this panel would all agree of the desirability of that goal of a nuclear-free world. there is no particular linkage between the start treaty and judging the long-term ability to reach that conclusion. i have a skeptic who supports the vision of a nuclear-free world, but i think it is several decades into the future. i am worried about rushing too much toward that at a time where a lot of american allies are worried about whether the u.s. nuclear commitment is strong enough. of volunteer myself to start the answer, i am pretty skeptical of how much we can pass for the process in the next few years.

let me go down the aisle. >> i agree that we should have the objective, and i am not sure that we can reach it. a lot of things have to happen, and we might agree here that if we can get to a non-nuclear world, it might not be a bad thing. it would probably be about how likely is to get to the new verification mechanisms, and it would require fundamental changes in political relationships. a non-nuclear world is not bad. we have the pacific ocean, the atlantic ocean, and friendly neighbors. you may have a different view, and until you can get that likewise comfortable, the

country is going to have hesitation about nuclear weapons. i have come to a different conclusion, as we think about u.s. weapons in a broader context, we have to worry about not just russia and china, but others. or it might come to a different conclusion, looking at 1550 deployed warheads or even 1000, it seems to me that that level of forces will be sufficient in deterring anybody else. if the country is not going to be deterred by 1000, you're going to have to come up with some way to affect calculations. >> i am agnostic on the goal, i must say.

you have seen what a non-nuclear world looks like. it looked like the first half of the last century. it looks like world war one and world war two. of thing that was a very attractive world. i am a bit agnostic about the possibility or the possibility of that as a goal to its -- aspire to. as long as they provide a profound deterrent effect, it seems to me that they are enormously important for us and for many other countries. let me add to that, because the bipartisan strategic commissioned i believe got it right with regard to the goal of nuclear 0, the pie partisan commission saying that it will be feasible with the transformation of the world order.

i agree that it will be feasible and even admiral as a goal -- an admirable as a goal. the question in my mind is whether the transformation is feasible. if there is any indication of what might be possible in the future, the answer is that level of transformation is not possible. the league of nations was an effort to create security to end international war. it failed. the united nations was an effort to create a security system to an international war. so far, it has failed to do that. in my mind, absent a collective security system that can provide security for all members, nuclear 0 will be difficult to get to if not impossible.

let me say lastly, i think nuclear zero is the wrong goal in general. i would much prefer to see zero weapons of mass destruction. if we are going to have a goal to aspire to, it should be no weapons of mass destruction. biologicaln't want weapons that can be every bit as devastating as nuclear-weapons. it is difficult to get rid of nuclear weapons if biological weapons are going to remain out there. some countries want a nuclear deterrent to prevent a biological attack. i would much rather see the goal of no weapons of mass destruction if we're going to pause at a goal.

while today's speakers are course independent, and we must treat them with a degree of caution that one should treat any economic forecast. indeed they are explicit about this, illustrating the uncertainty surrounding any economic forecast with the use of charts, rather than claiming and valuable certainty my previous assessors asserted when they provided their forecasts. the only thing that was infallible was that the political forecasts were usually wrong. with that caution in mind, let me turn to the forecast.

after the deepest recession since the war, the greatest budget deficit and the biggest banking csis of our lifetime, a recovery was going to be more chlenging than the previous recessions, but the message for office for budget responsibility is that britain's economic recovery is on track. the economy is growing and jobs are being graded and the deficit is falling. -- jobs are being created and the deficit is falling. employment and g.d.p. are high year in every quarter and in every year than in the june forecast. at a time when markets are gripped by fears about government finances of crossed europe, today we see the government was absolutely right to take a divisive -- decisive action to take the britain economy out of the financial danger zone. britain is on course to grow the economy and balance the votes.

something some people repeatedly said it could not have been. let me take the house. the detail of the forecast. the forecast the economy are brought in line with those produced in the june budget, despite the challenge and international conditions. i also points out there very similar to the european commission forecasts, which also happen to be published today. and it is forecasted that britain will grow faster than germany, france, japan, the united states of america and the european union. the forecast real gdp growth of 1.8% this year, 2.1next year. 2.6% in 2012. 2.7% in 2015. growth this year is not expected to be considerably tighter than was forecast in june. and some of this improvement is likely to be permanent since

some of it made a temporary impact to stop building. as a result of its forecast of the rate of growth all be 0.2 percentage points below the forecast in june. they also predict above trend growth for the full year after that. and the level of gdp is forecast to be around half a percent higher next year than was forecast in june and indeed higher throughout the whole forecast time. mr. speaker, some have made predictions of the so-called double-dip recessions. while it is pointed out that the growth has been volatile but this is a common characteristic of post-recession recovery, the central view is there will be no double-dip recession. e forecast is for growth texture of more than 2%. and they expect the slowest quarter of growth will be 0.3% rising back to 0.7% by the leader quarter of next year. rthey also forecast inflation

ball all, 3.2% in 2010 to 1.9% in 2012. crucially the forecasts of gradual rebalancing of the economy as we move away from an economy built on debt to economy where it reinvest in exrts. again, something some people said would not happen. and they expect more demand come -- to come from british investment. this new model of sustainable economic growth will rebalance the economy towards investment and exports and away from an unhealthy dependencen private debt and public deficit. it will bring to an end to the unsustainable situation where family saw less and less each year so they ended up in the

worst in the report today darling money to pay for increasingly expensive houses. employment is forecast to grow in every year of this parliament. total employment is expected to rise from 29 million to 30.1 million, over 1 million additional new jobs. and on unemployment banks to faster than expected growth in the economy, the rate is slightly lower this year at 7.9% inead of 8.1%. theorecast for the unemployment rate is unchanged from the june budget at 8%. they predict a gradual decrease in unemployment with a rate falling every year. at the end of the parliament year we are forecast to report just about 6%, half a million fewer unemployed people and at

the beginning of this parliament. the trend is similar to that of the internationally recognized labor forecast measure of unemployment. however, the level is expected to be high year. this revision is mainly due to a change in the wake of clothes from her allowance will give place as a result of the new high in assessments. and in other words, more people are going to go on to jsa's. this will create a welfare system that encourages people to seek work and reduce costs to the taxpayer. in each year, fewer people are expected to be on both of these out of work benefits than in

the june forecast. i can also tell the forecasts that they have now recalculated estimates for the reduction in headcount in the public sector. in june the forecast of the reduction in headcount of 490,000 over theext four years. in the latest forecast assessment bridgette assessment has come down to 160,000 reduction. -- and the latest forecast the assessment has downtown 160,000. the heck are reduction still need to take place and will happen over four years. the forecast is private sector job creation will far outweigh the reduction and public-sector employment.

it is in line with the employment trends in the 1990's. the most important point is this. the lesson of what is happening all around us in europe is that that unless we deal decisively with a record budget deficit, many thousands of more jobs will be put at risk in the private and public sector. mr. speaker, let me summarize the forecast for the public finances, which shows that britain is decisively in dealing with its debt. barrowing this year is expected to be 1 billion pounds less than forecast in june. -- borrowing this year is expected to be 1 billion pounds less than forecasted in june. government debt as a share of gdp is expected to people low 70% in 2013. the debt ratio is expected to

peak at a low point compared to june, just below 70%. on the central forecast we will meet the fiscal mandate to eliminate the structural current budget deficit when year early in 2014. at the same is true to get debt falling as a percentage of gdp. the government has a quite rigid a wider merger -- has all wider mandate for managing this. in both cases the mandate is met. mr. speaker, it is clear that our decisive actions have proved to the world that britain can live within her means. this government has taken britain out of the financial dangers and said our economy on the path to recovery. that is not only the judgment of the zero vr, it is the judgment of the imf, t

european commission, the bank of england and all the major business organizations in this country. already our efforts are paying off. today's forecast shows the cost of servicing the government's debt has come down. it is predicted we will se 19 billion pounds in interest payments between now and the end of forecasts time. this is 19 billion that will no longer be paid british taxpayers to private bondholders and foreign governments. it is 19 billion pounds that would have bn wasted and will now be saved. this is an uncertain world but the british recovery is on track. employment is growing. 1 million more jobs are being created. the deficit is set to fall. the plan is working. we will stick to the course, and that is only too well confidence to flourish in growth to return. i urge those who seriousl suggest that when they see what is happening to our neighbors

across europe that we should abandon the the size of plan we're following and are more and spend more to think again. what they propose would be disastrous to the british economy. it will put us back in the international line we have worked so hard to escape from. it would mean higher deficits and job loss and we should reject that path. stability is a necessary condition growth but not enough. our ecomy's competitiveness has been in decline for over a decade. that is whywe have already announced annual reductions in corporation tax, cut the small companies rate, expanded loan guarantees, invested in an apprenticeship and promoted exports through a major trade mission. let me set out some of the other things that we are announcing today to support growth and the rebalancing of our economy.

i set out a plan to reduce the main rate or a corporation tax to 24%. -- asset at a plan to reduce corporation tax to 24% sen. the proposed to make the u.k. and even more attractive location for international business by reforming the outdated and complex rules for control of foreign companies. we have seen a steady stream of companies cut that left the u.k. over the years. we're not content to sit by and watch our competitors reach away on our corporate tax state undermined. n.y. another tax issue a corporal -- of crucial importance intellectual property. for a long time we have argued we should increase incentives the ability to develop new products ithis country. to encourage busesses to invest in the u.k., we can

confirm that we will introduce from april 2013, although or 10% corporate tax rate on properties that are newly commercialized. i can tell the house that the results of this measure, glaxo smithkline will announce a new 500 million pound investment program in the uk. including new manufacturing, a 50 billion down -- 50 million pound venture-capital plan. and build a new biopharmaceutical plants in this country. in total they estimate of 1000 new jobs will be created in the u.k. over the lifetime of these projects. and today we are also launching across government growth review. this will be determined forensic examination of however government can do more to remove

growth opportunities. too often the national inclination is an opposite direction, creati new regulations and putting up barriers and mormaking life more difficult. together with the business department, the treasury will lead an intensive program of work, including all parts of governments. we will identify requirements that can benefit the whole economy, specific priority will be given to improvement of the planning system in support for the exporters of. at the same time we will begin a new sector by sector cus on removing barriers of growth and opportunity predict opening at new opportunities. -- and opening new opportunities. pricked by bricks we will remove

the barriers that are holding britain back. -- bricks by bricks we will remove the barriers that are holding britain back. i attended the european meetings in brussels yesterday. we agreed ahree-year package for ireland's fourth 85 billion euros, which is warranted to safeguard financial stability. of that 35 billioneuros, copy used -- 35 billion will be used to support the banking sector wi 10 billion going to a canadian bank recapitalization and 50 billion will besed for sovereign debt support. ireland will contribute 17.5 billion towards the so bgtotal package. the terms of the imf loan will

be determined over the coming weeks. in principle the bilateral loan is for 3.2 5 billion pounds. the rate of interest on the loan will be similar to their rates levied by the imf and the euro zone. this loan to ireland is in britain's national interest. it will hp arkoses economic partners manage their with the difficult conditions. i should also tell the house that the euro zone finance ministers met without me to discuss a permanent financial stability facility, and i made it clear as a subsequent meeting pet the u.k. will not be part of at. the u.k. will not be part of a permanent bailout mechanism, and the european financial stability mechanism agreed under the previous government and day and of which we are parts, will cease to exist when that permit it euros on mechanism is put in place.

when we came into office britain was in the financial pages own. the economy was on stable. our public finances were out of control. >> the chancellor must be heard. >> our economy was unstable. the finances work out of control. we took decisive action. the independent office for budget responsibility has confirmed that the british recovery is on track. our public finances are under control. 1 million jobs are set to be created. today we took further measures to secure growth and promote stability. britain is on the mend, and i commend this statement for the house. >> mr. speaker, let's move to reality.

here's what the ovr says. as we discussed in chapters 3 and 4, past experience and common sense suggest that the central forecast for economy and the public finances are almost certain to be role. there are upside and downside risk to both. the only question is on which side of wrong that actually fall. this government has committed our country to our rate of fiscal consolidation that has only been attempted twice in living memory. on both occasions by countries that benefit from strong growth and a benign global environment. no country has attempted to cut so quickly so deeply of good and ireland. we have the highest fiscal deficit in the g-20. not true. the u.s. has a personal lehigh year in fiscal deficit. the plan to reduce it by less than half over the next five

years. -- they plan to reduce it by less than half over the next five years. japan cuts by less than a quarter. the chancellor has talked chosen to take an unprecedented gamble with people's lives and the country's future. he has done so on the basis of fundamental defeat -- deceit. the ovr expos that deceit last year and they have exposed it today. all of those stories claiming their constituents that things were worse than they expected and said they have never had it so good, will he tell them they will have to find a new excuse? nothing in his statement today can high death mask that it is the balanced approach of my right hon. friend that solid

growth return at the beginning of the year. small growth return at the beginning of the year and the recovery growing momentum and a < million people growing -- claiming it out of work benefits than previously projected. that was the previous chancellor not this one. this is an approach to it that this government has rejected. the reckless gamble that member support is still to come. the chancellor is in the casino but has lost a bundle will get. it is the ovr's judgment of the future that matters more than their resizerevised forecast ofe year that is almost over.

they are explicit. they expt a slow recovery next year as spending cuts begin to take effect. looking beyond xt year, the forecast for growth over the next four years is reduced to an average of 2.4%. this compares to the 3.1% average growth of the recessions in the 1980's and 99 k.i.a.'s. this growth was driven largely by growth in the financial sector and in public services, both of which will not bin a position to help this time. low growth means -- no growth means fewer jobs.

unemployment will rise next year. no wonder the conservatives level of government association pointed out last week the front- loading cuts in local authorities will lead to 140,000 job losses next year, much higher than originally expected. the increase on january 4 will cost 215,000 jobs. ovethree times as many as the proposed increase on national insurance, which it called a tax on jobs. the chancellor tells us of public-sector jobs will be protected by his decision to cut welfare benits, but this works both ways. can he tell the house what additional hit to private sector jobs is from those welfare changes? the families up and down is country, a jobless recovery will be no recovery at all. this government has no interest in protecting jobs, no alternative measures.

worst of all, no plan for jobs. indeed just last week, a growth plan actually trunkshrunk. there will be a debate. there will be a discussion. the government's plan relies on a huge increase in exports. let's hope to materialize. it is it a gambla gamble. -- let's hope they materialize. exports need markets and there's nothing to suggest that the global economic climate will assist us in achieving of boost to growth. he h abolished investment allowances from manufacturing to

pay for a cut in corporation tax. a tax that would give 1 billion pounds to the banks. can he tell us what sense there is in helping companies that make large profits but little investments at the expense of businesses that will invest heavily in the uk? we were very pleased to hear his announcement on the patent office. we were very pleased because it was our proposal. it was lord dyson that are due this in cabinet. and that is why it was in last year's report. and it was an excellent proposal. it was a labor proposal. here is i -- here is our idea. they will give an 80 million pound loan to the market. there is an idea they can chew over a for the next four months.

the chancellor talk about developments on ireland. we support the financial assistance offered to ireland, at the lessons cannot be ignored. a slower pace of consolidation might have been ireland's best bet at encouraging growth. that is a lesson for us as well. the chancellor's analytical ability was demonstrated in his 2008 article that has been quietly posted. here he is again in 2008 confident that ireland were not be affected by definition of crisis that was just emerging. and here is what the chancellor said. ireland now has a future fund assets fell to provide security against future shocks and liabilities. their public finances are well placed. their competitiveness has risen. their institutions are strong growth.

-- are stronger. he was wrong a lot ireland, and he is wrong about the uk. --wrg about ireland and he is wrong about the uk. >> yes, well, the first point i made is that the icing the chancellor made the mistake of writing at his reply befe he saw the forecast today. he predicted it all, somehow they're being lowered growth when in fact growth is higher in every quarter and in everyear than the june forecast. in i assumed he wrote his statement before the european commission forecasts because he had a whole list of countries. the european commission forecasts of a the next few years we will grow more quickly than germany and france s, the united states of america, japan, the euro zone and the eu

average. you might as well start with the most accurate forecast for the economy. as i say, it is not much of an analysis of what they've said day. of course, he skated over the fact that because of a welter changes we introduced, we have been able to introduce the head count reduction, which any deficit-reduction program, assuming the one he will propose, as required. he should at least acknowledge that the welfare changes to achieve that, and his party leader calls them very important choices about whether they will support welfare reform or would rather see a higher public sector doposses. -- job losses. he said he did not believe in the rebalancing of the economy. the assumptions for exports and

investment i made were pitiful. they are the estimates made by pimm independent body, whose members were -- that their appointment ratified by the select committee. he accused me of having no alternative measures. [laughter] as far as i can tell the have a blank sheet of paper as the new economic policy. they talked about the importance of protecting intellectual property and supporting the fourth of bonds and then praised the work of james dyson, who last time i checked with someone we consulted rather than him. lord drayson also had some interesting things to say. since -- i should also welcomed

by the way -- >> members really must calm down. the noise and the chamber was off-putting. the public notice it, sodalite. let's put an end to it. sooes of the chancellor. >> on ireland's i do of course welcome the support that opposition has given to the decision we have taken to offer a bilateral loans. we have will have to bring legislation before the house. -- we will have to bring legislation before the house. i should have mentioned that sweden and denmark have also provided bilateral loans. i come back to the point, which is that this forecasts shows a million new jobs being created over the next four or five years. it shows the economy rebalancing.

all he could come up with is that he renad an editorial last week, and i note that that is how he does his homewk. he photocopies of articles from "the ft." . . brevity is obvious. the savings ratio would be steady around 6% for the next five years. on page 67, the new forecast

assumes just over half that. only 3% for the remainder of the parliament. willy consider measures to address this? -- will he consider measures to address this? >> it has the ratio returning to average before the recession came. the government will want to find ways to encourage savings more effectively than as before. >> what is the forecast between the gap between the ridges and the porous? are we expected to grow? >> i am not aware of that forecast.

we are increasing provision from the porous -- poorest. we are trying to give those with the lower income to increase their wages. >> does he think the european central bank will make available all the liquidity needed by major banks because they say they are insolvent? >> the european central bank is independent. we now have a verbal agreement that the mechanism will not be a permanent part of the bailout.

we will not be part of that bailout. >> what assurances has he received from ireland? what about the loan given to them? of assets they now own? can he indicate what progress he has made with the northern ireland executive on regard to the corporate tax so that we can compete fairly with a naon that has a 12.5% corporation tax attached to it? >> on the irish bank restructuring package, this is now going to take several weeks, at least, to put in place. we are very aware, of course, of

the interconnectedness of the banking systems of ireland, northern ireland, and local uk that is one of the reasons why we are making this bilateral contribution. that is why we're discussing the banking package. i certainly am conscious that some of the irish banks of significant assets in the u.k. and we have very real interest in the future of that. it is why, my honorable friend the financial secretary, -- why he came to ireland earlier this week. i want e treasury and secretary of state to remain in close contact with members from northern ireland. on a corporation tax -- this has been genuinely a matter of debate. i do not think that has been secret. it has been in the newspapers. in the european union, some member states wanted to attach a condition to arlen's or petition tax rate -- ireland's corporation tax rate. it is a real challenge for

companies in northern ireland with that will 0.5% and corporation tax rate. -- with that 0.5% corporation tax rate. i took a position which was, it is not really for other member states to dictate the tax rates of sovereign nations, even when they are seeking international assistance. the level -- the rate that tax is levied by the irish government should be a matter for the irish government and the irish parliament. if the showas on the other foot, we would not want to be accepting decisions imposed on this parliament about tax rates. this should be a matter for the elected parliament of the country. i do not deny it is a challenge for the northern ireland -- for northern ireland, -- that will 0.5% rate. -- for northern ireland, about 12.5% rate.

>> will this not create new opportunities for tax avoidance? >> i can assure that we will seek to avoid that -- tax avoidance. it is there to keep pace with the changes in corporate tax regimes, which have been introduc in many other countries. ireland is just one that we've been talking about. you see th in belgium and the netherlands, where they also made corrate tax changes to attract international companies. we have to keep pace with those chges. that is why we are taking the measures that we are. >> george mahmudi. >> the chancellor -- george moody. >> official said this is because of a lack of serious content. -- officials say that this is

because of a lack of serious content. >> we have published a series of documents. some of them on corporate tax reform, some on intellectual property, and some on the budget -- that is what the white paper does. proposes measures that will then be legislated for. we'll have measures to address the competitiveness of british industry that will specifically look at things like the competition regime, the approach we take to attracting inward investment, how we improve our employment elie doebele and alike, and look at specific fixes -- how we improve our theoyment outlook and like, and look at specific fixes. he is welcome to be involved.

>> isn't the strength of these forecasts that they were prepared by individualx/ >> that is a very significant feature of what is happening today. it is completely unprecedented r a chancellor to present a forecast that has been produced independently by people verified by the all-party treasury select committee who have their own separate press conference. members have had a couple of hours to look at these documents. if you think back to a couple of years ago and the numbers that were rattled off, you had no opportunity to look at those documents. it was the chancellor's judgment, rather than an independent judgment. i think this is a major improvement to the fiscal policy making in this country. i hope when it comes to the house of commons it will have all-party support. >> why is the ish bank worth

saving yet northern rock was not? among the irish banks are gettingapital -- >> the irish banks are getting, in many cases, a capital injection. we had poorly regulated banks. we're improving our regulation system. frankly, if the honorable member does not think we should be supporting the irish banking system, then the impact of his proposals would be very severe. >> he called this slow growth in the, -- in the coming years. does he agree that private- sector led growth is exactly what the u.k. needs after the bubble that was previously burst? >> i think he makes an extmely good point. what is actually happening here

is a rebalancing of the economy. e shadow chancellor, i hear he is muttering away about what he calls low growth. it is actually more rapid, according to the european commission forecast, then germany, france, the u.s.a., japan, the eu average, the euro zone average, and i am not sure what his proposals are that would increase that growth rate. if you have some, now is the time to produce them. >> most public-sector cuts will take place in the north. any jobs that are created -- not likely to be many -- will be in the south. is this policy unbalanced? >> in the last decade, in the government that he was a member of, for every 10 jobs created in the southeast, only one was created in the midlands and the north. that is the situation we inherited and it is the

situation we're trying to change. we want is the export and investment increase. we are aiming for a more geographically-balance model of economic growth. i can tell you that announcements like the one today and the events that follow will help that. for the third time ever, there is a tax cut for new employees specifically directed at regions outside of the south. >> my right honorable friend did never tires of reminding those opposite that this recession, like all previous post-war recessions, it is a recession built on debt. you cannot borrow your way out of debt. >> i can assure my honorable friend that i will not tire of reminding the opposition of that. as i come forward with new economic policy, -- they come forward with new economic policy, i would be happy to examine it, but there is nothing to examine.

>> he sees private sector growth being driven by investment and export. in the obie our's report today reportl be our -- obr's today, we see dramatic uncertainties in the euro zone. if this does not turn out to be as expected, where ds the chancellor see private-sector growth coming from? >> the first point i would make is that, of course, one of the primary tasks of the obr is to address whether we will hit the fiscal mandates. they're not a matter of controversy. they show what we've done to get the british finances under control. under this scenario that is volunteered, ty say that this the mandates will be met under those conditions. it helps the fiscal forecast rather than perverts it because the tax base is more focused for

consumption. >> when the books are balance, will the chancellor seriously look at reducing the erall burden of taxation? it is just far too high. >> i would say to my honorable friend that i am the leader in trying to reduce the tax burden and reduce taxes. i have always believed the best way to achieve this is stable public finances. otherwise you cut them one year and have to put them up the next. i am a fiscal conservative as well as a tax-cutting conservative. >> i refer to the center he came to my honorable friend. chancellor, through the obr, is suggesting there will be 8% growth in business investment, yet [unintelligible] it suggested will increase by 6% in the next four years.

according to the government of the bank of england, there are real doubts about whether the euro area or in the united states will deliver the sort of export growth that has been suggested. it is not -- is not the chancellor just a little bit worried about the of the present in these estimates? is he concerned that they will be delivered -- about the optimism in these estimates? is he concerned that there will be delivered on in the next four years? among these are independent forecasts -- >> these are independent forecasts. he is not in anyone's pocket. it is totally independent. i believe he is on the treasury select committee he interviewed the man for this job. he passed him. these are not my estimates. these are other people's estimates. they made the forecast. he says there is scant evidence. that is not what the office for

but responsibility believes. they are independent. -- for budget her responsibility believes. -- that is not what the office for budget responsibility believed. they are independent. >> is a taxpayer support ending up supporting professional bond and equity holders in banks? this has been one of the most difficult issues we have had to wrestle with. it is not possible to hold the senior shareholders responsible for taking a hair cut, which did happen in some of the u.s. bank rescues, with pretty disastrous effects. that is why that decision was taken.

some shareholders will suffer losses as i think is appropriate. >> given that the newest year for production in the report suggests that growth will surpass the previous predictions. it was 2.6%, 2.3% trend, 2.1%. what hope can we have that predictions are want to be any more reliable? is it not the case, in fact, at growth will not rise as much as predicted? >> i said right at the beginning of my remarks that these are economic forecasts, that we should treat them with the caution that one should treat all economic forecasts. i it least explicitly acknowledge that. these have been independently

produced. these are central forecast. this is not a forecast come hell or high water. it is in line with most independent commentators, forecasters, happens to be close tohe european commission numbers which were produced today and were not available to the obr or british government until today. we had -- have confidence that they are part of a people who look to the u.k. and see it growing sustainably over the coming years and the jobs being created. >> all talk is of cuts. with spending still rising, despite these so-called cuts and with that as a proportion of gdp rising to a staggering 70%, will my right honorable friend remind the house of the coin a phrase, there is no alternative to further massive efficiency

savings, particularly in health? >> i certainly agree with my honorable friend that an essential part ofhis program of a public expenditure is that we get greater productivity in the public services. he is the former chair of that committee and has much to offer. treasu is engaging with him on this, i hope, and will engage further with him in the coming months. he is absolutely right. when there is less money available, if you do not have reform, then we will have a deterioration in the service. that is why we have to back reforms. that is why we're supporting those reforms. >> the office of budget responsibility is forecasting a relatively sluggish medium-term

which, it says, reflects the impact of the government's fiscal consolidation. can the chancellor confirmed that it follows that, if the government's fiscal consolidation, have been less severe, and the medium-term outlook would be less sluggish? in other words, he has cut too far, too fast? >> the short answer is no. obviously, what we have inherited was a very deep recession, a major banking crisis and a record fiscal deficit. i thought that, once i was assured across the parties that this was common ground, that we should use the link to address the fiscal deficit. the letter o the letter be the latter are -- the obr did produce a comparison to the current and

previous government plans. over time, it was a much more sustainable path to growth and would avoid the downside risk of a major fiscal event, which, frankly, a major loss of confidence in the u.k. pick aboutnot having to worry the uk's credit worthiness of their, unlike some other countries in the european union -- out there, unlike some other countries in the european union. we have sustainable growth and jobs being created. >> thank you, mr. speaker. could the chancellor tell us his assessment of what would happen if we ignored the imf -- you -- the imf-eu and moved toward

putting our own house in order? >> would happen if you actually did this tomorrow? if the shadow chancellor bought out tomorrow and told me to adopt his plan and the u.k. would back off its fiscal considation program, it would take much longer. we're with the u.k. be within 30 minutes after that statement? >> the number of losses of jobs in the public sector has been revised downward. i'm very concerned that the $18 billion -- about the 18 billion pounds. was that an explicit decision a policy by the chancellor? does he think that is fair? >> a, i do, of course, think this pending review was fair. at i said at the time, if they

would produce an actual spending review, maybe we could compare, but they do not want to do that. i said to the budget and spending a rebuke that i would make you a code decision to try to seek further -- and the spending review that i would try to make further changes. this is a challenge that anyone doing my job would face. we need to reduce the cuts in departments. that is what we were able to do. >> norman? >> may i congratulate the office ofudget respsibility on a fairly transparent, comprehensive, an excellent report, which i think is up first in this country. can you give us an assessment of any remaining threats that you seek a final stanza -- financial stability from the ural zone countries? >> of course theres a concern

about the high deficits in the euro zone. let us hope that the action taken yesterday to stabilize ireland and also the clarification that era's own ministers offered about the future permanent blout mechanism and the involvement of private sector credit within that will help achieve that. that is certain what the intention was yesterday. >> they will announce proposals for cuts will likely loss of 400 jobs. this will have a devastating effect on my constituents. it will also ad to a loss of confidence by those who ha jobshat they will have jobs in the future. this might well lead to grow up and on their part to spend money in the economy? -- economy. is the concern that could affec the new jobs and future growth?

>> i have enormous sympathy with anyone who faces a job loss. what i would say is we're creating economic conditions where they will be -- there will be able to find a new job, i hope. we expect a 1 million new jobs to be created over th coming year. i would make this observation to the honorable lady, who i think was the parliamentary private secretary to the previous chancellor. if the government had been reelected, they would be cutting billions and billions of pounds from public spding this year, next year, in the years ahead. that was in the budget. if sheas able to find a way of many billions pounds without damaging local government, she should say so.

and i welcomed t reform -- >> i welcome the reform. will this be scrutinized? >> the short answer is yes. one specific thing we want to look at is how government should be helping businesses grow. that includes procurement. government spends too much of its money on the large companies in the country. not enough within e smaller. that is one of the thing we're trying to improve. >> on public sector jobs, the chancellor says that the numbers are up. some projections show that this is front loading. will the chancellor look at [unintelligible] so that we do not see those jobs losses next year?

>> i said at the time it was a challenging settlement. i have removed some of the ring fencing to allow the maximum flexibility to deal with that. this country was borrowing 1 pound for every four it was spending. we can see what happens to countries with high budget deficit and no plan to deal with them. the labour party wants to put forward a plan to reduce local deficit. >> we welcome the announcement he made. can you tell us more about the tax competitive measures you are doing to help the country? >> i have made no announcements. i can certainly say no more.

>> we're looking at two is a civic things -- to do specific things that we believe will help encourage large multinationals -- two as of the things that we believe will help bridge a large american nationals -- two specific things that we believe will help multinationals come to the u.k. countries are being aggressive in trying to attract companies. these x measures will make as one of the most competitive places in the world to locate headquarters. on the patent and lower corporation tax rate -- this announcement is just one of many from companies that depend on that to power their business.

it will make is very competitive to other countries. >> mr. speaker, obr has confirm that we will borrow 1 billion pounds less. apparently we could not afford to make it 80 million pound loan. the chancellor has deliberately [unintelligible] these policies are now damaging the british economy. >> i think that was one that was prepared earlier. first of all, the u.k. growth is forecast to be higher than germany, france, or many other european countries, and the united states of america. it is also a case that the forecast in question creates a million jobs. when it comes to the sovereign loan to ireland, that is of a

totally different nature from industrial support. it will be set out in terms brought before the house of commons. it is 3.25 billio pounds, not the number he gave. >> he has 34 -- reinforced the need for exports to help our recovery. what can he do to personally help reverse the situation whereby we currently export more to southern ireland than we do to all of the brick countries put together -- bric countries put together? >> that is one of the focuses of foreign and trade policy. we he tried to increase our exports to those countries. the prime minister laid -- led major trade delegates visits to india d china. business secretary was recently

in russia. i think a trip has been proposed for brazil. referring to those countries and other important emerging economies like indonesia and turkey, we are seeking to expand our exports. we do not want to export less to anyone in those areas, we just want to increase our exports to emerging areas. >> we know that the deficit was paid to avoid a depression, a chance that would not fade. first and foremost, profit, jobs, growth statutes. secondly, taxation. thirdly, savings over a longer time. this will cast millions of work. it will be -- who these will be

unnecessary. >> that was a complete load of nonsense. what is independent forecasts shows is that we're creating a million jobs. the economy is growing more quickly open next couple of years and most of our european competitors. the situation was absolutely catastrophic. people were calling into question britain's ability to pay. if that is the situation we have inherited, we have done ny things, in the last six months, and to make sure the british economy is on the mend. >> i am sure the whole house welcomes this chart which shows there is almost no probability of a double-dipped recession. with the chancellor agree with that forecast? -- would the chancellor agree with that forecast? >> it is, of course, an independent forecasts.

while i have the right to disagree, i have not exercised that right today. >> what were the things offered to end housing targets? does the chance cannot accept that a private-sector lod -- will the chancellor not except that a private-sector led -- >> that is one of the sectors we're looking at as set ou in the review published today. if i can just correct him, the capital investment program is actually higher than the program from the march budget. if he is not aware of that, so be it.

>> mr. speaker, i welcome my right honorable friend's statement today, particularly the forecast where it sees projected public-sector job losses dropping. based on that 490,000 figure, previously, price waterhouse coopers projected 1 million jobs, would he like to comment on t reduced impact on private-sector unemployment as a result of the new projected job losses and the public sector? >> of course, the projection is made for private sector employment as well. it takes into account all of the potential impacts on that and finds that a net 1.1 million jobs are going to be created. there will be 30 million people on unemployment at the end of the parliament, rather than 29 million the day. >> [intelligible]

what other cultivating measures is he considering? >> we have created the regional growth fund to look at areas in need of support and investment. we have been able to announce some significant transport investment in other parts of our country. you mentioned the national tax reduction outside of the southeast and southeastern area. i am trying to create a more geographically-balanced economy than i found when i took the job. >> it is clear from the response that the party opposite is still in denial of the huge deficit they have created. i congratulate, mr. speaker, my right honorable friend for creating a viable and workable, transparent plan.

could i go back to the permanent fiscal stability facility? what will hapn if another euro zone country requires a bailout? >> first of all, i don't know my honorable friend for his comments. i would say this about -- i'd thank my honorable friend for is common. i would say that the bilateral loan -- there is a very specific, and i stress the word specific, circumstance that would lead us to support ireland for the interconnectedness of our economies. i also said that the european financial stability mechanism -- the eu fund -- was something that the previous government had signed up to that the u.k. could not block its use because it operated under to and the --

under qmb. i think that this mechanism will disappear in 2013. we have taken a bad situation and make it a lot better. >> thank you, mr. speaker. can the chancellor tell whether ireland's fiscal consolidation has been successful? >> i think the point i would make -- ireland has had to take some incredibly difficult decisions to deal with its this goal deficit. it has announced, with the support of all the major parties, with the exception of sin fein, that it will have to take further austerity measures. we should have some respect for the incredibly difficult situation that ireland finds itself in and actually take some

comfort that we, in this house, are able, because of the measures we a taken in our public finances, to help this country. we're on the firing line -- not in the firing line in the way we did -- we might have been in this party had not won the election. >> despite the extensive naysaying from the party opposite, is of the chancellor aware of this cent report -- is the chancellor aware of this recent report that businesses and thnorthwest are looking to expand -- in the northwest are looking to expand? what will be the expectation for job creation? >> we have a. boyd that increase in the small company rate at the previous government wanted to introduce even in the recovery. we have been able to avoid damaging part of the jobs tax. the forecast is for jobs to be

created in the private sector, across the country, including in the northwest. frankly, as one could see, the labor party wanted to talk down the economy. it is no wonder they were rejected at the election. >> he is talking a complete load of nonsense, as he put it earlier. looking across the irish sea, what does he -- a private sector recovery has not happened in ireland. why should it be different here? >> if the honorable gentleman cannot tell the difference between those situations, then maybe he should not turn up at these events. i would jusmake this observation -- this is an

independent report, produced by an individual. from the opposition front bench about the independence of the office about it responsibility. we set this up on an independent basis, giving up fourembers of the treasury the select committees and rights to approve or reject the appointment of the members of the committee. we will see whether opposition members, including those on the front bench, support this legislation when it comes before paiament. at the moment, it does not sound like it will, but perhaps they will change their mind. >> is my right honorable friend as concerned as i and that the prospective regulations proposed by the retail distribution review, might actually result in a loss of jobs? >> i kno there are a number of concerns that have been raised

about the review of this area. they are an independent regulator. these have been drawn to their attention. >> does this apparent good news mean that the government can now [unintelligible] scrapping plans to hike university tuition fees. or is it pure ideology? is that what it is about? >> this issue is about the hypocrisy of the labour party. they set up that report he was in the cabinet that agreed to that. they're all now walking away from it. it is absolutely pathetic. >> the predict on page 118,

table 4.21, that we will save $19 billion in -- 19 billion pounds in interest payments. of these the right choices? do we have this 19 billion to spend on schools, rather than putting in the pocket of private government or bondholds? >> he is absolutely right. this is one of the issues that is less commented on, but a very relevant. we are reducing the debt interest payments that we inherited from the party opposite. we had a situation where the debt interest, the money that we have to pay out to those we have borrowed from -- that bill is coming down by 19 billion pounds. we would otherwise have followed the leader baathist -- the labour's plan.

weave other plans for taxpayer money. >> read the then lend to ireland to repay the ecp -- rather than lend to ireland to repay the ecp -- ecb, might it not bit more sense to help ireland deleveraging by purchasing some assets directly? >> that we say this to my honorable friend -- let me say this to my honorable friend. i think this had to be part of a coordinated international effort with the imf and the other european member states. we have taken apart in that. we have our own the -- i do not think coming out with our own unilateral package would of been particularly easy with the imf organizing international effort. i've said earlier that we will, of course, want to look at the

impact of the bank reorganization and banki reorganization in the ireland and some of the assets that are managed in the u.k.. i will keep the house informed about that. >> i welcome my right honorable friend's statement today. in particular, the investments to a new facility that the university -- at the university. with the chancellor agree with me tha byutting something into the science budget and coming to this house today and presenting figures of growth and stability for the u.k. economy, this is setting out a clear message to the rest of the world that the u.k. and east midlands is an excellent place to invest? >> i completely agree with my honorable friend, who was a powerful champion of the east midlands and her constituency in a few months that chia's been here. she welcomes -- that she has

been here. she welcomed this nouncement. of course, the support for job creation inhe east midlands and across the country would not be there if we have a fundamentally unstable economy like the kind that we inherited in may. >> what steps are being taken to maintain low interest rates? >> the bank of england's monetary policy committee sets the interest rates. it is independent in doing so. the purpose, in pt, of the measurese are taking to reduce the deficit has been to give the monastery policy committee the maximum flexibility and freedom -- monetary policy committee the maximum flexibility and freedom to stimulate the mind -- stimulate the demand in the economy. that has enabled them to keep

interest rates low, which has been a help to the economy. >> turning to the corporation tax reform -- can the cncellor confirmed that it will make the u.k. more attractive as a lding company jurisdiction and help make us a preeminent headquartered as much as the financial center? >> i thinkhey will help to do that. my friend is right. they will help the u.k. be an attractive place to international companies to create jobs in. also, that changes to the patent regime will help a number of sectors, for example, pharmaceuticals. pfizer is a big

public-sector workers. we are speaking to reduce the impact of this which has taken place. we are doing best in a way that would be -- it has a reduced impact on the head count loss. we are putting in place a comprehensive program, work program to help people that are without work to find work. there are a million new jobs to

be created. that should help. >> and next, "q&a" and then live your calls and comments on "washington journal." >> i am the education program specialist here at c-span. each year, we have a documentary competition. it is for grades 6 through 12 to talk about issues affecting our nation. this theme was chosen because we wanted to explain how the federal government has affected an issue or event in your life or community. once you have a topic, you can begin research. you can provide different points

of view in a 5 to 8 minute documentary. for more information, you can visit our web site or e-mail any questions that you have. go get started. we cannot wait to see what you have. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> this week on "q&a," our guest is john burns, joining us from the studios of westminster live, located across the thames river from the houses of parliament. >> john burns of "the new york times," the last time we chatted, i ask you about a book when you were going to write your memoirs. you said i probably should not, people think i should. have you thought about it? >> i have thought about i