UK pay rising in real terms, says coalition

 

David Cameron: "I want to see people paid more"

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Most British workers have seen their take-home pay rise in real terms in the past year, the government claims.

It has produced figures showing all except the richest 10% saw their take-home wages rise by at least 2.5% once tax cuts were taken into account.

That is more than the Consumer Prices Index (CPI) inflation rate of 2.4% in the year to April 2013.

Labour leader Ed Miliband said the figures were "dodgy" and ministers were out of touch with people's lives.

Analysis

So did we all feel a little better off this morning?

The government is suggesting that the vast majority of us should.

There is a debate how the figures on rising wages add up. But this isn't simply a matter the statisticians - it's a battle for territory amongst the politicians.

Labour have made great play of a "cost of living crisis" - citing a fall, on average, in gross wages since 2010 of £1,600.

For a while, the government didn't have a dog in this fight - instead pinning its hopes of a political recovery on the economic recovery.

But now, teeth gnashing, they are getting on to Labour's ground in a sign that they won't concede any arguments before the general election.

The trouble is trading statistics doesn't in itself make people feel better off - and the IFS says, across the piece, average incomes are still likely to be lower in 2015 than 2010.

The coalition are hoping, though, that today's foray might just plant the suggestion that - to coin a phrase - things can only get better.

The government said the figures showed only the top 10% of earners fell behind the CPI rate - which excludes the costs of buying and owning a home such as mortgage interest repayments - with an average increase of 2%.

It said it made its claims by taking into account cuts to income tax and national insurance.

Conservative skills and enterprise minister Matthew Hancock said: "Of course, as a consequence of the great recession, people who work hard have been made poorer and times are tough for families as a result.

"That's why, as part of our long-term economic plan, we are cutting taxes for hardworking people so they have more money in their pockets and are more financially secure."

Speaking on Thursday, Prime Minister David Cameron said there were "some positive signs" on take-home pay but a sustained and broad-based recovery in people's finances would take time.

The Lib Dems said they had been the driving force behind tax cuts for the lowest-paid, which will see no-one pay tax on the first £10,000 of their income by 2015.

But Labour said the government's figures were based on weekly, not annual earnings and did not take account of benefits cuts.

Chart showing government figures on take-home pay

"This is a complete insult to millions of people who can see with own eyes and feel with own pay packets that they are getting worse off," Mr Miliband said.

"I think this is a government in a hole that has no answers to cost of living crisis."

Analysis

Is real-terms pay now rising?

As ever, the answer to this depends on which statistics you choose to look at.

Official ONS figures on pay show that annual pre-tax pay rose 2.1% in the year to April 2013.

Over the same period, inflation was 2.4%, so in that period pay was falling in real terms.

However, now we know that CPI inflation has fallen to 2%, it might be reasonable to assume we have reached the point at which pay is again growing in real terms.

But other statistics tell a different story.

According to the ONS, average weekly wages rose by just 0.9% between the autumn of 2012 and 2013. That is well below inflation.

Put another way, the average weekly wage, pre-tax, rose from £472 to £475 over the last year.

On figures like that, not many people will be feeling richer.

And in any case, inflation out-stripped pay in each of the last five years. So we have quite a bit of catching up to do.

"All they're producing is a set of dodgy statistics, data that doesn't add up, to try and tell people what they can see with their own experiences, with their own lives just isn't true."

Paul Johnson, director of the Institute for Fiscal Studies, told BBC Radio 4's Today programme the government had used "a perfectly sensible set of numbers" to calculate take-home pay for the 2012-2013 period.

But he pointed out that more up-to-date Office for National Statistics data - the average weekly earnings index - showed wages rose "quite a lot less quickly than inflation in the most recent months".

He added that the IFS's own analysis suggested that "if the recovery takes off and continues as expected, people will start to see their incomes rising by 2015... but they will be well below where they were six or seven years ago".

Labour's assertion that real annual wages have fallen by £1,600, on average, since 2010 also only gave a "partial picture", the IFS added.

TUC General Secretary Frances O'Grady said the government's figures should be taken "with several tons of salt" as they did not include the effects of tax credits and benefits, particularly the freeze in child benefits.

Earlier this week, the International Monetary Fund upgraded its forecast for the UK economy, the latest in a series of positive economic indicators.

It now expects the economy to grow 2.4% this year - faster than any other major European economy - against its previous forecast of 1.9%.

Chart comparing earnings and inflation
 

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  • rate this
    +3

    Comment number 855.

    On the matter of MP pay. I believe we should pay every one of them £110,000 per annum with £50,000 per annum fixed expenses, no more and no less. That MP's should not be allowed to have any other job or income, while their assets and savings, other than their main residence, should be taken into trust with guaranteed growth of 1% above RPI, anything above this being taken by the state.

  • rate this
    -11

    Comment number 854.

    When will people realise that Gordon Brown ran this country into the ground???

    Ed Balls-Up and David Millibland were also part of his cabinet of incomptence!

    The country is slowly healing and Cameron, Clegg & Osbourne have had to make some very harsh decisions and they are turning the UK around and we are growing into a very strong economic power within Europe.

  • rate this
    +6

    Comment number 853.

    Just Check my back Account. Seems that even after cutting back on all "pleasure Spending " i am still not flush. My pay have gone down over then past 5 years and i am in the private self employed sector. seems all my bills and taxes have gone up. When will the politicians stop lying. We are not stupid. Roll on 2015

  • rate this
    -10

    Comment number 852.

    It's amazing that one of the comments of good news #95 @betsyboo is the lowest rating. Just goes to show how those who are the most angry are the most jealous. He's stating a fact and they hate it

  • rate this
    +11

    Comment number 851.

    Recently we found my husbands pay slip from 8 years ago - his take home pay (ie. after tax, which is PAYE) is the same as it is now despite earning supposedly £7000 more per year. We are certainly not better off - in fact our family is a whole lot worse off.

  • rate this
    +10

    Comment number 850.

    I like many 1000's of others have had 1 payrise in the last 4 years, that was a paltry 1% coupled to this is a 3 year rise in my pension cost (public sector) has seen my take home pay fall. Cost of living in the past year has risen somewhat.. lies must mean theres an Election coming.
    Oh and the 11% pay increase for MP's /:

  • rate this
    +9

    Comment number 849.

    UK pay not rising for me, says employed middle class guy.

    No pay rise for 6 years, I work in a team of two that was a team of 17 ten years ago.

    In real terms, I have less coming in, and more going out.

    Hope those MP's are all OK though. That's the important thing.

  • rate this
    +21

    Comment number 848.

    Once again the BBC should be thoroughly ashamed for trumpeting this Tory propaganda!

    Do some journalism, report the REAL news and stop pandering to the rich and the diownright deceitful. Anyone with an ounce of common sense knows this absolute nonsense!

    People are relying on FOOD BANKS just to survive!

    Be ashamed BBC, be very very ashamed!

  • rate this
    +8

    Comment number 847.

    768. zzgrark

    Cutting spending could have been done in many different ways. Labour had a plan for massive spending cuts, with a short delay built in. Labour's plans' however, were being applied intelligently with a view to maintaining spending where it could most help the economy, e.g. large building projects. The coalition cut across the board indiscriminately knowing they could blame Labour.

  • rate this
    -8

    Comment number 846.

    As an employer we always aim to offer above inflation wages rises every year as our prices increase year on year, and so do most of our costs. The real cost of living crises has been caused by the lack of credit as the financial institutes re-organise balance sheets and the last Labour government increasing benefits for all and promoted debt as a way of life.

  • rate this
    +2

    Comment number 845.

    While polititions continue delude themselves about improving take home pay. Having received first payrise since economic downturn my salary has dropped by 15% over the period had it kept pace with the Gov's target inflaion rate of 2%. Maybe the Westminster numties should get out of its ivory towers and see how their 1.5 decades of financial screwups have effected the rest of us in the real world

  • rate this
    -5

    Comment number 844.

    752 "You mean Tory wives in divorce proceedings? Yes I'm sure their incomes have gone up in real terms too" - ah yes, you couldn't answer the question as to why Socialism believes £26,000 per annum completely free is not enough and not "something for nothing", because there is no defence, so you made a silly comment. Well done. :)

  • rate this
    +5

    Comment number 843.

    Really ???? On what planet is this happening ??? Not on planet earth .
    Pay rise is wiped out by rise in gas and electric. Petrol costs is making driving to work a massive percentage of my take home pay. As public transport has been cut I have no choice but to drive.
    Am I getting better off ??? NO WAY. !!!!! Comment sums up just how out of touch these people really are . Makes me sick to the core

  • rate this
    +2

    Comment number 842.

    TRUTH, above all is what we want, what we deserve isn't it. We can handle the truth. We don't want trumped up figures we know to be false by experience and propaganda that's peddled, as if we're all stupid.
    We are constantly insulted by this.

    (The first commandment of any decent society and governing body should be the TRUTH. (Now who's being unrealistic ay.!!))

  • rate this
    +4

    Comment number 841.

    Torries must be really desperate if they bring out made up statistics already now. Besides even if it is the case it is no thanks to the Torries but more to LibDems

  • rate this
    -4

    Comment number 840.

    725. Mark_from_Manchester
    TALK TO HAND TORY BOY THINK THE ETON BOYS ARE WORRIED MORE. LOOK AT THE DRIVEL & CHERRY PICKING OF STATS. BY THE WAY DID THE POLICE EVER TELL YER WHERE ALEX FERGUSON WAS THE OTHER NIGHT. PLEB OUT,...

  • rate this
    -3

    Comment number 839.

    Public sector worker here not had a pay rise at our work for the last 8 years anybody getting only 1% each year arrhhhh poor you, the real world says want more money you have to move jobs

  • rate this
    +1

    Comment number 838.

    My wife and I earn a "medium" income. We keep detailed household accounts (we are sad like that). Compared to 2007 we are thousands better off, not entirely 100% due to the mortgage rate. Our income has risen more than our expenditure. That isn't a party political comment, just a fact.

  • rate this
    -1

    Comment number 837.

    If you only look at the editor's picks you would think everyone on this thread agreed with Cameron. Bias at the BBC? Surely not!

  • rate this
    -3

    Comment number 836.

    As a Single earning family in 20% tax bracket I can't say we have noticed.. Despite having one kid still at home... I have had to sub my two kids in higher education an extra 2k as they had their loans reduced this on top of the £800 or so I was emotionally blackmailed by HM Gov to give them...

 

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  42.  
    17:29: Plaid Cymru response: 'Delighted'

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  43.  
    17:21: Craig Oliver response in full

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  44.  
    17:20: Ashdown on TV debates
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  45.  
    17:16: Miliband response

    Ed Miliband says it's "make up your mind time with David Cameron"...."he is a prime minister that is running scared".

     
  46.  
    17:16: Greens on TV debates

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  47.  
    17:10: DUP response: 'Shambles'

    But Peter Robinson, leader of the DUP and First Minister of Northern Ireland, said the debate negotiations had been the "greatest electoral shambles of all time". He said there was "very considerable doubt as to whether the debates will take place". He added: "The broadcasters are not in the position to dictate in the way they are seeking to do." He said they were allowing "parties which are smaller than mine" to take part.

     
  48.  
    17:03: David Cameron's spokesman response

    David Cameron's communications chief Craig Oliver says they have made their final offer and are willing to discuss it, but are disappointed with the broadcasters' decision.

     
  49.  
    16:59: Sturgeon on TV debate developments

    Scottish National Party Leader Nicola Sturgeon said: "David Cameron is clearly running scared of having to answer for his government's record of failure and incompetence - and this arrogance in trying to lay down the law has become his comeuppance. It is entirely up to David Cameron to decide whether having an empty podium will do a better job for the Tories than he is capable of."

     
  50.  
    @politicshome PoliticsHome

    tweets: .@David_Cameron is "doing further damage to trust in British politics" by refusing to take part in more than one TV debate, @natalieben says

     
  51.  
    16:49: TV debates reaction - 'flash of steel'

    Stewart Purvis - former Ofcom partner for content and standards - has told BBC News that there is a "flash of steel" in the broadcasters' reply. He said he thought there was a feeling the broadcasters "had to reply" to the "really very aggressive" letter from the prime minister's communications chief Craig Oliver. He also described the seven-way debates as definitely having "public value", saying they would be "a very worthwhile programme".

     
  52.  
    @hopisen Hopi Sen, blogger

    tweets: Countdown until Clegg et al realise that broadcasters are now proposing to give Ed M his own show if Cameron says no, and so demand balance.

     
  53.  
    16:42: Farage on the debates

    UKIP leader Nigel Farage said: "I am pleased that the broadcasters have stood firm at last, but it would have been far better had they stuck with their original proposal, which included fewer parties. Nonetheless we accept the challenge."

     
  54.  
    @robindbrant Robin Brant - BBC political correspondent

    Tweets: So it's Final offer v final offer in #ge2015 TV debates stand off

     
  55.  
    16:29: TV debates

    You will find more on the TV election debates here.

     
  56.  
    @montie Tim Montgomerie - columnist at The Times

    Tweets: The broadcasters' position is ridiculous: include Plaid Cymru but not the DUP?

     
  57.  
    Carole Walker, BBC Political correspondent

    tweets: Broadcasters appear to be standing by threat to hold debates - even without PM

     
  58.  
    16:15: Two seven-way debates, two hours long

    The broadcasters say "there needs to be two seven-way debates of a minimum of two hours each, within the election campaign, allowing time to properly represent the views of all parties, covering a broad range of subjects". This has been the position broadcasters have outlined in the past.

     
  59.  
    16:12: Full statement

    You can read the full letter from the broadcasters on the TV debates here.

     
  60.  
    16:10: Broadcasters' statement

    The statement says: "The broadcasters would like the prime minister to reconsider taking part in all of these debates. 22 million people watched the leaders' debates in 2010 and there is a public desire and expectation for them to happen again in 2015.

    "The broadcasters' proposals have come after extensive work over the last six months to ensure the public have the opportunity to watch televised election debates once more. The group have worked in an independent, impartial manner, treating invited parties on an equitable basis. They have listened to the views expressed by all parties and adapted the proposals to take into account electoral support.

    "The broadcasters will continue to work closely with all parties invited to take part in the televised debates to bring them to their millions of viewers across the UK. The heads of news of all four broadcasters would welcome the opportunity to meet Mr Cameron, or his representatives, to discuss the debates."

     
  61.  
    @joeyjonessky Joey Jones. Sky News deputy political editor

    tweets: Quite a confrontation between broadcasters and PM just before election. Right or wrong, @David_Cameron isolated. May get quite nasty.

     
  62.  
    16:08: More from broadcasters

    The broadcasters say the debates will go ahead on the following dates:

    • 2 April: ITV produce seven-way debate with the Conservative Party, Labour Party, Liberal Democrats, the Green Party, UKIP, the SNP and Plaid Cymru
    • 16 April: BBC produce seven-way debate with the Conservative Party, Labour Party, Liberal Democrats, the Green Party, UKIP, the SNP and Plaid Cymru
    • 30 April: Sky News and Channel 4 produce head-to-head debate between the prime minister and the leader of the opposition
     
  63.  
    @nick_clegg Nick Clegg, Liberal Democrat leader

    tweets: Come on @David_Cameron you haven't got your own way so accept it and take part. #tvdebates

     
  64.  
    16:06: Analysis Alex Forsyth Political correspondent, BBC News

    This is a big decision for the broadcasters to take, because it runs the risk of allowing Ed Miliband the chance to get his message across unchallenged if David Cameron is "empty chaired".

     
  65.  
    16:02: TV debates to go ahead

    The broadcasters - which include BBC, ITV, Sky and Channel 4 - have released a joint statement regarding the TV election debates. They have said that the debates will go ahead as planned, in the same format as originally proposed, and they have asked the prime minster to reconsider his position. The broadcasters intend to forge ahead with plans for three debates to take place on 2 April ITV 16 April BBC and 30 April (Sky News and Channel 4).

     
  66.  
    15:58: Look back

    Team change here and a good time to take a quick look back at some of the main stories of the day:

    • Some Scottish Labour MPs are urging Ed Miliband to rule out a coalition with the SNP after the general election
    • Free TV licences and bus passes for pensioners would stay under a Labour government, Ed Miliband has said, but winter fuel allowances would be taken from better-off pensioners
    • At the Green party conference, leader Natalie Bennett said the poorest in society had been "blamed for the mistakes of the wealthy" and called for a "peaceful political revolution" to end the "failed experiment of austerity"
    • Plaid Cymru demand equal funding for Wales and Scotland in any Westminster coalition talks after the general election in May
    • Researchers at Oxford University estimate the number of migrants settling in England increased by 565,000 in the past three years, with two-thirds coming from other EU countries
    • UKIP leader Nigel Farage says he will "do his best" to avoid personal attacks on his opponents during the general election campaign
    • Drivers in England will get 10 minutes' grace before being fined if they stay too long in council-owned car parking spaces, the government has said
     
  67.  
    15:47: Greens 'idealistic'
    Comres/ITV poll

    The Comres/ITV poll mentioned below also asked respondents the words or phrases they associated with the Greens, UKIP and the Lib Dems.

    The Greens were most likely to be thought of as "idealistic" (41%), UKIP most likely to be seen as "dangerous" (46%) and the Lib Dems most likely to be seen as "middle class" (38%).

     
  68.  
    15:40: Mental health care

    The government is publishing a consultation paper on plans to give people with mental health conditions in England greater control of their care. Ministers promised changes after revelations about abuse at Winterbourne View hospital in Bristol. Care minister Norman Lamb says the changes would put people in charge of their care and promote community support as an alternative to hospital, admitting many families feel "their concerns are ignored".

     
  69.  
    15:33: Plaid Cymru conference
    Leanne Wood

    Plaid Cymru leader Leanne Wood has told her party's spring conference in Caernarfon that she wants income tax powers to be devolved without any referendum. She told party activists: "The Westminster parties have entrenched Wales' funding disadvantage. They should be able to commit to the same funding per head for Wales as Scotland. An additional £1.2 billion for our public services and greater resources to strengthen our country's economic prospects and end Wales' fiscal dependency for once and for all." She also added that her party would create a drugs fund to boost access to new medicines.

     
  70.  
    15:26: Cameron 'cowardice' over debates
    David Cameron MP

    Labourlist has some robust criticism in response to David Cameron's refusal to participate in a head-to-head debate with Ed Miliband: "If he really thought he had a plan, he'd be willing to defend it on whatever TV format he could.

    "His cowardice shows the modern-day Tory party has no heart or soul. It, fundamentally, doesn't know what it stands for."

     
  71.  
    15:19: Ukraine

    The Foreign Secretary, Philip Hammond, has warned Russia of tighter sanctions over Ukraine. Speaking during a visit to Poland, Mr Hammond said the European Union was ready to take further measures and the conditions of the Minsk ceasefire agreement must be upheld.

     
  72.  
    15:11: DUP will not seek 'narrow party advantage'
    Peter Robinson

    The DUP has released a statement saying it will not align itself with the main parties to seek narrow advantage in any coalition negotiations - but will focus on delivering for Northern Ireland.

    DUP leader and Northern Ireland first minister Peter Robinson MLA said: "Our MPs will not be part of any government coalition. We will not be seeking any Cabinet seats or any narrow party political advantage. The DUP will use its influence to further the best interests of Northern Ireland and of the Union. Unlike other parties we are not ideologically tied to any one of the major parties at Westminster but can do business with either the Conservatives or Labour."

     
  73.  
    @MSmithsonPB Mike Smithson
    ComRes/ITV poll

    tweets: ComRes/ITV poll on public reaction to GRN party policies

     
  74.  
    @MichaelPDeacon Michael Deacon, Telegraph sketchwriter

    tweets: ‏THE WAITING IS ALMOST AT AN END. Green Party press officer says Fully Costed Manifesto will be published "towards the end of March"

     
  75.  
    @johnestevens John Stevens, Daily Mail reporter

    tweets: "Visual minuting" of Natalie's speech #greensurge #gpconf

    Green confernce
     
  76.  
    @TotalPolitics Total Politics

    tweets: Weekly polling review: Conservatives pulling ahead?

     
  77.  
    14:48: 'Vote for the party that cares'
    Green conference

    "I say to you very simply, vote for the party that cares", Ms Bennett tells her conference as she brings her speech to an end. "Vote for the common good. Vote for the politics of the future. Vote Green."

     
  78.  
    14:47: 'Change Britain'

    There are people who want to see business as usual, Natalie Bennett says. To counteract them, we need people use their votes, she adds. If we all vote Green, "we can change Britain".

     
  79.  
    ‏@rosschawkins Ross Hawkins, BBC political correspondent

    tweets: Free social care paid for by wealth tax, higher taxes on those earning over 100k, tax avoidance, Robin Hood tax under Green plan

     
  80.  
    14:45: Young 'have it tough'

    Younger generations "have it tough", Ms Bennett says. That's not the fault of their elders, she adds. "We need to look out for each other."

     
  81.  
    ‏@SophyRidgeSky Sophy Ridge, Political correspondent, Sky News

    tweets: Financial transactions tax - "Robin Hood tax" - and more tax on those earning over £150k going down well in hall #GreenSurge

     
  82.  

    A financial transaction tax would be introduced by the Greens and those earning over £100,000 "should pay more, says Ms Bennett.

     
  83.  
    14:43: Care plan 'means jobs'

    Free social care for those over 65 would mean 200,000 new jobs and training places, Ms Bennett says. It will be a core pledge in their manifesto.

     
  84.  
    @rosschawkins 14:43: Ross Hawkins, BBC political correspondent

    tweets: Natalie Bennett wants free social care for over 65s

     
  85.  
    14:42: 'New taxes are needed'

    The Greens will restore equal care for all - that principle should apply to social care too, Green leader Natalie Bennett says. "Those who have the most should contribute most - new taxes are needed."

     
  86.  
    14:41: Remove market from NHS

    That's why I'm delighted to work to introduce an NHS reinstatement bill that removes the market from the NHS, Natalie Bennett says.

     
  87.  
    14:41: Bennett - NHS

    In the NHS, the infiltration of the profit must be reversed, Ms Bennett says. The market "costs us big time", she adds.

     
  88.  
    @LabourList LabourList

    ‏tweets: 12 target seats Labour are worried they might not win because of the Greens labli.st/1KxwLym

     
  89.  
    14:39: Greens: Power and wealth

    The current model of economics and society serves those with power and wealth, says Green leader Natalie Bennett. We must be citizens first and foremost - paying to common funds to look after the old, weak, poor and sick. This is what the politics of the future will look like, she adds.

     
  90.  
    14:38: No Tory deal

    "Just imagine a strong group of Green MPs", Natalie Bennett says. That group would never support a Tory government, she continues. They would have a huge say and could help develop that new politics she has been talking about, she says.

     
  91.  
    14:37: Climate change

    Speaking about climate change, Natalie Bennett says "we have to be up to the task". She says change has to come - the market is short-sighted and short-term. It is blind and senseless and works for the 1%.

     
  92.  
    @jameschappers James Chapman, Daily Mail political editor

    tweets: .@natalieben: "Noone should be worrying about a fracking drill burrowing into the heart of their community". Eh? #gpconf

     
  93.  
    14:36: Food banks

    Almost half jobs since 2010 are for self-employed people, but many of them are living in poverty, Natalie Bennett says. Individual charity isn't a substitute for collective justice, she says of food banks.

     
  94.  
    @rosschawkins Ross Hawkins - BBC political correspondent

    Tweets: Ed M last week "a society that works for all and not just a few"; Bennett today "society that works for the many not just the few"

     
  95.  
    @rosschawkins Ross Hawkins - BBC political correspondent

    Tweets: Bennett words almost identical to Miliband's — society that works for the many not just the few

     
  96.  
    14:35: 'Demand for change is louder'

    Up and down the country campaigns demanding new politics are growing, Natalie Bennett says: "The demand for change is louder and clearer, at last, the people are fighting back."

     
  97.  
    14:34: 'Green surge'

    The Green surge is more than a hashtag or numbers, Natalie Bennett says. It's the result of members' "commitment" and "hard work". The Greens are a "central player" in British politics, she says.

     
  98.  
    14:33: 'Nobody should live in fear'
    Bennett

    Nobody should live in fear of not being able to put food on the table or going into debt to pay for education, Natalie Bennett says. The politics of the future is not the politics of transaction, she says. That is the "old" and "failed" politics.

     
  99.  
    14:29: 'Politics of the future'

    The "politics of the future delivers for everyone" in our one planet, Natalie Bennett adds. "That's the politics of the Green Party."

     
  100.  
    14:28: 'Agents of change'

    "Britain could be a very different country on 8 May", Natalie Bennett tells delegates at the party's conference. The Greens can be the "agents of change" looking to the "politics of the future", she says.

     

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