Over her foreign secretary. The president of the European Council told her there had to be much more progress in brexit talks, before any discussions on a trade deal. Meanwhile, the chancellor is beavering away, trying to make sure he avoids a repeat of the humiliating u turn after the march budget and hoping to shore up his own position, with cabinet colleagues breathing down his neck. But with fellow cabinet members including michael gove and amber rudd breathing down his neck, hell also be thinking about making a splash in a good way if such a thing is possible. I have not got money to buy a house. When do you reckon you will be able to buy . About ten years. Working as a nurse for 26 years, do the tories expect our support in the light of another 1 pay increase . There isnt a magic money tree we can shake to provide for everything people want. Indeed there was no magic money tree for the nation. But are the tories about to unveil a more modest, magic money tap . No, they dont have an overall majority at this stage. On that grim mid summer night for the conservatives, they lost seats in their natural territory. Anxious younger people lay at the heart of that story as voters in their 20s, 30s and 40s preferred labour. It is Philip Hammonds challenge in this budget to reset his party and the relations with those Younger Voters. At the june election, we lost among all age groups up to the age of 49. And that is a terrifying position for the conservative party to be in. So i do think that the party is very, very focused. In the feverish atmosphere at westminster, there has been an intense internal debate in the treasury about how to pitch the budget. Should the chancellor be bold and allow spending to flow, or should it be a case of steady as she goes with spending restraint . I am told one senior aide advised the chancellor to throw caution to the wind to make sure he leaves a memorable legacy. This could, after all, be your final budget if theresa may finally snaps with you. Other friends say this most cautious of politicians is not about to change the habits of a lifetime. I understand the budget will contain both elements of that internal treasury debate. The chancellor will turn on the tap. It will be more than a dribble, but we should not expect a gush. Every penny is accounted for by the man known as spreadsheet phil. No doubt labour will say its all just an illusion. One of the chancellors oldest friends believes he will spend some of his so called headroom or war chest, even though it is expected to be below the £26 billion he identified in march. So i think what the chancellor is saying is, look, it will be silly to throw away all the good work we have done in getting down the deficit level, about to turn the corner on debt. Of course i am listing and in my autumn statement i created headroom. Ill look at other ways in which the headroom can be used to attack the problem so many people have spoken to me about. I am convinced he will be looking at some housing ideas. There are some really creative ones about looking at loan guarantees for small builders and things in that era. But also he knows that we need to build more social housing and Affordable Housing and hell be looking at ways to encourage that. The astonishing fact is the difference in the likelihood of someone voting conservative, whether theyve got a mortgage, own their own home or are in private rented or socially rented accommodation. The difference is dramatic. I know that every single conservative mp is very focused on that fact and on the reality, which is that if we do not do something about this over the next three to four years, before the next election, then we will be writing ourselves out of the electoral script. We can expect a united cabinet front next week. But not since the blair brown wars has been such a poisonous atmosphere ahead the budget. One person told me borisjohnson and michael gove are leading the internal charge against the chancellor, because they fear that the treasury has grabbed hold of brexit policy. Nick is here now. Next week is going to be a busy one for the nations political pundits. He kept on saying headroom. It has picked up in recent weeks and he will want to address those areas, especially health and housing that caused the tories such grief in the general election. Whats interesting is the assumption that that headroom would be used solely by the chancellor to help him navigate through what he expects to be a bumpy brexit. Government sources are saying, no, it is there to help you when you have a slowing economy and that is what we have at the moment. Talking about loan guarantees and so forth, for small builders, its not exactly splashy stuff. No, but remember, with Philip Hammond, he has built his entire career. Hes not an accountant, but he behaves like one. Hes an incredibly cautious person. He does know that when, as nick bowles, we may have heard him, we may have not, every age group under 49 voted for the labour majority and not the conservatives. This government has got to be addressing their concerns. Philip hammond understands that. We will see the war chest being dipped into. But he Still Believes you have to be cautious and he will be sticking by the fiscal rules for a moment. Thanks very much. We will be coming back to you later on. Next week is going to be a busy one for the nations political pundits. Im joined by rachel shabi, ian dale and simonjenkins. First of all, on the question of whether Philip Hammond will be safe or bold, will it be maybe his last budget . Does he have to get Something Big out there . Every chancellor has to be a legacy. But not an increase in National Insurance . I wouldnt have thought so. Expectations on housing had been raised through the roof, namely by his cabinet colleague making the speech yesterday. Theres no way that whatever he announces will not be enough for people like nick bowles, who want to see lots of progress on housing. All the talk on this intergenerational fairness, that actually something has to be taken to the younger and taken from the older tory voters. I think thats true. I also think you buy votes from young people by appealing to their pocket. The problem he has isJeremy Corbyn gave away the biggest election bribe in history by offering half the age cohort £50,000 for the university education. You cant beat that. That was gigantic and irresponsible, but massive. I think that is what moves them rather than housing. With the polls being neck and neck, you would expect the polls to be better for labour, if there was a decent offer on housing, maybe stamp duty, a holiday forfirst time buyers, it might send a signal actually that they are looking after Younger Voters rather than the wealthier, older voters. No, no. This tinkering at the edge isnt going to cut it. He cant do it. He cant do it politically because of the divisions and chaos in government. He cant do because it is not in his dna, nor the governments dna to try to understand the economic crisis. They cant even grasp the causes. That its a systemic crisis. They do not understand the effect it is having on peoples lives and hardship it is causing. How can they have any solutions . They are part of the problem, they cant be part of the solution. You have someone like sergei javits saying we need £50 billion extra to build houses. The housing figures this year are the highest for some time. 217,000. But what it needs to be is 400,000. There are all sorts of Creative Solutions to get there, but im not sure any of the parties have the answer. Can hammond deliver that, especially in the fiscal rules . Well, i really think housing is a mess. You dont build houses overnight. You can affect supply, the private rented sector. I think young people would appreciate more social housing. The real problem is homelessness in cities. As the word crisis implies. There is this assumption that you can throw money at young house buyers and somehow help them. All it does is increase house prices. Do you think labour has outflanked the conservatives . Are they offering more to younger people, more than the question . This was massive. Every student i have spoken to has said they were bowled over. They were offered £50,000. That is serious money. It is not. Im not underplaying this. Housing is a massive crisis. Student debt is a huge issue. But theres a Bigger Picture here, which is about having a vision. Lets talk about that. The whole question is, will this be the end of austerity . Youve got a Public Sector pay freeze, the nhs needs to suck in a lot more money now. I dont think they can do it. Ijust dont think they can handle it. They dont have the kind of solutions that were going to need. Were looking at productivity rates which are flat lining while people are working longer hours for less pay and working conditions with living costs rising. Its a system thats failing. And tinkering around with things like stamp duty isnt really going to cut it. There is a big thing that he has to go through the big boost of spending on infrastructure. Thatll provide jobs and perhaps boost productivity. They would say they are doing that already. The road Building Programme at the moment is the biggest for many years. We can go down the road that John Mcdonnell wants to go down and spend £17 million on all sorts of things. We all want more money for the Health Service and education. But in the end its got to be paid for. Labour so far if they have not explained how they would pay for the massive splurge of spending. No one believes it he does, he says spend it. Anyone can do that. The real problem is the one that nick identified. He wants to appear responsible without making a silly mistake like over National Insurance. To do that, you need to form a very fine judgment as to how much you give away and how much you do not. The politics is he has to appear to be giving something away. The key word is austerity. It affects everyone. It isa it is a word that strikes home. Finding a way of appearing to be a generous chancellor. We know he is going to do something bold. Presumably something theresa may agrees with. We dont know. Were really arguing in a vacuum. In the end, all politicians are elected to government to decide how to cut up the public spending cake. Theyre judged on that. I think in this budget most people are expecting a lot of money for the nhs. But if he says were going to put in an extra 2 billion, rachel will say, that is not enough. We should put 4 billion in. Whatever the chancellor is going to do he will be criticised. What i am saying is we need to get beyond this thing that there is only so much money. Actually, you konw, this is out of kilter with what most respected economists around the world and even those famous marketers at the imf are saying, which is that you have to invest in an economy. That is where you generate growth. You should borrow when there is low interest rates. What would you like to see that public requirement going into . When the labour party talked to businesses and representatives about this, they say, you are right, we do need this investment. We need infrastructure and skills. If we look at this as a very particular budget, happening at a time, i would not say brexit stasis, but theresa may has been chided by donald tusk, and you have Phillip Hammond laying out his stall but he does not know what party it will be at or the end journey . He has to be a chance for all time, he cannot pretend this is my only budget or this will come to an end in one year. It is very difficult but the problem with journalists as were in a state of perpetual hysteria. I think were all quite calm i have lost track of, she survive. Until christmas, now. Prime minister tend to survive and chancellors as well. They tend to not get on very well. This is normal. Would anything break this christmas not until there is a better alternative. We are in a situation where Phillip Hammond is determinedly soft as a brexiteer and there is a difference of opinion as how this is being handled and brexit is a huge focus, people dont know what is happening but there is more focused than the budget . I would agree with a lot of what simon said, apart from the last bit, i dont think he is safe, if she carries out a major reshuffle in january or february, she may be forced into a reshuffle before then. What do you think the impact of brexit is on the chancellors thinking . This budget is short term because we dont know exactly what the brexit outcome will be so it is very difficult for him to plan. He has to keep back some money in case we have no deal, very relu cta ntly. I think he is looking to the short term rally than long term on wednesday. Stay there. Were going to hear more on brexit. Two interesting developments, donald tusk has essentially said to theresa may, you need to put more money on the table within two weeks, there is already 20 billion euros, they want 60 billion, they want a bigger indication and the significance of the next two weeks is donald tusk once that before the European Council on the 14th of december, where eu leaders might say, yes, we can move onto the next stage and talk about trade and transition. David davis was tickling that up . He did a speech in berlin and he said, we will be doing something in the next few weeks. He did not want to be specific and was clearly indicating that britain would like to say it at the council and not beforehand. The taoiseach has also been pretty vocal today. Leo varadkar has said that britain has to put in writing that it will ensure there is no hard border in ireland and that has to be done to ensure that he will agree to move onto the next age at the European Council. Interestingly, no member state has a veto over the article 50 process. But there are three areas, northern ireland, Citizens Rights and money and it is irelands moment in the sun and it is difficult to see how donald tusk could move on without the agreement of ireland. One area where the chancellor is widely expected to make an announcement in the budget is the rules for the governments flagship welfare programme, universal credit. Labour forced a vote yesterday in the commons on cutting the initial waiting time for universal credit from six weeks to four. It won, though conservative mps abstained and the government has yet to respond. Critics argue that the inequalities and delays in the system have created new hardships for people. Newsnight filmmaker Stuart Denman went to newcastle, one of the trial areas, where he spoke to three people who say it doesnt work for them. He began his quest at a food bank. 13 weeks, it was. It was eight weeks and then it was another five weeks. You just had to try to pay what you needed to pay. But you werent paying rent or council tax. Im getting my money every month now, the same date. Its just the amount you get. It was bad enough when i was on the. It was £102, i think. It was bad enough then but now it is £72 a week. You cannot do it, its impossible. It really is. Ian has been on universal credit for about six months. He says he has not been under pressure to look for work, which he thinks is down to poor health. I have met you here at a food bank. How often do you come here . Once a week. And what do you do for the rest of the week for food . I get food out of the bin now and again, which i did a couple of days ago. Sandwiches. How old are you, ian . 54. Did you imagine life to be like this at 54 . Not as bad as it is, i dont think. I knew without a job it was going to be really, really difficult but i didnt think it was going to get as difficult as it is. Its getting out of hand now. If youre not in a family you may as well not exist. If you cant buy your own house you may as well not exist. Ian later tells me he will be receiving an additional allowance for caring for a friend so he is now more optimistic about getting by on universal credit without work. But what if universal credit is actually putting you off finding work . I have been on the universal Credit System as a carer, which means i dont have to actively seek work at this point in time because my daughter receives a disability allowance. I have received my first payment in july. It went as smoothly as it could apart from the fact that i didnt get the amount i was expecting and also i subsequently found out that, despite keeping them informed, i had a legacy debt that has accrued by having claimed tax credits. How much is that debt . £2800. In 2012, lynne was made redundant from a well paid role in the Public Sector. She was able to find short term consultancy jobs but increasingly had to depend on benefits to get by. She sold her two bedroom flat to make ends meet and now she and her two teenage daughters live in privately rented accommodation. The option is to either go back into well paid work, which isnt necessarily available, or in terms of downsizing or trying to manage within the benefits system, then that is not going to be possible under universal credit. Lynne feels it would be too complicated to accept ad hoc consultancy work while on universal credit. Its too unstable. If you have high peak months, like seasonal, or you get a contract that is three months but you dont work for two but you earn that amount, you are going to be in and out of the benefits system. You cant wait six weeks every time. I am an extremely resourceful person and now i am in the position where, through the austerity measures that the government have implemented and the system of support has left me in this situation more than i have left myself. I would be better off handing my taxi badge in and going and signing on. I would get more money by not working. Which i cant understand at all. Robert is a self employed taxi driver. When he applied for universal credit, an appointment was arranged for him to prove he was self employed. But on the day of the interview he was offered a fixed taxi fare of £90, which he took instead. The appointment was eventually rescheduled but he missed that one, too. You missed two appointments . Yeah. But that was to take work . Yeah. Part of your claimant commitment is you cant refuse paid work. But you must attend all interviews. How can you do both . Youre desperate for money. Thats the option youre going to take every time. Roberts payments started eventually, which he combined with his taxi earnings. But