13/06/2013 Daily Politics

Daily Politics. The Chief Inspector of Schools says

comprehensives systematically fail Britain's brightest kids. He put

them in the mixed ability classes, they fail to teach them properly,

don't set them challenging homework or don't have the know-how to get

them into a good university. We'll be asking why it's all such a mess.

The House of Commons committee has effectively accused Google of

dodging its fair share of taxes. It insists it operates within the law.

Who is right? We'll have the latest on the

stand-off between the government and protesters in Turkey and get some

international reaction to the two weeks of running battles.

And, Gyles meets Maggie's old driver and talks about how ministers come

to rely on the man old holds open the car door.

So, in the next hour, with us for the duration, Tom or Tam Grey. He's

the second baron of Strathclyde no less as the Laird of Paisley, I

welcome you to the Daily Politics. Thank you very much. Good to be

here. He sat in the Cabinet until a year ago as leader of the House of

Lords. Google is in the news again. Today's scathing House of Commons

report into the tax affairs has given it headlines. The Public

Accounts Committee, one run by Margaret Hodge, laid into the

Internet giant, dismissing the argument that all the salesmen and

women are based in Ireland as "brazen and unconvincing". Google,

according to a press release, earn something like $1. 3 in the UK in

the first quarter of this year and paid only 0. 1% of that in taxes.

That last bit wasn't on the press release.

The committee chairman, Margaret Hodge, isn't impressed? I think the

fact that over six years they have had a turnover of $18 billion here

in the UK, yet paid only �16 million in corporation tax is evidence that

they are not paying enough. Corporation tax during that period

was running in 27, 26, 25%, that's the figure we should be seeing on

the profits made here in the UK from the sales.

Now, we asked Google if they wanted to come on and talk about their tax

affairs but they didn't. They September us a few words. As we have

said, Google complies with all the tax rules in the UK, and it's the

politicians who make the rules. They sent us a few words. The public

accounts comity wants to see companies pay more tax where

customers are locate bud that's not how the rules operate today. We

welcome the call to make the current system simpler and more transparent.

That was Google. Now, obviously, major corporations

will use the tax rules to mitigate their tax, most of them do that.

They claim everything they do is legal. But there is an arguen't

about something that might not be legal. That is, where are the

advertising revenues generated for Google? They are saying we do really

all the selling in Ireland, that's therefore where we pay tax. The

committees of the law of evidence suggest they sell a lot of

advertising in Britain? It's a very timely and interesting report. Most

interesting because it comes the week before this great G8 meeting

taking place in Northern Ireland next week and David Cameron's said

one of the issues he particularly wants to discuss is the role of

multinational taxation. Google make one very good defence

which is they stick to the law, they are not breaking the law, they stick

to the rules that have been applied by the politicians for many, many

years now, and if politicians change the rules, they should do so, then

they'll comply with them 4. I have some sympathy. I understand that

too. I'm sure the rules are very complicated so if you hire expensive

accountants, you can find ways around them. But this issue of where

the advertising revenues are generated, in a sense, is nothing to

do with sticking to the rules at all. This is a potentially criminal

mat matter because you have an obligation in your tax return to

tell the truth. Of course.And if you are paying commission to people

who are selling advertising in Britain, but you are booking that

advertising in Ireland, that should be looked at by HMRC? I'm sure HMRC

if they haven't already thought of it will have now had the idea

watching you on this programme. With everything we know about HMRC, they

are very capable of dealing with large companies. But again, you

think you made a good point about the over complication some the

rules. Nobody understands the rules and it comes to a matter of judgment

between the tax authorities and various companies.

I think a greater clarity in this area, trying to pay tax where

revenue is raised, would be a very good direction to go down. But

almost more importantly than that, George Osborne has had a policy

since 2010 of trying to reduce taxation for corporations and what

we know from all the experience in the last 40 years is that when you

reduce the overall level of taxation, companies are happier to

pay what they have to do and don't go through all the hoops that many

organisations and individuals do. He's kept the hoops. When you were

in opposition, you pointed out that Gordon Brown doubled the size of the

tax guide when he was Chancellor. True. Doubled it. It's now so big

you can't even carry it around. What has your Government done? Added

another several hundred pages to Gordon Brown's pages? And this is an

error. We should not over complicate taxation. That's why this meeting

next week is an important next milestone. People have been

discussing it for a long time about how to deal with it. It's important.

We all need to pay the tax that is due, but not to pay the tax that is

not due. OK. Time four our daily quiz. The speaker's wife is called

Sally Bercow, if you hadn't heard. Strathclyde will give us the correct

answer. You will you think? I hope to discover what it is before then!

He hasn't a clue. I'll have to tell him!

Are comprehensives failing Britain's brainier kids? The report by the

watchdog says they are. The Chief Inspector of Schools says it's an

issue of national concern. Looking at 2012, the Ofsted report

found 65% of pew piles at non-selective schools who achieve

level five or above, quite a high level of attainment, in English and

maths, at the end of primary school, they went on to fail to get an A* or

A grades in both subjects at GCSE. A quarter of students who gained

this prestigious level five in English at the end of primary school

failed to gain a B grade at GCSE, corresponding to over 40,000 high

attaining students, or at least they were at the end of primary school,

not making the expected progress. Looking ahead to university

applications, in 20% of non--selective secondary schools, no

student achieved two As and a B at A-level in at least two of the key

subjects. That is the minimum offer required by the minimum universities

called the Russell Group. I'm joined by Ofsted's Chief Inspector, Michael

Wilshaw. Were you surprised by the findings or did you suspect them?

was shocked by them. Really?Yes, I come from the comprehensive system,

I was a teacher in Inner London for many years and a teacher in London's

comprehensives for many years. I was very certain rised at the under

performance about the most achievable kids. Why? If you talk

the results, you would think, these kids are good, that's a key to a

whole range ofpingcational opportunities. What then goes wrong?

Well, we have pointed to a number of important things. First of all, the

transfer, the transition between primary school and secondary school

is not good in many of our schools. So bright youngsters, bright eye and

bushy tailed doing well at the end of year six in primary schools,

transfer to secondary school and not enough is done, particular

particularly at Key Stage 3 and in year seven at Key Stage 3. They are

given the work they eve already done in primary school so they get bored

and they lose interest, it then becomes much harder at Key Stage 4

to catch up at age 14-16. You also raised the issue that a lot of kids

have been taught in mixed ability classes; they are not being set in

classes related to their ability. Upping that's a problem because you

say, or the report says, that if in mixed ability classes, the teachers

tend to teach towards the middle range? We are not prescriptive, we

are saying you make the judgment about the school organisation and

the classroom organisation you want. But, if you are going to use mixed

ability classes, you have got to make sure that you have people and

teachers who know how to teach in a mixed ability way. That's tough, is

it not? That is tough. That's why I, as a head, rarely used mixed

ability. We'll be looking in the next round of inspections at what's

happening in these mixed ability classes which may be holding back

our brightest children. The most disturbing thing, or one of them, is

inspectors found in a number of schools that teachers didn't know

who their most able children were in the class.

They can't kept tabs on them? hadn't kept tabs on them or tracked

their progress. And they didn't intervene to find out why? That's

right. You are in favour of setting them? I am. That's my view.You are

not being prescriptive, but if you had your way, you would have setting

in the comprehensive system? That's up to heads but I did and I would.

What we want to say is that if heads are going to pursue this line of

mixed ability, classroom organisation, they have got to

deliver the outcomes of our brighter children. Let me raise an issue

about the Association of schools and colleges who've been on behalf of

the union leading this report, they say it's not appropriate to use this

primary scleefl five asker to predict future GCSE successes, they

say you have taken the wrong benchmark? I've been a head and, if

I 'ed met a youngster at the end of year six who'd achieved a level 5 in

English and ale level 5 in maths, and got a good report from the

primary, I would have expected that child to be an able child. In nine

cases out of ten they were. And yet, as you said in your report, 65,000

of these children are not getting the top grades at GCSE. What do you

make of this? I think all parents will be deeply concerned and worried

and and interested by this report and the schools have got to react.

I think there's this point, this line between young children leaving

primary schools doing very well and, then a few years later, not doing

very well, is a clear indication that something's happening in those

three or four years that they are getting to their secondary schools.

Now, there may be a myriad of reasons between league tables about

what schools have been doing in order to get people to pass, but the

fact is, they are letting down these able students because if they are

not getting the right GCSEs, they are not taking the right A-levels

and not getting the opportunity to go to the top universities. There

are serious consequences for our country. We want the brightest

children, the majority of who go to non-selective secondary schools,

three million go to non-selective secondary schools, only 150,000 go

to grammars, so it's really important for the future of the UK

that the youngsters do really well. All right. Listening to all that is

Brian Lightman, the General Secretary of the Association of

School and College Leaders. He has a bit of a sound problem, as you can

see there in Birmingham. Let us see if he can hear us. Can you hear me

here in London? Yes, I'm afraid I didn'the hear the beginning of what

has been said, sorry about that. understand. Let me come to you then.

Two thirds of kids who seem to be bright at the age of 11 because they

get these great results in level 5 in English and mathematics then fail

to get either an A or A* in the subjects at GCSE. That's a national

scandal, is it not? Well, I think the first thing I want to say is,

this is a serious subject that we need to have a reasoned discussion

about. I'm very concerned about the sort of sensationalist head Lymes

that we are hearing about, a culture of low expectations and so on. We

need to be clear what a level 5 actually means. When a pupil gets a

level 5 at kinder Key Stage 2, this is a high stakes accountability test

and schools are understandably teaching children to the test and

preparing for that. Level 5 has a very wide range of performance. Now,

a child who has just scraped level 5 after a lot of tuition and coaching

to get through it is in a very different place from a child who is

at the top level of level 5 and therefore one of the highest

achievers. The fact they have got a level 5 doesn't automatically mean

that they are going to be getting As and A*s at GCSE. Most schools assess

children on entry, they use standardised tests and other key

things. The thing is to identify the brightest children when they come

through to secondary school and that we do everything we possibly can to

stretch them and challenge them. These kids are leaving primary

school in pretty good shape and you would expect them to do well in

secondary school and they don't. Something is going badly wrong.

don't all do badly at secondary school. This is the point. Many of

those children, I think 84% of those children were getting A stars and

Bs. You know, you have to look at the data properly. There's no point

- Not on the subjects that the Russell Group of universities, our

top universities want. Hang on here. This is a misinterpretation of data.

Those Russell Group facilitating subjects are a number of subjects

which the Government has highlighted and I don't have a problem with them

highlighting those subjects, but there are other rigorous A-levels

that those students will have done and that's not shown in the data.

You may say that, hold on, you may say that, but the Russell Group are

the top group of universities. We all want to see bright kids, more

bright kids from poorer backgrounds getting to our top universities.

course we do. Zblt Russell Group has set what it thinks you need to get

to get into their universities. Let me say the point I was trying to

make, if there are many students who go to Russell Group verse toys who

do not have those -- universities, who do not have those subjects, but

they have other subjects, such as philosophy. We cannot draw sweeping

conclusions based on a performance indicator that has been invented

recently and was not something that was there when the children came

through and you know, we need to look at the data properly, otherwise

we're making generalisations. We're talking about a failing system and

we're not talking about the good practice. That report describes a

lot of good practice as well. We need to build on that. You seem to

be very defensive on this. Not at all. The bottom line is that a lot

of kids who leave primary school with good results are not then doing

well in secondary school and not getting into the Russell Group of

universities. Answer me this: If these kids doing well on the level

five, if they go to grammar school, 60% of them then get A or A star in

English and maths. Why do two thirds of them not in the comprehensives?

The children who go to grammar schools have been selected on

different assessments. These level five kids, who are going to

comprehensives are some of the brightest kids out of the primary

schools. Yes, some of them are.They have gone to grammar schools 30 or

40 years ago. Some of those children are but not all of them. Level five

is not the admissions criteria for grammar schools. I understand that.

The data is not being used properly. It's being misinterpreted, rather

than saying what more can we do. I don't represent head teachers would

want to dumb down the system and have people failing. We are

absolutely resolute in our wish for those children to do their best.

You're not doing very well, are you? I disagree. You have an opinion and

you're not using the data correctly. % of non-selective secondary

schools, 20% are places where no student achiefs two As and a B at

A-level in key subjects. In those subjects. Yeah. Not in the other

subjects. Now if those subjects are priority that the Government is now

doing, then we will have to constrain people. I have to tell

you, there are very well known politicians who don't have A-levels

in those subjects. We need to have a look at the sorts of people...

You have a look... Which politician doesn't have an A-level in English

or maths? I don't know. You look at things like economics and so on.

Look at what the Prime Minister has got. The Prime Minister has a first

class degree. Yes, that's right. But they don't need to have those

subjects in order to get into a top-class degree. It is part of the

measure, but it's not the only measure. What you're saying is that

the whole system is failing because of data that is very, very

selective. The other point here is that Ofsted do not routinely inspect

the most outstanding schools. This is a small sample and you need to

look at the whole picture. What I'm not here to say there isn't more we

could do. We should be doing more, but I'm certainly not prepared to

accept evidence that is unreliable. Evidence is unreliable. That's

nonsense. We visited 41 schools. These were average comprehensive

schools which took a fair spread of ability. We also looked at the

evidence from 2,000 subject inspections in something like 150

school inspections. We looked not just at those 41 average

comprehensive schools, but we looked at what was coming through in

inspections of schools over the last year. So, the evidence is there. We

really must, as a country, stop making excuses. We know that too

many of our youngsters from the state system are not doing as well

as they should. The universities say that. The Russell Group universities

say that. We have to deal with this issue and not make excuses about it.

I would expect head teachers up and down the land to have high

expectations of their students coming to them. Ofsted says you're

making excuses. We're not. We're saying let's look at the data

properly. Let's look at exactly what we're hearing here and what the

sample is and what questions were asked in the schools and let's talk

about what we can do together rather than having this confrontational

situation where all the time we're told we're failing to do this,

failing to do, that when at the same time, more and more students are

going to university and getting good first-class degrees, more than ever.

They're not all from the, these comprehensives. More students all

round are going, proportionate. A hugely disproportionate number of

our kids who are going to the Russell group of universities are

coming from the private and grammar schools. What this Ofsted report

seems to suggest is the reason is we're failing the brighter kids when

they enter secondary school. That's a simplistic conclusion. There are

lots of other reasons why children from independent schools and from

selective schools have very, very good chances to go, they're given a

lot of help an tuition and so on. We should support the children in the

non-selective schools to ensure that they have those opportunities that

are afforded them in the privileged environments. , we've overrun

because I wanted you both to have a good say. It's a very important

subject. I thank you both. There were more protests in Turkey

last night with riot police firing tear gas to disperse protesters. The

country's governing party says it's prepared to hold a referendum on the

issue which sparked the riots. It started as a dispute about a park

but the way the police treated campaigners triggered rioting. The

government says it's confident that the new "gesture of goodwill" would

clear the area but warned those who remained but they would "face the

police". Our correspondent Quentin Sommerville is in Istanbul. It looks

like this mass use of police power has diminished, if not destroyed the

protest, is that right? Well, if you look behind me, I'll step back and

you can see, that's the square down there, and it's largely cleared of

protesters much they've been pushed back into Gezi Park. They're

remaining there and rejecting that offerer from the Prime Minister.

They say it's a ploy. They don't accept. It within the last couple of

hours he's said to them it's that or the redevelopment of the park. This

is your final warning. But we're now into the stage where we've had in

the last 36 hours, two ultimatums that he was going to clear the park

of protesters. But they're not ready to accept that. It's still a relaxed

atmosphere in the park at the moment, certainly during the day.

But it's a very defiant atmosphere. Have seen terrible pictures of what

the riot police have been prepared to do to the protesters. In the end,

would I be right in think thinking that if they don't get out of that

park, he will send in the riot police? I think that there's a very

real likelihood of that. It's worth remember remembering, this is about

much more than just that punch of trees behind me. It's about -- bunch

of trees behind me. It's about a large minority who believe the

government is too authoritarian, that it doesn't listen to them. The

government has said we are listening to you, we've given you this

opportunity. Istanbul can have a referendum over the future of the

park. The protesters aren't buying that. Do you get a feeling there

that you're at a kind of for good or ill, you are at a kind of turning

point in modern Turkey? I don't feel that, no. To be honest, it fields

quite -- feels quite localised. Last week when the protests were at the

fiercest, we travelled across the country. We went to the coast and

there was an energy and it felt almost like a momentum. Coming back

a week later, that seems to have dissipated.

on this story. We go straight to our very own Jo Coburn in Strasbourg.

Andrew, the protests and unrest in Istanbul and other Turkish cities

have caused concern for politicians here at the European Parliament.

They debated the situation in Turkey earlier this week. They came up with

a resolution calling for the Prime Minister's government to be more

democratic and less heavy handed with the protesters. The question is

will Turkey take any notice? To discuss that my two guests, a

British conservative MEP and also a representative from Germany's SDP

party and of Turkish heritage. Why should the Prime Minister listen to

anything that's said here, Turkey's not part of the EU. That's a good

question. I would say, there is a mixture of different things for the

time being. For example, I guess the prime minister is very emotional. I

would say surrounding him, all the advisor are hard liners, I would

assume. So with a mixture of this, Mr Erdman with his emotional ilt, he

is saying, European Union is not what they say is not valid for us. I

think there's a mixture of all these things. Does Turkey still want to

join the EU? Accession talks have been going on for years. Is there a

feeling now that after years of frustration perhaps they're going

off the idea? Official Officially they say yes. It's one of our first,

important issues or things in the next time. But if you look to the

poll toy, or to the politics, you can see there is, you know, Turkey

has multiple options. In the last few years, they grew up with the

economy and so from that perspective Turkey has multiple options and they

are not ready to bow to the European Union. What's your response to

what's been going on, the political unrest? Do you have sympathy with

the protesters or the government? I'm concerned. I have sympathy with

the protesters. They have a democratic right to protest and

that's part of living in a democracy. You asked the question

about Turkey joining the EU, Turkey has much to offer the EU -

economically, it's a very, it's develop developing. Security, NATO,

they are a good friend to the United Kingdom. They fight against

terrorism. But there's been such hostility in the European Union

about Turkey joining up. There are certain boxes that Turkey has to

tick. Democracy and human rights are the top of the list. I work on the

women's rights committee and I know the area women's rights in Turkey

still needs to be addressed. For example, they have forced marriages.

They have honour killings still. you think those are the real issues

at stake here, that Turkey will never be able to join the EU unless

it becomes less socially conservative? No, I don't think so.

I think the young population in Turkey, for example, is totally

oryen tented to the European Union. They are modern. They tried to get

into the European Union but we all know that the visa regulation is not

ready for that. I think that the prime minister, maybe he has another

agenda. He sees he is a big star in the near east countries and northern

African countries. So I think he is trying to go into both directions

and finally, he will decide. Significant is this unrest? Our

correspondent, we just spoke to, said actually he feels it's more

localised. It's not a major turning point for Turkey. Do you agree?

don't think so. I think that this is a mass protest. It starts with the

Gezi Park, we all know. Now it's a protest against the way of

leadership. It's a political issue now. So I think that Mr Erdogan

would be able to overcome the situation in order to give the hand

to the protesters, like the last two days, he has some meetings with the

protesters. I think, but we have to help them. We have to help the

Turkish government with cooling down Turkish government with cooling down

Turkish government with cooling down period. How does the EU help?

How can the EU help? What's happened is, the Prime Minister is in a way a

victim of his own success with his economic liberal reforms. He's a

socialite Conservative by nature. It's almost a new class, middle

class secular population, mainly in the cities, not in the rural areas,

who use the Internet, Facebook, they are nor in touch with European

ideals, and suddenly, he's cutting back now and is introducing things

like a ban, or they tried to introduce a ban on red lipstick on

the Airways, kissing in public, things that are done in normal

European states. Yes no, will Turkey ever join the E Snitch There's a way

to go, we'll see -- the EU? I think it's 100% that sometimes it will

happen. Thank you to both of you and back to you, Australian drew, in

London. -- Andrew in London.

There are certain things you aassociationiate with Germany, good

cars, enthusiastic supporters of the euro, or at least one of them

stereotypes may no longer be true. German politicses in London this

week are arguing that the euro should be abandoned. Professor Bernd

Lucke is a former World Bank economicist, former member of Angela

Merkel's ruling Christian Democrat party and the current leader of a

new euro critical party Alternative for Germany. What would this mean

for Germany, for the European economy and for us? We can ask him

he's with us now. Welcome. Thank you very much.

What is it you want? Do you want to abolish the euro or do you want to

retrench the euro back into a smaller, more sustainable zone?

The latter would be the least we'd like to do. Moving back to national

current sills is an optionism depends on whether it would be

passable, the bailing out. Our prime goal is actually to get rid of the

certain European countries. Get rid of? Let them exit the euro and let

them regain the national currency which also allows them to be

competitive again. Would that not put Germany's economy at a

disadvantage, because if you got rid of certain countries, their

currency, if they went back to the Sasapa and the drachma, and the

Lira, their currency would devalue, and the German euro, or what's left

of it, would soar, all of your exports would be priced out of the

market? That's not quite true. First, it would be fair if the

certain European countries had their chance in European competition.

Currently the German currency is just under valued and the currency

of the European states is under valued. The port thing is that

exports don't only depend on exchange rates, they also depend on

demand and income and these countries are see seerry in a

recession. German exports have dropped by 25%. Because people

haven't got the money? Exactly, yes. If we boost their economies, German

exports will actually Ben from it that. Let me welcome our Scottish

viewers who're joining us on BBC Two. They've BP watching First

Ministers questions in the Scottish Parliament. We are discussing this

new Euro-sceptic party, can I call it that? Of course, yes -- they've

been watching First Ministers questions in the Scottish

Parliament. If Germany simply left the euro

itself, that would be the end of the euro, wouldn't it? That would

probably be the end of the euro and it's not what we recommend. We

recommend a gradual dismantling, starting with the southern European

countries. You will know that at the time when it was Mr Mitterrand in

France and Chancellor Cole in Germany, that many people knew at

the time that including all these countries, Italy, Greece, Spain,

Portugal, that we are nowhere near the Maastricht criteria, many people

now that it would probably end in tears the way it is at the moment.

But Mr Cole and Mr Mitterrand were on a political thing, they wanted

political union. Surely if you allow the eurozone to break up the way you

are suggesting, it kind of holes the whole euro project below the water

line? I mean, many economists have warned

in #19ed 92 and 1999 not to establish a common currency -- 1992.

They ignored it everywhere except in Britain, I suppose. So you were very

wise. Plenty of people are keeping their heads a little lower now.

far as the political dimension of the euro is concerned, that's

exaggerated. The European Union's fared well in terms of which we did

not have a common currency. It's very aren yabling to think about

this and move back to a system which is more flexible. You have got a

German soul mate now, Tam? I think it's very significant. It represents

something I've felt for a very long time. Britain's not isolated in

Europe. There are now many people in Europe, including the Professor

here, saying very much the same things as the Conservative Party's

been saying for many years about Europe, it's over bureaucratic and

over centralised, it creates regulation that people would rather

not stick to. This is the great opportunity that David Cameron's

spotted, not just for Britain to have renegotiation, but for the

whole of Europe to decide what is in our collective interests and to

create a new Europe with less centralisation, less expense, less

bureaucracy. The Single Currency is a key question for Germany. I eve no

idea how this is going to be resolved. Actually, what the

Chancellor in Germany is trying to do is to keep kicking the can along

the road for a bit longer. That's probably the right thing at the

moment, to create a bit of stability within Europe, whether we end with

some countries falling out of the euro, I don't yet know.

Professor, would it be rude of me to suggest you are going to do that

well in the September Federal Elections? Whether we do well or

not, this depends on how much money we can raise for our campaign which

is actually our most severe problem currently. The established parties

get millions of euros in state funds and the newly formed parties do not.

You can tap him for a few euros. Professor Lucke thank you for being

with us. Stephen Hester is to step down as

Chief Executive of the Royal Bank of Scotland before the end of the year

to pave the way for the preprivatisation of the bank. He

said he's "content" with the board's decision. An interesting use of the

word, but the news has provoked anger in the city and among

commentators who say he's been forced out by the Treasury. Before I

came on air, I looked to see that the stock in the bank was falling

this morning. That may have changed since, but the markets didn't react

well. Treasury Minister, Sajid see ya individual made a statement to

the Commons this morning and explained the process that RBS is

undergoing and answered questions on the Government's involvement in the

decision of Mr Hester -- Sajid Javid. Royal Bank of Scotland is

moving from the rescue phase to the next phase, a phase of focussing on

becoming a UK bank that provides greater support to the British

economy and is prepared for its return to the private sector. The

Government has always been clear that we want to see RBS become a

more focussed, retail and commercial bank focussed on supporting the

British economy and with a much smaller international investment

banking arm. Did Stephen Hester go voluntarily or

was he pushed? What role did the Chancellor have in prompting his

departure? When did the Chancellor set out to the chairman and the

board his desire that Stephen Hester should go? And, is there now any

role for UKFI, or have they been circumvented on the discussion of

the Chief Executive role? Chancellor has not been directly

involved in meeting with Stephen Hester. Prior to the announcement,

he's not met with him prior to the announcement of his departure on

this issue. This is a decision for RBS and its board. RBS and its board

have made this decision jointly with Stephen Hester and come to a

voluntary agreement. The chairman of RBS, Sir Philip Hampton, did ask to

meet the Chancellor last week to inform the Chancellor of the board's

decision. That's the official line, but it's

clear as mud what really happened. Let's ask a man who knows, a good

friend of this programme, Alastair Heath. What do you think's happened

here? I think what's happened is, uncreasingly the Government's views

on what should happen to RBS has differed from what Stephen Hester's

views are and also the views of people who want to maximise the

value of RBS's share price. The Government wants to reduce art

officially the size of RBS's investment bank, probably because

they don't like the idea of owning investment banks, they're obsessed

with the idea that the bank needs to be domestically focus and retail

focussed. If you genuinely want to maximise its value, that's probably

not the strategy you should be pursuing. That's why the private

sharehold shareholders are worried about political interference.

are saying there's been a disagreement between the Chief

Executive who had won vision for the future of the bank going forward and

the aims of the Government finally firming up on what it wants to do

with the bank, which was different from Mr Tess Hester? That's the most

plausible explanation. The Government are saying Hester didn't

want to be there too long, they are saying they needed someone else to

deal with the privatisation process. It seems like the Government and him

are no longer agreeing. They are no longer on the same wavelength. We

know there is a consensus for privatising the bank in some form.

But there are various ways of doing that and various time scales for

doing it. Do we have a clear idea yet what Mr Osborne, the Chancellor,

wants to do? I think he wants to first start off with Lloyds Banking

Group, which is a much easier privatisation. We are a small part

of that? The taxpayer opens a part of that and the bank is in a betser

state, the an easier bank to deal with. The share price has risen

quite well? Yes. Apart from that, look at RBS. I suspect the way they

choose to from I vattise Lloyds may give us an idea of how they want to

do Lloyds. He wants to do it before 2015? For political reasons, but it

depends on how the bank is managed, is it being maximised to --

privatised to maximise the share price? The way the Conservatives

have got the previous one sold off chumps of BP when it was owned by a

big chunk of the state and it was sold at a market rate, you went for

the highest price, it was back in the private sector. Should it be a

more British Gas Tell Sid operation in which you try to use state

ownership of RBS to spread the ownership among ordinary British

people? I absolutely think it should be like a Tell Sid-type operation.

Thises a massive one-off opportunity to actual actually redefine

capitalism and increase the amount of shares. It's a major opportunity.

There are a number of good proposals, such as the one from

Policy Worthington Cup exchange for example. It's a great opportunity.

It's also on binding the public back to the City to try and show that the

interest can be aligned again. agree with that. That's the right

way forward. RBS is one of the biggest banks in Britain, the

largest lender I think. It needs to be in a proper shape in the private

sector, and if anything, this row, if that is what it is, just

demonstrates what is a bad -- what a bad owner the Government is, much

better to be in the private sector. Spread the ownership as widely as

possible and if we can get people to become interested in owning shares

again, then we'll all benefit, including the people who become

buyers, because they'll understand that owning shares can be a route to

long-term prosperity. Thank you very much for marking our

card today. Our special guest Tam sprath collide, former leader of the

House of Lords, what red tear peer of the realm, so he has plenty to

say about Lord's reform. There were attempts at an overhaul

of the other place, as they quaintly call it. The Upper House is still

not ready for potential change. The constitutional reform committee are

plugging away trying to bring consensus on how to bring the Lord's

into the 21st century. Teach them how to deal with lobbyists as well,

that would be an idea. The evidence-taking session was taking

part this morning. It was said earlier that there was a

consensus that the House of Lords was too big. Is that consensus

universal across the membership of the House or was it confined to

people, the four people we have here who are regular attenders and

participants? I think the feeling is that we are too big. But where do

you go from there in determining what the size should be. The only

qualification I would make was the one I gave earlier that Lord hill

our leader had interesting figures about the active participation.

Again, I can't speak for Lord Hill. I think you should look at what he

has said about this because it -- in effect he says it isn't total

population, it's trying to find ways of making better use of the

membership. Joining us now the Lib Dem peer and whip, Ben Stoneham.

Welcome. Now Tam Strathclyde when you resigned as leader of the Lord's

you admitted, that the quo ligs "had broken down in the Lord's". What's

the current stated of the coalition in the Lord's. It's extremely good.

I think you took that out of context. Never do that (! )There

was substantial disagreement in the reform in the House of Lords, within

the House of Lords and within the House of Commons. What I love about

this debate and I've been involved in this debate for a long time, is

we look to the Lord's to debate and discuss it, but actually, House of

Lords reform is really about the House of Commons. They will never be

-- there will never be change until the House of Commons agree on what

to do. Last summer, the House of Commons voted in overwhelming

numbers on a plan that I supported, Ben supported and many others, the

Government supported, but when it came to actually deciding how to do

it, the House of Commons decided on an historic fudge. It was ever thus.

They did that in the days of Enoch Powell. The same old story.Did Tam

Strathclyde find is so difficult to work with you? I think you're

misrepresenting it. He spoke to me the following day and apologised. He

said he was completely misquoted. They always say that. I think it's

unfair to say that. The reality is I think Tam Strathclyde had been

pressed by the discipline -- would be impressed by the discipline

showed by the Liberal Democrats in the coalition. I think the

relationships work pretty well. Inevitably there will be areas of

disagreement. Have things got better since he's gone snoo I think they've

just carried on. That's very diplomatic. I believe that. They've

got better. He's difficult. That's unfair as well. This is co-ligs

politics working extremely well. It's sickening. In 2010 relaunched

into an experiment in Parliament and in the House of Lords about how to

make coalition work. None of us had experience. Bits of it were messy.

On some bills I think individual parties played their cards harder

than I think some of us had imagined. But the underlying

strength of the coalition is the Prime Minister, Deputy Prime

Minister, the Chancellor and his number two get on extremely well.

The essential purposes for creating the coalition still exist. We have

local difficulties. Let me give you an example, on the vote on

boundaries. Where I thought the Liberal Democrats got themselves

into a ridiculous position. Ratted on you. Not only that, they promoted

a system which they themselves had said was unfair. The reality was the

Tory backbenchers in the Commons were foolish. They should have

continued on the House of Lords reform. This is something we could

have an argument on. I was going to say is that I think Tam Strathclyde

is a classic person who has spent most of his life sustaining the

coalition and the Conservative Party. He's skilled at running

coalition. What about the coalition in the Lib Dems? All political

parties are coalition. I'm a social Democrat. OK. It's all well for you

to be so cosy here. But we watch this from the outside. The failure

to reform the Lords, you're just this huge dumping ground for the

establishment these days. There's 800 of you. The coalition will add

another 50. I mean, it's a joke. It's very difficult to reform. There

are lots of vested interest. Stop adding to them. If you don't, you

change the age profile. The average age is already about 93. Joot

Liberal Democrats would say should reform the House of Lords.

How is it that the wore's only superpower of 300 million poem --

world's only superpower of 300 million people, its upper house has

100 members and this little island off the coast of France has an upper

House with 800 plus. It's too big. The House of Commons is too big as

well. We tried to reduce that as well. They wouldn't let you do that.

They certainly would not, which was a pity You have to reform the House

of Lords at the same time. There There was a deal done which said

that the House of Commons should reduce to 600 and We Will Rock You

reform to the House of Lords. thought if this lot gave you the

referendum on AV you would give them boundary changes. The fact is that

the gravy train continues. You have a career in politics, it comes to an

end, oh, no, we'll stick you into the House of Lords, �300 a day, nice

title, gets you reservations in restaurants and we're off to the

races. I'm sure you get reservations too. But the serious point...

McDonald's! The difficulty for reformers has always been that the

House of Lords actually does the job it's asked to do remarkably well,

for very little cost. It analyses, scrutinises, revises legislation. It

does the job that a second chamber should do. It just doesn't need 800

of you. I agree. On that amazing consensus, we move

on. Thank you for being with us. Now imagine being sat, if that's the

correct English, in a car with Margaret Thatcher, after she stepped

out of Downing Street for the last time. Or hearing ministers make

crucial decisions as you're driving them to meet heads of state or rock

stars, if you're Tony Blair. Probably not something you'll find

in the job description to join the Government car service, but they are

witnesses to some unique and intimate moments of history. For the

latest in our series on the Westminster village, Giles has taken

to the road with former Government They are privy to secrets, but have

no official role. They drive ministers but not policy. Sometimes

they share a trust and relationship with people at the top that Cabinet

colleagues don't get close to, Government drivers. Thart political

equivalent of what the butter saw. You build up a rapport between you.

Over the years, of course, but initially are you getting to know

one another. Once you get to know a minister, of course, then you become

privy to everything that's going on in the car. Most of them do gel with

their ministers because if they don't, it's best they come off and

another driver goes on there. Sometimes you do get a clash of

personalities. Did you ever have any? There was only one minister

ever in my career that I couldn't get along with too well. That was

earnest Marples. Was Transport Secretary in the early 60s. Here he

is talking about drink driving. People drink and then they have too

much and it's the end of the year and they drive home. I'm all for

drinking. I'm in the a scrooge. I like my drinking, I had a sherry

today. Denis wasn't a fan. I drove him for about six months or so, in

the end, I did a swap. I think it was in both our interests.

Diplomatically put! That's right. I wound up with a wonderful man, Enoch

Powell. It's long been thought that Government drivers' network was a

crucial sounding board for ministers. Every driver has a story

to tell. A lot of them confide in ministers, between each other. It's

a wonderful network there in fact, when we get back to the garage

telling stories. Ghast drivers network, what does that say about my

policy and where I'm going? Very much so. And we used to feed them

little things that possibly, if it wasn't too sensitive of course, we'd

let our ministers know. Always. On one occasion in 1976, Denis knew

something before his minister Harold Hever. I'd known, funnily enough

through some colleagues in work, I knew that Harold Wilson was going to

resign the next day. When they came out of kobt they'd been informed. "

Oh, yes I heard that yesterday." It all went dead in the car. He said, "

You knew yesterday and you never told me? He was quite annoyed.

drove Mrs Thatcher on and off for years and finally ended as her

official Prime Ministerial driver. The strangest journey he had with

her was her last in that role. was the most amazing journey. We got

in the car and for once, there wasn't a word spoken in that car

from the time we left Downing Street until we actually came out of

Buckingham Palace. It was very poignant. In today's money-saving

climate ministers tend not to have their own driver. A bonus possibly

to the Treasury, but perhaps politics and history are poorer as a

result. Now, did you have a Government car

or a driver when you were a minister? I did in the old days, in

the 1980s and 90s. But all that stopped under the new austerity of

2010. I have to say, it was one of those perks that was absolutely

fantastic. You got to know your drivers. You were on very good terms

with them. They were extremely helpful and it was a relief to see

your driver there when you needed to go somewhere. It did change. I think

it was probably right that it changed. Did you have a pool of

cars? You did. You need to get ministers from A to B, using public

transport where that's zrierable. But they need -- desirable. But they

need to be in cars and get to where they need to be effectively. It's

not such a good situation from the minister's point of view, but from

the taxpayers' point of view it's fair enough. The driver ever tell

you things? Very much so. The gossip was extraordinary. They always had a

little tale to tell. They were very discreet about where they got their

information from, a bit like people in your great profession. But they

did know stuff. They didn't brag about what the former minister

they'd had in the car before, so there was also a discretion there.

They were very keen, usually, to tell you what it was. You felt you

could have confidential discussions with another minister in the back of

car? Very much so. I never doubted the security of a driver. On one

occasion I was dealing with something extremely sensitive. After

I said to the driver, " Did you hear any of that? . He said he never

listened to anything. He just switched off and talked about

something different. Probably because it's so boring. Right, now

just before we go. We have to get the answer to quuries. Why is the

Speaker's wife Sally Bercow in the headlines again? A, she's locked her

husband out of the flat? Selling furniture on I bay and inviting

buyers to pick it up. Varietying Nigel Farage for sea or putting an

innocent face on her census form. They're all credible. That's the

clever nature of this quiz! I think she locked him out. If only! She may

have done. That we don't know. She's selling furniture on eBay. It's not

the official furniture, it is her own furniture, innocent face. That's

all for today. Thanks to our guests. The One O'clock News is starting

over on BBC One now. I'll be back tonight at 11.35pm with John

Simpson, Fiona Millar, John Prescott, Michael Portillo, Miranda

Green, and making her first appearance with us will be