16/01/2014 Daily Politics

engaging in a civilised dialogue on immigration. I do not agree, I do

not think it is possible for Conservatives to go back on

modernisation. I don't think those Conservatives to go back on

people committed to it have retreated. Let the welcome our

viewers from Scotland. We've been joined by viewers in Scotland who

have been watching First Minister's Questions from Holyrood. Not only is

it over, that none of these issues are part of the modernisation

agenda, partly the reason is it failed. It failed to get an overall

Tory majority. Your modernisation agenda was essentially about

appealing to the chattering classes within three square miles of here,

and came up with nothing for striving, working class and lower

middle-class voters. I do not think the argument was perfect. I do not

agree. First of all, the Conservative party did succeed in

forming a government in circumstances where its previous

election results were badly hit. The swing to the Conservative party was

massive. But it did poorly in Scotland and the North West. And not

well enough with ethnic minorities. Among the kind of people who elected

Margaret Thatcher and Tony Blair. I am self-critical, there were things

we argued correctly which were important, and other things which

did not get the attention. It became important when the Conservative

party was dealing with such a large deficit. What has posed a big

challenge to the ideas we were developing was it did not -- it

turned out a period of no growth, and cuts. You mentioned the minimum

wage. As if that was part of the modernisation agenda. What is the

equivalent of the modernising agenda this time, compared to vote blue, go

green, big society? First of all, the big society issues raised by

David Cameron, a broken society, that is not over. We have to return

to that. Secondly, it does have to reflect the fact different economic

times mean you have to deal with issues of the incomes of the low

wage in a more competitive way. Which your modernisation agenda had

nothing to stay in 2010. Are we agreed? I had better move on! I

agree it wasn't complete. It was highly politically successful. If

the conservatory had not done what it did, it would not have got close

to winning power. Tell us briefly, it is dead agenda, to fight this

next election. I do not agree. We must not retreat from social liberal

issues. Secondly, it does have to make sure people feel, even on

issues like welfare, it is being fair, as well as being tough. And it

has got to find ways to appeal to people on low incomes and showed as

the country recovers, it will have the interests of everyone. Those are

tough, new challenges. We will see. Now, the NHS. It's been likened to a

national religion, and many joined Hands Off Our Hospital campaigns to

save local services from closure. I am at Saint Thomas 's Hospital,

Parliament is across the River Thames. Let us find out what people

think about the politics of the NHS. There are a lot of things to educate

people. Staying of drink and smoking. The accident and emergency

locally was full of people at new year with injuries from drink. Which

is wasting a lot of money. The friend I am visiting, she is 21,

unexpectedly she caught meningitis. They have treated her for the last

six months for free. She has been an inpatient for ages. To think how

much that is costing? I dread to think. We complain about tax. When

something like that happens, if it wasn't covered... Someone has

recommended the idea of an NHS tax, specifically for the NHS, would that

work? It is good the way it is. You never know when you will need it. I

have been helping all my life but any time and could need an operation

or procedure that costs thousands of pounds. I think it is OK the way it

is. It does get larger and larger. And we have an ageing population. As

health care services get better. That increases the total amount of

people who need to be taken care of. Yes, it is a big, black hole. You

sound it up perfectly. But then you are a medical student.

The government should sort out the NHS. What if it costs more money and

there is no end to it costing more money? I don't know, I can't help

you there. I don't blame him! Danny Finkelstein recently proposed a

complete re-think in our approach to NHS spending. And we're joined by

Vidhya Alakeson, from the Resolution Foundation, to discuss his medicine

for the health service. Danny, what do you think should

happen? It is more I think people do not appreciate how rapidly it is

increasing as a proportion of national income. It is a big

decision, do we want to, in 50 years, be spending ?1 in every ?5 on

health care? What I want to do is to link what we spend on the NHS with

taxation. An NHS tax? If you appeal to someone we are going to spend a

greater proportion of income on health. There are good arguments for

that. You would have to suggest an increase to pay for it. People would

no longer feel the NHS should keep on spending without anybody having a

grip on how much it was costing. On my tax return, I would see so much

money on income tax, and on the NHS tax. You could turn national

insurance tax, as an example, into specifically an NHS tax. A bit of it

does go to the NHS. What you make of that? I question to -- the extent to

which a hypothecated tax would change the state of debate and

fundamentally change what people expect from the NHS. As every

country gets richer and spends more on health care, where do we stop

spending on other aspects, if we want to spend more on health care?

It is what the opposition wants. We should expect to spend more on

health care. Isn't that the problem, wouldn't people say, just take more

of that money from my tax? We were spending more on an army at the

start of the programme, now it is health. The conversation was, should

we be spending more on the army? I am in favour on spending more on

everything. Are you? You are not, really. It depends who is spending

it. I am certainly in favour of spending more on defence, and health

care. I think we are spending too much on the welfare on certain

aspects. Let me come back. It seems to be right, as you say, as we get

wealthier, when the health service was set up, I was part of the

first-generation looked after by the NHS, at our health spending would

fall, it was projected. But the costs of technology and someone is

rising. If that is the one area in public spending which will rise,

doesn't it mean on the left and right you have to look at government

pulling out of other areas? That is one option. You could grow the tax

base by keeping more people in work, so we have to get more of the

ageing population in work for longer. Would you increase taxes?

That is a bigger conversation than just about the NHS. At the moment,

there any conversation is what can be cut? But also, where can we raise

tax revenue? There is potentially a revenue raising agenda in terms of

funding an NHS. We will suddenly have to pay more for the NHS. One

puzzle would be a hypothecated tax. In other areas, you can do more. We

want the best of everything is what I meant. The NHS is no different. We

cannot do that without regard to how much it costs. It is increasing

rapidly as a proportion of public spending. We haven't got the deficit

down because the proportion of money spent on the NHS is rising.

Therefore we haven't got the deficit down as quickly. We need to be

realistic. Where would you get the money from? For a start, new money

to the NHS doesn't necessarily lead to better care. There is a huge

amount of money we need to spend better. Less in hospitals and more

on the community. Ring-fencing the NHS and cutting social care to an

extreme, is that a sensible way forward?

Last month, George Osborne announced the Government's intention to

abolish the cap on student numbers. The Government wants an extra 60,000

students in higher education at an eventual cost to the taxpayer of ?2

billion a year. So we have already spent another ?2 billion. The move

will, in part, be funded by selling off the student loan book. But do

the numbers add up? We can talk now to the blogger and writer Andrew

McGettigan. What is wrong with the government's idea to sell off the

existing student loan book and use it to finance more university

places? There are a number of problems with the Autumn

statement's presentation of figures, but ultimately student loan figures

lose money. You send them out into the world, and you get it back over

30 years, but how much do you estimate you lose on that loan? Back

in the 2010, rents of spending review, we thought we'd only lose

30p in every pound -- comprehensive spending review. But now we expect

to lose 40p in every pound. You have to find that funding therefore from

somewhere else. Selling alone that loses money, and you might not get

what they are worth when you sell them to the provider, especially if

you've you have to compensate the purchase with future subsidies going

the other way because they cannot change the terms, that means you end

up going over the cliff. You have to put some money in from somewhere

else. That is the fundamental question about sustainability. But

if you sell the loan, securing it, whoever buys the loan book, surely

it's their responsibility to get the loans. The government has the money.

It won't happen in this case because they are collected through HM RC, so

that is where the primary collection occurs and that's where it will

continue to come from. The current management process, is it up to

scratch to deal with that sale? I suspect you think not. The National

Audit Office thinks not. It said the current setup was not fit for

purpose and it needs to remodel the repayment collection, so if you

enter a contract with the private sector, where you have a target on

collection performance we might see money going the other way because

the systems in place are not fit to meet the targets. Thank you for

joining us and outlining that. We are joined by David Willetts, the

University Minister, and John Denham. Welcome to you both. What do

you say to Andrew? It's right to have more people going to

university. We don't have a target but it's great to have the

opportunity. It's good for them and the economy and we can finance that

by bringing forward the proceeds of the sale of the student loan book.

The policy is right within its own terms. It's simple. Young people

want to go to university and everybody who has that qualification

has the ability and aptitude to do it should have the opportunity. We

are unusual for a western country where there are tens of thousands

each year who want to go to university and we slam the door in

their face. Most countries don't do that. George's ambition, quite

rightly, is that people have the aptitude and ability should be doing

it. He said that when he looked at the Autumn statement measures, but

one that did the most for the long-term performance of the British

economy was giving more people the chance of getting a university

degree. But is it true that 40% of the loan book will never be repaid?

That is the current estimate, and it changes every time there is a new

estimate. It usually goes up. It has been going up the last few years,

but why is simple. We said you pay back more if you are earning more

than ?21,000 per year, so as earnings have underperformed since

the forecast, every time there is a new set of earnings data, which

shows what we assumed they would be, it effectively makes the ?21,000

threshold more generous. It was generous when we started and it is

more so now. That is a deliberate policy. If you admit, as we stand at

the moment, before the higher loans have really begun to work through,

that 40% of the loans you will never get back, why don't you just cut the

student fees by 40%, which would be less of a deterrent for people to go

and try to make sure that you collect the remaining 60%? The good

news is that fees are not a deterrent. Nobody pays up front. We

have had record numbers of applications, and better than that,

record applications from people from low income backgrounds, so they

understand the system. John, what is your reaction? Let's take the

non-repayment of fees. If you have a child going to university paying

?9,000 per year, there are effectively paying ?6,000 for the

education and ?3000 per fees that will never be paid. If you did not

spend so much on debt cancellation, you could put it into higher

education and the fees could come down. We now see that the course the

government has taken, outside the ideological idea of having high

fees, is wrecking family finances and is very bad for public

investment. If we shifted every penny we could into teaching we

could bring the fees down to about ?10,000 for the average three-year

degree instead of ?25,000 at the moment. What is your response? It's

not wrecking family finances because families are not paying for it. We

cannot predict who will be earning what in later life, but we say if

you earn more than ?21,000, you pay back. If you are less well paid, you

don't pay back. It's a gradual scheme that means nobody need worry.

You only pay back through income tax. You said to me in a

Parliamentary reply that 50% of people never paid the loans off in

full. So you get 40% of the money not paid back, and 50% of people do

not pay back in full. So that means that these people, 9% of everything

they earn over ?21,000, they will pay for 30 years and they still

won't have cleared what they earn. That makes it a terribly bad deal

for them and the taxpayer and the economy. What is saying is they are

paying a 29% rate of income tax. But if people are earning a lot, they

should pay for their education. If you shifted it away from a high fee

policy, nobody would be paying the 29% rate of income tax. Ineffectual

writing of 100%. If someone is earning a lot of money, they should

pay that. All you have to do is reduce the rate of debt

cancellation, spend that on fees, on teaching people and the fees will

come down. More people will have loans that they can pay off, they

will borrow less in total and they will be paying less in total. That

is what we could do. Is it right to take away the cap? Should you leave

that universities? Ideally is you want people to go to higher

education, but the financing system is like raising a mortgage to

financial annual holidays. Sooner or later you hit the buffers. You have

to have real money to do it with. By the way, who is going to buy the

loan book? We are expecting significant interest from within the

city. Financial institutions? It will be a knock-down price, that is

the trick. I just wondered who would buy it. Probably The Royal Bank of

Scotland. If it's cheap enough. The night we see the first ever

Westminster correspondence dinner. Tickets are like gold dust. But

apparently just 50 pairs of tickets have been allocated to members of

the Westminster press pack. The Prime Minister's soiree is set to be

a rather less glamorous affair than that held by our friends across the

pond. Let's see how it goes down in DC. Thank you. How do you like my

new entrance music? My next 100 days will be so successful I'll be able

to complete it in 72 days. And on the 73rd day, I will rest. The first

black president. That's unless you screw up. And then it's been a big,

what's up with the half white guy? I'm continuing to spread our agenda

globally and around the world, as well as internationally. Barack

Obama, he's already a lame duck, so why wait? Picking the right actor to

play him was the challenge. As it turns out, the answer was right in

front of us all. Daniel Day Lewis. Were you nervous about playing him?

Yes, I was. Look, look. Let me be clear about this. You wouldn't

believe how long it takes to put these ears. I want to talk about

some serious issues. OK, here it comes. Nuclear prior inflation --

nuclear proliferation. Nuclear proliferation. Nuclear

proliferation. You can see it is a huge production in America. It takes

days and days beforehand, about 1800 people go, massive parties around it

as well. Not going to be quite the same in London, I think. Two people

who definitely won't be attending are Michael White, of the Guardian,

and Paul Staines, aka Guido Fawkes. I don't think they could get the

tickets. Why are we doing this? It's a revival of an old thing, a bit of

a White House thing, I used to go there, in enormous basements under

the Hilton hotel. A big loving, everybody scratches each other's

back. That is not the British way. It is more the French way, dare I

say it. It's a people, the biggest room they can get in Westminster

security problem -- it's 170 people. Why am I not going? Only 50 tickets

for couples, and I've it all before. Let the young people enjoy

themselves. Do you wish you were there? You have to pay me to go to

some of these events. A good thing if you take your wife, she has

missed you all these evenings, with your mistress if your French, and

you get some brownie points from her for all the things you've done. What

a lovely thing to say. He is softening. I think he's selling out.

I gate-crashed the Downing Street Christmas party, the kids get to see

Santa, some guy called George Osborne and the wife gets a new

hairdo and enjoys immensely and it gets off my back. He goes to all the

parties now. No harm in it. In America it is built around the

president, and we don't have one here. There has been an argument

that the leader of the opposition will not go because he does not get

to speak, only the Prime Minister would. They have all got egos, these

chaps, otherwise they wouldn't ball over the -- volunteer for the job.

He is both Mr Thatcher and Mr Reagan, that is why Francois Holland

got away with it, his estate. It's a different game. Although he might

want to contradict me, we are less deferential here. Is the Prime

Minister sweating over this question on getting the jokes right? They are

quite risky, some of the joke. You saw Barack Obama doing his Daniel

Day Lewis. Just imagine Cameron or Ed Miliband doing that and being

completely slated for it, because we don't have the same reaction here.

It is quite risky, I think. Last time I heard him speak at one of

these events, it was like the monthly lobby lunch at Westminster,

and he made a joke about his European speech and said it was like

Tantric sex, the more you waited, the better the speech would be. And

then the speech was an absolute disaster. He should have stuck to

the Tantric sex. Will you gate-crashed? I don't think so. I

would be writing about all the parties I went to if I did that. It

happens to us all. What an amazing break out of lack of hostility, so

we say thanks to all of our guests. I am back tonight for This Week with

David Ginola, Ross Kemp, Jane Moore, Diane Abbott, Michael Portillo and

Miranda Green at 11:35pm on BBC One. And I will be back here tomorrow as

well, if I wake up in time. Is anyone else working yet? Goodbye.