Sir Stuart Rose, Former CEO of Marks and Spencer HARDtalk


Sir Stuart Rose, Former CEO of Marks and Spencer

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new measures will be implemented by 2019. That is it for me. Now it is

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time for HARDtalk. My guess today is one of the best-known and most

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successful retailers in Britain. Until this year, he was chairman

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and before that chief-executive of Marks & Spencer, the shops that

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sell small clothes than any other in the UK. Recent figures suggest a

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high street is struggling with sales down, shops closing and

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confidence low. What are the chances of Britain and the world

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avoiding putting back into Sir Stuart Rose, welcome to

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HARDtalk. There are parts of the United Kingdom where one in three

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shops have closed. The High Street does seem to be a pretty brutal

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place at the moment, doesn't it? is hard going, no doubt. My old

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adverse surreal thriller Green told me that things had got very bad. --

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my old adversary, Sir Philip Green. If you go for what I have done all

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my life, self-help, and due order retailer with things that people

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want to buy and you offer quality and value and service and

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innovation, you can survive and probably thrive. If you have got

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none of those things, you will have a tough time. To look at the big

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picture, even if you make the point that some shops can do all right,

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do you think the United Kingdom is heading for a double dip recession?

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No. I have just got back from a cup of coffee with Digby Jones and we

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both agreed that that was not the case. Many people have an

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optimistic view. I think we will continue to make slow but steady

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progress through the rest of 2011 and into 2012 and 2013. I am not a

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double dip recession man and I have got a track record of saying that.

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The head of Deutsche Bank has said that there has been sealed percent

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growth this year, shops or under pressure, many people think there

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is no hope and that things could get worse. I think they're wrong.

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But, the answer is, we don't really know. Let's look at one of the big

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drivers of recession. This recession is quite interesting. The

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trading path of the UK plc is not in bad neck, the balance sheet is

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in a real mess and then you can get the balance sheet sorted out...

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There is another factor, companies are doing better in the UK for stop

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my own company, its balance sheet is doing well. Margins of companies

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are in good shape. We need something to happen. A lot of this

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will be driven and should be driven by public confidence. I think the

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biggest single factor holding back the UK and much of the world is the

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fear factor and public confidence. That is being hit because people do

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not have money. They do have money. Look at the plus side, you are

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talking to an optimist, interest rates are low and people are being

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squeezed. People are being careful and thoughtful style. -- thoughtful.

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I was talking to a manufacturer the other day and they were saying that

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volume has gone down. Turn a negative into a positive and it is

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different, I accept. A full game goes down, it does not mean people

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are eating less, it means they are wasting less. -- If of volume was

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down. A large amount of stuff is thrown away. That has been cut down.

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We you're an optimist. A lot of people would say that unemployment

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has gone up. Those are people who will not have money. It has

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consistently gone up. It has not gone up to the same degree that

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forecasters predicted. People are taking home next money -- less

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money. People don't want to take less money for the same job. They

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have had to and that is why the numbers aren't as bad. People have

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less money. People are being flexible about how they are dealing

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with this recession. They're taking part-time jobs and being flexible

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about their hours. You ask if it is going to be a double dip recession.

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That is two quarters of negative growth. I don't think that will be

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the case. I think we will continue to grow. George Osborne will have

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to reduce his forecast. Before we look at what George Osborne does,

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one wonders where this growth is coming from. George Osborne is

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relying on the private sector here. We have seen exports affected

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because the rest of the world are struggling. The eurozone is having

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a terrible time, America is struggling, where is the growth

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coming from? We will have to fall back on traditional strengths. We

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have to keep supporting. The pound is pretty low and our goods are

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quite affordable overseas. I don't know the answer, in truth. I am

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more optimistic than you are. the UK, a financial body has said

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it expects 0.3 % growth in the last quarter of the year was a good

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contract by as much as 1%. It could. You say that the Chancellor has

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said that growth will not be as he had hoped. He went on to say that

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he will stick to his plans for dealing with the deficit. Which is,

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the word always used in the UK, austerity. Is she right to do so?

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think so. I am right -- consistent about this. As a retailer, for me

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to support the increase in VAT, that was a brave thing to do. I

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think we're doing the right thing. I think it will be proved to be

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right. Let's take the political side, if you're going to deliver

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bad news, you might as well do it early on. It is like going to a

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doctor. Would rather get the truth then the bad -- the truth and the

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bad news or would you rather people do everything was fine and then

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produce afterwards it was not. I am not a member of the Conservative

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Party. Many people will change their position. They will say that

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it is a Yallourn and growth has not materialised. Alistair Darling has

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said it will strangle the economy. -- it is one year on. He would say

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that, wouldn't he? The economy is still growing. It may be growing in

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a sluggish way but it has not gone negative. It is still growing.

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America, countries and the eurozone, they are ending up going to be

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finding themselves in the same position as the UK, forced to take

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austerity measures. The good news for the UK is that we are separate

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from Europe. We are dependent for exports and some imports, we are

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important Lelant, but what the Government has done will serve the

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UK in good stead. -- importantly linked. The issue about Europe is

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quite simple. If you talk to a German businessman, they will tell

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you privately, they have done pretty well on the last few years

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about the fact the euro has been lost. The German economy is doing

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well. The issue for Angela Merkel is domestic politics. Are they

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going to be like the rest of Europe, and tell the rest of Europe they

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will do that, much as they did for East Germany, or will they just

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continue as they are? Germany has done very well. All the forecasts

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are, poured from your own, it is not going to. Germany could be most

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affected. -- apart from your own. You mentioned America. People talk

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to me about America. Never underestimate two things. Never

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underestimate deep ingenuity of former Sapience, almost Fabians got

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us into this speech. -- the ingenuity of human beings. Human

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beings got us out of this before. Also, never underestimate America,

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Uncle Sam. They could surprise us all. We do not rather wake up every

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morning being optimistic rather than pessimistic, I ask you?

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said you supported the Government when they raised VAT up to 20 %.

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You still support them in that. Is it not harming the High Street?

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a different government had done it, I don't believe that if the Labour

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Party had won the last election they would not have done that.

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it Harminder High Street? I don't think so. I think it is tough

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medicine. -- harming the High Street. If we get through 11 and 12,

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next year, don't underestimate the impact of the Olympics, that will

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lift the nation's spirits, that will mean beer through the worst

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and can move on. It is uncomfortable to have a bit of

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inflation at the moment. I believe that the deficit will come down

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sharply. We will see the impact of the austerity measures and what VAT

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has done. I think by the time you get to the end of 2012, 15-18

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months away, you will see a better economy. Despite the deficit?

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coming down now. Do you think the Government can meet its targets?

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Surely it cannot do it by the end of the Government. I think the

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original target was to reduce it by half. But with the last government.

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Alistair Darling was going to reduce by half. The coalition have

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said they hope to eradicate it. They may or they may not. It will

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come down by a substantial margin. They will be in a significantly

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better position by the time of the next election. -- we will.

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economists wrote a letter in the Financial Times saying the top rate

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of tax should be scrapped because it is damaging. I don't understand

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the academic research that they have done to develop that case. It

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is absolutely and no no. How can I explain to my secretary that I am

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having less tax on my income and hers is not going down? The Prime

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Minister put that on the back- burner effectively and that is what

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it should be. I am happy to pay extra tax will the UK is in

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difficulty. When you hear the likes of Warren Buffett offering, other

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top businessmen is well, all of these people... You keep saying all

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these big Eddie Wade names. What they are proposing is that they

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give tax more. -- heavy weight. I am a bigger pay more tax. I am

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paying extraying extra VAT and for other goods and services. As is

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everyone else and the country. You are a wealthy man, should you be

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taxed more? I am happy to have a debate about that. Should you be

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taxed more, let's have the debate. It Warren Buffett has set very

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publicly, takes a more money from me. Would you say that? Let's look

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at that the other way round. I am a free market economist. I believe in

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a free market. I believe the penal rates and tax he had before

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Margaret Thatcher have reduced it is wrong. I believed that that

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reduction was the right thing. If, in the short-term, the occasion was

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made for me to pay more than 50 % tax and it would pay the -- help

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the UK, I would be prepared to do that. I would be prepared to do

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that. Are you prepared to go further and do but Warren Buffett

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has done and stepped forward and put their hand up... I am not that

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type of public figure but, yes. is interesting because we have not

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seen many British businessman come forward in the way that they have

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an say the main thing. Maybe we should ask them more. What is it? I

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wonder if it is a Dutch cultural thing. -- cultural thing. We should

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not forget where we came from. you go back to go be started, even

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from iced started work in the 1970s that until today, over a 40 year

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period, we are all better off. There is a price to be paid for

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that. If that price is that you have to pay more tax then fine.

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He said how could you explain to your secretary wider tax rate was

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being reduced. I wonder how you explained to you Secretary their

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huge pay-out when you left. When you left, I do left with �8 million.

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You have been criticised for being paid very large sums. I am not here

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to debate this. What the calculation is 8 million - the �8

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million is a theoretical amount of money that I could have got. In

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reality, the actual amount of cash is actually very much less. I have

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left cash in Marks & Spencer showing I have belief in the

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business. I got paid well. You were the best paid executive chairman. I

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was running the business. I branded business on a day-to-day basis. I

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think this is very interesting. The man who wrote the report sent that

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companies should comply or they should explain. He didn't say

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comply or else. The company explained at the time. What we

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would do come off for the record, is that since we don't have the

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chief executive at the moment, we will move Stuart Rose up as an

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option. We will then hire a chief executive, which we did. We then

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hired a chairman. I have not run the company since I left in

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December. In the meantime, the business has done fine. What I want

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to ask you is that the question of your pay. You may not like talking

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about you pay. You made the point that my conscience is entirely

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clear. I am very happy. Don't you ask yourself why nobody will defend

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you? Pay has not become a fashionable issue. I do not believe

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the pay that I have received, I don't know what the number was, let

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us assume that it was �2 million, was enough to run a 10 billion

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Corporation. I don't believe that was unreasonable. One of the things

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that we have seen is an incredible trained in Paris. When you... Would

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you tell us what you were paid when you start third, when you took over

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as chief executive in 2000 m for? Are probably earned more because I

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had a signing on fee. It is not a very relevanry relevan. If you do

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well, the argument is you should get paid. When you look at how you

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judge value of what you have added to a company, he turned the company

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around but you got add tremendous Arad of plaudits for that. In the

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years before you left, it was not doing too well. We have to

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separates Stuart Rose and the Marks & Spencer issued from the recession.

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The company did extremdid extremp to the end of 2007. Like every

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other company, it suffered. If you compare our share price, the high

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point and low-point, I don't think it'll be very different to where it

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was higher order it was low. We are in a pretty difficult hole. You

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started your interview by saying it was difficult. Retail analysts and

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not telling people to Rashad empire retail stocks at the moment and

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that is why it is low. -- to buy its retail stocks. Mark took over

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from year on a very high package. We can debate that. He failed to

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put out one thing. There were �4 billion of dividends. I think I was

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worth every penny in terms of the effort and time I put in. I would

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defend myself absolutely. Those on the shopfloor would say... If you

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talk to them,... What I ask about you, would they think they were

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worth more. Everybody thinks they are worth more. Any time I could

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say I have one to be paid more. Everybody believes they are worth

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more. An awful lot of the women do. An awful lot of a man are not

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getting paid the same amount as the men they are working alongside. Why

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do you think Marks & Spencer is a rarity? We are told there is a pay

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gap of 15.5 %. It is not true. It is an historic thing, which is bad.

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:19:29.:19:31.

Is it not true? Are very is a pay gap? There ip? There ip. If you

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take the proper companies, I don't think that is the case. You having

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an accountant doing the job in- company X. I think men and women

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are paid the same. We don't pay them different rates of pay. I am

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with you. I am against it. Female managers are paid less than men

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doing the same job. If they are doing exactly the same job and they

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have the exact same length of service and benefits, it is wrong.

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Why is it happening? It is hard to get rid of historic issues. You

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ca caall women's pay up by 30% overnight. You would have a

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massive problem. Over time, they would catch up. There is

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transparency in large companies today. What about lower down? What

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a bad if you are not on the board? There should be transparency. They

:20:43.:20:51.

should be open pay scales. Is it right and proper that Mary knows

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wh whows what Philippi is earning. Identity that is right. --

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:21:12.:21:13.

people doing the same job for study could be a girl, not a boy. There

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should be a marriage scale or whether you are and eight graded

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person or a be graded person. apart from the fact that you have

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more equality then you could ever deal with come up there is really

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no glass ceilings. There are a glass ceilings in some companies. I

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think it has two sides to the glass. Women feel they can't get through.

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I don't believe that. I have worked for women twice in my career - two

:21:46.:21:56.

women bosses. It was great. Do you think women learn too much? I think

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there is a slight feeling from themselves - I can't do it, or at I

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am a woman. Look at some of these were men. She had four and five

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children and ran a job. It is a little bit of a Pope issued there.

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I don't need it is as big an issue as people make out. We should

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explain, Mervyn is one of the company's that has been asked to

:22:31.:22:38.

make it clear what their plans are about women. Only eight came

:22:38.:22:43.

forward with plans. Marks & Spencer was one of them. Marks & Spencer

:22:43.:22:52.

have women on its board for a long time. It is odd. Or perhaps it

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:23:02.:23:02.

isn't? We could debate this. A short debate is that women are as

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good as men. They seem to be better organised and just as able as men.

:23:07.:23:13.

If you had a man and a woman and 21 of them was better than the other,

:23:13.:23:18.

you should not be promoting the woman just because she is a woman.

:23:18.:23:24.

I do believe in equal opportunity. You have given up a job at Marks &

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Spencer. It is a very high profile role. You enjoyed the limelight.

:23:30.:23:35.

You are an outspoken man. What are you going to do next that is going

:23:35.:23:42.

to satisfy? satisfy? oing to be a box sticker. I don't know what I am

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going to do. My father retired 25 years ago and he felt he was ready

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to retire. We will exercise and to live better. I am not ready to hang

:23:56.:24:00.

my boots up. I am looking for something to do. I am a remarkably

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busy unemployed man. I had five days off in August when everyone

:24:05.:24:15.
:24:15.:24:34.

seemed to have the whole month. The gales swept in on the Atlantic

:24:34.:24:38.

during Monday cannot bring him problems to the northern parts of

:24:38.:24:48.
:24:48.:24:48.

the UK. -- bringing problems. The warnings have downgraded on Tuesday.

:24:48.:24:53.

Potentially one or two problems. You will need to take some care out

:24:53.:24:57.

there but not as windy as it was. Some pretty big gusts coming

:24:57.:25:03.

through northern parts of England. Also across Wales. Those winds

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bring in one or two showers as well. A largely dry story for Northern

:25:11.:25:16.

Ireland. Still a pretty windy start to the day. The rain likely to

:25:16.:25:20.

become an increasing problem across many north-western parts of

:25:20.:25:24.

Scotland - heavy and persistent across many parts of the Highlands.

:25:24.:25:31.

Still blowing through the central belt. Some care needed on the north

:25:31.:25:35.

and south roads for high-sided vehicles. We come out of the

:25:35.:25:45.
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sunshine and into the cloud. One or two showers heading into London.

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Driven on quite quickly by does brisk winds. They will not last

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that long. That rate never gives up across north-west Scotland. Perhaps

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into the Glasgow area come the afternoon. Those winds coming

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through. Very unpleasant with that combination of wind and rain. Might

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just squeeze up to 20 degrees in the far south-east of England. As

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we go through the night time he read, a Tuesday night into

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Wednesday, the winds definitely showing signs of easing down by the

:26:24.:26:31.

end of the night. Just one or two showers. A few clear spells as well.

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Most places holding in double figures. Just dipping 28-9 across

:26:37.:26:46.

northern Scotland. A quiet Day on Wednesday. Not a huge amount of

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sunshine on Wednesday. Temperatures near the mid-September average.

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