Browse content similar to 12/01/2012. Check below for episodes and series from the same categories and more!
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Tonight, grim news from the UK's biggest retailer, if shopping slows | :00:07. | :00:12. | |
down, does the UK economy have anything else to take its place? | :00:12. | :00:17. | |
If this is struggling, can we get more of this? Voices from the world | :00:17. | :00:22. | |
of business and economics are here to tell us. | :00:22. | :00:25. | |
The benefits trap, a dramatic defeat in the Lords last night, a | :00:25. | :00:29. | |
legal challenge today. Is the Government's big plan to slash the | :00:29. | :00:34. | |
welfare bill in tatters. The Employment Minister will face a | :00:34. | :00:36. | |
disability campaigner here in the studio. | :00:36. | :00:39. | |
Britain's spy agencies will face a criminal investigation into | :00:39. | :00:42. | |
allegations they were complicit in the rendition and torture of | :00:42. | :00:46. | |
Libyans and their families. The intelligence people have been | :00:46. | :00:51. | |
caught by the tides events, the fall of the Gaddafi regime has | :00:51. | :00:55. | |
produced documents, testimony and hard questions for the UK to answer. | :00:55. | :01:01. | |
As the west's economy continues to falter, we look at Japan's called - | :01:01. | :01:07. | |
- called decade, were they really lost, or can the Japanese really | :01:07. | :01:14. | |
teach us how to handle a slump. Good evening. The dark Satanic | :01:14. | :01:21. | |
mills have long shut down, the mines have closed and the steel | :01:21. | :01:25. | |
franc dk factories of Sheffield are now retail parks. We Brits don't | :01:25. | :01:29. | |
know how to make things any more, but at least we know how to shop. | :01:29. | :01:34. | |
Buted today's round retail figures suggest even that is no longer fail | :01:34. | :01:38. | |
safe. Many big high street chains have seen the worst figures for | :01:38. | :01:46. | |
years. Tesco, which has bucked every downturn trend, their shares | :01:46. | :01:50. | |
dropped 15%, nearly a billion was wiped off the stock market value. | :01:50. | :01:55. | |
When Tesco is pale, all bets are out. With exports also down, we ask | :01:55. | :01:58. | |
where the Superman cloak of economic salvation will have to | :01:58. | :02:02. | |
come from. For decades now, this has been the | :02:02. | :02:09. | |
new Jerusalem. On the outskirts are man chest, the taffrord centre is | :02:09. | :02:14. | |
no dark Satanic mill, but a glitzy architecture showing its place at | :02:14. | :02:17. | |
the heart of the economic life. In future there will be no heavy | :02:17. | :02:20. | |
industry, but there would be financial service, new flats, and | :02:20. | :02:28. | |
above all, shopping. For centuries our most magnificent | :02:28. | :02:30. | |
buildings were religious, now these are the cathedrals. This is where | :02:31. | :02:34. | |
we worship. But now, there is a growing bod hey of opinion among | :02:34. | :02:39. | |
economists -- body of opinion, but among economists there is a growing | :02:39. | :02:43. | |
opinion that reliance on retailing is tooer far, we have to break our | :02:43. | :02:48. | |
dependance on it if we are to have a sustainable recovery. While the | :02:48. | :02:51. | |
boom lasted the wisdom was if manufacturing and exports shrank, | :02:51. | :02:56. | |
it didn't matter, as long as rising house prices kept the consumer | :02:56. | :03:00. | |
confident and spending, the economy would grow. Today came a shock, | :03:00. | :03:02. | |
that hadn't happened even in the great recession of three years ago. | :03:02. | :03:06. | |
After two decades of rapid growth, Tesco shares plunged after it | :03:06. | :03:10. | |
announced that on a fair comparison of last year, sales over Christmas | :03:10. | :03:16. | |
fell, and profits would be squeezed. The shares ended the day down 16%. | :03:16. | :03:19. | |
We always felt the most important thing to do was makep shopping | :03:19. | :03:24. | |
better for our customers -- make shopping better for our customers | :03:24. | :03:28. | |
the we made a big of move on prices in the run up to Christmas, | :03:28. | :03:34. | |
starting to be rewarded with increased volumes, and noise around | :03:34. | :03:38. | |
Christmas, the message didn't cut through. Economists say less retail | :03:38. | :03:44. | |
spending is what we if we want to rebalance our lob sided economy | :03:44. | :03:51. | |
away from retail. Retail has limits, incomes lag behind inflation in a | :03:51. | :03:54. | |
recession, consumer spending reaches its maximum. If you want | :03:54. | :03:58. | |
economic growth you can't rely on jobs in retail, you have to have | :03:58. | :04:02. | |
jobs in manufacturing, consumer goods, the higher value items. | :04:02. | :04:06. | |
Here is where the money used to flow into our economy, down the | :04:06. | :04:12. | |
Manchester ship canal. In would come see -- sea-going ships, with | :04:12. | :04:17. | |
raw cotton and sugar, out would go manufacturing goods of all kinds. | :04:17. | :04:21. | |
The scale of this canal shows just how confident we once were that the | :04:21. | :04:25. | |
rest of the world would want to buy our exported goods. Since the 1970s | :04:25. | :04:28. | |
when the ships stopped coming and going, we have had a different idea | :04:28. | :04:31. | |
of what a modern economy is. One based on retail developments and | :04:31. | :04:35. | |
construction. Now it looks like that idea has run its course, and | :04:35. | :04:39. | |
we will have to find another idea of what our economic direction is. | :04:39. | :04:43. | |
The hope is, that growth will now come from of manufacturing and | :04:43. | :04:47. | |
exports, but is it really any more than a hope. In September UK | :04:47. | :04:51. | |
industrial output fell by 0.7%, compared to the same month a year | :04:51. | :04:54. | |
before. Between August and September, production overall | :04:54. | :04:58. | |
remained flat. This is exactly the sort of company | :04:58. | :05:03. | |
that is supposed to benefit from this great economic rebalancing. A | :05:03. | :05:06. | |
successful manufacturer, that earns money through exports. | :05:06. | :05:10. | |
This is a wheel set that is virtually finished, it has been | :05:10. | :05:14. | |
through a number of stages to get here. When I'm up and down the | :05:14. | :05:21. | |
country on a train, that is what I'm riding on? Absolutely. Let's | :05:21. | :05:25. | |
say that each carriage you would be in would have four of those | :05:25. | :05:28. | |
underneath. The factory has been here for more than 100 years. There | :05:28. | :05:33. | |
there is nothing old fashioned about its machinery, it may no | :05:33. | :05:39. | |
longer be British owned, but last year at full tilt sold 40,000 train | :05:39. | :05:45. | |
wheels. That export boom is flagging now The trade deficit is | :05:46. | :05:51. | |
growing. In spite of the weak pound, it it is not easy to compete on | :05:51. | :05:55. | |
price. If we were only supplying single components like the wheels | :05:55. | :06:00. | |
on their own, we would have a difficulty in competing against | :06:00. | :06:04. | |
imported, Chinese, or wheels from any low-cost country. However, what | :06:04. | :06:12. | |
we do, is that weed add value. We have n this country and company, we | :06:12. | :06:15. | |
have a culture, --, in this country and company, we have a culture | :06:15. | :06:19. | |
based on quality and service. manufacturers believe if the | :06:19. | :06:21. | |
Government wants more businesses like this, it will take proper | :06:22. | :06:24. | |
commitment, including Government money. We can invest in the | :06:25. | :06:28. | |
technology, we can bring the people, we can find the people with the | :06:28. | :06:34. | |
right attitude, but then, I think, we need help to get us over that | :06:34. | :06:39. | |
next step. We have taken that step, and we have invested ourselves, and | :06:39. | :06:44. | |
we have had some funding, some support on funding. But there is a | :06:44. | :06:48. | |
big, big danger that is now disappearing. | :06:48. | :06:51. | |
Counting on property, financial services and shopping, may have | :06:51. | :06:55. | |
seemed like our economic future 20 years ago. But nothing dates like a | :06:55. | :06:59. | |
vision of the future. And the hope that exports will drive a recovery | :06:59. | :07:03. | |
right now looks like little more than a hope. We may know that we | :07:03. | :07:08. | |
want to rebalance our economy, what we are yet to work out is how. | :07:08. | :07:13. | |
Let's start there, how can the economy be rebalanced. I'm joined | :07:13. | :07:20. | |
by the businesswoman and Dragon's Den Deborah Meaden, and Elizabeth | :07:20. | :07:24. | |
Truss a Conservative, and Gillian Tett from the Financial Times. | :07:24. | :07:29. | |
Thank you very much for coming in. Should we be worrying, first of all, | :07:29. | :07:33. | |
Deborah Meaden, that the retail base seems to be slowing down, is | :07:33. | :07:40. | |
thated good news, or is it just bad news? I think certainly basing the | :07:40. | :07:47. | |
entire notion that it is slowing down on the Tesco's' results a | :07:47. | :07:50. | |
slight overreaction. Tesco's may have issues and it probably does in | :07:50. | :07:56. | |
itself, however, within Tesco's. won't be the first or the last of | :07:56. | :07:59. | |
the Christmas season we have seen? When you look at the retail sector, | :07:59. | :08:03. | |
without a doubt, people are feeling nervous, if they have money they | :08:03. | :08:06. | |
are finding it difficult to spend it. They don't want to spend it, | :08:06. | :08:15. | |
they are feeling nervous. It is, really, if shopping is slowing down, | :08:15. | :08:20. | |
and George Osborne said it would be an export-led recovery, 18 months | :08:20. | :08:24. | |
on we are in a pretty dire place? think the issue is, these policies | :08:24. | :08:29. | |
take a while to take effect. We're talking about welfare reform, | :08:29. | :08:32. | |
education reform. I think one of the big issues we have as a country, | :08:32. | :08:36. | |
and why we're not as competitive as we should be, is our skills base is | :08:36. | :08:40. | |
not as good as Germany, it is not even as good as the US. We're | :08:40. | :08:43. | |
struggling to compete against countries like India and China, | :08:43. | :08:48. | |
that are turning out thousands of technicians and mathematitions. | :08:48. | :08:54. | |
We're 28th in the world for Maths. Those things take a while to | :08:54. | :08:57. | |
address, we are getting the free schools in place and the academys | :08:57. | :09:01. | |
in place, they don't happen overnight. Would you say we have | :09:01. | :09:05. | |
got the balance wrong, in the way the stress and balances are put on? | :09:05. | :09:08. | |
We spent too much money we didn't have, both consumers and Government, | :09:09. | :09:12. | |
spent money we didn't have, we consumed more than we should have | :09:12. | :09:15. | |
done. Given the amount of money we were earning. We weren't paying our | :09:15. | :09:19. | |
way in the world. I'm afraid this is the period of reconciliation of | :09:19. | :09:24. | |
that. We have to start paying that money back. We need to become more | :09:24. | :09:27. | |
competitive, and more productive as a country. Because it is simply not | :09:27. | :09:31. | |
right that people in other countries, who may be earning lower | :09:31. | :09:34. | |
wages, have higher skills than us. That can't go on in the long-term. | :09:34. | :09:38. | |
We have to rebalance that. And this is not just one Government, this is | :09:38. | :09:42. | |
not just a Conservative Government, this is a succession of bad | :09:42. | :09:46. | |
Government decisions, isn't it? think so. Just coming back to the | :09:46. | :09:50. | |
retail issue, the news from today. I'm just not sure why anyone is | :09:50. | :09:55. | |
surprised. In fact, what Government should be doing, is counter acting | :09:55. | :10:02. | |
what private investment does. We know that private investment is | :10:02. | :10:07. | |
pro-cyclical, too much during booms and too little in bust. The | :10:07. | :10:10. | |
Government has copied that, too much credit and too much tax and | :10:10. | :10:13. | |
interest reductions during the booms, now during the bust, | :10:13. | :10:21. | |
increase in VAT, freeze in public sector wages. So what is lagging | :10:21. | :10:24. | |
not inspiring? It it is right we shouldn't have spent too much in | :10:24. | :10:28. | |
the boom, but now we are in a position of massive debt. The issue | :10:28. | :10:32. | |
is, if we don't reduce the debt the credit rating will be affected and | :10:32. | :10:37. | |
interest rates will go up, that will affect mortgage holders and | :10:37. | :10:39. | |
the country's long-term viability. We have got to have a careful | :10:39. | :10:43. | |
balance between those things. I think George Osborne's got it right. | :10:43. | :10:46. | |
What wr doing is we are moving money from things -- what we are | :10:46. | :10:50. | |
doing is moving things like money from welfare spending into | :10:50. | :10:52. | |
infrastructure spending. That is a positive way to see growth, first | :10:52. | :10:56. | |
in the short-term and certainly in the long-term. Infrastructure is | :10:56. | :10:59. | |
another area where Britain is not competitive. It is still peanuts | :10:59. | :11:04. | |
what we are seeing now. Is there a solution staring you in the face, | :11:04. | :11:10. | |
in terms of the way that we should be redressing that imbalance? | :11:10. | :11:15. | |
reality is, it is a terrible time to produce exports, because the | :11:15. | :11:18. | |
global economy is not exactly booming. The kind of conversation | :11:18. | :11:21. | |
we are having here is not different from the conversation you might | :11:21. | :11:24. | |
have in America at the moment. Certainly, we have just gone | :11:24. | :11:27. | |
through a decade where people are far too dazzled by financial | :11:27. | :11:32. | |
services and consumption, and all the froth, and there really wasn't | :11:32. | :11:35. | |
enough diversification. Similar to the conversations they are having | :11:35. | :11:39. | |
in Germany? It certainly is. Where they have managed to keep their | :11:39. | :11:42. | |
manufacturing base very strong, even exporting to China, how did | :11:42. | :11:47. | |
they pull that off? Unfortunately the UK has underemphasised the type | :11:47. | :11:51. | |
of skills you need to support a manufacturing base, and as I say, | :11:51. | :11:55. | |
has been far too dazzled by all the consumption-driven economies. | :11:55. | :11:58. | |
issue is, there is at short-term issue and the long-term issue, | :11:58. | :12:02. | |
actually we live in a short-term society, we are all looking for | :12:02. | :12:06. | |
quite quick results. The truth of the matter is the answer to this is | :12:06. | :12:12. | |
very long-term. We need a long-term plan. And my worry is that the | :12:12. | :12:14. | |
Government is forced to, because society is looking for the answer | :12:14. | :12:18. | |
now, the Government is forced to coming up with answers now that | :12:18. | :12:23. | |
don't change long-term. Can I remind viewers, Deborah was talking | :12:23. | :12:28. | |
about the long-term, if you take us back to the 1970s, you can see that | :12:29. | :12:32. | |
cut, that split between the service industry, the service and | :12:32. | :12:35. | |
manufacturing industry is roughly half, and then to where we are now, | :12:35. | :12:40. | |
when you can see how much the manufacturing has been eaten away. | :12:40. | :12:44. | |
Was that somewhere along the line a deliberate decision, wasn't it? | :12:44. | :12:48. | |
think it was a decision. We decided to become a service-led country. I | :12:48. | :12:53. | |
think it was the wrong decision. I think that balance is always the | :12:53. | :12:56. | |
answer. And there is always the tipping point, if we were totally | :12:56. | :12:59. | |
of manufacturing it would be a problem, too little manufacturing | :12:59. | :13:03. | |
it is a problem. That is where we are now. It is very easy to row | :13:03. | :13:11. | |
Manchester United size the days when manufacturing was - | :13:11. | :13:14. | |
romanticise the days when manufacturing was strong and qalty. | :13:14. | :13:19. | |
It is not just the size of manufacturing but the quality | :13:19. | :13:23. | |
produced. When Seimens won the contract some months ago, and it is | :13:23. | :13:30. | |
how are we giving the national contract to a international firm, | :13:30. | :13:34. | |
why is a surprise that giving it to one of the greenest companies in | :13:34. | :13:41. | |
Europe, spending 6% of its money on GDP, was it surprising they | :13:41. | :13:45. | |
produced the company that is going to produce the high-speed green, | :13:45. | :13:49. | |
fast modern trains in the UK. Alongside the question about the | :13:49. | :13:52. | |
quality of manufacturing skills, there is the question of what kind | :13:52. | :13:55. | |
of jobs you are creating in the service sector. Certainly, it does | :13:55. | :14:03. | |
appear the service sector is marked by the elite doing the sexy stuff, | :14:03. | :14:06. | |
the brain-power stuff. You have the mass of workers not doing very | :14:06. | :14:10. | |
exciting jobs in the service sector at all. That lead into issues about | :14:10. | :14:14. | |
economic polarisation, and labour market polarisation, that are | :14:14. | :14:18. | |
incredibly serious for the Anglo- Saxon economies today. We have an | :14:18. | :14:21. | |
hourglass economy, the jobs at the top are increasing, the technical | :14:21. | :14:25. | |
and professional jobs, the service jobs are increatesing. Those jobs | :14:25. | :14:31. | |
in the middle, -- increasing. The jobs in the middle, the plumbers | :14:31. | :14:33. | |
and electrician, they are decreasing in number. We have to | :14:33. | :14:37. | |
get the skills up. You asked a question about Germany, what | :14:37. | :14:42. | |
Germany did, in 200, when they had issues -- 2000, when they had | :14:42. | :14:45. | |
issues with the education system, they doubled the length of the | :14:45. | :14:49. | |
school day. They upped the level academic suggests in schools. They | :14:49. | :14:52. | |
did something about it. My fear for the country is we have serious | :14:52. | :14:57. | |
problems with the skills base. are too short-termist in the | :14:57. | :15:00. | |
political decisions? I don't think we realise how serious the issue is | :15:00. | :15:05. | |
with our education system. Michael Gove gets that, but do we as a | :15:05. | :15:10. | |
country understand how vital it is for everybody to get a basic level | :15:10. | :15:13. | |
ofed good education. Deborah, when we are talking about | :15:13. | :15:17. | |
education now, we are basically recognising that this is, what 20 | :15:17. | :15:20. | |
years away, if this is the beginning of a cycle, we are not | :15:20. | :15:24. | |
going to address the economy, if it needs a new skills base, a new | :15:24. | :15:29. | |
education, a new re-think, that's what long-term means, isn't it? | :15:29. | :15:33. | |
There are two parts to this. So it would be wrong to sit here and say | :15:33. | :15:37. | |
the only answer is long-term, now we have to tackle our future. We | :15:37. | :15:41. | |
need to look forward and say what do we want to be, and how do we | :15:41. | :15:44. | |
need to prepare our young people to take us there. That's the long-term | :15:44. | :15:49. | |
plan. We can't, therefore, say that's it. What do you d'oh we want | :15:49. | :15:54. | |
to be, do you think? We have -- what do we want to be? We have to | :15:54. | :15:57. | |
recognise we have to be better in the next five years. Everybody | :15:57. | :16:01. | |
wants to be the next Steve Jobs? That is quite a good example. | :16:01. | :16:07. | |
Britain has to rediscover its entreprenurial spirit. One of the | :16:07. | :16:10. | |
most inspiring stories I have heard recently, was a mother and daughter | :16:10. | :16:14. | |
in Cambridge, couldn't pay the school fees, went out and created a | :16:14. | :16:18. | |
company, the Sachle company, they start not only of manufacturing | :16:18. | :16:21. | |
them in England and selling across the world, they are about to hit | :16:22. | :16:26. | |
New York. That is the example we need to build on. I'm glad we | :16:26. | :16:31. | |
brought up Steve Jobs, he was a genius, but every little bit of the | :16:31. | :16:36. | |
iPhone and I pad trace their funding, their development d iPad, | :16:36. | :16:40. | |
trace their funding, their development and the vision back to | :16:40. | :16:43. | |
state investment. The Internet, the communication technology, the touch | :16:43. | :16:48. | |
screen was all state funded in the United States of America. We can't | :16:48. | :16:53. | |
afford that any more. Why not, we do quanative easing? We do have | :16:53. | :16:56. | |
great research and development in this country, it is one of | :16:56. | :16:59. | |
Britain's comparative advantages, what we need to get is the rest of | :16:59. | :17:02. | |
the education system up to standard, so it is absorbed better into the | :17:02. | :17:05. | |
economy. But I just want to say one positive thing had, I do think | :17:05. | :17:09. | |
there are a lot of niche opportunities at the moment and | :17:09. | :17:12. | |
there are some agricultural engineers in my constituency who | :17:12. | :17:18. | |
have seen their order books rise, because eastern Europeans are now | :17:18. | :17:28. | |
:17:28. | :17:44. | ||
Mick cannising their farming. There are opportunities out there. Where | :17:44. | :17:50. | |
would you focus the state funding? The green area, this is where the | :17:50. | :17:53. | |
different types of expertise in the country that could be applied to. | :17:53. | :17:58. | |
The UK spends more on furniture than on green. George Osborne has | :17:58. | :18:01. | |
pretty must said, the green issues must come second to growth in the | :18:01. | :18:05. | |
economy now? I don't think he has said that. What we have done is the | :18:05. | :18:08. | |
Government has protect research spending, and said it is very | :18:09. | :18:11. | |
important that we maintain our premier position in the world, | :18:11. | :18:16. | |
which we do have in research. And those opportunities are being | :18:16. | :18:19. | |
developed by our universities. I think it is right that academics | :18:19. | :18:23. | |
come up with the ideas that we choose the best people, and we | :18:23. | :18:28. | |
allow them to think innovatively. Turin came up with the idea of the | :18:28. | :18:31. | |
computer, he didn't know how it would be going out in the world. It | :18:31. | :18:35. | |
it was because he had that academic freedom to pursue that, that he was | :18:35. | :18:39. | |
able to come up with those new ideas. What I do worry about is | :18:39. | :18:42. | |
following the latest fashion, or the latest trend about where we | :18:42. | :18:47. | |
might think the idea is coming from. I think we should actually be more | :18:47. | :18:52. | |
open than that. I want to bring this back to you Deborah, as a | :18:52. | :18:56. | |
hand-on businesswoman. You said that Tesco had made mistakes. If | :18:56. | :19:02. | |
you are looking to actually put your finger on what went wrong with | :19:02. | :19:06. | |
Britain's biggest retailer? They know, the one thing I would never, | :19:06. | :19:10. | |
ever do in business, is set my business, set my store out on price | :19:10. | :19:14. | |
and price alone. I think Tesco's did that. It is aled golden rule | :19:14. | :19:18. | |
for me. We will never fight on price. We will fight on good value, | :19:18. | :19:22. | |
on quality, I will never, ever fight on price. That is what | :19:22. | :19:25. | |
Tesco's did. I think Tesco's know they have got it wrong. Do you | :19:25. | :19:30. | |
think there will be a big shake-up, the papers are saying they have of | :19:30. | :19:36. | |
to have a re-think? The other supermarkets didn't enter the | :19:36. | :19:40. | |
battle, they set their stall out. The end of the Tesco empire? | :19:40. | :19:42. | |
because they are smart enough to recognise it T they have already | :19:43. | :19:49. | |
recogniseded it, they will change -- -- it, they have already | :19:49. | :19:53. | |
recognised it, they will change it. If Britain is to face years of flat | :19:54. | :20:01. | |
growth, what can we learn from Japan, who have suffered two | :20:01. | :20:04. | |
decades of loss. With changes to the welfare system | :20:04. | :20:10. | |
and plans to cuts and payments to young people, the accusations from | :20:11. | :20:13. | |
Labour come, ministers say they will press ahead with reform, | :20:13. | :20:17. | |
despite a legal challenge today and defeat in the Lords. Chris Grayling | :20:17. | :20:20. | |
said tough decisions had to be taken to tackle the deficit. Is he | :20:20. | :20:24. | |
right? In a moment we will hear from him and a disability | :20:24. | :20:27. | |
campaigner. Let's start where the Government | :20:27. | :20:34. | |
has, with the soaring cost of working-age benefits, up 40% in | :20:34. | :20:41. | |
real terms since 1997. They are fiendishly complex, the rulebook | :20:41. | :20:45. | |
for the DWP runs to nearly 9,000 pages. This is only part of the | :20:45. | :20:52. | |
picture. Local authorities and HMRC also administer an overlapping and | :20:52. | :20:55. | |
confusing system. All collecting similar data and dealing with many | :20:55. | :20:59. | |
of the same people. Not surprisingly error and fraud costs | :20:59. | :21:04. | |
an estimated �5.2 billion a year. At the end of all this, one quarter | :21:04. | :21:08. | |
of working-aged a dults are not in work. | :21:08. | :21:14. | |
-- working aged a dults are not in work. The incentives for taking a | :21:14. | :21:19. | |
job are overwhelming people. From 600,000 people, for every pound | :21:19. | :21:24. | |
they would earn 90% would be lost in tax or withdrawn benefits. The | :21:24. | :21:28. | |
first law of welfare spending is unreformed, it will rise and rise. | :21:28. | :21:32. | |
If you look, when I looked at it, I found most of the growth was | :21:32. | :21:35. | |
increasing numbers of people getting on to benefit. They may get | :21:36. | :21:38. | |
on to benefit temporarily through a recession or something, and then | :21:39. | :21:43. | |
they find they can live there, on it, and they don't come off. The | :21:43. | :21:46. | |
system didn't encourage them to come off and help them to come off. | :21:46. | :21:51. | |
The longer they remained on, the more demoraliseded, the less | :21:51. | :21:56. | |
employable they became, they became lifetime recipients of benefit. | :21:56. | :22:01. | |
Government's plan is wholesale reform. Out will go income support, | :22:01. | :22:05. | |
income-based jobseeker's allowance, income-relateded employment and | :22:05. | :22:08. | |
support allowance, housing benefit, Child Tax Credit and Working Tax | :22:08. | :22:13. | |
Credit. All to be replaceded by one Universal Credit. That, will be -- | :22:13. | :22:17. | |
replaced by one Universal Credit. That will be capped at �26,000 a | :22:17. | :22:19. | |
year, maximum. The Government is having difficulty | :22:19. | :22:22. | |
over changes that will come in before the Universal Credit arrives. | :22:22. | :22:27. | |
At present, if you have made the right NI contribution, you can get | :22:27. | :22:30. | |
employment support allowance for as long as you are out of work. The | :22:30. | :22:34. | |
Government wants to cap it at a year. Last night, ministers were | :22:34. | :22:38. | |
defeated on this in the Lords. is a pretty big rebellion last | :22:38. | :22:42. | |
night, know it is mainly crossbenchers, an awful lot of | :22:42. | :22:46. | |
Liberal Democrats be a taind. I think we have -- abstained, we have | :22:46. | :22:50. | |
to try to convince our party. I don't expect to be able to convince | :22:50. | :22:53. | |
the Conservatives, that we don't want to be a nasy party. We want to | :22:53. | :22:58. | |
protect d nasty party. We want to protect the poor and disadvantaged | :22:58. | :23:01. | |
and the sick. I know it is trite saying that, that is a basic | :23:01. | :23:05. | |
principle we have had in our party. The Government was defeated three | :23:06. | :23:09. | |
times in the Lords. A Labour amendment raised the one-year cap | :23:09. | :23:14. | |
to two years. Last night they tried to cross a basic line of public | :23:14. | :23:19. | |
decency for cutting back on benefits for patients suffering | :23:20. | :23:25. | |
cancer and young people suffering disabilities. We were right to say | :23:25. | :23:28. | |
to Chris Grayling these ideas were wrong and take them off the table | :23:28. | :23:31. | |
and bring something better back. The Government is trying to get its | :23:31. | :23:38. | |
message across, that this change would not affect the sickest | :23:38. | :23:40. | |
recipients benefits, and only affect those with significant | :23:40. | :23:44. | |
savings or other income. This is introduced because of the economic | :23:45. | :23:48. | |
climate, nobody wants these sorts of changes. But the Labour | :23:48. | :23:52. | |
proposelals would cost �1.6 billion, that money would have to come from | :23:52. | :23:55. | |
somewhere else in the benefits budget. That means finding other | :23:55. | :23:59. | |
people to take money away from. And they haven't made any suggestions | :23:59. | :24:02. | |
where that money would come from. I think that would be extremely | :24:02. | :24:06. | |
difficult choice to make. Generations of politicians have had | :24:06. | :24:12. | |
to grapple with, essentially, the same problem. The Social Security | :24:12. | :24:17. | |
Secretary patrols a �75 billion system, groaning with complexity | :24:17. | :24:21. | |
and contradiction. Peter Lilly knows what it is like to patrol | :24:21. | :24:27. | |
welfare, but he says it should be a vote-winner? When I wandered | :24:27. | :24:34. | |
through the less sal lubous places in the country, they would say, | :24:34. | :24:38. | |
you're that man, keep it up. But in the posh Hampstead, they would say | :24:38. | :24:44. | |
I was cruel and unthinking, I had the mass of people on my side. It | :24:44. | :24:48. | |
was the only area where our popularity increased in the period | :24:48. | :24:54. | |
192 to 1997. But perhaps the biggest problem with welfare reform | :24:54. | :25:02. | |
is rather well exsemplified by this, frankly, baffling Government advert | :25:02. | :25:08. | |
for tax credits in 1999. The system is so complex, hardly anyone | :25:08. | :25:13. | |
understands what is going on. Joining me now is the Employment | :25:13. | :25:19. | |
Minister, Chris Grayling, and disability campaigner, Sue Marsh. | :25:19. | :25:23. | |
Liam Byrne accused you of crossing the line of decency, is it more | :25:23. | :25:26. | |
important for you to save money, even if you face that kind of | :25:26. | :25:31. | |
accusation? I think he's just plain wrong. In the Labour Party last | :25:31. | :25:34. | |
week, Liam Byrne was talking about the need to take tough decisions on | :25:34. | :25:39. | |
welfare, and he's doing the opposite. We are not taking away | :25:39. | :25:42. | |
benefits from people who have no other income. We are not taking | :25:42. | :25:45. | |
away benefit who is are not going to be able to work again. We are | :25:45. | :25:48. | |
making changes for people who have got another income, or who have | :25:48. | :25:51. | |
thousands of pounds of savings in the bank. That's the principle of | :25:51. | :25:54. | |
what we are doing. That was presumably understood pretty well | :25:54. | :25:59. | |
by those in the Lords. Lord Patel saying he's sympathetic to cutting | :25:59. | :26:02. | |
the deficit, but highly sympathetic to something that will make the | :26:02. | :26:06. | |
lives of weak and vulnerable people even more miserable. This is why it | :26:06. | :26:09. | |
is being shout down now? If you take the example of one of the | :26:09. | :26:13. | |
amendments last night, on young people. What we have is a situation | :26:13. | :26:16. | |
right now, where if a young person reaches adult life, and they have | :26:16. | :26:21. | |
other financial means, they could receive for example a substantial | :26:21. | :26:24. | |
inheritance, they are still able to unconditionally receive benefit | :26:24. | :26:27. | |
support for an on going period. If they are never going to be able to | :26:28. | :26:31. | |
work, the situation won't change for them. If they are in a position | :26:31. | :26:35. | |
where with the right help and through or work programme, we have | :26:35. | :26:37. | |
put in place specialist support to help people who have the potential | :26:37. | :26:41. | |
to return to work to do so, I don't think it is right that somebody who | :26:41. | :26:44. | |
has other financial means, should depend on tax-payers who are on | :26:44. | :26:49. | |
reallyively low incomes themselves, very often, to pay the money to | :26:49. | :26:53. | |
help people who also have money themselves. What is is wrong with | :26:53. | :26:59. | |
that? What the amendment was about, we felt, was children who were born | :26:59. | :27:04. | |
profoundly disabled, who might not be able to work when they get older, | :27:04. | :27:08. | |
should have an entitlement in adulthood for an independent income. | :27:08. | :27:12. | |
They shouldn't have to rely oned adults or family to look after them. | :27:12. | :27:18. | |
If you are born that profoundly disabled you should have a right to | :27:18. | :27:25. | |
that money. You will be allowed a benefit with more unconditional | :27:25. | :27:29. | |
support than other Governments. Those people won't be in a | :27:29. | :27:36. | |
different position, it will remain unchanged. It is so easy to | :27:36. | :27:39. | |
demonise the Government in an emotive issue, they are saying the | :27:39. | :27:43. | |
support group will not change the benefits structure, this is only | :27:43. | :27:45. | |
about people who presumably you would want to see getting back to | :27:45. | :27:49. | |
work? Firstly, we don't think enough people are going into the | :27:50. | :27:53. | |
support group. That is one of the big flaws, we don't believe enough | :27:53. | :27:55. | |
people with long-term conditions are getting that long-term support. | :27:56. | :27:59. | |
That is not about an amendment to the reform? The amendments | :27:59. | :28:04. | |
yesterday, we were sitting watching the debate, one of the debates was | :28:04. | :28:09. | |
about how terminally ill do you have to be to apply for benefits. | :28:09. | :28:13. | |
Six months you would get unconditional support, if you were | :28:13. | :28:15. | |
terminally ill for three or four years you wouldn't get the support. | :28:15. | :28:20. | |
I find it shocking that I'm living in a country where I sit there and | :28:20. | :28:24. | |
hear ministers and Lords arguing over how terminally ill you have to | :28:24. | :28:29. | |
be to get benefits If you didn't have the problems you have, would | :28:29. | :28:32. | |
you still want this reform? would want to change the welfare | :28:32. | :28:36. | |
state and make it back to the core objective, helping people back to | :28:37. | :28:40. | |
work and disabled people into work. The point about the support group, | :28:40. | :28:43. | |
the long-term group that receive unconditional support from the | :28:43. | :28:47. | |
state, we have grown that in the past year. Bigger than we took | :28:47. | :28:51. | |
office. We have introduced changes consciously intended to provide | :28:51. | :28:55. | |
better support for people with long-term mental health problems. | :28:55. | :28:59. | |
We are having to take difficult decisions because of the deficit, | :28:59. | :29:02. | |
across a whole range of different areas. There are things we are | :29:02. | :29:06. | |
having to do we would rather not, we are certainly trying to get the | :29:06. | :29:10. | |
balance right. It would be very easy, wouldn't it, to say, once | :29:10. | :29:14. | |
somebody has been classified as disabled, or a chronic sufferer, | :29:14. | :29:18. | |
they need never be assessed again, that might not help the state or | :29:18. | :29:22. | |
individual? That isn't what the debate was about yesterday. We | :29:22. | :29:24. | |
weren't talking about the assessments. One of the other votes | :29:24. | :29:28. | |
that failed, was for a one-year time limit on employment support | :29:28. | :29:33. | |
allowance, not people in the unconditional group, but the people | :29:33. | :29:37. | |
judge unwell, unfit to work, but could get back to work with the | :29:37. | :29:41. | |
right support. When ESA was originally designed, they thought | :29:42. | :29:46. | |
it would take 2-5 years for those people, with the right support, to | :29:46. | :29:52. | |
get back into work. Introducing a one-year time limit, means someone | :29:52. | :29:57. | |
like me, very ill for 7 years, when I go into that support group, I | :29:57. | :30:02. | |
will be entirely dependant on my husband to survive. There are | :30:02. | :30:05. | |
people on benefit, who don't want to live on it, they want to get | :30:05. | :30:14. | |
back to work? No problem with that. The people happy with that. Do you | :30:14. | :30:17. | |
think that is right to have no means assessment? Nobody has called | :30:17. | :30:21. | |
for that. We need a fair assessment, looking at people's condition | :30:21. | :30:25. | |
individually. I don't think we can have a tick box system, of 15 | :30:25. | :30:30. | |
questions, where you sit in front of somebody, and they say you have | :30:30. | :30:35. | |
to fit the rigid scale. We have seen a lot of u-turns on your | :30:35. | :30:39. | |
Government, successive Governments have tried and failed on the | :30:39. | :30:43. | |
benefits system. You have legal challenges with the unemployment | :30:43. | :30:47. | |
benefits cuts and the defeat in the Lords, are you wondering why people | :30:47. | :30:50. | |
can't do it? This is transformation of the welfare state that is | :30:50. | :30:55. | |
necessary. In many of our communities we have long-term, | :30:55. | :30:58. | |
endemic worklessness, gone from generation to generation. We have a | :30:58. | :31:01. | |
low level of people with disabilities in work. What we have | :31:01. | :31:04. | |
done through the revolutionary work programme, a payments by results | :31:04. | :31:07. | |
basis. We have organisations that are delivering personalised support | :31:07. | :31:11. | |
to get people into work, from long- term benefit dependency, they have | :31:12. | :31:19. | |
the freedom to do what -- freedom to do what works. You sound very | :31:19. | :31:22. | |
certain you will pull this off. We have heard David Cameron hint that | :31:22. | :31:26. | |
child benefit might be relooked at. His words were, we had always said | :31:26. | :31:31. | |
we would look at the steepness of the curve, look at the way it is | :31:31. | :31:38. | |
implemented, you introduced this at the Tory Conference before last. | :31:38. | :31:42. | |
The re-think child benefit cuts, that will change? In terms of the | :31:43. | :31:46. | |
welfare reform, there is no u-turn planned. Child benefit is done by | :31:46. | :31:49. | |
the Treasury as part of the budget preparation, I don't know what they | :31:49. | :31:54. | |
are doing. Would you be surpriseded for a re-think on child benefit? | :31:54. | :31:57. | |
would be surprise. Would you be surpriseded if there was a change | :31:57. | :32:02. | |
to that policy now? We will always, with every policy try to implement | :32:02. | :32:05. | |
it in as sensible a way as possible. I have heard nothing to suggest | :32:06. | :32:09. | |
that we are about to change direction massively on child | :32:09. | :32:12. | |
benefit. The Prime Minister has said he will be careful and | :32:12. | :32:17. | |
thoughtful about how we do it, and makes changes as effectively and | :32:17. | :32:21. | |
efficiently as possible. Scotland Yard has launched a | :32:21. | :32:24. | |
criminal inquiry over claims that British spies were involved in the | :32:24. | :32:30. | |
rendition and torture of Libyans. One of the leaders of the anti- | :32:30. | :32:34. | |
Gaddafi forces, Abdel Hakim Belhadj, a rebel command, Libyan exile, says | :32:34. | :32:37. | |
he was tortured after being detained with his wife in 2004, | :32:38. | :32:42. | |
when they were trying to seek asylum in the UK, and held for six | :32:42. | :32:47. | |
years in Libyan prisons. Our correspondent is with us now. How | :32:47. | :32:53. | |
worried should those that were in charge then be now? Up until now | :32:53. | :32:56. | |
people have been saying we don't have a huge problem with this. | :32:56. | :33:00. | |
People in Whitehall. It it is interesting that the heat has gone | :33:00. | :33:03. | |
up distinctly today. The announcement of a police, formal | :33:03. | :33:07. | |
investigation, and we hear tonight, for example, from the Independent, | :33:07. | :33:11. | |
they have a bit of a scoop, that the police planned to talk to Jack | :33:11. | :33:16. | |
Straw about this. The Intelligence Services's armed was everything | :33:16. | :33:20. | |
they did in relation to these case was properly authorised. The form | :33:20. | :33:23. | |
it takes a submission, called, to the Foreign Secretary, to seek | :33:23. | :33:26. | |
political approval for a particular course of action. That is why the | :33:26. | :33:31. | |
police would want to talk to Jack Straw. If he indeed did sign off on | :33:31. | :33:34. | |
these operation, they want to know exactly under what terms and what | :33:34. | :33:39. | |
was the arrangement. What is being alleged, in the case of Abdel Hakim | :33:39. | :33:44. | |
Belhadj, who, of course, has come to prominence in Libya, as one of | :33:44. | :33:48. | |
the men who took Tripoli from Colonel Gaddafi. There he is after | :33:48. | :33:54. | |
the fall of Tripoli. Is he he was picked up with his wife, in Bangkok, | :33:55. | :34:01. | |
they were then detained by the authorities and put on a plane. The | :34:01. | :34:03. | |
other story, Sami Al-Saadi, said he was picked up in Hong Kong and put | :34:03. | :34:07. | |
on a plane. Both men said he they spent years in Libyan jails being | :34:07. | :34:11. | |
tortured. The people who did the picking up were not British, the | :34:11. | :34:15. | |
people who put planes in to take them to Libya were not British. The | :34:15. | :34:18. | |
allegation is British intelligence was used to tip-off the local | :34:18. | :34:22. | |
authorities that these machine were there, to detain them, and then to | :34:22. | :34:26. | |
grease the wheels, if you like, of the rendition machine to much match | :34:26. | :34:31. | |
up people, places, planes and get them to Libya. That is the | :34:31. | :34:37. | |
allegation, which would involve a lot of sophis it try if it was to | :34:37. | :34:43. | |
stay inside the guidelines. How does it fit in with the wider | :34:43. | :34:48. | |
graft of inquiries? A couple ended today, the Crown Prosecution | :34:48. | :34:52. | |
Service said they decided there was no case to answer against an MI5 | :34:52. | :34:57. | |
answer referred to as Witness B, connecteded with the case of Binyam | :34:57. | :35:02. | |
Mohamed, and an MI6 officer present at Bagram Air Base in 2002, when a | :35:02. | :35:07. | |
suspect was being mistreat there. That's over, nothing will happen to | :35:07. | :35:11. | |
those people. There is a bigger story, which is the Gibson Inquiry. | :35:11. | :35:16. | |
This was supposed to look into all sorts of claims reason decision and | :35:16. | :35:19. | |
alleged British involvement in torture, connected with the | :35:19. | :35:24. | |
Intelligence Services in that early called war on terror period. Up | :35:24. | :35:28. | |
until now, this inquiry has made no headway whatsoever. They said they | :35:28. | :35:31. | |
were waiting for the decision on those two case that is we heard | :35:31. | :35:35. | |
about today. But the lawyer for those two Libyans we heard about at | :35:35. | :35:41. | |
the beginning, is now questioning whether the inquiry as a whole, the | :35:41. | :35:46. | |
Gibson Inquiry into the wider issues can still go ahead at all. | :35:46. | :35:49. | |
I understand the inquiry has announced it will be reviewing the | :35:49. | :35:52. | |
position. From the point of view from all of the people, who I'm | :35:52. | :35:57. | |
aware of, who are concerned, the hope is this will be the final nail | :35:57. | :36:02. | |
in the coffin of what would have ended up being a really rather | :36:02. | :36:07. | |
shabby excuse for an inquiry, rather than what is required about | :36:07. | :36:14. | |
something as important and serious as this range of allegations. | :36:14. | :36:17. | |
how real then is the danger of a whitewash in these inquiries? | :36:17. | :36:22. | |
is what the people on that side of the argument have said they are | :36:22. | :36:28. | |
concerned about. The chief of MI6, John Sawers, said today they would | :36:28. | :36:30. | |
co-operate fully with the new inquiry into the Libyan cases. That | :36:31. | :36:35. | |
they had nothing to fear from it. That it was in their interests to | :36:35. | :36:38. | |
get the issue resolved and to move ahead with all the issues they are | :36:38. | :36:42. | |
facing. I think there are questions though about the degree to which | :36:42. | :36:47. | |
people like policemen can delve into the secret world. If, forks, | :36:47. | :36:53. | |
people claim - for example, people claim not to remember things and | :36:53. | :36:55. | |
not present themselves for questioning because they are out of | :36:55. | :37:01. | |
the country. There are limits to push into the secret world. This | :37:01. | :37:04. | |
could provide a point of conflict between investigators and the | :37:04. | :37:08. | |
secret world. Hillary Clinton tonight told of her | :37:09. | :37:13. | |
total dismay after a video showing US Marines your reignating on what | :37:13. | :37:20. | |
are thought to be dead -- urineating on what are thought to | :37:20. | :37:25. | |
be dead Taliban soldiers. Two of the marines had beened identified. | :37:25. | :37:29. | |
Afghan President, Hamid Karzai brand the acts inhumane. While a | :37:29. | :37:35. | |
member of his peace council warn the video could act as a recruiting | :37:35. | :37:41. | |
tool for the Taliban. In the 1980s it was all about sushi, signs and | :37:41. | :37:46. | |
neon lights. Tokyo was buzzing and the rest of the world couldn't get | :37:46. | :37:51. | |
enough. Japan's bubble burst, the stock market crash sending the | :37:51. | :37:56. | |
country tumbling. They call the next 20 years the dead zone of flat | :37:56. | :38:00. | |
growth. We are looking to see if we are heading the same way. What | :38:00. | :38:04. | |
lessons to learn to avoid it. We will learn from an economist to say | :38:04. | :38:09. | |
it is a myth that Japan failed a over those years. And Gillian Tett | :38:09. | :38:14. | |
who worked there for many years. Japan doesn't look like it's been | :38:15. | :38:19. | |
stagnating for 20 years. The streets are bustling, almost half | :38:19. | :38:25. | |
of all women have a Mike 'The Hatchet' McVitie handbag, and other | :38:25. | :38:31. | |
luxury brands are not -- Mike 'The Hatchet' McVitie handbag, and -- | :38:31. | :38:35. | |
Louis Vuitton handbag, and other brands are not far behind. Is the | :38:35. | :38:39. | |
model not to fear but to follow in Japan. | :38:39. | :38:43. | |
The Full Heart Company has doubled its work force, since the bad times | :38:43. | :38:48. | |
began. They produce panels that control the machines that make the | :38:48. | :38:52. | |
exports Japan is famous for, cameras and cars. The jobs of the | :38:52. | :38:58. | |
staff have never been under threat. Have you ever laid anyone off, ever | :38:58. | :39:08. | |
:39:08. | :39:10. | ||
let anyone go? We never laid off the people. But we made the | :39:10. | :39:16. | |
employees take the salaries down. Why have you never laid off people, | :39:16. | :39:26. | |
:39:26. | :39:27. | ||
if the economy has been bad? Why? Because we don't have bad people. | :39:28. | :39:33. | |
In recent years, Japan has been held up as a dreadful warning to | :39:33. | :39:36. | |
western Governments. What the future would be like if they failed | :39:36. | :39:42. | |
to get a grip on the economic crisis. Not just one, but two lost | :39:42. | :39:49. | |
decades. Of little or no growth. Japan's GDP growth has certainly | :39:49. | :39:53. | |
lagged behind the west. But other indicators suggest a different | :39:53. | :40:00. | |
story. Per cap at that, electricity consumption grew nearly twice as | :40:00. | :40:06. | |
quickly in Japan between 1990 and 2004, compared to the United States. | :40:06. | :40:11. | |
59 of the world's 100 cities with the fastest broadband connections | :40:11. | :40:16. | |
are here. Life expectancy has risen to 83, the highest in the world. | :40:16. | :40:23. | |
The unemployment rate is just 4.5%. In Britain it is 8.3%. Keith Henry | :40:23. | :40:27. | |
has lived in Japan for 27 years, and now advises foreign companies | :40:27. | :40:36. | |
on doing business here. Japan has succeeded in providing a stable | :40:36. | :40:41. | |
economic past, present and looks like, in the near term at least, | :40:41. | :40:46. | |
economic stability. At a level wealth that the world has never | :40:46. | :40:51. | |
seen before. That type success is then reflected in Japanese society. | :40:51. | :40:57. | |
That brings the social cohesion, absolutely. | :40:58. | :41:01. | |
Tokyo's skyline glitters, economic malaise or not. Perhaps not | :41:01. | :41:05. | |
everything is bright.P Japan's national debt has soared in recent | :41:05. | :41:09. | |
decades. The biggest now in the industrialised world. One day there | :41:09. | :41:14. | |
may be a reckoning, an economic collapse, not avert, but merely | :41:15. | :41:21. | |
postponed. Gillian Tett is still with me. From | :41:21. | :41:24. | |
Tokyo we are joined by Eamonn Fingleton, who believesp Japan's | :41:24. | :41:29. | |
failure is a fifth. We will start from you, you go against the grain | :41:29. | :41:35. | |
on this, do you believe the lost decades were a myth? Yes, indeed. | :41:35. | :41:40. | |
As it was pointed out, consumer living standards are very high here, | :41:40. | :41:45. | |
and have increased. Life expectancy and so on, a greatism improvement. | :41:45. | :41:51. | |
But also, a key thing -- a great improvement, but also a key thing | :41:51. | :41:54. | |
people overlook is the trade situation in Japan is very strong, | :41:54. | :41:59. | |
it was very strong in the 80s, that was the reason that the country was | :41:59. | :42:06. | |
known as jugger naut Japan, but the current account surplus in 2010 was | :42:06. | :42:16. | |
:42:16. | :42:19. | ||
three of-times the figure for 1989. Japan, you referred to earlier to | :42:19. | :42:23. | |
Japan as the example of advanceded manufacturing, you can see how it | :42:23. | :42:29. | |
trades with China. It sells about $140 billion to China. It has done | :42:29. | :42:32. | |
it from a position of weakness, if you like. If you look at growth as | :42:32. | :42:39. | |
a measurement, nothing is happening. Is that not such a bad thing? | :42:39. | :42:44. | |
suggesting that growth is probably understated by western accounting | :42:44. | :42:49. | |
standards. There are various reasons for that. There are | :42:49. | :42:53. | |
enormous accounting issues in how growth is calculate. The Japanese | :42:53. | :42:59. | |
are very conservative on this, is my point pt if you look at the key | :42:59. | :43:03. | |
things that are really -- if you like at the key things really | :43:03. | :43:07. | |
incontravertable, Japan is doing well. This throws our received | :43:07. | :43:12. | |
wisdom into a different light. Should we, you know, on the brink, | :43:12. | :43:16. | |
or in recession be looking at Japan and saying we don't want to go that | :43:16. | :43:21. | |
way, tell us what to do to prevent it. One of the great unexpecteded | :43:21. | :43:26. | |
benefits of the financial crisis, is many chrished pieces of received | :43:26. | :43:30. | |
wisdom -- cherished pieces of received wisdom have been | :43:30. | :43:36. | |
questioned, certainly about America and Japan. And it is right, that | :43:36. | :43:42. | |
aspects of the Japanese economy do need more praise. The GDP, one | :43:42. | :43:46. | |
important factor people forget is the Japanesep population has been | :43:46. | :43:49. | |
shrinking and in America increasing. That influences the numbers. I wo | :43:49. | :43:54. | |
argue the most important point of all, is -- I would argue one of the | :43:54. | :43:59. | |
most important points of all is the issue of social cohesion. What is | :43:59. | :44:02. | |
striking about Japan, the level of social cohesion, the ability to | :44:02. | :44:09. | |
share pain and pull together. are risk averse?, they do not like | :44:09. | :44:15. | |
debt or savings? Lock at the example about the labour force -- | :44:15. | :44:20. | |
look at the example about labour force and salaries, bosses can cut | :44:20. | :44:24. | |
workers' pay when times are bad and raise them when times are good is | :44:24. | :44:27. | |
very important. It is not that different from Germany, but it | :44:27. | :44:31. | |
creates a lot more flexibility and much more cohesion that helps them | :44:31. | :44:36. | |
to wear the pad times. Eamonn Fingleton, interesting that, if | :44:36. | :44:40. | |
social cohesion is a massive thing, if we are broadly in a similar | :44:40. | :44:43. | |
place to where Japan was, could you really say to those of us here in | :44:43. | :44:50. | |
the west, it doesn't matter? think the position of Britain and | :44:50. | :44:54. | |
in the United States is much more serious than the one that Japan | :44:54. | :45:00. | |
faced in the early 1990s. The crash, the financial crash inp Japan was | :45:00. | :45:04. | |
truly spectacular, but -- in Japan was truly spectacular, but the | :45:04. | :45:08. | |
effect on the economy was minimal. Basically, the undereconomy of | :45:08. | :45:18. | |
:45:18. | :45:19. | ||
manufacturing, which is the engine in the car -- underperforming of | :45:19. | :45:23. | |
the economy of manufacturing which is the engine of the car brought | :45:23. | :45:28. | |
them out. The system of employment is the strength of Japan, it is | :45:28. | :45:32. | |
often criticiseded, but this it has this great strength that it is | :45:32. | :45:36. | |
flexible and still maintains a high level of overall employment. What | :45:36. | :45:41. | |
about the massive debt mountain Japan has got? It is a problem. But | :45:41. | :45:47. | |
it is partly an issue about social cohesion and shared pain. Most of | :45:47. | :45:51. | |
the debt is held by the Japanese. 90% of the bond market is held by | :45:51. | :45:55. | |
the Japanese. If the Japanese are collectively willing to take a | :45:55. | :45:59. | |
haircut to suffer losses on the debts in the future, frankly, that | :45:59. | :46:02. | |
kind of doesn't matter. If there are foreigners are fd involved, as | :46:02. | :46:08. | |
they are in countries like the UK and the US, where half of the UK | :46:09. | :46:15. | |
debt is held by non-investors. The question is do you pull together or | :46:15. | :46:19. | |
not as a society. The downside is I don't think most Americans and most | :46:19. | :46:24. | |
British people would agree to live with the kind of other side of that | :46:24. | :46:28. | |
system consensus, namely, a very impress Sonning society, where you | :46:28. | :46:34. | |
have to conform -- impress Sonning society where you have to conform. | :46:34. | :46:40. | |
Would we live in a situation where many women when they get married | :46:40. | :46:45. | |
and have children they stop work. That is the reality ofed modernp | :46:45. | :46:55. | |
:46:55. | :47:17. | ||
Japan. It is a trade -- reality of That is all we have time for | :47:17. | :47:27. | |
:47:27. | :47:55. | ||
Hello Widespread frost tomorrow morning. | :47:55. | :48:03. | |
A bid of cloud and the North West England and the Midland. For much | :48:03. | :48:13. | |
of England, crisp, clear afternoon. Closer to home it should be the way | :48:13. | :48:16. | |
of cold. In East Anglia quite pleasant. South-West Midlands and | :48:16. | :48:20. | |
eastern parts of Wales, we could see patchy low cloud, coming and | :48:20. | :48:26. | |
going through the day. Some lingering in the south west. For | :48:26. | :48:29. | |
most a dry and sunny day. In Northern Ireland the brightest | :48:29. | :48:32. | |
conditions in the morning. Particularly acrossle central and | :48:32. | :48:37. | |
eastern areas, to the west one or two spots of rain. Across much of | :48:37. | :48:41. | |
Scotland enjoying a settle spell. The North West, particularly the | :48:41. | :48:47. | |
Western Isles and some rain developing. The difference between | :48:47. | :48:51. | |
Friday and Saturday will be a bit more clout for northern and western | :48:51. | :48:55. | |
areas. Patchy frost -- more cloud for northern and western areas. | :48:55. | :48:59. | |
Patchy frost. A little bit more cloud generally in the south, for | :48:59. | :49:04. | |
the start of the weekend. That said, still a lot sunshine, some of that | :49:04. | :49:08. |