28/06/2011 Daily Politics


28/06/2011

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Good morning, folks. Welcome to the Daily Politics. More commit other

:00:28.:00:35.

high street. Two more retail chains announced shop closures. Thorntons

:00:35.:00:39.

and TJ Hughes are the latest victims. Thousands of jobs are

:00:39.:00:43.

malign. We are asking what, if anything, can be done. More power

:00:43.:00:47.

to the students. The Government says it wants greater competition

:00:47.:00:51.

between universities. Labour calls the latest shake-up to higher

:00:51.:00:55.

education a complete shambles. And they are back on the streets,

:00:55.:00:59.

eight two day general strike is being held across Greece ahead of a

:00:59.:01:09.

vote that could determine the So, all of that in the next half-

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hour. With us for the duration, media and advertising might

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:01:25.:01:29.

Let's turn our eyes to the visit of Wen Jiabao yesterday. It appears

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the Chinese premier is not happy with David Cameron criticising

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China's human rights record. Do you do business in China? Big business,

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close to $1 billion. What should come first, business of human

:01:43.:01:47.

rights? The answer is probably both. But there are ways of doing it. I

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draw a distinction between what we saw Jack rocks and the IOC do

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around the Beijing Olympics. -- Jack rocks. There were external

:02:00.:02:10.
:02:10.:02:13.

issues like Sudan and Darfur. The quiet diplomacy, in the context of

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the Beijing Olympics, dealing with difficult issues, against how

:02:18.:02:24.

Google handled a similar set of issues and, in a way, how the Prime

:02:24.:02:30.

Minister yesterday talked about human rights issues, the Chinese-

:02:30.:02:34.

made moves last week to release prisoners and try to deal with the

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issue. It doesn't work to, in public, take them to task.

:02:42.:02:45.

David Cameron done too much of that? I think it's a difficult

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thing to balance. You are making political decisions, you have to

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counterbalance... Has he got the balance right? If you actually

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tried to do something, I don't think... It is this odd question

:02:57.:03:01.

about a loss of face. Westerners get worried about that. I think the

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key issue is that you do it in private, the Chinese listen and

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learn, if you have a strong case, talked to them privately and they

:03:10.:03:14.

will change and move on. Slapping them in the face in public, whether

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it is Google, and I don't think it was quite as bad yesterday as

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people are making out, but I think it's counter-productive. When you

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say business of human rights, you can achieve one with the other, by

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working closely with them. Do we really want to be friends with

:03:29.:03:33.

them? They are always mounting cyber-attacks against us, they are

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not our friends. The MI5 has written that hundreds of UK

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companies have been hacked by the Government of China. The German

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government says that the personal computer of Chancellor Merkel was

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hacked into. Are you suggesting that Julian Assange is a Chinese

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plant? No, I think he is Australian. The Vodafone network, there were 90

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million a tax on consumer accounts. On the road system, about 6 million

:04:09.:04:15.

a year. Cyber-attacks is a major issue and we had only seen the

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beginning of it. But there are many types of hackers. People are

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attributed to many governments. It's going to be an issue we have

:04:23.:04:27.

to deal with increasingly, whether it be Sony, the attacks they have

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suffered, or others in recent months. It's a big issue, but you

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can't put it at the door of the Chinese totally. Have you ever been

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in a dilemma where, on the one hand, if we going to this market and do

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this we could make a lot of money, on the other hand... Yes. Sudan.

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Iran. I was offered a considerable piece of business by a major

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multinational company in Iran. Which, to the front, given the

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sanctions that were meant to be operating and which the UK and

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American government claimed are being effective, I was shocked to

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even have the offer made to me. We declined. Burma, Cuba is off limits.

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There may be political changes. Iran is actually one of the next 11,

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I call it the next 10, because Iran is of the map. We made the decision

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not to do it. If it's a difficult decision. If you go to Turkey, you

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will find many examples of sanction busting through Turkey. We are glad

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you took the decision to be with us today. We've got a lot more to talk

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about. An offer I couldn't refuse. Andrew Neil, the Godfather! Plans

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for a radical shake-up of universities in England will be set

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up by the Government today. Ministers say they want to increase

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competition and provide potential students with more information.

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They are hoping to improve what they are calling the quality of

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courses and drive down the level of fees. They also propose allowing

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private companies to offer degrees and the best investors to recruit

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more students with top grades. This is what David Willetts had to say

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earlier today. What we are saying is, look, students are going to be

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thinking very carefully about the quality of the academic experience

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at university, what their job prospects after they had been to

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university. We are looking for a transformation in the amount of

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information that they get so that they will be able to make well-

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informed choices. It will really drive universities to think about,

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well, how crowded are the seminars? How much practical experience do

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they get, how much work experience do we provide? Those are the things

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that students care about and we want them to know what is being

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offered. No government minister was available to talk about the

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proposals. We are joined by Gareth Thomas, the shadow university's

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minister. Isn't is a good thing that the universities that people

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really want to go to La going to be given the freedom to get bigger?

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the Government proposals, the vast majority of students who get the

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highest grades get the opportunity to go to university. What is in

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this white paper is that the number of student places that we are

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seeing offered, at a far lower rate, is likely to be increased. Students

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are going to seek place is taken from mainstream universities,

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beneath the very highest level, and offered at far lower rates. That is

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likely to affair in a -- a share in a new generation of high property

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corporations, some of which have very low degree completion rates

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and high drop-out rates. I'll come to private universities in a moment.

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But students are not stupid. They will go to the university that will

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give them the best chance of scoring a job in the future. That

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will give them the best student experience. Really, what will

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happen, is that those that are poor-quality will fall by the

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wayside. That is just the way it should be? Well, that is not what

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the Government is saying. It is taking place is away from

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universities, many universities with a pretty good reputation at

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the moment. It is going to offer them, in an auction, to the lowest

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bidder. Beneath the highest universities, you are going to see

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cuts... Of what examples can you give me where they are taken places

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away from a successful, good university? By what benchmarks do

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you say it is good? The Government is going to propose that the

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students that get a highest grades will be able to go at the

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University of their choice, if the universe deep in question wants to

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expand. Beneath that level, what the Government have been ripping up

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to now is that they want to cut university places at every other

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university by a small amount, 20,000 places, and offer them, in

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an auction, to a lower bidder. Doesn't that drive down prices for

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students? That is what they want to hear, they want to pay less? That

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is what they want to do, drive down the headline fees that they have it

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-- allowed to rise to �9,000 in most cases. Potentially, what they

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are going to do is make a race to the bottom, to lower quality

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degrees. I don't know why you keep saying that, they will go to the

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cheap university that is the best in that bracket. Martin Sorrell,

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what do you think? I welcome greater private sector... As in

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most areas of activity, greater private sector involvement. I

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noticed the Shadow Minister talked about the American experience. My

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experience of the private sector in America is that it has been pretty

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vibrant, it has contributed to general levels of improving

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education and training, at different levels. At the most

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excellent degree level, at trade schools, that schools on down. I

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feel that involving the private sector is not a bad thing. Netting

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fees inflate I think is very important. Actually, I did

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something for business schools at the turn of the millennium. We

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looked at business schools. There are too many in the UK. You get

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people coming in and donating to create a new school, that sucks in

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more teens, Chancellors, students, you get a lowest common denominator.

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I want the highest common multiple. One of the things we can sell the

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Chinese is education and training, it's one of our strengths. Boosting

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the private sector in education, having a public and private

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partnership is not a bad thing, it's a good thing. Students

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investing in their education, being able to pay for it longer term,

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very much the American model, I think that's a good thing. I don't

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agree with Martin's General point that there is a role for public-

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private partnerships. There is a role for the private sector. But if

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you take what has happened in America, many of the very big

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business higher education corporations do have very high

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drop-out rates, very low degree completion rates. They have very

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aggressive recruitment practices. Some of them have been compared to

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the pension mis-selling scandals we have had over here in the past. I

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think we have to be extremely careful that quality is not

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sacrificed because of the Government's financial incompetence,

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to drive down fees for students. But the Americans have eight of the

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top 10 universities in the world, they are the benchmark, Harvard,

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Yale, these are the best universities in the world. We are

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not talking about those type of universities expanding go be here.

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We are talking about universities that offer a far lower standard of

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education. Otherwise we would not have the statistics from the US.

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are talking about a leaked White Paper, we haven't seen it yet. Is

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there going to be some sort of benchmark to, testing, approval

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process? One would hope so. One would hope that they are regulated

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more vigorously, more often, in order to prove their worth. It's

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not clear if that is going to happen. We will get those details,

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as you say. We've got quite convincing leaks, but when we see

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it for real we will have you back. Greece, and the trade unions have

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begun a 48 hour general strike against the proposed drastic public

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spending cuts, which are being voted on by parliament tomorrow in

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Athens. If their package of austerity measures is rejected,

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degraded national loans will have to be withheld. The country could

:12:45.:12:50.

run out of money within two weeks, some say. That would throw the

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European sovereign debt crisis into a new level of chaos. Jon Sopel is

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in Athens. The demonstrators, are they going through the motions or

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do they believe that they can stop these austerity plans? I think the

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key is how many people turn out. If it is hundreds of thousands of

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people who turn out and show that the anger is widespread, not just

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concentrated amongst trade unionists, I think that will have

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some influence. The other factor to bear in mind is how much trouble

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there is today. We have seen groups of at -- anarchists, and I think we

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can see them emerging into the square, wielding sticks, or wearing

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gas masks and crash helmets. They are clearly intent on causing some

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trouble here. Now, I think some trouble was always going to be

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expected and anticipated today. If you look at the opinion polls, it

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is not just a small minority of people opposed to the austerity

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measures that are protesting outside Parliament today. It is 70

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to 80% of the Greek people. We are broadcasting from Syntagma Square,

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from the roof of what should be prime real estate. The building is

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largely derelict and empty because so many businesses have closed

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during the past year or so of the austerity crisis. If people had

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expected the parliament to vote for the austerity measures. But when

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the politicians see the scale of the demonstration you are looking

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on know, might they changed their minds? Might there be a vote to

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reject austerity? Let's deal with the maths. For those that don't

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know the precise numbers in the Greek parliament, there are 300 MPs,

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155 of them are from the ruling Socialist Party. If they all toe

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the line, George Papandreou should get it past. If you Socialists say

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they are going to vote against. There is also a lot of pressure on

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the centre-right to come in and back it. They will be very aware of

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the people out there. If you like, Greece has two choices. One of them

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is awful and the other one is calamitous. I think that is what

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the Greek politicians have to weigh in mind. Do they go for the awful

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choice of having another austerity programme, further tax increases,

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further spending cuts, on a country that is already suffering? Or do

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they go for the calamitous choice, and many people think it would be,

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of a default and all of the consequences that might flow from

:15:33.:15:43.
:15:43.:15:44.

that? Not just, of course, for Thank you, look after yourself.

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Looks like it will be a hot day in Athens in more ways than one. Don't

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we meet a reality check? Greece has already had a bail-out, it is now

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looking for another 100 billion bail-out, it may come back for a

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third bail-out and the austerity measures, which mean massive

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unemployment in the public sector and huge privatisation, is probably

:16:06.:16:12.

not going to happen? It is too big to sail again. Look at the knock-on

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effects. That is different. Would it be Portugal, Ireland, Spain,

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there are still a fundamental issues to be dealt with. It is too

:16:26.:16:30.

big to fail, it is Northern Rock and Lehman Brothers all over again.

:16:30.:16:35.

Look at the ramifications for the system, it is also interconnected.

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At the end of the day, to say it is posturing would be unfair because

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it is much deeper than that, but this is a process... In the case of

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restructuring and bankrupts, they like companies to go through this

:16:51.:16:57.

as well. Somebody is going to have to pay the bill at the end of the

:16:57.:17:05.

day. You are part of the eurozone, in Ireland. Right? Yes. Has the

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euro got a future? We are coming back to the UK if the legislation

:17:09.:17:15.

gets... Coming back to Britain? This is not unique to Daily

:17:15.:17:21.

Politics. This isn't the Politics Show! This is Daily Politics.

:17:21.:17:27.

sorry. We're coming back when the legislation is enacted. We said

:17:27.:17:33.

after the last Budget, we would get shareholders' approval, which we

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haven't got yet, but on the euro, I think it does hang together and it

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will hang together. Putting myself out on a limb but I think the

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Greeks will approve it. There is a contingency plan that the EU have

:17:49.:17:54.

already indicated they will put in place, emergency funding, and then

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they will ask the Greeks to make the decision again. The politicians

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are stuck between the banks and between the people so they have to

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go through this process. It is very unpleasant. You have Amicis

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involved as well. It is very unseemly and difficult -- you have

:18:14.:18:19.

anarchists involved as well. Let me be the first to welcome you back.

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We missed you. You should never have gone. It was the threat of

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increased taxation, not the reality. Let's turn our eyes to the high

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streets. Or is really not well in the retail sector. A David Bailey

:18:37.:18:41.

goes by without another household name announcing a fall in profits

:18:42.:18:48.

and shop closures -- barely a day goes by. It is carnage on the high

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street! Carnage is the word for it to be

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honest and it looks like it may just keep getting worse. Gloomy to

:18:56.:19:06.

say the least. Be warned, the list of shops I am going to go through

:19:06.:19:10.

is very, very long. At first, we mourned the disappearance of those

:19:10.:19:13.

charming family owned shops as we bemoaned an attack of the clones,

:19:13.:19:18.

the big generic superstores. But now it looks like closing time for

:19:18.:19:21.

some of the giant retailers. This morning, chocolate purveyors

:19:21.:19:24.

Thorntons announced plans to close up to 180 stores over the next

:19:24.:19:31.

Fashion store Jane Norman shut all it's 90 stores this weekend. It

:19:31.:19:34.

reopened them yesterday but only to the administrators. Although

:19:34.:19:39.

efforts are being sold to sell it. Up to 1,600 jobs are at risk.

:19:39.:19:42.

Liverpool-based TJ Hughes has also said it will call in the

:19:42.:19:47.

administrators. Up to 4,000 jobs are thought to be at risk.

:19:47.:19:50.

On Friday, Habitat, founded in 1964 by Sir Terrence Conran, saw its 30

:19:50.:19:54.

stores outside London placed into administration. 900 jobs are under

:19:54.:19:57.

threat. Mothercare announced in May it will

:19:57.:20:04.

shut 110 outlets and and focus on out of town super-stores.

:20:05.:20:08.

HMV announced plans to close 60 stores at the beginning of the year

:20:08.:20:13.

due to declining sales. It has also sold the Waterstones book chain for

:20:13.:20:19.

�53 million to prop up its finances. Focus DIY and Oddbins are amongst

:20:19.:20:26.

other stores that have faced buy- I'm joined now by Stephen Robertson

:20:26.:20:30.

from the British Retail Consortium. This is a miserable lift. What do

:20:30.:20:36.

you blame it on? There is no doubt that the consumer has got a lot

:20:36.:20:41.

less in their pockets. We saw it reported last month, 8% less

:20:41.:20:45.

discretionary spend. Where that is really hitting, as your list

:20:45.:20:51.

demonstrates, is the non-food retailers because it is

:20:51.:20:58.

discretionary spending that gets hits first. It is then non-food

:20:59.:21:04.

retailers that we saw serious decline in, we have all got to eat.

:21:04.:21:09.

Those sales are being sold at a poor practice because of the deals

:21:09.:21:14.

and offers that go behind them. good ones will survive, the bad

:21:14.:21:20.

ones will sink and that may be no bad thing? Remember, the retail

:21:20.:21:30.

sector is 10% of all jobs in the UK. That is 3 million jobs. These

:21:30.:21:33.

closures and reductions in trading are not without consequence and

:21:33.:21:37.

right now, it is very important that the private sector is well

:21:38.:21:41.

positioned to be able to mop up some of the jobs that we have seen

:21:41.:21:48.

been shed in the public sector and we need to get from cuts to growth.

:21:48.:21:53.

What do you want the government to do? You want a big hand to be

:21:53.:21:59.

played? No. We do not want handouts. But there is no doubt about it,

:21:59.:22:04.

things like the business rates increase that we saw at Easter, and

:22:04.:22:09.

eye-watering 4.5%, do not help the situation. We do need action. The

:22:09.:22:12.

red tape challenge that the Secretary of State for the

:22:12.:22:16.

Department of business has issued. We need to get conclusions to

:22:16.:22:21.

remove some of the problems that we have in business to do with ticking

:22:21.:22:25.

boxes. In the employment legislation, we have seen growth in

:22:25.:22:29.

the number of people going to industrial tribunals, which wastes

:22:29.:22:33.

time and money in business. Let's see those sorts of things sorted

:22:33.:22:37.

out very quickly. We have seen the appointment of a celebrity to

:22:37.:22:42.

review the high street. Let's get to action, not more reviews. Thank

:22:42.:22:47.

you very much. Back to Andrew. Thank you.

:22:47.:22:50.

With us now is Allister Heath, editor of City AM, and Clare Perry,

:22:50.:22:56.

who is a Conservative MP. Welcome. Allister, let's UN pick this. Let

:22:56.:23:02.

me suggest to you, fundamentally a lot of these shops are closing

:23:02.:23:07.

because of this incredible squeeze on living standards. People's wages

:23:07.:23:11.

are not in any way keeping pace with prices. They just don't want

:23:11.:23:16.

to spend any more. That is the number one reason for this

:23:16.:23:23.

situation. When retail sales stopped growing or shrink, the best

:23:23.:23:26.

performers continue to do well but the weaker shops go bust and that

:23:26.:23:31.

is what is happening. When things are harder, we see a difference

:23:31.:23:36.

between the retailers. Inflation is very high, taxes are going up and

:23:36.:23:40.

in comes a not keeping up. The second reason is the technological

:23:40.:23:44.

revolution, which is linked to the first. That is the longer term

:23:44.:23:49.

trend. When everything is booming, when retail sales are going up

:23:49.:23:53.

because of cheap credit, the fact that internet retailers were going

:23:53.:23:57.

up 20% did not matter for traditional bricks and mortar shops.

:23:57.:24:01.

Now it does. People are shopping mall online so there we could

:24:01.:24:05.

traditional stores are going under and that trend is not going to stop

:24:06.:24:11.

any time soon. So all the closures we see of famous high street names

:24:11.:24:16.

is a direct consequence of the government policy. It is a

:24:16.:24:22.

consequence of unravelling a decade of over leverage. People are

:24:22.:24:26.

perhaps moving from consumption toward saving and investment and in

:24:26.:24:31.

the long term, that makes for a more sustainable economy. Meanwhile

:24:31.:24:37.

the casualties of Sirius. The good shops continue to survive. -- the

:24:37.:24:42.

casualties are serious. John Lewis had its best performance ever. In

:24:42.:24:47.

smaller market towns, if you get the shopping centre right, you have

:24:47.:24:53.

a fantastic mix of independent retailers and it becomes a more

:24:53.:24:57.

sustainable economy. Towns like devisers. So there is nothing to be

:24:57.:25:02.

done. The biggest problem is when there is no link between business

:25:02.:25:07.

rates and the local council can't see so all things that affect the

:25:07.:25:13.

locality, like high street parking, developments, the council has no...

:25:13.:25:18.

What we have to do, I am hoping there will be a consultation next

:25:18.:25:23.

week, is give councils more up lift if they generate... Would that has

:25:23.:25:31.

saved Habitat? We have seen a huge change in shopping patterns and

:25:31.:25:35.

perhaps Habitat is not the strongest there. I suspect a lot of

:25:35.:25:42.

traffic has gone to John Lewis. We need a stronger link between their

:25:42.:25:45.

business community and the local council. Some of this is probably

:25:45.:25:49.

the inevitable shift of market forces but this is still an

:25:49.:25:55.

expensive country in which to be a retailer. We are a rock in the

:25:55.:25:59.

North Sea with 60 million people and leasing property is extremely

:25:59.:26:08.

high. Rents peaked at 2008 and they have come down, except London rents.

:26:08.:26:14.

Prime positions in London, driven by the Olympics. But the recession

:26:14.:26:19.

is an accelerated. That has accelerated the process.

:26:19.:26:23.

Fundamentally it is the rise of e- commerce. It is interesting that

:26:23.:26:28.

the internet is the biggest medium in the UK. It was the second

:26:28.:26:31.

country in the world where we saw the internet surpassed television

:26:32.:26:36.

as the main medium. Denmark was the first country a couple of years ago

:26:36.:26:44.

and the UK was two years ago as well. This is an e-commerce country.

:26:44.:26:47.

Most non-food will be sold over the internet. It will be a mixture. The

:26:47.:26:55.

model will be a mixture... I am the woman who probably does most of the

:26:55.:27:02.

shopping as recreation... Not if you are my husband. By increasing

:27:02.:27:06.

use the internet, that is key. the high street, these jobs are

:27:07.:27:11.

completely the same, the customer experience is terrible, they are

:27:11.:27:16.

dull. Many reporters is trying to make the high Street's more

:27:16.:27:22.

exciting. -- Mary. I don't think it is about the government trying to

:27:22.:27:28.

change these things. The biggest single driver is the fact that this

:27:28.:27:32.

quarter and the previous quarter, retells will continue to fall and

:27:32.:27:38.

that is because of high inflation, increasing taxes and low incomes.

:27:38.:27:42.

It is exactly the same as newspapers. Chopping trees down and

:27:42.:27:47.

distributing newsprint is not a particularly economic the efficient

:27:47.:27:51.

process or environmentally-friendly. If you can download a newspaper, it

:27:52.:27:58.

is much more efficient and cheaper. Newspapers never close because some

:27:58.:28:06.

mug is always ready to buy it. newspapers actually make money. Of

:28:06.:28:11.

course some newspapers are doing badly. But by shifting their models

:28:11.:28:17.

to embrace the new technology, and it is interesting, what is Murdoch

:28:17.:28:22.

in the process of doing? Proving that subscriptions work. Don't we

:28:22.:28:26.

need these retailers to think about their online brand. We have been

:28:26.:28:31.

talking about this for 20 years. Sorry to keep plugging John Lewis...

:28:31.:28:37.

You have done, non-stop! There is a great online presence there.

:28:37.:28:42.

Anyway! We have run out of time. One thing is for sure, the high

:28:42.:28:47.

street will be very different in the next five years. Thanks to our

:28:47.:28:51.

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