28/06/2011 Daily Politics


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


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


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


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


to the students. The Government says it wants greater competition


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


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


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


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


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


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


the Chinese premier is not happy with David Cameron criticising


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


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


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


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


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


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


the Beijing Olympics, dealing with difficult issues, against how


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


Minister yesterday talked about human rights issues, the Chinese-


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


government says that the personal computer of Chancellor Merkel was


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


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


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


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


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


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


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


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


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


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


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


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


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


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


American government claimed are being effective, I was shocked to


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


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


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


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


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


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


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


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


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


competition and provide potential students with more information.


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


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


private companies to offer degrees and the best investors to recruit


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


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


thinking very carefully about the quality of the academic experience


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


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


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


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


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


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


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


offered. No government minister was available to talk about the


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


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


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


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


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


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


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


are going to seek place is taken from mainstream universities,


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


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


corporations, some of which have very low degree completion rates


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


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


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


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


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


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


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


universities, many universities with a pretty good reputation at


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


most areas of activity, greater private sector involvement. I


noticed the Shadow Minister talked about the American experience. My


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


vibrant, it has contributed to general levels of improving


education and training, at different levels. At the most


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


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


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


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


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


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


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


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


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


the private sector in education, having a public and private


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


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


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


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


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


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


business higher education corporations do have very high


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


aggressive recruitment practices. Some of them have been compared to


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


think we have to be extremely careful that quality is not


sacrificed because of the Government's financial incompetence,


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


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


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


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


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


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


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


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


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


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


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


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


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


begun a 48 hour general strike against the proposed drastic public


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


Athens. If their package of austerity measures is rejected,


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


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


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


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


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


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


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


concentrated amongst trade unionists, I think that will have


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


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


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


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


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


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


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


measures that are protesting outside Parliament today. It is 70


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


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


largely derelict and empty because so many businesses have closed


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


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


the politicians see the scale of the demonstration you are looking


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


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


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


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


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


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


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


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


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


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


choice of having another austerity programme, further tax increases,


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


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


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


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


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


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


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


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


unemployment in the public sector and huge privatisation, is probably


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


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


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


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


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


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


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


restructuring and bankrupts, they like companies to go through this


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


goes by without another household name announcing a fall in profits


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


street! Carnage is the word for it to be


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


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


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


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


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


some of the giant retailers. This morning, chocolate purveyors


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


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


reopened them yesterday but only to the administrators. Although


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


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


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


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


stores outside London placed into administration. 900 jobs are under


threat. Mothercare announced in May it will


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


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


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


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


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


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


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


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


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


demonstrates, is the non-food retailers because it is


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


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


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


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


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


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


closures and reductions in trading are not without consequence and


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


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


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


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


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


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


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


red tape challenge that the Secretary of State for the


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


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


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


the number of people going to industrial tribunals, which wastes


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


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


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


you very much. Back to Andrew. Thank you.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


consequence of unravelling a decade of over leverage. People are


perhaps moving from consumption toward saving and investment and in


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


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


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


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


a fantastic mix of independent retailers and it becomes a more


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


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


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


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


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


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


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


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


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


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


the inevitable shift of market forces but this is still an


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


North Sea with 60 million people and leasing property is extremely


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


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


is an accelerated. That has accelerated the process.


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


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


country in the world where we saw the internet surpassed television


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


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


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


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


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


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


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


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


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


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


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


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


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


distributing newsprint is not a particularly economic the efficient


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


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


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


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


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


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


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


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


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


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


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


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