16/09/2011 Daily Politics

Alone and welcome to The Daily Politics on Friday. As George

Osborne warns that Britain is not immune to troubles in the eurozone,

has the City learned the lessons of the financial crisis? And after a

bruising year of lost referendums and other setbacks, how are the

Liberal Democrats feeling as they head towards party conference? And

what does the future hold for the Tories? We are joined by one of the

brightest young stars. And talking of big ideas, we go

back to the free school in Slough which opened its doors for the

first time this week, Langley Primary School. We started with a

proposal, and then it picked up more and more support. And now, it

And with me today, Sue Cameron of the Financial times, and Jackie

Ashley from The Guardian. Later today, George Osborne will join

European finance ministers to discuss the global financial crisis.

This morning he has told an audience of business people in

Manchester that the fate of the euro cannot be a matter of

indifference to Britain. indifference to Britain.

Here at home we are not immune to what is going on on our doorstep.

America and the eurozone are our two biggest export markets. But I

am confident that we can weather the storm. That was George Osborne.

He's talking about Britain not being immune, Sue Cameron gone but

it seems that the banking system is better regulated, but nonetheless,

is not immune to Rogue Traders? Absolutely, what a spectacular

disaster. And it comes almost three years exactly since the collapse of

Lehman Brothers. It is a terrible problem for confidence. As George

Osborne says, although Britain might be in a better position to

weather the storm, we are certainly not immune from such storms. It

seems as though the whole system is staggering from crisis to crisis.

And then, in the middle of it, you get UBS losing �2 billion. It is

the same greed, the same driven profit at any price. That's the

point - is it about culture, is that culture still so very

prevalent, do you think, Jackie Ashley? I think the very fact that

he could lose that much money without anybody noticing, it must

have been going on for some time, presumably. Another interesting

thing, in the report on banking which they're all considering now,

I don't think there is any mention of dealing with Rogue Traders like

this. So I think this will happen again, unless more reforms are put

in place. I suppose it could be grist to the mill for those who

support the separation between retail and investment banking.

can you stop it? If they go off and have a gamble, how can you stop it?

This time last year, things were challenging enough for the Liberal

Democrats. But since that party conference, the party has had a

torrid time. Rebellions over tuition fees were followed by

defeat in the AV referendum, and near annihilation at the local

elections. Add in agonies over the NHS, boundary changes which could

hit the party hard, and this week promises to be even more

challenging for the party. Our political correspondent Carole

walker joins us now. What do you think will be top of the agenda?

think the overall problem for the party will be how it can set out a

really distinctive Liberal Democrat voice, one which appeals not just

to Liberal Democrat activists, but to voters more widely, without

becoming some sort of internal opposition to their coalition

partners. Clearly, there are some key flashpoints on this. We know

that on the NHS, for example, some very senior figures in the party,

including Baroness Williams, are very unhappy indeed that the

leadership at the moment are planning to have just a topical

discussion and a question-and- answer session on this. They want

to have a proper motion which they can vote on to set out their

opposition to some of the changes which are being brought in in the

NHS, even though those changes have been amended somewhat. They're

trying to force a vote in the Conference on that. Beyond that, it

will be fascinated to see what kind of tone we get on things like

taxation. The Lib Dems are very opposed to any moves to scrap the

top 50p rate on tax. They want the effort to go into lifting people at

the bottom end. And indeed, concerns on things like benefits

changes, in particular the ideas being floated about removing some

of the benefits from rioters. I'm joined now by the Liberal

Democrat MP Tom Brake. On health, is it time for your colleagues like

Baroness Williams to be quiet on this issue? Certainly we have made

a huge amount of progress on the bill. The Government came forward

after the listening exercise with more than 180 amendments. I think

it has been substantially improved. So, they should shut up? There may

be scope for more negotiations behind the scenes, but in terms of

the broad brush of the bill, I think that it is what is going to

be. So, the Liberal Democrats will not be able to vote on this, the

party faithful? We're going to have a question-and-answer session on

the subject, I'm sure the members will want to express their views.

But broadly speaking, we have made the changes which were needed to

the bill, particularly addressing people's concerns about

privatisation. That does not sound very democratic, it sounds like

you're running scared of what my -- what they might vote for. The we

had a very democratic conference in the spring, we had a motion which

set out clearly what we were going to do. You have had a pretty awful

year, electorally, and now we have had the boundary review, and it

looks as if the Liberal Democrats are going to come off worse in

terms of seats being split up and lost, not least your own... If you

talk to any of the political parties, they will probably say the

same thing. But how do you feel about your seat? Clearly, if the

Boundary commission proposals go ahead, it becomes a completely

different -- seat. It gets split in half and gets joined up with parts

of Croydon. My personal opinion is that that is not a natural

community, and the boundary commission will need to look at it

again. You did vote for these proposals in the first place. But

now it looks as if you and others are saying you do not like the

results? What we voted for was that there should be 50 fewer seats, we

accept that. The Boundary commission has come forward with

proposals, and I think we are entitled to put forward alternative

suggestions. Will you vote it down if it does not go the way you would

like? It is far too early to say what the outcome might be. If any

vote takes place, it will be in 20,013. -- it will be in 2013.

it will be difficult for you and other Liberal Democrats. Do you

accept that many of your colleagues have built up personal connections

with the electorate, which you will now lose? If the boundaries are

changed, then of course we will have to establish ourselves in an

adjacent part of the constituency. But I'm confident that my

colleagues are capable of doing that. You do not feel stitched up?

No, I think the Boundary commission have conducted an exercise which to

a great extent has been a desktop exercise. We now have to come back

to them and say, you need to look again, particularly at natural

communities, and their historic links, and how they co-exist.

Looking at taxation, the party has always said that it wants to take

people out of the bottom end of the scale, something you say you have

partly achieved. You're also clear that the 50p tax rate should stay

for the moment. But is there a possibility of trading that, seeing

it abolished, if you got your mansion tax? Again, it is far too

early to say. We have said clearly that we are committed to increasing

the tax threshold, up to �10,000, by the end of the parliament. We

are on track to do that. And we believe that at this present moment,

we need to maintain the 50p tax, because people on low and middle

incomes are suffering. But would you be prepared to see the 50p tax

rate abolished if you had some kind of mansion tax or land value tax at

the other end? I'm not part of the Treasury team. But what would you

like to see? It is too early to say. It is above my pay grade. Well, I

think it is not going to happen. The Tories just will not have it.

They will not have a mansion tax. I think it will be the issue which

will show the dividing lines between the two parties in the

coalition. There will be a debate about the 50p tax rate, because it

is symbolic. It says what each party stands for. It will be very

interesting what comes out at the end. At the present moment in time,

with the economic threats which we are facing as a country, and the

difficulties for people, particularly on low incomes, I

think it would be completely unsustainable for us as a party to

get rid of the 50p rate. But the Conservatives are saying, yes, we

need to do it to stimulate business. But it will be much harder for them,

now that they have had this disaster with the UBS, politically,

to get rid of the 50p tax rate. what if this review, in January,

says that it makes no money for the Treasury and harms the economy,

what would your position be then? We will consider the report

carefully. Those arguments have been deployed in the past, but I

would want to examine the detail. It sounds as if you would not be

prepared to even look at the idea of abolishing that 50p tax rate.

Maybe we can do things in terms of, if there is an issue about the 50p

rate, and issues to do with tax evasion and tax avoidance, then

that is something we could address. But again, I think the message

which that would give, at this present moment in time, would be a

very, very bad message. Do you agree with Chris Huhne that Nick

Clegg would make a tremendous European Commissioner? I'm sure

that if...! I'm sure that Nick Clegg, in future years, when he is

considering alternatives, maybe that is something he would consider.

But personally I am very happy with Nick Clegg as party leader. He's

doing a great job. It was borne out in a recent opinion poll in the

Times, which showed that as a party, we have both the right policies,

according to a substantial number of people, as well as the right

leaders. So much for the Lib Dems, but what

about the Tories? It should not be forgotten that they did not

actually win the general election last year. The coalition still has

more than three years to run. But a group of Tory MPs have written a

book which sets out their vision of a future without the Liberal

Democrats. Looking into their crystal ball, they see their ideas

returning David Cameron to Downing Street at the next election, but

also but in Britain firmly on the path back to greatness. They're

calling for radical reform of the Health Service, patients to be held

responsible for drinking, smoking and diet, and being asked to

contribute more for excessive and preventable dependency on the NHS.

They think lower tax rates are the answer to kick-starting growth,

arguing that it previously worked for countries like Estonia, which

has a flat rate of 26%. The book is bursting with new ideas, but they

have nothing to say about David Cameron's pet project, the "big

society", perhaps because that slogan failed to win the day in

2010. We are joined by one of the authors, Conservative MP Chris

Skidmore. Let's be clear, you have got no time for the idea, I presume,

that the coalition might continue beyond this Parliament. Absolutely

it will depend on the election in 2015, the voters. But what about

you, you would not want that? want to fight for a Conservative

government, with David Cameron as the Conservative Prime Minister.

But what about the view which has been expressed to me by people

within the party, and MPs like Nick Knowles, that being dependent on

Liberal Democrat support is preferable to relying on MPs on the

right of the Tory party? I'm a Tory MP, and many of the 150 new MPs

fought as Conservatives, and we want to fight as Conservatives at

the next general election. This is why we have put this book together

now. We have probably less than 1,000 days until the collision ends.

We need to get these ideas out for discussion. So Domitian -- the

coalition ends. Have you had in the input from people at the top of the

party? The book has only just been published. You said the coalition

is at its best when it is bold, and it is bold when it is Conservative,

so presumably you feel the Government has suffered by being

constrained by the Liberal Democrats? When you look at Iain

Duncan Smith's welfare reforms, capping housing benefit, when you

look at Michael Gove's fiscal policies, these are successful

policies which are working, but overall, they are Conservative

policies. Hopefully when it comes to the general election, the

electorate will have realised that within the coalition, it has been

the Conservative Party which has presented radical reform. Three

schools, NHS reforms, nothing to do with the Liberal Democrats...

disagree. Clearly, as a coalition, the different parties have pushed

parts of their manifesto with varying degrees of success. An

assessment on The Politics Show actually said that three-quarters

of the programme of the coalition was emanating from the Liberal

Democrats. But on those issues we There are Liberal Democrat

ministers in those departments, but it may be that the overall flavour

comes more from the Conservatives' manifesto. In other areas of policy,

it will be a Liberal Democrat emphasis that comes across.

feel that NHS reform has been watered down because of the Liberal

Democrats? Not at all. The Health Select Committee made very similar

recommendations to what has happened about clinical

commissioning groups. We would agree that we have to make reform

of the NHS is to survive for the next 30 years, otherwise it is

going to run out of money with the ageing population. One of the

things you have said in the literature is that patients should

be held responsible in the future for lifestyle choices, so excessive

smoking, drinking, diet and obesity. You say they should be expected to

contribute more. How? This is a debate that we need to have. First

and foremost, we want to stay within the context of the NHS

constitution, free at the point of delivery, but when you look at

services in the NHS and you look at people who are dependent on it,

some people persistently use NHS services, and resources are being

taken up... How do they contribute more? That is something we have to

discuss. You're talking about contributing financially? It may be

the case that if somebody has told that they have to stop leading a

lifestyle in a certain way and they persistently refused, the NHS and

the doctors have the ability to act on that. In what way? Should they

be refused treatment? Should they pay? It may be that they could be

paying through a social insurance scheme. When you look at the rest

of Europe, the Netherlands, for example, they have a compulsory

scheme which the state subsidises. They have a reset mechanism which

ensures that the most probable patients, those with genetic

disorders, the insurance companies compete for that. We do not put

that idea in the book, but in terms of funding the NHS by 2050, it will

need about �230 billion in order to cover the ageing population. We

have to find that somewhere eventually. You have hinted that

the idea of social insurance. It has always been difficult to

suggest it. How would you persuade an electorate to sign up for that?

David Cameron has said, we will not go down that route. It is not

something for 2015. The Netherlands spent 25 years discussing how to

fund their healthcare system. We could have a conversation or 25

years. We have a commission talking about the social care, and we may

have to look at an insurance mechanism in order to fund

residential care. You talk about people who smoke a lot and eat too

much and drink too much. By and large, these tend to be the poorer

groups in society, and it seems to me the only answer is to say that

they are going to have to pay. But surely cannot be right, it is not

an election-winning formula. Balance that in the book with what

happens in the United States where you create health gaps. We do not

focus on who is using the NHS, and when you look at statistics

elsewhere, about 10% of the population are responsible for 40%

of the costs. If you target and intervene on that percentage, you

can bring down costs dramatically. How do you marry that with the

anti-nanny state that we hear so much about Greta Marc Dutroux not

want public education about not drinking and smoking. The approach

is universal. The reason why the NHS does not deliver as much as it

could is because millionaires get the same treatment as the people

who desperately-needed. What do you think about that idea? I am pleased

that Chris is putting his forward as an idea, something we can

discuss, because we generate a lot of discussion in coalition. You are

dead against it! We might want to put into play ideas that you

achieve what Riz is trying to achieve by putting additional

taxation on fatty foods, for instance. -- Chris. Generally, you

look fairly shocked at the idea. What I am comfortable with is that

in coalition we are grown-up enough to discuss these ideas and come

forward with a decision... You are sitting on the fence, Tom Brake.

strong, puritanical idea of, we will tell you how to live your lies,

the rich will be able to enjoy themselves because there will

always be doctors who look after them. The people who will suffer

are the poorest. People have to take greater individual

responsibility over their own lives. Having universal service, we have

not focused on how people can take individual responsibility. Without

money, they cannot. And dedication as a role. There is an entire

slimming industry, a multi-million- pound industry... Don't we know it!

I'm afraid we're going to have to wrap it up. Now, over the past year,

the Daily Politics has been following the progress of a free

school being set up near Slough. Last week, Langley Hall Primary

School opened its doors for the first time. In a moment, we will

speak to the woman who set it up, but first Adam Fleming goes back to

Day three of a new term at a new school. The second that you walk

into this building, you can take it is is a school that has been open

for less than a week. First of all, everything is immaculate, and the

air is the full of smell of fresh Langley Hall is one of 24 free

schools that opened this month. It is publicly funded, free from local

authority control, and it was set up by the owner of an education

company. On the Daily Politics, we have followed its progress from the

birth of the idea to the first chime of the school bell. It is a

bit like a snowball coming down a hill. It started with a proposal,

obviously, and as it started to roll, it picked up more and more

support, more and more people into the project. Things started rolling

in June last year when potential free schools applied to the

Department for Education. That was followed up in December 2010 by a

very detailed business plan, 250 pages long. In April, parents

applied for places, a leap of faith because they did not know which

building it would be in. Some free schools Ali had their funding

agreed late last month, which was a little bit last minute. -- Only.

has been bumpy. At every level, all the way along the line, the delay

we experience in releasing funds, you are ready to go, just waiting

for that release, because things take time to put in place. Some

involved in the project think the government will not let the school

be free enough. I think the term free school is a misnomer, because

in actual fact we have more red tape than ordinary schools. They

have insisted on putting in extra layers of financial controls to

make sure that we cannot misuse public money. Money is one of the

things that worries the critics. Nick Clegg claims he prevented free

Something that has always been denied by the Conservative

Education Secretary, Michael Gove. Labour say that town hall education

budgets will be cut as a result. None of that seems to bother the

parents of Langley Hall, where it is home time. I think it was about

it being a new school, it is exciting. I am a mature parent, it

looks like it is going back to what it was before. Like all reforms to

education, a lot of time will have to pass before we know whether the

free schools policy is really working.

Adam Fleming reporting, and we are joined by Sally Eaton, director of

education at the Langley Hall primary school. It has been a long,

hard road. It certainly has. Give us a flavour of what it has been

like. It has been challenging, as you can imagine, and we did not

expected to be anything else. The timescale was, I suppose, one of

the challengers. We had 10 weeks to refurbish a rather large building,

and it looked as if that was an impossible task, but we managed it.

Four days before we actually opened, we have no tables and chairs,

because the company that was going to deliver them to us went into

liquidation. We had to find replacements. I see, yes, so

difficult majestically. Yes! Picking up on what one of your

colleagues said, free schools is a misnomer because you remain weighed

down by bureaucracy and rules and regulation. Is that how you feel?

Yes, I mean, we met almost on a weekly basis from someone from the

DFB all the way through the process. They wanted to know what our

policies and procedures were. There were times when they advised,

strongly advised that things were changed. So yes, you know, we were

very much rained in and sort of kept together. Is that how you

understood it was going to be at the beginning, the idea that he

would be more free to do your own thing? Yes, I think we did. I think

we will be free with our curriculum, and that is very important to us.

Although the national curriculum will be the bedrock and the

foundation of what we do, we want to be able to look at the creative

arts and other subjects and perhaps develop them in a different way.

Sue Cameron, the idea of free schools here does not sound as free,

or from the film, as free as the Secretary of State and the

government said it would be, free of local authority control, free

with the curriculum. You have got Whitehall on your back. It sounds

as though you have! I think it is a pity. It is clearly quite difficult,

it is a new concept, and if they just said, you can do what you like,

or something pretty close to that, when things went wrong... One of

the good things about the schools, there is an element of them being

pilot projects, so different things can happen. Some are bound to be

more successful than others. You have to be careful that to have

some financial controls at the beginning. But it does sound as

though they have overdone it. not know, it is public money. If he

wanted to use your own money and charge fees, you can have a private

school, but they should be some accountability on that. On the idea

of profit not being allowed, should they? Sweden argues that is what

made them successful. I worry when profit comes into education like

that. If it is government money, the state says it will educate the

nation's children, and then somebody else makes a profit.

not think it is necessary either. The money that we have got coming

in is perfectly sufficient, and it just brings in an element that

might be confusing. Thank you very much. Time now to see what else has

been going on in our round-up of David Cameron began the week in

Moscow for the first official talks since the poisoning of almost by

Alexander Litvinenko in London in 2006. The Prime Minister said he

wanted to rebuild the relationship. The Russian Prime Minister, Dmitry

Medvedev, he would have made a good KGB agent. Warnings of cuts to

pensions, the Labour leader Ed Miliband upset activists by

refusing to support strikes. believe it was a mistake to have

strikes at the last summer, and I continue to believe that. Nick

Clegg revealed a prescription for growth, getting the country to work

building new roads, rail and broadband projects, but there was

gloomy news as unemployment rose sharply, particularly among the

young. Mr Cameron denied claims of complacency. If we were not taking

a step, you have to make the cuts! At plans for a shake-up of

constituency boundaries left many MPs are stunned and even some big

beasts worry about their future. Ken Clarke, Member of Parliament

for Rushcliffe. How very candid, as ever, of Ken Clarke. Thank you to

my guests. Enjoy the conferences. That is all for this week, but I'll

be back on Sunday at 1:35pm on Sunday on BBC One what the Politics

Show. We will be back on the Daily Politics next week with all the

news from Birmingham. Until then, we will leave you with that rare