:00:39. > :00:43.Good afternoon, and welcome to the Daily Politics. Is Britain's Afghan
:00:43. > :00:48.strategy in disarray? After a spate of attacks on allied troops by
:00:48. > :00:51.rogue Afghan soldiers, NATO suspends joint ground operations.
:00:51. > :00:56.But that was only hours after the Defence Secretary told MPs that the
:00:56. > :00:59.attacks would not lead to any change in strategy. But they've
:00:59. > :01:06.demanded that Philip Hammond comes back to the Commons today to clear
:01:06. > :01:08.up the mess. We'll have all the latest.
:01:08. > :01:11.Former Prime Minister John Major says the "green shoots" of economic
:01:11. > :01:14.recovery are starting to emerge. Is he right? And will any current
:01:14. > :01:18.politicians be brave enough to come on and say that?
:01:18. > :01:21.How can the Government bring down the welfare bill? The Government is
:01:21. > :01:31.apparently looking at radical ways to cut billions from benefits
:01:31. > :01:31.
:01:31. > :01:35.payments. But could it prove too controversial? What is England's
:01:36. > :01:39.second city? Manchester. Wrong. Does Birmingham have an image
:01:39. > :01:43.problem? Politicians there are trying to boost the city's image,
:01:43. > :01:47.but does anyone down south know where it is?!
:01:47. > :01:50.All that in the next hour. And with us for the whole programme today is
:01:50. > :01:53.the economist Jonathan Portes. He heads up the National Institute of
:01:53. > :01:56.Economic and Social Research. Welcome to the show. Let's start
:01:56. > :01:59.with the news that the Government is considering changing the way
:01:59. > :02:02.that annual rises to benefits and pensions are calculated. For a long
:02:02. > :02:05.time the rise in benefits was pegged to one measure of inflation,
:02:05. > :02:09.the Retail Price Index. The coalition changed that so benefits
:02:09. > :02:17.are now related to the rise in the Consumer Prices Index, which is
:02:17. > :02:22.usually lower than RPI. And now, we understand, they're considering
:02:22. > :02:25.another change: to link benefit rises to average wage increases,
:02:25. > :02:30.which for the past few years have been lower still. Any such change
:02:30. > :02:35.could save billions from the annual welfare bill. Would it save
:02:35. > :02:40.billions? Only in the short term. Remember, over the medium term,
:02:40. > :02:50.wages tend to raise higher than prices pause we see improvements in
:02:50. > :02:53.productivity and we all get richer. Over the past three years or so
:02:53. > :02:58.earnings to value has fallen. Benefits would rise hire. What this
:02:58. > :03:02.means is this is a strange idea. It would save money in the short term
:03:02. > :03:08.but would cost a lot in the long term. Is the implication they'd
:03:08. > :03:12.only do it in the short term in order to recoup some of the �10
:03:12. > :03:16.billion they're hoping to save even further from the welfare bill and
:03:16. > :03:20.link it to inflation, not wages? What we have seen reported at least
:03:20. > :03:26.by the BBC is that the linking to the wages would be going forward,
:03:26. > :03:29.so it would be linked to wages going forward, and it would be
:03:29. > :03:34.rather odd because what that would mean would be you'd be taking money
:03:34. > :03:37.out of the economy in the short term, reducing the deficit in the
:03:37. > :03:41.short term, which is the wrong Qing to do from an economics point of
:03:41. > :03:45.view but you would be costing a lot of money in the long term.
:03:45. > :03:48.Politically, it would be quite popular. Surveys show,
:03:48. > :03:54.unsurprisingly, the majority of the British public would favour that if
:03:54. > :03:57.it meant reducing welfare payments. That's true, but it is rather
:03:57. > :04:01.illogical to make the saving in the short term then do something which
:04:01. > :04:05.would cost the country more in the long term. You're of course basing
:04:05. > :04:08.that on the fact the rate of inflation would change that
:04:08. > :04:11.dramatically. At the moment wages have been lower than inflation.
:04:11. > :04:15.Although inflation is coming down, we don't know what's going to
:04:15. > :04:20.happen in the future. We don't know, but it would be absolutely
:04:20. > :04:24.astonishing if over the next ten or 20 years wages didn't rise
:04:24. > :04:27.considerably faster than inflation that would be unprecedented in
:04:27. > :04:32.recent British history. I don't think that's going to happen. Over
:04:32. > :04:35.ten or 20 years wages will rise faster than prices. The idea was
:04:35. > :04:39.floated by the Prime Minister earlier this year. He said
:04:39. > :04:42.increasing the rewards of work is only possible if out-of-work
:04:42. > :04:47.benefits rise in line with pay, again, a political justification
:04:47. > :04:52.for this, but also that will strike a chime with many members of the
:04:52. > :04:56.public. Well, you can perfectly well argue it's quite reasonable if
:04:57. > :05:00.you want to keep the ratio of benefits to pay roughly constant,
:05:01. > :05:06.then over time, having benefits rise roughly in line with earnings
:05:06. > :05:10.or pay does make a lot of sense. I can perfectly well see the logic of
:05:10. > :05:13.that but we also have to accept historically and over the medium to
:05:13. > :05:22.long term that'll mean benefits rising faster, not slower. Thank
:05:22. > :05:24.you. There seems to be major confusion
:05:24. > :05:27.over the Government's strategy in Afghanistan following the latest
:05:27. > :05:29.attacks on NATO troops by rogue Afghan forces. Last night the
:05:29. > :05:31.Defence Secretary Philip Hammond said there would be no change of
:05:31. > :05:34.tactics to deal with so-called green-on-blue attacks. However,
:05:34. > :05:36.within hours the International Security Assistance Force, or ISAF,
:05:36. > :05:39.announced that joint operations with Afghan troops would now be
:05:39. > :05:43.scaled back after a loss of trust between NATO and Afghan forces. So
:05:43. > :05:48.far this year there have been at least 51 deaths caused by Afghan
:05:49. > :05:52.forces or militants wearing their uniforms. Of those, nine were
:05:52. > :05:54.British. That compares to 35 for the whole of last year, one of
:05:54. > :06:04.which was British. This morning the Foreign Secretary has been
:06:04. > :06:08.answering questions from MPs. He insisted the move did not represent
:06:08. > :06:15.a major policy shift for British forces. Like the great majority of
:06:15. > :06:18.Afghans in my experience and our troop, they want us to succeed. The
:06:18. > :06:23.future of Afghanistan remains clear, and the Taliban should be very
:06:23. > :06:27.clear, and I make it very clear to them now that our strategy hasn't
:06:27. > :06:32.changed in Afghanistan and it will not change in the face of these
:06:32. > :06:36.attacks to. Give any other response, of course, is to increase the
:06:36. > :06:41.incentive for such attacks. That was the Foreign Secretary.
:06:41. > :06:44.Joining me now is our defence correspondent Caroline Wyatt. There
:06:44. > :06:54.does seem to be confusion. You just heard William Hague saying there is
:06:54. > :06:57.
:06:57. > :07:01.going to be no change in strategy but a suspension of joint NATO
:07:01. > :07:04.missions has been suspended. Out of Kabul, a statement that came from
:07:04. > :07:10.ISAF, the International Security Assistance Force, did imply what
:07:10. > :07:17.sounded like a fairly major change but with further clarification this
:07:17. > :07:22.morning from ISAF and the Ministry of Defence it man made clearer. It
:07:22. > :07:28.is a temporary measure being put into place to protect troops more
:07:28. > :07:35.at a time of heightened sentiment with a film that is stirring up
:07:35. > :07:38.sentiment in that area but with the green-on-blue attacks attacks on
:07:38. > :07:43.NATO's forces. This has already taken effect. We have had statement
:07:43. > :07:47.coming out of the MoD saying this tactical measure will have a
:07:48. > :07:53.minimal impact on our operation. "We have a strategic plan that
:07:53. > :07:59.hasn't changed. We're confident about the way the plan is being
:07:59. > :08:03.executed." The MoD says. "Some temporary measures have been taken
:08:03. > :08:09.to reduce our vulnerability to civil disturbances and insider
:08:09. > :08:13.attacks and further assessments will go on in coming days." There
:08:13. > :08:18.is an effort to protect British forces. It does send out a signal
:08:18. > :08:22.to the Afghans that that strust and has been eroded to a certain degree.
:08:22. > :08:29.Have I understood it right that actually UK-Afghan joint patrols
:08:29. > :08:34.will continue despite the fact that we have heard from General Alan
:08:34. > :08:37.that actually joint Afghan missions - is he talking about US Afghan
:08:37. > :08:42.missions will now stop, and what's happened to the chain of command
:08:42. > :08:46.here? All of these are good questions. It seems to me the
:08:46. > :08:50.initial statement from ISAF didn't make clear what this meant. Further
:08:50. > :08:54.clarifications we have had over Kabul but also out of the MoD now
:08:54. > :08:59.are saying that is temporary measure. They haven't been
:08:59. > :09:05.suspended but permission for lower level operations - for example
:09:05. > :09:09.going out on a foot patrol would seek a greater risk assessment. But
:09:09. > :09:13.we have heard from Philip Hammond, the Defence Secretary, speaking
:09:13. > :09:17.outside Downing Street perhaps 20 or so minutes ago saying in fact
:09:17. > :09:19.British troops have been cleared to take those decisions at a lower
:09:19. > :09:22.level. Caroline Wyatt, thank you very much.
:09:22. > :09:25.With me now is the Liberal Democrat former Defence Minister Nick Harvey,
:09:25. > :09:29.who lost his job in the recent reshuffle. Denis Macshane is a
:09:29. > :09:32.Labour MP who summoned the Defence Secretary to the Commons yesterday.
:09:32. > :09:37.And Patrick Hennessey is a former British Army officer who has served
:09:37. > :09:40.in Afghanistan. We have had some clarification
:09:40. > :09:44.there. Why didn't we hear that from Philip Hammond last night? There
:09:44. > :09:49.has been a change, hasn't there? Well, it seems that something was
:09:49. > :09:54.announced by General Alan in Kabul last night, which reading between
:09:54. > :09:59.the lines it looks to me as though it has slightly taken London and
:09:59. > :10:04.Washington by surprise. There has been a refining of his message this
:10:04. > :10:09.morning, but it's clear this is not a major strategic shift. It is some
:10:09. > :10:14.sort of enhanced risk assessment at a heightened time of tension, but
:10:14. > :10:20.our approach - the British approach of close partnering and mentoring
:10:20. > :10:23.of the Afghan troops in Helmand is going to continue. It has to
:10:23. > :10:28.continue because this is basis upon which everything we're doing is
:10:28. > :10:32.founded. Before we go on to the fact that the UK joint missions
:10:32. > :10:36.will continue, let's go back to the way it was communicated. How on
:10:36. > :10:40.earth could that sort of message be broadcast by ISAF without our
:10:40. > :10:43.Defence Secretary know or being told? I think ISAF viewed this as
:10:43. > :10:47.an operational and tactical decision and have probably been
:10:47. > :10:51.taken by surprise the extent to which back here in London and
:10:51. > :10:55.Washington it is being seen by the political community as something
:10:55. > :10:59.more strategic. There is your answer. There has been slight
:10:59. > :11:02.communication, but nothing more serious than that. Come on. Let's
:11:02. > :11:07.get serious. This is the beginning of the end. Yesterday Philip
:11:07. > :11:10.Hammond had to be dragged to the Commons to explain why British
:11:10. > :11:13.soldiers still were being sacrificed to no evident purpose.
:11:13. > :11:17.Today again he's had to be dragged to the House of Commons. He didn't
:11:17. > :11:22.volunteer the statement. He has been walking up and down Whitehall
:11:22. > :11:26.asking what his policy would be. Mr Hammond and Cameron for months -
:11:26. > :11:31.Nick, a very loyal Minister, also said, "We're there to patrol, fight,
:11:31. > :11:35.train, mentor the Afghans. Now Washington has decided that's over,
:11:35. > :11:41.and I just can't any longer as a Parliamentarian say more British
:11:41. > :11:44.men - boys - very often young boys - should be sacrificed for a policy
:11:44. > :11:48.that's just been totally thrown overboard from the United States."
:11:48. > :11:53.Exempt it sounds like they'll be more protected if there is going to
:11:53. > :11:56.be a more vigorous vetting procedure before joint patrols are
:11:56. > :12:00.allowed, that would surely protect British troops. We should have the
:12:00. > :12:04.guts to take the decision the Canadians, New Zealanders, the
:12:04. > :12:08.Dutch, very brave people have taken to say our role in Afghanistan - we
:12:08. > :12:12.went there with honour. There is no more terrorist threat. It's over.
:12:13. > :12:17.We should come back and secure basis. We're not talking about
:12:17. > :12:21.scuttle, but no longer reporting every week, as the Prime Minister
:12:21. > :12:24.has, to that some British boy has been killed for no discernible
:12:24. > :12:27.national interest. The politicians and the Ministers have to get a
:12:27. > :12:30.grip on this and the Prime Minister should take charge of this
:12:30. > :12:32.personally. Is this the beginning of the end of the British role and
:12:32. > :12:38.strategy in Afghanistan? I am not sure this is particularly the
:12:38. > :12:42.beginning of the end. I think there was clearly confution. Apart from
:12:42. > :12:46.everything else, what surprised me when I was there is it didn't seem
:12:46. > :12:52.to take accountability of life on the ground. The British live in
:12:52. > :12:57.shared bases with the Afghans. You're all living together anyway.
:12:57. > :12:59.It wouldn't work practically anyway. The threat of the insider attacks
:12:59. > :13:03.isn't coming from Taliban infiltration. It's coming from
:13:04. > :13:10.soldiers who have a lot of stress who turn their weapons on the
:13:10. > :13:17.British and Afghan allies. There are twice as many Afghan-on-Afghan
:13:17. > :13:20.attacks as there are green on blue. To say you're not going out on foot
:13:20. > :13:28.patrol together, it doesn't address that you live together. Why the
:13:28. > :13:34.change of strategy? It's come from Central Command to deal with the
:13:34. > :13:37.immediate effect. You don't see that as a permanent shift, the
:13:37. > :13:40.increase, the spike, in the number of people that have been killed in
:13:40. > :13:47.these attacks you think will go back down to the levels we have
:13:47. > :13:53.seen in the past? I am not sure it will but I think it's a symptom of
:13:53. > :13:59.the Afghan security forces rather than a technical strategy from the
:13:59. > :14:04.forces. It has to carry on if there is any chance of handing over to
:14:04. > :14:09.the Afghan forces? I don't think British sacrifice should be
:14:09. > :14:15.sacrificed to cultural tensions in Afghanistan. I don't know if we
:14:15. > :14:18.stay there another 12 months, 12 years, 120 years we'll make a real
:14:18. > :14:21.difference. I think our mission is accomplished. I cannot bear the
:14:21. > :14:26.thought that because politicians will not tell the military what to
:14:26. > :14:32.do that more British boys will lose their lives. Well, he's right,
:14:32. > :14:35.isn't he? A lot of the public agree with that. Dennis has had this view
:14:35. > :14:40.for some time. I don't think there is anything that's happened in the
:14:40. > :14:44.last 24 hours that impacts that one way or the other. The Afghan forces
:14:44. > :14:49.have grown quickly to their strength of 150,000 from a very
:14:49. > :14:52.slow start, and it is this close working with them and the mentoring
:14:52. > :14:55.with them that's caused their competence to develop frankly
:14:55. > :14:59.faster than anybody believed possible. We have two years left
:14:59. > :15:04.there if a combat role before the Afghans take full responsibility
:15:04. > :15:09.for their own security and we move into a more of an International
:15:09. > :15:12.Development role there. If we're going make the best of the two
:15:12. > :15:15.years there and not negate everything that has been achieved
:15:15. > :15:18.to date, we have to work their competence up to the maximum
:15:18. > :15:24.possible level, and to do that you have to be integrated with them.
:15:24. > :15:27.You can't do it in a stand-off-ish sort of way, or you'll slow the
:15:27. > :15:32.whole thing down. Do you think the message that came out of ISAF was
:15:32. > :15:35.wrong? No, I don't think it was wrong. I think as Patrick was
:15:35. > :15:40.saying it was a perfectly sensible response to the heightened tensions
:15:40. > :15:44.at this moment. Similar things have actually been done in the past when
:15:44. > :15:47.there have been heightened tensions when things have kicked off around
:15:47. > :15:52.international films and things in Afghanistan. Before we just ease
:15:52. > :15:56.back a bit... Why was the MoD not told? I think the MoD heard about
:15:56. > :16:01.it as ISAF were doing it, and because General Alan evidently
:16:01. > :16:05.thought this was an operational thing that was right for him to
:16:05. > :16:08.decide. If chain of command at the end of the day do have to take
:16:08. > :16:13.responsibility. It is they who make these risk assessments from day to
:16:13. > :16:17.day, and I acknowledged at the start this seems to be a bit of a
:16:17. > :16:21.communications muddle which is hopefully... That is very, very
:16:21. > :16:26.serious issue if even if you don't see the particular... If I may,
:16:27. > :16:31.this is a made-in-Washington, decided-in-Washington policy.
:16:31. > :16:34.not. They don't consult with the MoD. Mr Obama has a very difficult
:16:34. > :16:39.election to get through. America also wants out of Afghanistan. Why
:16:39. > :16:43.can't you accept you're an elected politician, a decent guy. It's over.
:16:43. > :16:47.Stop saying... But why is this particular - we have heard now both
:16:47. > :16:49.from Nick Harvey and Patrick Hennessy. That's your view. But why
:16:49. > :16:54.has this particular incident suddenly propelled your rhetoric
:16:54. > :17:00.ever further down that line? Why has it changed it so dramatically
:17:00. > :17:03.when we have heard the policy... be honest, as Dick Fairly says,
:17:03. > :17:07.with the Prime Minister in a responsible way I have been saying
:17:07. > :17:10.strategically there is not much point in British soldiers staying
:17:11. > :17:16.in GM. We're going to come out. You can't say we're staying there
:17:16. > :17:19.forever. That's just silly. It's not my rhetoric. I think Philip
:17:19. > :17:23.Hammond should have come and made a statement to the Commons yesterday.
:17:23. > :17:26.I think he should have been on top of the process. He self-evidently
:17:26. > :17:30.isn't. It has been decided in Washington. The policy that has
:17:30. > :17:40.been defended that we're there to trade jointly with our Afghan
:17:40. > :17:40.
:17:40. > :17:48.friends is is now out of the window. We have heard it is not out of the
:17:48. > :17:53.window. My understanding is not out of the window. This has no impact
:17:53. > :17:57.on the training missions going on, ongoing training. How all
:17:57. > :18:04.advantages has that been, what has been achieved by the kind of policy
:18:04. > :18:10.we heard about, these joint missions with Afghan forces?
:18:10. > :18:13.spent several months working with the Afghan army and they are now of
:18:13. > :18:17.a different army in how they conduct themselves. There are no
:18:17. > :18:22.longer led by the British and Americans but are working with them.
:18:22. > :18:27.They still require a huge amount of support which we are providing. But
:18:27. > :18:32.it is nonsense to imagine that there is suddenly a Chinese wall
:18:32. > :18:42.between afghans and British especially in Helmand. They co-
:18:42. > :18:44.
:18:44. > :18:48.exist. I have been in Afghanistan also and I think we just have to
:18:48. > :18:53.take a strategic decision. The Russians have had to come out after
:18:53. > :19:02.they lost too many men. The Prime Minister it said he was going to
:19:02. > :19:07.get on top of this policy in 2010. Because of all the deaths, you
:19:07. > :19:14.cannot add more bodies to that funeral pyre. Let us stop the blood
:19:14. > :19:17.sacrifice now and we think what we are doing. You do not honour the
:19:17. > :19:22.sacrifice that has been made in a ten-year period by packing in
:19:22. > :19:29.before you finish the job. There is an internationally agreed timeline
:19:29. > :19:32.that we will lease by the end of 2014. It is essential for the
:19:32. > :19:37.Afghans that they take over responsibility from that stage. We
:19:37. > :19:42.have two years left to continue the work and increase the confidence of
:19:42. > :19:47.their security apparatus to enable it to stand on its own two feet
:19:47. > :19:51.when we moved out of a military role. If we do not finish that work
:19:51. > :19:54.to the best of our ability then that is what will dishonour the
:19:54. > :19:58.contribution that has been made over the decade we have been there.
:19:58. > :20:03.The in terms of viewing those opinions about should we use this
:20:03. > :20:11.as the reason to pull out now, or does Britain have to stay and
:20:11. > :20:16.finish the job? Well more broadly it seems difficult for me just as
:20:16. > :20:22.an ordinary citizen to determine what the strategic objective of are
:20:22. > :20:27.staying there is. It is quite unclear to me and to most people
:20:27. > :20:30.what we are actually trying to achieve. The answer to that is
:20:31. > :20:34.Afghanistan was in lawless state that became a haven for
:20:34. > :20:40.international terrorists. But the goalposts have moved. Of course
:20:40. > :20:44.they have, we have achieved a great deal. But we can only safely leave
:20:44. > :20:48.when the can be confident that our departure will not lead to the same
:20:48. > :20:53.lawless state all over again. And we are making very good progress
:20:53. > :20:59.towards that end in my judgment and that of Western governments and
:20:59. > :21:04.military, but we have not finished the job.
:21:04. > :21:10.So, top marks or an ignominious fail? The Education Secretary's
:21:10. > :21:12.proposals to replace GCSEs were examined in Parliament yesterday.
:21:12. > :21:16.Michael Gove said the new English Baccalaureate would end years of
:21:16. > :21:18."drift, decline and dumbing down". In a moment, we'll be getting a bit
:21:19. > :21:28.of reaction from Giles and some guests. But first, here's what the
:21:29. > :21:30.
:21:30. > :21:34.Commons made of it last night. Some will argue that more rigorous
:21:34. > :21:40.qualifications in these subjects will lead to more students failing.
:21:40. > :21:43.But we believe fatalism is indicative of a dated mindset. One
:21:44. > :21:48.that believes in the distribution of abilities so fixed that great
:21:48. > :21:53.teaching can do little to change them. We no great teaching is
:21:53. > :21:56.changing lives even as we speak. What does this new system to have
:21:56. > :22:02.to ensure that all young people are studying English and maths until
:22:02. > :22:07.they're 18? How does it help that 50% who do not go on to higher
:22:07. > :22:12.education, how does it help the bottom 20% who are most at risk of
:22:12. > :22:15.becoming not in education, employment or training? There is a
:22:15. > :22:19.place for course work and examinations especially in the
:22:20. > :22:24.subjects I used to teach, history and geography. There are also some
:22:24. > :22:27.pupils were simply do not test well because they are not supported at
:22:27. > :22:32.home in the same weight more privileged children may be. What
:22:32. > :22:37.will he do to support those young people from generally poorer
:22:37. > :22:40.backgrounds who struggle in exams? Coursework and controlled
:22:40. > :22:46.assessment often works to the benefit of middle-class students
:22:46. > :22:47.whose parents can better support them and actually the form of
:22:48. > :22:50.examination so we're putting forward a better designed to
:22:50. > :22:56.support students from poorer backgrounds to show what they can
:22:56. > :22:59.build rather simply showing what their parents have achieved. Can I
:22:59. > :23:06.press the minister further on children who leave school with
:23:06. > :23:12.nothing, those on the corner of the street drinking cans of beer. We
:23:12. > :23:16.all have them in our constituencies. Why are there left on the shelf?
:23:16. > :23:20.Does my Right Honourable friend agree that it is not just good for
:23:20. > :23:24.children but also essential for our country that we are internationally
:23:24. > :23:31.competitive in our exam results. Where we fall behind is in the
:23:31. > :23:36.European Union. We are 12% of the population of the European Union
:23:36. > :23:40.but now we have fallen to around 4%. One of the key reasons being that
:23:40. > :23:45.we're not good enough at speaking battling grimly to be able to
:23:45. > :23:49.compete in such an essential area. The growth of language teaching as
:23:49. > :23:55.an integral part of our education is central to what the coalition
:23:55. > :24:05.government wishes to achieve. We do verge in this from the last
:24:05. > :24:15.
:24:15. > :24:24.government. Welcome. The ebank is just around
:24:25. > :24:30.the corner. Nick Dakin joins me now. And Damien Heinz, the Conservative
:24:30. > :24:39.MP. What is wrong with adding up rigour into the examination system
:24:39. > :24:42.with an exam that we know the grades have been inflated. Everyone
:24:42. > :24:46.agrees with rigour but I'm interested in what we're doing for
:24:46. > :24:51.young people to prepare them for the real world of today. There was
:24:51. > :24:56.a lot in what Michael Gove said yesterday, I believe, I know, but
:24:56. > :25:00.he gave no evidence that a three hour exam at the end of two years
:25:00. > :25:05.is the best way to assess people and prefer them for the modern
:25:05. > :25:09.world. No evidence to come back Lord Baker's opinion that there
:25:09. > :25:13.needs to be practical tests within it any assessments going forward.
:25:13. > :25:17.So I think the statement yesterday for Michael Gove begs more
:25:18. > :25:22.questions than it answers. What would be wrong with looking at the
:25:22. > :25:26.system and saying, we have a way of changing it but you cannot call it
:25:26. > :25:32.the same thing because otherwise it would still be devalued by
:25:32. > :25:35.association. There's nothing wrong with changing the name. What we
:25:35. > :25:40.need is some stability in education to allow professionals to get on
:25:40. > :25:43.with the job and continue to do a great job for young people. We do
:25:43. > :25:50.not want this perpetual change and both political parties are guilty
:25:50. > :25:55.of that from time to time. I find it ironic that in searching for
:25:55. > :26:01.rigour we have to take a French word to describe a new English exam.
:26:01. > :26:11.That could only come from a government such as we have today.
:26:11. > :26:14.Well calling it E Bac does not make it a bad exam. Some think-tank this
:26:14. > :26:21.are broadly persuaded of your politics but not persuaded of this
:26:21. > :26:25.change. I'm not usually accused of being pro-European but young people
:26:25. > :26:30.are working harder than ever before, being examined more than ever
:26:30. > :26:34.before and are being let down by the system. GCSEs have been eroded.
:26:34. > :26:38.We have broken all domestic records in terms of grades but have fallen
:26:38. > :26:46.down International League tables so we do need reform and an exam that
:26:46. > :26:51.everyone has a Trust in. Let us go back to the old exam. If I'm 14 or
:26:51. > :26:55.15 I will be asked by the system to concentrate on the working very
:26:55. > :26:59.hard to pass a set of exams that I already know the Secretary of State
:26:59. > :27:05.for this country has said is not worth having. We know that changes
:27:05. > :27:11.coming and we have a timetable and proper consultation. That is
:27:11. > :27:15.absolutely right. I was at the tail-end of O-levels and a new exam
:27:15. > :27:22.was about to come in in the form of the GCSE. We still worked for those
:27:22. > :27:26.exams, that is what we did. You're doing what you're paid for which is
:27:26. > :27:29.analysing government policy and criticising it. But they did change
:27:29. > :27:35.from the O levels to the GCSEs, there were complaints at the time.
:27:35. > :27:39.I have taught O levels and GCSEs and the worst exam I ever taught
:27:39. > :27:44.was O-level English language. A total lottery, not fair, not
:27:45. > :27:53.rigorous. If we go back to those days I think we will quickly feel
:27:53. > :27:57.the pinch of that. As he knows we're absolutely not talking about
:27:57. > :28:02.going back to the O-levels. These will keep the best features of the
:28:02. > :28:07.GCSEs but get rid of the bad ones like the competition between exam
:28:07. > :28:12.boards will DUP and the capping of aspiration at the foundation levels.
:28:12. > :28:18.Thank you for doing your homework. That is it from me.
:28:18. > :28:22.Turn out of 10! Now, whisper it, is the economy quite as bad as
:28:22. > :28:23.everyone is saying? Amidst all the doom and gloom that fills our
:28:23. > :28:30.newspapers and television screens, some economists are rather quietly
:28:30. > :28:33.suggesting there could finally be signs things are turning around.
:28:33. > :28:35.Back in 1991, when Britain was in the middle of a recession, the then
:28:36. > :28:37.Chancellor Norman Lamont said in a speech written by our guest of the
:28:38. > :28:42.day Jonathan Portes, that he detected "the green shoots of
:28:42. > :28:44.economic spring", and he was heavily criticised for it. So will
:28:44. > :28:49.we ever hear another Minister mention that loaded phrase "green
:28:49. > :28:52.shoots"? This morning the latest inflation figures were announced
:28:52. > :28:54.showing the Consumer Price Index was down to 2.5% in August from
:28:54. > :29:02.2.6% the previous month, the Retail Price Index was down to 2.9%, from
:29:02. > :29:04.3.2% the previous month. The latest employment figures show the number
:29:04. > :29:07.of people in work has increased by 236,000 to 29.6 million, the
:29:07. > :29:09.largest quarterly rise for two years, and even the markets are
:29:09. > :29:19.showing positive signs, with the FTSE 100 rising steadily over the
:29:19. > :29:21.
:29:21. > :29:25.last three months. We're even making more things, Britain's
:29:25. > :29:31.industrial output rose by 2.9% in July, its fastest pace for 25 years.
:29:31. > :29:33.And manufacturing output for July rose by 3.2%. So what's going on?
:29:33. > :29:43.We can speak to our Economics Editor Stephanie Flanders who joins
:29:43. > :29:44.
:29:44. > :29:48.What is happening is something that was expected at the start of this
:29:48. > :29:51.year - the story the Chancellor, the Bank of England, Ministers were
:29:51. > :29:54.telling themselves at the start of the year is there was light at the
:29:54. > :29:59.end of the tunnel. Things would start to get better in the second
:29:59. > :30:03.half, around now, because you would have, as we have seen this morning,
:30:03. > :30:08.inflation coming down, stopping - taking quite a bite out of
:30:08. > :30:12.households' incomes. You might see a bit more forward activity from
:30:12. > :30:15.businesses and the High Street, and things would stop feeling worse. I
:30:15. > :30:18.think the surprise we had - I am afraid that explains some of the
:30:18. > :30:24.good figures the last month or so is that the first half really was
:30:24. > :30:27.much worse than expected. We had that big fall in GDP. Some of that
:30:27. > :30:31.was due to the extra Bank Holidays. I am afraid we're sort of catching
:30:31. > :30:35.up on that, in a sense that some of that big rise in industrial output
:30:35. > :30:39.in July was actually just to recover from that extra Bank
:30:39. > :30:42.Holiday, so we need to be a bit careful in looking at the latest
:30:42. > :30:45.figures, but there are certainly signs things are levelling off.
:30:45. > :30:50.There may be more confidence coming from those strong employment
:30:50. > :30:54.figures. We created almost as many jobs in those three months as
:30:54. > :30:58.America, which is a seven-times larger economy and growing much
:30:58. > :31:03.faster, so there has to be something good going on in the
:31:03. > :31:07.economy. The economists are talking about a levelling off, a sort of
:31:07. > :31:12.rea guning of a generally flat position rather than a sort of big
:31:12. > :31:15.feeling that now we're heading off on a strong recovery. Yes. On that
:31:15. > :31:19.basis, although we might be through the worst point of the recession,
:31:19. > :31:23.you don't predict this is going to signify the start of growth of any
:31:23. > :31:27.major description? At the moment, given what happened in the first
:31:27. > :31:32.half, we'd be very lucky - in fact, quite unlikely we'd see growth over
:31:32. > :31:36.the course of 2012 as a whole, and I am afraid you would find it hard
:31:36. > :31:39.to find anyone in the City predicting strong growth from here.
:31:39. > :31:44.We're still way behind where we were when we started the recession,
:31:44. > :31:48.which is unusual to have had such a slow recovery with so many bumps.
:31:48. > :31:52.It is possible things are going to start to feel a bit better, not the
:31:52. > :31:53.least because confidence over the eurozone is feeling stronger.
:31:53. > :31:58.you very much. Funnily enough, no Minister was
:31:58. > :32:02.keen to come on today to talk about green shoots - I can't think why -
:32:02. > :32:06.actually, I can't blame them, but I am pleased to say we have been
:32:06. > :32:11.joined by the Conservative MP Andrea Leveson, who sits on the
:32:11. > :32:18.Treasury committee, and Lord Myners. Do you agree with John Major, green
:32:18. > :32:20.shoots are appearing? No, I think it's apparent we want green shoots.
:32:20. > :32:24.Of course. But in reality what the Conservatives were determined to
:32:24. > :32:27.achieve in Government was to eliminate the structural deficit,
:32:28. > :32:32.rebalance the economy. We have seen evidence of that with over a
:32:32. > :32:35.million new private sector jobs. That's really good news and to
:32:35. > :32:42.invest proceeds into hardworking people. We have cancelled tax
:32:42. > :32:46.freezes and with raises in tax-free personal allowance, so on. In a
:32:46. > :32:51.workman-like fashion we're trying to get out of the worst crisis ever.
:32:51. > :32:55.It can't be underestimated. We have come from so far behind. As
:32:55. > :33:00.Stephanie said, there is an awful long way to go, so you don't want
:33:00. > :33:04.to be too optimistic. Andrew doesn't want to say green shoots,
:33:04. > :33:07.and who would because people have been pilloried for saying it in the
:33:07. > :33:10.past. There are indicators that perhaps the worst is over. Do you
:33:10. > :33:13.agree? The problem with economics is you'll get conflicting
:33:13. > :33:17.indicators at any point. It's wonderful to see the rate of
:33:17. > :33:21.unemployment coming down, but remember, we still have long-term
:33:21. > :33:24.unemployment at a 16-year record. John Major talked about the stock
:33:24. > :33:28.market being high. The UK stock market is actually lagging other
:33:28. > :33:31.stock markets and is almost certainly the beneficiary of
:33:31. > :33:36.quantitative easing rather than true economic recovery. We've got
:33:36. > :33:40.very low long-term interest rates, which are consistent with people
:33:40. > :33:44.believing that the economy is still in recession, so, no, I would not
:33:44. > :33:49.use the term "green shoots". I would say that the economy is
:33:49. > :33:53.probably flat lining at the moment across the whole country, but it's
:33:53. > :33:57.very, very unwell in the north of England and Wales, parts of the
:33:57. > :34:00.country Tories don't normally go to, whereas in the south-east it's
:34:00. > :34:04.probably a little better. Let's talk about that. There is a
:34:04. > :34:08.perception - as you say, these things often are about perception -
:34:08. > :34:11.that London and the south-east may not be suffering in quite the same
:34:11. > :34:16.way generally as the rest of the country do you agree with that?
:34:16. > :34:21.Well, when you look at what you have done policy-wise, we have
:34:21. > :34:23.created the lowest corporate tax rates in the G7. We're focused on
:34:23. > :34:29.getting businesses able to recover. We're creating private sector jobs
:34:29. > :34:34.across the country, and so actually, it's not for Government to call
:34:34. > :34:37.sectors - to impose its own strategy on different businesses.
:34:37. > :34:43.The industrial policy recently announced - did indicate you would
:34:43. > :34:48.be doing that. We want to support private sector. The Government
:34:48. > :34:51.can't call private sectors. How do you read it, particularly with
:34:51. > :34:56.unemployment? Because the figures have been coming down. Is that
:34:56. > :35:00.misleading? No. What it shows is - I agree broadly with Stephanie. The
:35:00. > :35:04.economy has essentially had no growth over the last two years, so
:35:04. > :35:08.the perception we'd fallen back into a severe double-dip recession
:35:08. > :35:12.earlier this year was a statistical fluke and wasn't really happening.
:35:12. > :35:16.Equally, the idea we suddenly have a sharp recovery isn't right. What
:35:16. > :35:20.we have had essentially is two lost years partly because the Government
:35:20. > :35:24.took the mistaken decision to tighten policy too hard, too
:35:24. > :35:28.quickly. That's of course backfired. We know that's what happened.
:35:28. > :35:31.What's happening in the labour market - I think what has really
:35:31. > :35:36.surprised people is how resilient it has been despite how weak the
:35:36. > :35:39.economy has been overall. That reflects very well on the
:35:39. > :35:43.underlying strength and flexibility of the UK labour market which is
:35:43. > :35:46.due not particularly to what's happened in the last year or two
:35:46. > :35:54.but structural reforms made by governments of both parties over
:35:54. > :35:56.the last 30 years. We actually have a labour market that's worked well.
:35:56. > :36:00.That's made this recession considerably less painful than it
:36:00. > :36:05.otherwise have been. You have talked about the wrong policies of
:36:05. > :36:10.the Government over the last two years. That's what's led to this
:36:10. > :36:13.flat-lining growth of growth. of it. Actually, the coalition
:36:13. > :36:17.hasn't cut in the way it said it would anyway. I think if you look
:36:17. > :36:25.at the figures - for example, in public sector, net investment has
:36:25. > :36:30.been cut by 40%, and if you look at the most recent GDP figures, what's
:36:30. > :36:34.depressing GDP has been to a large extent construction. Where is that
:36:34. > :36:39.coming from? Reduced public sector spending on social housing. You can
:36:39. > :36:43.draw a very direct connection from the mistake this cuts the
:36:43. > :36:48.Government did make. They have hardly reduced the current deficit
:36:48. > :36:52.over the last year or so. Almost all the reduction has been done in
:36:52. > :36:57.cutting investment, which is the wrong thing, any economist would
:36:57. > :37:02.tell you, to do in a recession. What do you say to that? I think
:37:02. > :37:05.that is completely wrong. Which bit is wrong because the deficit is
:37:05. > :37:08.going up again even though it was cut last year, and they have had
:37:08. > :37:13.cuts to investment. Let's be clear about this. The Government was
:37:13. > :37:18.determined to cut the structural deficit. We were left by the last
:37:18. > :37:22.Government with over 11% structural deficit. That's wrong. What do you
:37:22. > :37:27.mean? That wasn't the structural deficit in the last Government. You
:37:27. > :37:32.have cut the deficit by 25%. Most of that cut has been by cutting net
:37:32. > :37:35.investment - public sector net investment which isn't part of the
:37:35. > :37:39.structural investment. You should read the figures before you try and
:37:39. > :37:45.talk about this. The structural deficit was never 11%, and the cuts
:37:45. > :37:49.that cut the deficit by 25% was predominantly over two-thirds and
:37:49. > :37:53.three-quarters in the most recent year has come from cutting public
:37:54. > :37:57.sector net investment which isn't... Do you accept that there have been
:37:58. > :38:02.cuts in investment that public sector projects are a big cut.
:38:02. > :38:11.That's part of where the lowering of the deficit has come from?
:38:11. > :38:14.Government this week has announced an enormous guarantee in public
:38:15. > :38:18.sector - private sector funding for infrastructure has been
:38:18. > :38:23.extraordinarily difficult. What the Labour Party is saying, and I know
:38:23. > :38:26.Jonathan also advocates - is yet more spending. The Institute for
:38:26. > :38:34.Fiscal Studies has said under Labour Government we'd have had
:38:34. > :38:39.�200 billion more of borrowing. cost of borrowing is more too.
:38:39. > :38:43.is not a deliberate policy. What the Labour Party are advocating is
:38:43. > :38:47.yet more borrowing that would have a massively negative impact on our
:38:47. > :38:53.entire economy, pushing up interest rates. That is the fee, isn't it?
:38:53. > :38:57.If you're spending more money, that is not going to boost - necessarily
:38:57. > :39:00.boost growth in the economy, going to lead to higher borrowing and
:39:00. > :39:03.higher rates of deficit. At what point, Lord Myners, do you think
:39:03. > :39:08.the markets and credit ratings agency are going to say hang on.
:39:08. > :39:15.We're going to put up your interest rate payments? First the Chancellor
:39:15. > :39:21.is going to have to reduce deficit as a percentage of of GDP. He's
:39:21. > :39:26.going to have to announce fairly soon that drop isn't achievable.
:39:26. > :39:29.What he's missing is the role of the public sector to reinsert
:39:29. > :39:35.demand in the economy... subsidise jobs that aren't
:39:35. > :39:39.worthwhile and don't do anything? Exactly. The lessons we learnt from
:39:39. > :39:43.the '30s is when we have a demand deficiency, the Government should
:39:43. > :39:48.step in. How much would you like to spend? We're going into a spiral of
:39:48. > :39:51.decline. You also have to talk more positively. We didn't speak enough
:39:51. > :39:55.about that early on. All of this talk of austerity from the
:39:55. > :40:00.Government is having a draining effect on economic confidence.
:40:00. > :40:03.That's so wrong. Time and time again it was said the biggest
:40:03. > :40:08.problem is consumer confidence, consumer demand because it has been
:40:08. > :40:11.talked down. That's not the case. What we did is we had a debt crisis.
:40:11. > :40:14.What the Government was determined to do was put the economy back on
:40:14. > :40:18.the straight and narrow. By talking about the austerity measures and
:40:18. > :40:21.being clear about the task that lies ahead that gave the
:40:21. > :40:25.international capital market the confidence to continue to lend to
:40:25. > :40:28.Britain. That's why we have public sector debt figures that look like
:40:28. > :40:32.some of the southern European countries and borrowing rates that
:40:32. > :40:34.look like Germany's. It's because the international markets have
:40:34. > :40:40.confidence in our ability to rebuild the economy. That's key to
:40:40. > :40:45.our economic growth. We don't want to squander that, briefly, Lord
:40:45. > :40:48.Myners? No. And announcing a big spending package would. The markets
:40:48. > :40:53.would respond quite well because they're increasingly worried about
:40:53. > :40:56.the absence of growth and the fact that's now driving the deficit up
:40:56. > :41:01.rather than reducing it as the coalition claimed it would. Let's
:41:01. > :41:07.talk about green shoots - was that your invention in the speech with
:41:07. > :41:11.Norman Lamont? I co-wrote the speech with Norman and Andrew
:41:11. > :41:15.Tirery. I don't know who takes credit for the phrase but I
:41:15. > :41:20.contributed. Is it wise the talk about green shoots when you're in
:41:20. > :41:24.the middle of a recession? You know, the Government and, indeed, all of
:41:24. > :41:27.us do have a responsibility not to try to talk the economy down
:41:27. > :41:31.unnecessarily. We shouldn't be talking about austerity. The
:41:31. > :41:35.Government made a big mistake in the first few months after the
:41:35. > :41:39.election by saying we're like Greece... It was essential to get
:41:39. > :41:43.credibility. And the public, Jonathan Portes, seemed to support
:41:43. > :41:49.it. On that note - Andrew, thank you very much. You're staying with
:41:49. > :41:52.us, though I have made a confusion of who is staying and who isn't.
:41:52. > :41:56.Could Britain learn anything from the United States? The United
:41:56. > :41:59.States economic recovery might be sluggish, but it's doing better
:41:59. > :42:09.than Britain are they doing anything over there that we should
:42:09. > :42:13.
:42:13. > :42:18.be doing over here? We sent Susana to a little bit of Americana right
:42:19. > :42:22.here in the UK, the All Star Lanes in London's Holborn.
:42:22. > :42:25.Which is the best lane for recovery? If you're in President
:42:25. > :42:29.Obama's America, the answer seems to be to throw public money at the
:42:29. > :42:34.economy - so-called fiscal stimulus, and if you're coalition Britain,
:42:34. > :42:38.you could roll out spending cuts, otherwise known as austerity. The
:42:39. > :42:48.US economy has been growing, while Britain's has been shrinking, so is
:42:49. > :42:49.
:42:49. > :42:52.it time to switch lanes? I think there are lessons we can learn. The
:42:52. > :42:56.stimulus plan, which has been carried out in the United States,
:42:56. > :43:04.has made a big difference to growth and jobs. We ought to try that in
:43:04. > :43:10.the UK. We have already been trying on American shoes for size, so says
:43:10. > :43:13.free market think-tank. There is a myth about fiscal stimulus. We
:43:13. > :43:17.somehow believe Barack Obama is pumping huge amounts of money into
:43:18. > :43:23.the economy and David Cameron and Nick Clegg are practising austerity.
:43:23. > :43:27.Actually, the amount of debt that has been added to year on year is
:43:27. > :43:33.almost the same. The reasons America is bouncing back in the
:43:33. > :43:36.last three or four years have to be different reasons. Despite all the
:43:36. > :43:40.spending, almost 12.5 million people are out of work in America.
:43:40. > :43:44.Unemployment is still a major problem. The proportion of people
:43:44. > :43:48.without jobs has risen above 8.2% of the United States population.
:43:48. > :43:53.That's a slightly higher proportion than the UK where the unemployment
:43:53. > :43:58.rate has been falling. Here, the number out of work stands at just
:43:58. > :44:02.2.6 million. The last set of unemployment figures show the
:44:02. > :44:06.numbers not working fell by 7,000 in the three months to July that
:44:06. > :44:11.doesn't mean the agenda is working in the UK according to one American
:44:11. > :44:16.economist. Well, the growth path of the UK has been worse than in the
:44:16. > :44:21.US, and so it's hard to argue that short-term policies that were
:44:21. > :44:26.enacted in the past couple of years are a major factor in the low
:44:26. > :44:31.unemployment rate in the UK. Then there is the battle of the AAA
:44:31. > :44:35.triple credit rating. Britain has so far held on to its prized rating
:44:35. > :44:38.though it's on a negative outlook. The United States has already been
:44:38. > :44:41.downgraded by one ratings agency and might be again if Congress
:44:41. > :44:45.doesn't decide on a deficit reduction plan. I wouldn't worry
:44:45. > :44:51.too much if I was an American about perhaps the rating going down
:44:51. > :44:54.further. I wouldn't be too hung up as a Brit about our AAA rating.
:44:54. > :44:57.There are many, many, many other criteria the look at. So stay the
:44:57. > :45:07.course, or mix in some American flavour? The trouble is you don't
:45:07. > :45:10.
:45:10. > :45:17.know what it's like until you taste Lord Myners and Jonathan Portes are
:45:17. > :45:23.still with us. What has the stimulus package actually achieved?
:45:23. > :45:33.The American economy is now 1.5% bigger than when we went into the
:45:33. > :45:33.
:45:33. > :45:39.global recession. The UK economy is 4.3% smaller. We are one of only
:45:39. > :45:44.two G 20 countries that still has economic output below the level of
:45:44. > :45:47.the previous peak. The stimulus policies that Bagger bummer have
:45:47. > :45:51.followed have undoubtedly contributed towards increased
:45:51. > :45:56.output in America. But record numbers of people are still
:45:56. > :46:02.dropping out of the work force and that tells a different story.
:46:02. > :46:11.tells a story that is not great but it would have been even worse if we
:46:11. > :46:16.have not had fiscal stimulus. terms of the stimulus, it may have
:46:16. > :46:20.created demand and kept the economy moving, but would it do so in a
:46:20. > :46:25.sustained manner? I think sustainability comes from the fact
:46:25. > :46:29.that if the government puts more demand into the economy at a time
:46:29. > :46:33.when there is more supply and demand, it gets the economy going.
:46:33. > :46:38.And because it gets going, businessmen feel more confident.
:46:38. > :46:42.They see their customers coming back into their shops. I was the
:46:42. > :46:46.chairman of Marks and Spencers and that is how it works, the customers
:46:46. > :46:50.come back, the company begins to invest and then you have a
:46:50. > :46:55.beneficial cycle in which government contribution to the
:46:55. > :47:00.economy can be reduced. But to cut back now is suicidal in terms of
:47:00. > :47:05.the contribution of government expenditure to economic activity.
:47:05. > :47:08.Except that it does keep the markings on side -- the Markets on
:47:09. > :47:14.site. And it does mean that interest payments are low and that
:47:14. > :47:19.must be a good thing. We know what happens now when the ratings
:47:19. > :47:26.agencies downgrade some were like America, we saw that last September.
:47:26. > :47:30.What happened? Interest rates on US government debt fell. They felt and
:47:30. > :47:39.they stayed at their lowest rates in many years. But would that
:47:39. > :47:43.happen here? There's every reason to believe it would not. Do you
:47:43. > :47:46.know when the ratings agency started to downgrade Japan? More
:47:46. > :47:53.than 10 years ago. And what has happened to their interest rates
:47:53. > :47:57.since then, they have stayed at the lowest recorded interest rates
:47:57. > :48:04.since the Babylonian Empire. terms of the stimulus that you're
:48:04. > :48:11.both advocating, how much should it be? My personal opinion is that a
:48:11. > :48:15.short-term stimulus on the order of 2% of GDP, around �30 billion,
:48:15. > :48:20.directed in the first instance and public sector investment. So the
:48:20. > :48:24.kind of things the government is trying to do it anyway. But just
:48:24. > :48:32.off the balance sheet. The government does want more
:48:33. > :48:38.investment, but it does not want to be seen to be borrowing more.
:48:38. > :48:42.it does not want to add to borrowing. His 30 billion enough?
:48:43. > :48:47.It is less important how much it is that how it is spent. I would
:48:47. > :48:52.disagree with Jonathan. I think infrastructure is important. The
:48:52. > :48:58.others are trying to put back in some Infrastructure Investment that
:48:58. > :49:08.they pulled out. But are much like more to be done, not through
:49:08. > :49:09.
:49:09. > :49:13.monetary policy, but short-term cuts in VAT, tax concessions
:49:13. > :49:19.favouring the low paid. Let us go back to the issue of jobs. Lord
:49:19. > :49:21.Myners said earlier that cutting public sector jobs was not the way
:49:21. > :49:24.forward but you're not agreed with the government policies that says
:49:24. > :49:28.that many of those public sector jobs are wasteful, but they do need
:49:28. > :49:34.to go in order to rebalance the economy so when it comes out of
:49:34. > :49:41.recession it is in better shape? think over time the size of the
:49:41. > :49:47.public sector does need to be reduced. In the medium to long-term
:49:47. > :49:51.the books have to balance. The government is correct about this.
:49:51. > :50:00.The question that I and most economists have is about the timing
:50:00. > :50:04.of this. And on this I do agree with Lord Myers. To take demand out
:50:04. > :50:09.of the economy precisely in the middle of a recession. It is a
:50:09. > :50:14.question of timing and not of the long term strategy which most
:50:14. > :50:18.economists would agree. You should only be spending what you can fund
:50:18. > :50:22.through taxes. Well defence secretary Philip
:50:22. > :50:32.Hammond has made a statement in the Commons on NATO strategy in
:50:32. > :50:32.
:50:32. > :50:36.Afghanistan. In respect of the ISAF statement
:50:36. > :50:40.issued on Saturday the media have become over-excited. It might be
:50:40. > :50:45.helpful to quote from a press release issued by the commander of
:50:46. > :50:50.ISAF forces this morning. Recent media coverage regarding the change
:50:50. > :50:54.in ISAF's model of security force assistance to the Afghan national
:50:54. > :51:00.security forces is not accurate. ISAF remains committed to
:51:00. > :51:05.partnering with, training, advising and assisting our counterparts. The
:51:05. > :51:09.ISAF model is focused at the battalion level and above with
:51:09. > :51:14.exceptions approved by senior commanders. Partnering a prayers at
:51:14. > :51:19.all levels from platoon to core. This has not changed. In response
:51:19. > :51:23.to elevated track levels resulting from the innocence of Muslims video,
:51:24. > :51:29.ISAF has taken some prudent but temporary measures to reduce our
:51:29. > :51:33.profile and vulnerability to civil disturbances or insider attacks.
:51:33. > :51:37.The security force assistance model is integral to the success of the
:51:38. > :51:42.mission and ISAF will return to normal operations as soon as
:51:42. > :51:48.conditions warrant. Defence secretary Philip Hammond
:51:48. > :51:50.speaking to the Commons a moment ago.
:51:50. > :51:52.There are a million of them - and they've been behind some of the
:51:52. > :51:56.greatest scientific discoveries and technological advances in British
:51:56. > :52:01.history. So why is Birmingham City Council organising a meeting today
:52:01. > :52:03.to ask what makes a Brummie? Well, they're worried that
:52:03. > :52:06.Birmingham's status as the country's second city isn't
:52:06. > :52:13.recognised widely enough by people from elsewhere. We sent Adam out
:52:13. > :52:21.onto the streets of London to find out if that's true.
:52:21. > :52:29.Dino what England's second city is? I have no idea. Do you know any
:52:29. > :52:35.other cities in England? Oh, yes. It is Birmingham? Correct. Would
:52:35. > :52:42.she ever think of relocating to Birmingham? I would not. I have
:52:42. > :52:52.never been to Birmingham in all honesty. You have a lot of
:52:52. > :52:56.
:52:56. > :53:04.landmarks up their full stock like what? The big cow! The Bull Ring?
:53:05. > :53:10.What else has Birmingham got going for it? The train station! What is
:53:10. > :53:20.England's second city? Manchester. Would you like to try again?
:53:20. > :53:21.
:53:21. > :53:27.Liverpool. And again? Leaves. Dublin? That is in the Republic of
:53:27. > :53:36.Ireland! Have you heard of a place called Birmingham? Never heard of
:53:36. > :53:44.it. Where are you from? Coria. would you say is England's second
:53:44. > :53:50.city? What do you mean? Do you think it is a good second city?
:53:50. > :54:00.really. Why not? It is in the Midlands, there's nothing much
:54:00. > :54:09.there. Can you do a Birmingham accent? It is tricky to do a
:54:09. > :54:16.Birmingham accent... That is a Liverpool accent!
:54:16. > :54:23.I thought that was not bad. But it does sound as if Birmingham needs
:54:23. > :54:26.to do some publicity. Waseem Zaffar is in a Birmingham studio now. That
:54:26. > :54:30.will not have filled you with any great jury listening to those
:54:30. > :54:35.people who could not name Birmingham as the second city. Why
:54:35. > :54:38.does it seem to punch below its weight? There are a number of
:54:38. > :54:47.issues that we need to look at. I do not think the people of
:54:47. > :54:51.Birmingham themselves do not know enough about their history. We ate
:54:51. > :54:55.in the council are looking at what we need to be proud of and what
:54:55. > :55:00.attracts people to this great city. We have people who have been here
:55:00. > :55:05.for generations but also people from up to 150 different countries
:55:05. > :55:12.around the world who have made Birmingham their home. What makes
:55:12. > :55:16.you proud? It has fantastic places, the best sporting venues,
:55:16. > :55:24.incredible shopping-centres. But what makes me most crowd is the
:55:24. > :55:27.people of Birmingham, we are of the warmest, most friendly people. You
:55:27. > :55:33.can make Birmingham your home straight away. And that is because
:55:33. > :55:38.we hope people to settle and integrate here. We have incredibly
:55:38. > :55:42.diverse and friendly communities. Do you think the city centre is
:55:42. > :55:47.attractive? It has changed a lot and I think has been vastly
:55:47. > :55:51.improved. Do you think it is now an attractive city? Without doubt it
:55:51. > :55:56.is an incredible city centre pub there are also other places around
:55:56. > :56:03.the city equally as good. There's still a long way to go before it is
:56:04. > :56:09.a perfect city. Clearly some of the people you interviewed do not
:56:09. > :56:13.recognise it as the second city. This inquiry will look at that and
:56:13. > :56:17.address some of those issues. do you think would be a good way to
:56:17. > :56:24.start at Birmingham campaign to convince Londoners that this is the
:56:24. > :56:28.destination? One thing we need to do is educate the young people in
:56:28. > :56:33.that city, the people of Birmingham, on the heritage and history of the
:56:33. > :56:43.city and what it is today. We can sell the city far better than
:56:43. > :56:45.
:56:45. > :56:50.anyone else. But we did have an adoptive son, Usain Bolt! Do you
:56:50. > :56:58.think if they had chosen to have an elected mayor, would that help?
:56:58. > :57:00.was part of that campaign and I think it would have helped. But we
:57:00. > :57:06.met with the Prime Minister at last week to talk about punching our
:57:06. > :57:10.weight. What do you think about Birmingham, Louis Oosthuizen's I
:57:10. > :57:16.have been there a number of times, my sister lives just outside
:57:16. > :57:20.Birmingham. I don't know it. There is a tremendous advantage to the UK
:57:21. > :57:30.as a whole in having London as a global city but it has led to a
:57:31. > :57:31.
:57:31. > :57:34.somewhat distorted model of economic development. We are in
:57:34. > :57:39.possession of major cities which have plunged below the wait for too
:57:39. > :57:44.long. And we needed to get behind those cities and let them take some
:57:44. > :57:47.of the weight in generating sustainable economic growth. Do you
:57:47. > :57:52.think it has been to the detriment of cities like Birmingham, would
:57:52. > :57:58.you like to see that addressed? London is absolutely vital to the
:57:58. > :58:03.economic future of Britain, we should not downplay that in any way.
:58:03. > :58:08.But we cannot have a model of economic development solely based
:58:08. > :58:13.on London's advantages as a global city, we also have to insure that
:58:13. > :58:17.the regions and in particular the big regional cities also develop.
:58:17. > :58:23.What would be one bit of advice for Waseem Zaffar in terms of what they
:58:23. > :58:30.could do to promote Birmingham? What I know about the evidence of
:58:30. > :58:34.the city development is what really matters is people. From an economic
:58:34. > :58:37.point of view of what that means is skilled workers and in particular
:58:37. > :58:43.universities. It is getting good universities and making sure they
:58:43. > :58:47.work well with local business communities. And people go to those
:58:47. > :58:52.universities and want to stay there afterwards. Good luck with your
:58:52. > :58:56.campaign. That's all for today. Thanks to our