31/01/2013 Daily Politics


31/01/2013

Andrew Neil and Jo Coburn present the latest political news, interviews and debate. Their guest of the day is business and PR expert Roland Rudd.


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Good afternoon. Welcome to The Daily Politics. David Cameron said

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he would stick by the pledge to raise spending on defence in real

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terms after 2016, but can we afford it? And will it be enough, amid the

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challenges of the mad, bad, dangerous world? Are education

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policies in danger of failing less able students? It has just been

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announced that the accident and emergency department at Lewisham

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Hospital in London will be downgraded, after a fierce battle.

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Can campaigns to save local hospitals destroy efforts to

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improve the nation's health? And meet Bob Servant. BBC Four's new

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comedy follows a man with no political experience pitched into

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the maelstrom of a parliamentary by-election. All that coming up in

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the next hour. With us for the programme today is Roland Rudd, PR

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man extraordinaire. He heads up the NSPCC's campaign against child

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abuse, amongst many other roles. Starting with defence - according

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to some papers this morning, David Cameron has promised there will be

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no more defence cuts, and he has guaranteed to increase spending by

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more than inflation from 2015. But it turns out to be not quite as

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simple as that. We have been trying to work out exactly what the Prime

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Minister has promised. There is a lot of confusion this morning,

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partly because we have got briefings eminating from the

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Government here, and also from the back of the Prime Minister's

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aeroplane in Algeria. Two things are now bill grinned.. Said he

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would not go back on commitments made back in 2010, when he said he

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wanted to see real-terms increases in the defence spend. He was

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referring to the period of 2015 onwards. Some said, that includes

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the last year of the Comprehensive spending Review, which is subject

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to intense negotiations which are going on at the moment. But Downing

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Street is saying that defence spending for that period, three

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years from now, up until the first year of the next period, -- of the

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next Parliament, that defence spending is not ring-fenced for

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that period. The key thing that we know now, good news if you are

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George Osborne, I think, and the other departments which are not

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ring-fenced, is that the MoD spend for the following three years is

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not ring-fenced. The Prime Minister sending out a clear message on his

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North African trip, and remember, a man who is about to deploy possibly

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dozens of troops in West Africa, that the aspiration is, possibly,

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to see an end to cuts in defence spending, and possibly even more in

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terms of real terms growth. Clearers mug to meet! Let's see if

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the former defence minister can help us. Gerald Howarth, you were

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at the MoD until last year - what is your understanding? -- clear as

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mud. I don't think there is much changed here. The Prime Minister

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said in 2010 that his aspiration was that for 2015 onwards, there

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would be a 1% up lift in the procurement budget. Actually, what

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he said was, my own strong view is that this will require a year on

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year real-terms growth in the defence budget, in the years beyond

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2015. So, not beyond 2016. And not defence equipment, but the defence

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budget itself. He then told the Commons in 2011 - the Government

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plans to increase in real terms the investment in defence equipment by

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1% per year between 2015 and 2020. So, where are we now? The answer is

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that there is not much change... what is the position now? Dzeko has

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made it clear that there will be an increase, there is an aspiration

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for an increase... We cannot bind the next Parliament.. But you can

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have an aspiration. So, when? 2015. I thought we were just told

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it was 2016. Andrew, this is a very serious issue for the Armed Forces.

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That's why I am asking you questions about it. So, you cannot

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tell us the year, can you tell us if it is defence equipment or the

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defence budget? The Prime Minister has said that he wanted to see a

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real terms up left of 1% in the defence procurement budget. But

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what has happened since 2010 is that the world has become much more

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dangerous place, we have seen a completely unexpected and

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unanticipated eruption of turbulence in will have a go. We

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have seen Syria, we know Iran is dangerous, and the idea which is

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being floated in the past currently that defence spending should not be

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ring-fence between now and 2015, and that there should not be

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further cuts because the task of restoring the public finances is

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proving more difficult that we had imagined - my view is that we need

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to invest in defence now. We have given up some capabilities which do

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need to be restored, like the maritime patrol aircraft. That's

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not going to happen, is it? solution is that you freeze the aid

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budget. My argument, and the public will support me, is that we should

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freeze the aid budget, not cut it, but freeze it at its current level,

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which is about 8.6 �5 billion, and should not increase it by another

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more than �2 billion this year. Give that money to defence. Are you

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able to clarify for us whether the Government is talking about the

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defence budget or the defence procurement budget, which is

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equipment? I am not in the Ministry of Defence today, and I cannot tell

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you whether that is the case or not. I just wondered, since it is a

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mystery, with the two statements being contradictory. Downing Street

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has said it is defence spending... But Philip Hammond was talking

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about defence equipment this morning. Yes, but Downing Street

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has subsequently clarified it. Where is Labour on this? We are

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talking about aspirations, but my understanding, and that of my

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colleagues on the defence committee, is that it was defence equipment

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spending, so that is a 1% increase in less than half of the defence

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budget. And what we are seeing is that the Prime Minister does not to

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detail. I suspect he was quite tired coming back from Algeria. He

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said something without working it out. George Osborne, understandably,

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from his perspective, has had to slap down the Prime Minister.

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George Osborne is doing his best to try to defend a ridiculous

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situation. What I asked you was not about government policy, I was

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asking you about your party's policy. Are you going to increase

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defence spending up to 2015? Miliband has been clear, we cannot

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make pledges more than two years before an election. Gerald Howarth

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does not know any more than George Osborne does, what the economy is

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going to be like in 2.5 years. they do not know what the economy

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is going to be like in 2015, and yet we are planning to increase the

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aid budget every year between now and then. We planned to increase

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that aid budget when we thought the economy would have grown by six% by

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now. As we stand today, our viewers are faced with a Conservative Party

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in total confusion over defence spending, and you, with no policy

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at all. We have said very clearly that we will make decisions about

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departmental spending at the time of the election. We said in the

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last -- we saw in the last Parliament Liam Fox promising to

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expand the are many, and then cutting it. The big lesson is that

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you do not make spending commitments 2.5 years out. You have

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no policy. We have no spending commitments which we're making this

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far out, and we have demonstrated why that is not advisable.

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Prime Minister has indicated that he wants to see an uplift in the

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defence budget - whether that is confined to procurement, or with

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the that is the overall budget, I don't think is an issue. In any

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case, it is in the next Parliament. I think what your viewers will be

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much more concerned about is where we are today. We still have 9,000

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personnel in Afghanistan. And the Prime Minister how's, as every good

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Conservative Prime Minister before him, he has an aspiration to give

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Britain influence in the world, which I completely support. But we

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need the means to do that. That's what you both to - Labour fought

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five wars on peacetime budgets, and your government now wants to get in

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to West Africa and have a generational struggle, at a time

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when you are slashing the defence budget. The British people are

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right to wonder why we have got politicians on the Left and Right

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who want to increase our foreign policy commitments and cut our

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defence budget? It is vital that they clarify whether this is

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equipment or the overall budget. Otherwise, you could take more

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money away from pay and allowances to subsidise this procurement

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programme, which is why this is important. I think this is simple -

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you cannot ask the army to do more for less, which is what they are

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being asked. I do not believe the world has become more dangerous

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place. The world has been a dangerous place, and it will

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continue to do so. If we want to ask the army to do what they are

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being asked to do, we have to make sure the spending commitment is

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there. If there is a problem in terms of the spending, then we pull

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back on our ambitions. We cannot have it both ways. This leak from

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the Telegraph in terms of actual spending does not appear to be

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correct. They are also being asked, as you know, to come up with

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voluntary redundancies, which is another potentially real problem.

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Because then, you lose some of your best people, rather than allowing

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you to get rid of the weakest people, which is a terrible shame.

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Your own position is that the Government should, given the

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ambitions it has, which is why Mr Cameron is in Algeria and so on, it

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should be looking not to continue to cut defence spending over the

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next three years? That is my position to date. That was actually

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my position in government. Privately that was the view I

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expressed. I said to the Prime Minister that I could see no case...

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I said I had not met any Conservative member in the country

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there was in favour of cutting expenditure on the Armed Forces. He

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said, I gave a commitment, like I did on the third runway, and one

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has to respect the Prime Minister's integrity on this. My view is that

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the world has changed, the circumstances have changed. On a

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positive note, both Philip Hammond and Liam Fox did a fantastic job in

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sorting out the horrendous state of the MoD's accounts. They are now

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balanced, and would you believe it, we have even got a contingency

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amount of �12 billion in the budget! We had better leave it

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there. For it is time for our daily quiz. Later in the programme we

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will be talking about a new comedy a BBC Four, where Bob Servant is

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pitched into a by-election in Dundee. The question today - who

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was done the's most famous member of Parliament? Was it Gordon Brown,

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Winston Churchill, William Gladstone or Alec Douglas-Home? At

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the end of the show, Roland Rudd will give us the correct answer.

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have absolutely no idea! I will have it by the end of the show.

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was famous. What is Dundee famous for? Jam, Jews and journalism.

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:14:02.:14:08.

Correct. You do not get outside of Now exams. The Education Select

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Committee says it has serious concerns about the Government's

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intentions to reform GCSEs in England. They say that introducing

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the English Baccalaureate Certificate in place of GCSEs so

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quickly could threaten the stability of the exam system and

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will do little to help less able pupils. Instead, the Government

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should be concentrating on the 40% of pupils, who do not achieve five

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good GCSEs. Yes, well it has been called the biggest shake-up in

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school exams for 16 year olds in England in a generation. The plan

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is for GCSEs, seen by some as too discredited due to concerns about

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grade inflation and dumbing down, to be replaced by the English

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Baccalaureate Certificate or EBC. Students in England are due to

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begin studying the EBC in two years' time - initially in

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mathematics, English and science, though eventually history,

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geography and languages will also be included. Education Secretary

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Michael Gove says the aim of the reforms is to restore rigour to the

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education system. Announcing the reforms last September, he said: It

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is time for the race to the bottom to end. But critics say the EBC

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will be too narrow and will sideline subjects like art, music,

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religious studies, design and technology and drama studies. And,

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this morning, the Education Select Committee said the Government is

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doing too much too fast. I am joined now by the BBC's education

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correspondent, Luke Walton. How serious it is this criticism?

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a swingeing attack. It says the Government has not proved the case

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for GCSEs to be scrapped in key subjects. It mentions concern about

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less able pupils being left behind and subjects not covered by the new

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EBacc will be downgraded. It also voices particular concern about the

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plan to ask exam boards to franchise the qualification. It

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says introducing that change and a very tight timetable is a recipe

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for turmoil. This is just the latest in a series of criticisms. A

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few months ago England's main exam regulator wrote to ministers

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:16:38.:16:39.

voicing concern about the pace of reform. There -- there has been

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disapproval from head teachers and exam boards. The proposals are just

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for England. What sort of headache which cause for the rest of the UK?

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At the moment it looks like England is going it alone with

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disqualification. The Dutch government said it is sticking with

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GCSEs in all subjects. -- the Welsh government. Northern Ireland, we

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understand, is running its own review into the future of exams for

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14 to 18-year-olds. Scotland has had its own system of exams for a

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long time. There is concern about fragmentation of exams. That'll be

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a headache for universities and employers. With us now is Graham

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Stuart, who is the chairman of the Education Select Committee This

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morning, the top experts from the big four accountancy firms appeared

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before the Public Accounts Committee. What is wrong with the

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English Baccalaureate Certificate, as being proposed? What we say is

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the Government is right to say that 16-year-old exams need to be

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reformed, cut down the number of resits and have more testing at the

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end of the course and tackle grade inflation. What they are saying is

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they want to scrap GCSEs in this core group of subjects because the

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GCSE brand is broken and tainted. You do not agree? We do not think

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the Government has made a strong enough case to justify it. How is

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it that most subjects will be left with this discredited brand as

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GCSEs for years to come? Is it because those five are the ones

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:18:32.:18:32.

that he really cared about -- cares about? Computer science has just

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been added to the science collection today. We're not short

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of the details. You think that improvements could be made by

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reforming, stiffening, toughening up the GCSE system? It is a cross-

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party group which accepts the Government make mistakes on things

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like the diploma where they did not listen to things about curriculum

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design. Thousands of children took the Diplo, -- the Diplo match and

:19:05.:19:15.
:19:15.:19:19.

it has a -- it has up with it on the fine. It has massive political

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implications if it is not right. Cross-party we support a lot of the

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things you want. Let's look again at the methodology and make sure

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you get the implementation right. There is no point of bringing in a

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reform witches and kicked by another government and does not

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have the support of universities, employers and the profession itself.

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It is a good idea to ensure we have more we get in education. When the

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last government got rid of languages being compulsory, I think

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up was a huge mistake. We need to speak languages. We have been

:19:59.:20:05.

running a campaign to make at least one language compulsory. There is a

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need to make it better. I would be concerned that if you had two

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systems, you are left with some good subjects which are still going

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to be GCSE and tainted as grated two and great one for the key ones.

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You need to do one or the other. You cannot have two systems running

:20:28.:20:35.

together. That will be bad for the subjects that matter. Do you accept

:20:35.:20:39.

that GCSE qualifications have become devalued? It may not be

:20:39.:20:45.

possible to have one exam system covering those who are not at all

:20:45.:20:51.

academically gifted but also covers those who are going to head for the

:20:51.:20:56.

Russell group of universities. irony is that the Government is not

:20:56.:21:02.

a aware of how many people took the foundation Tear of GCSE. This exam

:21:02.:21:07.

will be sacked by a wider range of children and is the current main

:21:07.:21:17.
:21:17.:21:19.

GCSE. -- will be sacked. It will be broader. The Government asserts

:21:19.:21:23.

Bury's -- the Government says it is a harder exam and it will be taken

:21:23.:21:33.
:21:33.:21:36.

by more people. you move your measurement. We do not have the

:21:36.:21:44.

curriculum review yet. How you can come out with an assessment - you

:21:44.:21:50.

have a top Tia - without having the foundations in place. We do not

:21:50.:21:55.

know what you are supposed to teach and how schools can be held to

:21:55.:22:01.

account. We do not know how it will be assessed. It does not seem very

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coherent. If there were red lights flashing, the Secretary of State

:22:05.:22:11.

said he would listen. We think they are flashing pretty brightly. I am

:22:11.:22:19.

sure he will listen. You do not stand at all sure! I hope he will

:22:19.:22:24.

listen. He has a real sense of urgency to. There has been grade

:22:24.:22:29.

inflation which needs to be tackled. He wants to take us to a more

:22:29.:22:35.

rigorous set of exams. More stretch of the more able. Those sorts of

:22:35.:22:40.

things are right. You need to make sure you're clear about he wins and

:22:40.:22:44.

who loses, in particular about the Government that commits to closing

:22:44.:22:48.

the gap between rich and poor, there must be a positive outcome

:22:48.:22:55.

for children with lesser abilities, as well as the Mini Michael Goves,

:22:55.:23:05.
:23:05.:23:06.

who are sitting in schools today. Isn't it a very confusing today for

:23:06.:23:11.

teachers, pupils and parents? When I was at primary school and then

:23:11.:23:19.

grammar school, in Scotland, take the English exams, it was large-

:23:19.:23:24.

scale largely O-levels and A-levels so throughout the whole period.

:23:24.:23:30.

There was an exam below the O-level as well. Since then there has been

:23:30.:23:37.

a proliferation of exams. I have no idea where to start. It is true.

:23:37.:23:42.

Nothing irritates children more than when you tell them it is

:23:42.:23:48.

easier today than it was in our day it! It was, wasn't it? I do not

:23:48.:23:54.

know. If you have a permanent revolution in education you have

:23:54.:23:58.

problems. There has been deflation in these grades. They raise their

:23:58.:24:05.

questionnaire has been a problem in terms of standards. -- there is no

:24:05.:24:15.
:24:15.:24:16.

question there has been a problem. What I am concerned about is it has

:24:16.:24:22.

escalated. It will takeover GCSEs with a new system. We are looking

:24:22.:24:32.
:24:32.:24:32.

at ditching exams at AS-level. at the same time. There will be new

:24:32.:24:38.

A-levels, a new AS-levels and new GCSEs. He needs to get staff and

:24:38.:24:48.
:24:48.:24:52.

pupils ready to do it. Can you do a special level A-level? No, they are

:24:52.:24:59.

long gone. Thank you very much. Good luck with Michael Gove. Come

:24:59.:25:07.

back and tell us how you got on. The top expects from the big four

:25:07.:25:16.

accountancy firms stood accused of aiding and abetting corporate tax

:25:16.:25:19.

avoidance. But, as the hearing progressed, it seemed that they

:25:19.:25:23.

might also be engaging in question avoidance. I have won the scheme

:25:23.:25:28.

you offered to a company called Carlisle. Basically you devised the

:25:28.:25:37.

most complex company structure - absolutely extraordinary company

:25:37.:25:46.

structure. This is a company called Carlisle. They were European real-

:25:46.:25:52.

estate partners. Then you devised a hugely complex structure. That is

:25:52.:26:00.

the company structure. People listening will not be able to see.

:26:00.:26:07.

Two subsidiaries in Jersey. One subsidiary in Luxembourg. A whole

:26:07.:26:14.

purpose of the complexity of this structure is too, in your words,

:26:14.:26:24.

minimise tax - in my words, avoid tax. I know you cannot answer. This

:26:24.:26:30.

is your personalised offer to large corporations - to create a very

:26:30.:26:39.

complex set of company structures - the purpose of which, for you, is

:26:39.:26:46.

minimising tax and for us, avoiding tax. I cannot comment. The tax law

:26:46.:26:50.

is very complex in the UK and internationally. The Finance Bill

:26:50.:26:56.

just passed his 50 pages longer than any other finance bill. Do you

:26:56.:27:00.

offer a complex structures, involving setting up structures in

:27:00.:27:07.

low-tax jurisdictions bike in this case Luxembourg and Josie and

:27:07.:27:15.

Delaware and the Cayman Islands? Do you do that for the purpose of

:27:15.:27:21.

minimising tax? It will be one of the things that is taken into

:27:21.:27:24.

account. And we're joined by the Lib Dem peer and former Treasury

:27:24.:27:28.

spokesman Matthew Oakeshott. Is the coalition winning the war against

:27:28.:27:33.

tax avoidance? It is an uphill struggle. They are trying. I have

:27:33.:27:38.

been campaigning on this for many years in opposition and now. We are

:27:38.:27:43.

getting the message across that it is unacceptable. It has been a

:27:43.:27:52.

struggle. We were not helped by Sir Philip Green. Obviously we have the

:27:52.:27:56.

chairman of Google, one of the world class tax avoiders. At the

:27:56.:28:02.

moment he is on the business advisory group of David Cameron.

:28:02.:28:09.

Maybe we could get some more tax money out of him? I do not think

:28:09.:28:15.

talking to him would help. He has been very honest about it. There

:28:15.:28:20.

are ways of being very aggressive and not. I think George Osborne got

:28:20.:28:26.

it right in the Budget. He said aggressive tax avoidance is morally

:28:26.:28:31.

repugnant. We're trying to shame big companies into not doing

:28:31.:28:38.

morally repugnant things. You love to tinker and get your weight and

:28:38.:28:45.

have a tax cut here or a tax incentive there and so on. How big

:28:45.:28:53.

is a handbook? It is enormous. is not like that. It is like this!

:28:53.:29:01.

How many pages? 11,000 pages. not in government. I have never

:29:01.:29:09.

been in government. A lot of what I do is try to make it simple. Tried

:29:09.:29:17.

to stop all the dodges actually. First of all, Gordon Brown doubled

:29:17.:29:23.

the size and created hundreds of ways in which expensive accountants

:29:23.:29:29.

can find ways around it. This coalition government has added

:29:29.:29:34.

thousands more pages. I am not the coalition government and I am not

:29:34.:29:39.

Gordon Brown. As pension spokesman, I spent a lot of my life trying to

:29:39.:29:44.

stop Gordon Brown and Labour having such a lot of ridiculous tax

:29:45.:29:50.

arrangements. I have spent a lot of my life campaigning for

:29:50.:29:57.

transparency and simplicity. We are making progress. We got

:29:57.:30:00.

PricewaterhouseCoopers in the frame having to defend the outrageous

:30:00.:30:05.

things they do. There are two reasons why companies and people

:30:05.:30:14.

used the Cayman Islands. Basically you are doing it because it is

:30:14.:30:18.

corrupt and dirty money bought it is money that is avoiding tax. No

:30:18.:30:23.

other reason for it. reputational risks for companies

:30:23.:30:32.

now... Have I knew advising Starbucks? Yes. It is quite large

:30:32.:30:38.

reputation any. They are probably exploiting the huge tax code which

:30:39.:30:43.

has been created. There is a reputational risk if they are not

:30:43.:30:49.

seem to be paying their fair whack. That is right. I agree with what

:30:49.:30:55.

has been said. Going abroad to avoid paying tax is not acceptable.

:30:55.:30:59.

One of the things we are trying to encourage people to do is that you

:30:59.:31:04.

should not be honoured if you are avoiding tax. That has happened in

:31:04.:31:09.

the past and should not happen again. The mood has changed.

:31:09.:31:19.
:31:19.:31:21.

I have campaigned against Lord Ashcroft and other people, non-doms,

:31:21.:31:30.

getting status in the House of Lords, and I have done that. Amazon

:31:30.:31:34.

is a new one, but we have certainly got Lord Ashcroft to come onshore.

:31:34.:31:39.

It may be of symbolic importance, and I think most people will think

:31:39.:31:42.

it is only right that if you're not in this country paying your tax,

:31:42.:31:46.

then you should not be part of the tax and spend debate. You should

:31:47.:31:50.

not be in our legislative chamber. And you should not be honoured,

:31:50.:31:54.

that's fine, it is your choice, you can live anywhere in the world, and

:31:54.:31:58.

you should not get certain things if you do not live here. I

:31:58.:32:01.

understand that. But that is not going to make a blind bit of

:32:01.:32:05.

difference to the Treasury, trying to get these billions of pounds. It

:32:05.:32:11.

is not going to change overnight. EU regulations encourage companies

:32:11.:32:16.

to place their intellectual property rights in Luxembourg. So,

:32:16.:32:20.

what is the problem they fact I think it is true that you are going

:32:20.:32:28.

to have to have a more clear tax system. You have got mixed messages.

:32:28.:32:33.

We have had a message which said, if you come to Britain, you must

:32:33.:32:38.

pay a higher tax than the law necessarily says you have to pay.

:32:38.:32:42.

That is a confusing message to companies. It has to be one clear

:32:42.:32:47.

message. I agree with that, and this is work in progress for George

:32:47.:32:50.

Osborne. He stuttered of sending out a message of, come to Britain,

:32:50.:32:55.

it is the lowest tax place in the world. It is hard for him to move

:32:56.:33:00.

on from that and say, no, we do not want to say that. We need to look

:33:00.:33:04.

at the practical things that need to be done now. The key things

:33:04.:33:07.

include much more transparency in company accounts, so that we can

:33:07.:33:11.

actually see, and have proper reporting, country by country, for

:33:11.:33:15.

these big internationals. If you are Google, turning over billions

:33:15.:33:21.

here and only paying �6 million in tax, that means - and I believe

:33:21.:33:26.

there should be reform of company law, so that all big companies have

:33:26.:33:31.

to show exactly what they are paying, and the directors and the

:33:31.:33:36.

non-executives have to explain how much below the corporation tax what

:33:36.:33:41.

they are paying actually is. A lot of these companies depend on public

:33:41.:33:47.

approval. Starbucks is a case in point. They are minor tax dodgers,

:33:47.:33:51.

compared to Google and Amazon. Can I have my feet afterwards for that

:33:51.:33:58.

one, please? Your client is almost whiter-than-white! You can go to

:33:58.:34:06.

Costa Coffee, or wherever else, rather than... Did that come out of

:34:06.:34:15.

the PR budget? It is a pre-payment. It is just up front? No, they have

:34:15.:34:18.

restructured their business, so they are going to be paying tax.

:34:18.:34:25.

They wanted to pay tax immediately, now. On a turnover of? They do not

:34:25.:34:30.

split it up, it is a difficult question, because they have

:34:30.:34:35.

transfer pricing, of course. An awful lot of activity seems to

:34:35.:34:41.

happen in Holland. Holland as well as Luxembourg have got a reputation,

:34:41.:34:47.

in EU terms. But this is all part of getting this. In the Times today,

:34:47.:34:51.

PricewaterhouseCoopers are saying, we do not do this kind of thing any

:34:51.:34:57.

more. I am naming and shaming them, but I am also... We do not do mass

:34:57.:35:00.

market tax-planning schemes any more, they say. In other words,

:35:00.:35:09.

they only do a bespoke tailoring. bet you Starbucks' marginal rate of

:35:09.:35:14.

tax is a lot lower than mine. would never bet with you, Andrew.

:35:14.:35:18.

If they did not have a reputation or problem, they would not be

:35:18.:35:22.

paying Roland Rudd good money! After months of campaigning,

:35:22.:35:26.

residents of south London found out the fate of services at Lewisham

:35:26.:35:29.

hospital this morning. The Health Secretary told the House of Commons

:35:29.:35:31.

that whilst he understood the concerns of local people, he had

:35:31.:35:36.

taken advice that the future of health services in the area would

:35:36.:35:39.

be better if the accident and emergency department at Lewisham

:35:39.:35:46.

was downgraded. He explained why he felt he had no choice. The NHS

:35:46.:35:50.

Trust and is the most financially challenged in the country, with a

:35:50.:35:53.

deficit of �65 million per annum. It currently spends �60 million a

:35:53.:36:00.

year, 16% of its annual income, to service two PFI contracts, signed

:36:00.:36:04.

in 1998. For this and other reasons, repeated local attempts to resolve

:36:04.:36:08.

the financial crisis at the trust have failed. As a result, the trust

:36:08.:36:12.

is losing more than �1 million every week. In the three years

:36:12.:36:17.

since it was formed in 2009, it has generated a deficit of �153 million,

:36:17.:36:21.

a figure which will rise to more than �200 million by the end of

:36:21.:36:26.

this financial year, a huge amount of money, which has to be diverted

:36:26.:36:29.

away from frontline patient care. That was the Health Secretary,

:36:29.:36:34.

Jeremy hunt. We can now welcome our viewers in Scotland, who have just

:36:34.:36:39.

finished watching First Minister's Questions. Now, with us from

:36:39.:36:44.

outside Lewisham Hospital is Alex Bushill from BBC London. What has

:36:44.:36:49.

the reaction been? As you would expect, dismay, disappointment and

:36:49.:36:54.

anger. They say that this decision to close the accident and emergency

:36:54.:37:00.

unit here, downsizing it to a minor, urgent care centre, as well as

:37:00.:37:04.

downgrading the maternity unit, is grossly unfair. They say the south

:37:04.:37:10.

London Health Care Trust, this hospital, has debts, but they are

:37:10.:37:13.

manageable. They do not see why they should be forced to pay for

:37:13.:37:19.

the mismanagement of the neighbouring trust. The accident

:37:19.:37:22.

and emergency unit will go, and in its place there will be an urgent

:37:22.:37:27.

care centre, which means that those 120,000 people who come through the

:37:27.:37:31.

doors currently, that will drop to 60,000 people. The maternity unit

:37:31.:37:36.

will this capacity as well. 4,500 births every year here at Lewisham

:37:36.:37:41.

Hospital. That will shrink now to 1,000 births. So, there is a great

:37:41.:37:45.

deal of anger here. And as we saw last weekend, the campaigners have

:37:45.:37:49.

been out in some force. They say the argument may be lost, but the

:37:49.:37:54.

battle is not over. They will continue to fight this, they say.

:37:54.:37:57.

They say there are three years for the implementation to be carried

:37:57.:38:00.

out, and they say they build continue to try to frustrate the

:38:00.:38:02.

Secretary of State. They say they will also be seeking judicial

:38:02.:38:05.

review. They say the public consultation period has not been

:38:05.:38:08.

long enough. They are looking for three months of public consultation,

:38:08.:38:12.

which is why they will be going to the court to try to overturn that

:38:12.:38:18.

decision. With us now is Mike Farrar from the NHS Confederation,

:38:18.:38:23.

and the Conservative MP Nick de Bois. What do you say to that

:38:23.:38:28.

reaction, that it is grossly unfair, particularly because Lewisham has

:38:28.:38:31.

not mismanaged its finances in the way that neighbouring hospitals

:38:31.:38:36.

have? The point is a more general one. About the country, people are

:38:36.:38:39.

thinking about the changes to the Health Service which we need to

:38:39.:38:43.

make. At the moment, the way in which hospital care and primary

:38:43.:38:46.

care is organised means we are not getting the best results for

:38:46.:38:50.

patients. We are not spending the money has wisely as we can. We need

:38:50.:38:56.

to make a strong case for a case -- for change, of course, with public

:38:56.:39:00.

opinion as well. If we do that, we would like to think that we could

:39:00.:39:05.

count on political support from our elected colleagues at. Can you not

:39:05.:39:10.

count on that support? In many cases, we can. But we have seen

:39:10.:39:13.

cases where politicians have agreed with me in private, for example,

:39:13.:39:17.

when I was running health services, but have then said, they feel they

:39:17.:39:22.

have to be at the front of the march. That is not helpful. Do you

:39:22.:39:25.

think actually you're not being straight with your constituents

:39:25.:39:29.

when, in fact, as an MP in an area where a local hospital is proposed

:39:29.:39:33.

for closure, because perhaps it is failing or it is not as good as it

:39:33.:39:38.

would be if there was a merger, by saying, I am going to campaign to

:39:38.:39:44.

keep it open at any cost? Let's deal with that directly. I was

:39:44.:39:48.

elected to fight to save chase Farm accident and emergency from being

:39:48.:39:56.

downgraded. Fundamentally because the neighbouring area, Barnet, was

:39:56.:40:00.

saddled with ghastly Beefy debts. This was a consultation which many

:40:00.:40:05.

people had lost trust in. -- PFI gets. I was elected to do that job.

:40:05.:40:10.

There was no question. You were elected to do that job - is it the

:40:10.:40:14.

right decision to back keeping a hospital open if there is a

:40:14.:40:18.

clinical case which clearly says, we would be better off closing this

:40:18.:40:22.

unit and having a larger, more specialist unit up the road? It is

:40:22.:40:27.

not for a politician to start arguing about the clinical case. My

:40:27.:40:31.

criticism of the debate which has gone on around chase Farm is that

:40:31.:40:37.

the medical profession did not step up to the mark, did not make the

:40:37.:40:41.

case. If they had done that, they could win the hearts and minds of

:40:41.:40:46.

people, if it was the right thing to do. Why are they not doing that?

:40:46.:40:50.

He is white, we have to win the hearts and minds of people, and

:40:50.:40:53.

clinicians need to be involved in making that case. My argument is

:40:53.:41:00.

that where those cases for change have been made, like saving lives

:41:00.:41:04.

or improving survival rates from stroke, where commissions are

:41:04.:41:08.

saying that, I would expect my MP to be supportive of that. Would you

:41:08.:41:13.

like local politicians to keep out of the debate altogether? I am a

:41:13.:41:16.

democrat, I believe in democracy. It is really important that people

:41:16.:41:20.

understand why these changes are in their interests. They look for

:41:20.:41:24.

political leadership from their MPs.. But I have got the letter

:41:24.:41:30.

here, which you actually wrote to the medical director of the NHS,

:41:30.:41:34.

saying that actually, the front line professionals just were not

:41:34.:41:38.

there on during the case, they were not taking the lead. If they are

:41:38.:41:41.

not there arguing for a hospital to be closed because there was a

:41:41.:41:44.

better alternative, then you cannot expect politicians to do it for

:41:44.:41:48.

you? I would accept that. I think we have got to step up to the plate,

:41:48.:41:52.

we have to make the clinical case for change, we have to explain what

:41:52.:41:59.

it means. But also, we then depend on our politicians. Do you think

:41:59.:42:05.

there will ever be a case of MPs standing there saying, I think our

:42:05.:42:08.

local hospitals should close? Could that ever be the case, even when

:42:08.:42:14.

the clinical case is clear? would be an extremely foolish MP

:42:14.:42:20.

who stood outside an accident and emergency, which are massively

:42:20.:42:26.

reduced number of people were going to, and not saying, safe this

:42:26.:42:28.

accident and emergency. Particularly when the Government

:42:28.:42:32.

themselves have said that actually, if we do not win the support of GPs

:42:32.:42:36.

and patients, this is one of the four tests. So, in a way, you have

:42:36.:42:40.

got this conflict going on between winning the medical argument, which

:42:40.:42:44.

they think is a reasoned argument, and one that needs to be fronted by

:42:44.:42:49.

the medical profession, and only then, I think, should the

:42:49.:42:53.

politicians be making the point about reflecting their constituents,

:42:53.:42:57.

as to what they wish to do. These things do not happen overnight.

:42:57.:43:02.

Chase Farm has been going on since 2005. Constituents are never going

:43:02.:43:06.

to campaign to close the hospital, even if the numbers are low, unless

:43:06.:43:10.

they are persuaded of a clinical argument, with the backing of the

:43:10.:43:13.

local MP. If they are told that distances to the nearest hospital

:43:13.:43:17.

may be further, but you will see a specialist, and your rate of

:43:17.:43:21.

survival will increase, that is the argument you need to make as well?

:43:21.:43:24.

If that was a valid argument, I could see a case for someone doing

:43:24.:43:28.

that. But when you have eight years of consultation being held behind

:43:29.:43:33.

closed doors in central London, remote from the constituency, take

:43:33.:43:40.

a look at my example, chase Farm. If you say, we are going to consult

:43:40.:43:43.

the majority of people from Barnet, Haringey and Enfield, which is the

:43:43.:43:49.

area we are talking about, is it any wonder that there is a majority,

:43:49.:43:53.

based on Barnet and Haringey, which said, we would rather downgrade

:43:53.:43:57.

chase Farm and give everything to our neighbouring hospitals, which

:43:57.:44:02.

is now happening? I think the medical profession have to take the

:44:02.:44:05.

lead, but I am not signing up to anything which has been going on

:44:05.:44:15.
:44:15.:44:18.

where it has not been transparent It is an issue that is not just

:44:19.:44:22.

dividing the political class. The business world has been to-ing and

:44:22.:44:23.

fro-ing over whether David Cameron's promise to renegotiate

:44:23.:44:27.

our relationship with Europe and set a date for a referendum - five

:44:27.:44:30.

years from now - is a good move for Britain. So what impact is it

:44:30.:44:40.
:44:40.:44:45.

likely to have on firms? Susana Who likes a bit of European tipple?

:44:45.:44:50.

Tom, the resident wine expert here it is partial to a Bordeaux. A

:44:50.:44:54.

couple of miles away, but Prime Minister is after something with

:44:54.:45:00.

less of a European flavour. The wind is an analogy for David

:45:00.:45:06.

Cameron a pester Ps promised to Alter our relationship with the EU.

:45:06.:45:16.
:45:16.:45:18.

-- David Cameron's promise. All those promises have got people in

:45:18.:45:23.

the business world wondering whether the plan has legs. There is

:45:23.:45:28.

no doubt that our continental competitors are all going to be

:45:28.:45:32.

going out there saying, do not invest in Britain, you do not know

:45:32.:45:37.

whether they will have access in the single market or not. Come to

:45:37.:45:43.

us. We need to say, you will have confidence in Britain's future.

:45:43.:45:48.

PM was making clear that the single market remains the sparkling wine

:45:48.:45:52.

in the relationship and there is no question of David Cameron wanting

:45:52.:45:59.

the fizz to go out on that. Around half the UK trade's foreign

:45:59.:46:06.

investment is in UK markets. It says 3.5 million jobs in the UK are

:46:06.:46:13.

linked to export of goods and services to the EU. They say a fine

:46:13.:46:16.

wine gets better with age. Some business leaders think our

:46:17.:46:22.

relationship with Europe has become a bit sour. Business needs to be

:46:22.:46:28.

negotiated settlement within the EU. Currently, it is not helping our

:46:28.:46:32.

economy. If anything, the EU is a job destruction machine, rather

:46:32.:46:39.

than an entity that helps to create jobs and wealth. EU regulation does

:46:39.:46:44.

have the cost for British firms. It says companies spend up to �9.4

:46:44.:46:50.

billion on it in 2010. Uncertainty about what flavour we would end up

:46:50.:46:54.

with after a renegotiation on referendum has got some worried

:46:54.:46:57.

their firms in emerging markets may go elsewhere. The British Chambers

:46:57.:47:02.

of Commerce, which supports renegotiation but does not want to

:47:02.:47:08.

leave the EU, says those fears may be exaggerated. There may be those

:47:08.:47:13.

who decline to make decisions because of delay and uncertainty.

:47:13.:47:19.

Many said they will plough ahead anyway because it's his the

:47:19.:47:23.

location, legal system and friendliness which causes them to

:47:23.:47:31.

invest in the first place. -- it is the location. Will that be enough?

:47:31.:47:35.

The business world may find out in five years' time, which is how all

:47:35.:47:45.

this English wine happens to be. -- old. Joining us now is the City

:47:45.:47:54.

Spokesman for UKIP, Steven Woolfe. Business is divided. It is subtle.

:47:54.:47:59.

Do you accept that if Britain could negotiate a less odorous

:47:59.:48:03.

arrangement with the EU, most people would prefer to stay in?

:48:03.:48:08.

Good morning. Thank you for inviting me. Your point is on the

:48:08.:48:14.

premise that you can renegotiate. We do not believe that is possible.

:48:14.:48:19.

There has never been a renegotiation since the history of

:48:19.:48:24.

the European Union. It is quite nines were them to think they can

:48:24.:48:29.

have this but the practicalities are that most businesses recognise

:48:29.:48:34.

it is impossible. Where do we want to be in this global economy? What

:48:34.:48:39.

do we want to do? When they look at the European Union, they are saying,

:48:39.:48:44.

that is one market but it is not the only market. In many ways, it

:48:44.:48:49.

is not the pre-eminent market. Our trade with the rest of the world

:48:49.:48:54.

has increased to 55%. Most businesses with any form of export

:48:54.:48:58.

to the European Union are passionate about wanting to stay in

:48:58.:49:03.

the European Union. They want a reformed European Union. If you

:49:03.:49:08.

keep talking about renegotiation and opt-outs, you are not going to

:49:09.:49:14.

get them. Do not put the bar too high. Look carefully at what you

:49:15.:49:19.

can get in terms of multilateral reforms, which other countries want,

:49:19.:49:25.

like the Netherlands, Denmark, Ireland and Italy. If you do that a

:49:25.:49:29.

work on good reforms which improve the European Union for everyone,

:49:29.:49:34.

you might well get something. People in television studios like

:49:34.:49:38.

this have been asking for reform since the 1950s. When will it

:49:39.:49:44.

happen? The creation of a single market was a huge change. That is

:49:44.:49:49.

not a reform, it is an addition. was a massive reform. It does not

:49:49.:49:55.

always mean powers coming back from the centre. Some means powers going

:49:55.:49:59.

back to the centre. The commission is on the side of Britain in terms

:49:59.:50:04.

of making a more liberal Europe. Why don't we just have a common

:50:04.:50:10.

market rather than a single market? Canada, Mexico and the United

:50:10.:50:13.

States have a free-trade agreement. They do not have the massive

:50:13.:50:18.

bureaucracy that we have in Brussels. There is too much

:50:18.:50:24.

bureaucracy. It is not just a single market. By coming up have a

:50:24.:50:33.

free trade area? -- why can we not? It is not possible. America, Canada

:50:33.:50:39.

and Mexico have it to some extent. What we managed to do was to change

:50:39.:50:43.

the European Union so we would have a better market - the biggest

:50:43.:50:48.

market in the world. We're trying to have a free trade arrangement

:50:48.:50:55.

with the US. That is the prize that Britain wants. If you are right

:50:55.:51:01.

that it is impossible for a single country to bring back powers in any

:51:01.:51:07.

substantial way, then you should not care about that? There will be

:51:07.:51:12.

a referendum when you will get to say, he has not brought back enough,

:51:12.:51:18.

vote to leave. I care passionately. I care about what happens to the

:51:18.:51:23.

people of Europe. They need the opportunity to be free of the

:51:23.:51:28.

economic difficulties that they are in. You will still get the in/out

:51:28.:51:32.

referendum and you will still be able to campaign to leave. Only Mr

:51:32.:51:37.

Cameron can deliver that. We are short of one thing and that is that

:51:37.:51:43.

you cannot. We can. We do not have a single seat but one of the most

:51:43.:51:47.

exciting things about the positive aspect of David Cameron making his

:51:47.:51:52.

speech was to show that democracy works. Pressure from ordinary

:51:52.:51:58.

citizens and businesses, joining parties like UKIP or supporting the

:51:58.:52:02.

principles, it has caused concern within the political elite in the

:52:02.:52:08.

United Kingdom. You get plenty of time to speak on this. If I can

:52:08.:52:13.

just finish. The point is, ordinary people have actually had the

:52:13.:52:20.

opportunity to press their MPs here and forced pressure on Cameron to

:52:20.:52:26.

consider that it is not an extreme idea. They need to bring it into

:52:26.:52:31.

the centre of the table of discussions. That is a positive

:52:31.:52:36.

aspect. I do not think this would happen in the European Union in its

:52:36.:52:42.

democratic framework. It is interesting to hear UKIP praising

:52:42.:52:47.

the speech by David Cameron. 90% of it was about being in Europe and

:52:47.:52:52.

the vision of being in Europe. did imply he was enthusiastic about

:52:52.:52:57.

that if he could bring home the bacon. The first part of the speech

:52:57.:53:02.

said the vision he had about Europe a wire was important. The second

:53:02.:53:07.

part was about why the future of Britain was in Europe and how he

:53:07.:53:12.

was confident he could get a reform. He needs to manage that process

:53:12.:53:17.

very carefully and be careful about the language used. He is a local

:53:17.:53:21.

man made good. He compares himself to Nelson Mandela. And he wants to

:53:21.:53:24.

beat the Westminster parties to become Broughty Ferry's independent

:53:24.:53:28.

MP. Let's meet Bob Servant, the political ingenue, pitched into

:53:28.:53:31.

sturm and drang of a parliamentary by election in BBC Four's new

:53:31.:53:41.
:53:41.:53:47.

comedy, set in East Dundee. Inspector! I want you to know, if I

:53:47.:53:52.

am elected commit your job is safe. That would not be your decision.

:53:52.:54:02.
:54:02.:54:11.

You are the big man from the hospital. I am the medical director.

:54:11.:54:18.

I have seen you in the papers with the big cheques. Always glad to

:54:18.:54:25.

receive a charitable donation. am elected, I will not make a big

:54:25.:54:35.
:54:35.:54:38.

fuss if one of those big cheques should go... Go missing. I find

:54:38.:54:47.

that extremely offensive. So do I! We are joined now by the creator of

:54:47.:54:53.

Bob Servant - the writer, Neil Forsyth. How did you come up with

:54:53.:55:03.
:55:03.:55:04.

the character? From books. I wrote his autobiography. I created this

:55:04.:55:11.

hubristic character. When a 1-did television premise, I landed on a

:55:11.:55:16.

by-election and an independent candidate. Some people say he is

:55:16.:55:25.

loosely based on George Galloway. Absolutely not! He is from Dundee.

:55:25.:55:34.

He has no bigger fan than myself. In Dundee, we do not lack those who

:55:34.:55:40.

have moustaches. You are clearly from Dundee. Do you think of

:55:40.:55:46.

character would stand a chance if he stood there? I think Brian would

:55:46.:55:51.

but not bop. What does the electorate like in Dundee? They are

:55:51.:56:01.
:56:01.:56:10.

Broughty Ferry is the posh part of Dundee. It is to the east of Dundee

:56:10.:56:19.

and it is the posh part. It is the Scottish Riviera? Brian comes from

:56:19.:56:25.

Dundee. I managed to get the books to him and we were going to adapted

:56:25.:56:32.

for radio. He had great fun coming back and playing Bob in Dundee. It

:56:32.:56:38.

was shot in Broughty Ferry largely. It must have been nostalgic. People

:56:38.:56:45.

were approaching him on the streets. I actually think in the next Dundee

:56:45.:56:55.
:56:55.:56:57.

election he will get a few rogue boats. Both episodes are on iPlayer.

:56:57.:57:02.

Six episodes building up to election night. Will he or won't he

:57:02.:57:10.

be coming to Westminster? I have seen quite a few MPs talking about

:57:10.:57:16.

it. Have you ever fancied being a candidate for election? Absolutely

:57:16.:57:21.

not. The reason this be so successful is it appeals to the

:57:22.:57:31.

idea of having someone who speaks as he feels. Not lobby fodder. That

:57:31.:57:37.

is why people find politics so boring. Not enough people are

:57:37.:57:42.

personalities. He does not have a filter. That carries on in future

:57:42.:57:49.

episodes. It builds very nicely. Recover things like the question of

:57:49.:57:53.

independence in Scotland which is covered in his own style. Is there

:57:53.:58:00.

a message in the series? I think there will be a couple of political

:58:00.:58:05.

messages as the stakes get higher. It is showing a man who is a big

:58:05.:58:10.

fish in a small pond who has got into over his head, I think. I will

:58:10.:58:15.

watch it. There's just time before we go to find out the answer to our

:58:15.:58:25.
:58:25.:58:44.

Who was the most famous MP for That is fit for today. The One

:58:44.:58:48.

O'clock News is starting over on BBC One now. And I am back tonight

:58:48.:58:51.

on BBC One with Michael Portillo, Lord West, Alastair Campbell, Mary

:58:51.:58:53.

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