13/06/2013 Daily Politics


13/06/2013

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Daily Politics. The Chief Inspector of Schools says

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comprehensives systematically fail Britain's brightest kids. He put

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them in the mixed ability classes, they fail to teach them properly,

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don't set them challenging homework or don't have the know-how to get

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them into a good university. We'll be asking why it's all such a mess.

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The House of Commons committee has effectively accused Google of

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dodging its fair share of taxes. It insists it operates within the law.

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Who is right? We'll have the latest on the

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stand-off between the government and protesters in Turkey and get some

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international reaction to the two weeks of running battles.

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And, Gyles meets Maggie's old driver and talks about how ministers come

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to rely on the man old holds open the car door.

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So, in the next hour, with us for the duration, Tom or Tam Grey. He's

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the second baron of Strathclyde no less as the Laird of Paisley, I

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welcome you to the Daily Politics. Thank you very much. Good to be

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here. He sat in the Cabinet until a year ago as leader of the House of

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Lords. Google is in the news again. Today's scathing House of Commons

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report into the tax affairs has given it headlines. The Public

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Accounts Committee, one run by Margaret Hodge, laid into the

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Internet giant, dismissing the argument that all the salesmen and

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women are based in Ireland as "brazen and unconvincing". Google,

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according to a press release, earn something like $1. 3 in the UK in

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the first quarter of this year and paid only 0. 1% of that in taxes.

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That last bit wasn't on the press release.

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The committee chairman, Margaret Hodge, isn't impressed? I think the

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fact that over six years they have had a turnover of $18 billion here

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in the UK, yet paid only �16 million in corporation tax is evidence that

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they are not paying enough. Corporation tax during that period

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was running in 27, 26, 25%, that's the figure we should be seeing on

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the profits made here in the UK from the sales.

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Now, we asked Google if they wanted to come on and talk about their tax

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affairs but they didn't. They September us a few words. As we have

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said, Google complies with all the tax rules in the UK, and it's the

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politicians who make the rules. They sent us a few words. The public

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accounts comity wants to see companies pay more tax where

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customers are locate bud that's not how the rules operate today. We

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welcome the call to make the current system simpler and more transparent.

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That was Google. Now, obviously, major corporations

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will use the tax rules to mitigate their tax, most of them do that.

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They claim everything they do is legal. But there is an arguen't

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about something that might not be legal. That is, where are the

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advertising revenues generated for Google? They are saying we do really

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all the selling in Ireland, that's therefore where we pay tax. The

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committees of the law of evidence suggest they sell a lot of

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advertising in Britain? It's a very timely and interesting report. Most

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interesting because it comes the week before this great G8 meeting

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taking place in Northern Ireland next week and David Cameron's said

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one of the issues he particularly wants to discuss is the role of

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multinational taxation. Google make one very good defence

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which is they stick to the law, they are not breaking the law, they stick

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to the rules that have been applied by the politicians for many, many

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years now, and if politicians change the rules, they should do so, then

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they'll comply with them 4. I have some sympathy. I understand that

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too. I'm sure the rules are very complicated so if you hire expensive

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accountants, you can find ways around them. But this issue of where

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the advertising revenues are generated, in a sense, is nothing to

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do with sticking to the rules at all. This is a potentially criminal

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mat matter because you have an obligation in your tax return to

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tell the truth. Of course.And if you are paying commission to people

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who are selling advertising in Britain, but you are booking that

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advertising in Ireland, that should be looked at by HMRC? I'm sure HMRC

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if they haven't already thought of it will have now had the idea

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watching you on this programme. With everything we know about HMRC, they

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are very capable of dealing with large companies. But again, you

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think you made a good point about the over complication some the

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rules. Nobody understands the rules and it comes to a matter of judgment

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between the tax authorities and various companies.

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I think a greater clarity in this area, trying to pay tax where

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revenue is raised, would be a very good direction to go down. But

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almost more importantly than that, George Osborne has had a policy

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since 2010 of trying to reduce taxation for corporations and what

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we know from all the experience in the last 40 years is that when you

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reduce the overall level of taxation, companies are happier to

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pay what they have to do and don't go through all the hoops that many

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organisations and individuals do. He's kept the hoops. When you were

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in opposition, you pointed out that Gordon Brown doubled the size of the

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tax guide when he was Chancellor. True. Doubled it. It's now so big

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you can't even carry it around. What has your Government done? Added

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another several hundred pages to Gordon Brown's pages? And this is an

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error. We should not over complicate taxation. That's why this meeting

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next week is an important next milestone. People have been

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discussing it for a long time about how to deal with it. It's important.

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We all need to pay the tax that is due, but not to pay the tax that is

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not due. OK. Time four our daily quiz. The speaker's wife is called

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Sally Bercow, if you hadn't heard. Strathclyde will give us the correct

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answer. You will you think? I hope to discover what it is before then!

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He hasn't a clue. I'll have to tell him!

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Are comprehensives failing Britain's brainier kids? The report by the

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watchdog says they are. The Chief Inspector of Schools says it's an

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issue of national concern. Looking at 2012, the Ofsted report

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found 65% of pew piles at non-selective schools who achieve

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level five or above, quite a high level of attainment, in English and

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maths, at the end of primary school, they went on to fail to get an A* or

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A grades in both subjects at GCSE. A quarter of students who gained

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this prestigious level five in English at the end of primary school

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failed to gain a B grade at GCSE, corresponding to over 40,000 high

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attaining students, or at least they were at the end of primary school,

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not making the expected progress. Looking ahead to university

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applications, in 20% of non--selective secondary schools, no

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student achieved two As and a B at A-level in at least two of the key

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subjects. That is the minimum offer required by the minimum universities

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called the Russell Group. I'm joined by Ofsted's Chief Inspector, Michael

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Wilshaw. Were you surprised by the findings or did you suspect them?

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was shocked by them. Really?Yes, I come from the comprehensive system,

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I was a teacher in Inner London for many years and a teacher in London's

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comprehensives for many years. I was very certain rised at the under

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performance about the most achievable kids. Why? If you talk

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the results, you would think, these kids are good, that's a key to a

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whole range ofpingcational opportunities. What then goes wrong?

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Well, we have pointed to a number of important things. First of all, the

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transfer, the transition between primary school and secondary school

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is not good in many of our schools. So bright youngsters, bright eye and

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bushy tailed doing well at the end of year six in primary schools,

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transfer to secondary school and not enough is done, particular

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particularly at Key Stage 3 and in year seven at Key Stage 3. They are

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given the work they eve already done in primary school so they get bored

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and they lose interest, it then becomes much harder at Key Stage 4

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to catch up at age 14-16. You also raised the issue that a lot of kids

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have been taught in mixed ability classes; they are not being set in

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classes related to their ability. Upping that's a problem because you

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say, or the report says, that if in mixed ability classes, the teachers

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tend to teach towards the middle range? We are not prescriptive, we

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are saying you make the judgment about the school organisation and

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the classroom organisation you want. But, if you are going to use mixed

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ability classes, you have got to make sure that you have people and

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teachers who know how to teach in a mixed ability way. That's tough, is

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it not? That is tough. That's why I, as a head, rarely used mixed

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ability. We'll be looking in the next round of inspections at what's

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happening in these mixed ability classes which may be holding back

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our brightest children. The most disturbing thing, or one of them, is

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inspectors found in a number of schools that teachers didn't know

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who their most able children were in the class.

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They can't kept tabs on them? hadn't kept tabs on them or tracked

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their progress. And they didn't intervene to find out why? That's

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right. You are in favour of setting them? I am. That's my view.You are

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not being prescriptive, but if you had your way, you would have setting

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in the comprehensive system? That's up to heads but I did and I would.

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What we want to say is that if heads are going to pursue this line of

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mixed ability, classroom organisation, they have got to

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deliver the outcomes of our brighter children. Let me raise an issue

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about the Association of schools and colleges who've been on behalf of

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the union leading this report, they say it's not appropriate to use this

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primary scleefl five asker to predict future GCSE successes, they

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say you have taken the wrong benchmark? I've been a head and, if

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I 'ed met a youngster at the end of year six who'd achieved a level 5 in

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English and ale level 5 in maths, and got a good report from the

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primary, I would have expected that child to be an able child. In nine

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cases out of ten they were. And yet, as you said in your report, 65,000

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of these children are not getting the top grades at GCSE. What do you

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make of this? I think all parents will be deeply concerned and worried

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and and interested by this report and the schools have got to react.

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I think there's this point, this line between young children leaving

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primary schools doing very well and, then a few years later, not doing

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very well, is a clear indication that something's happening in those

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three or four years that they are getting to their secondary schools.

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Now, there may be a myriad of reasons between league tables about

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what schools have been doing in order to get people to pass, but the

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fact is, they are letting down these able students because if they are

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not getting the right GCSEs, they are not taking the right A-levels

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and not getting the opportunity to go to the top universities. There

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are serious consequences for our country. We want the brightest

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children, the majority of who go to non-selective secondary schools,

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three million go to non-selective secondary schools, only 150,000 go

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to grammars, so it's really important for the future of the UK

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that the youngsters do really well. All right. Listening to all that is

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Brian Lightman, the General Secretary of the Association of

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School and College Leaders. He has a bit of a sound problem, as you can

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see there in Birmingham. Let us see if he can hear us. Can you hear me

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here in London? Yes, I'm afraid I didn'the hear the beginning of what

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has been said, sorry about that. understand. Let me come to you then.

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Two thirds of kids who seem to be bright at the age of 11 because they

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get these great results in level 5 in English and mathematics then fail

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to get either an A or A* in the subjects at GCSE. That's a national

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scandal, is it not? Well, I think the first thing I want to say is,

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this is a serious subject that we need to have a reasoned discussion

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about. I'm very concerned about the sort of sensationalist head Lymes

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that we are hearing about, a culture of low expectations and so on. We

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need to be clear what a level 5 actually means. When a pupil gets a

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level 5 at kinder Key Stage 2, this is a high stakes accountability test

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and schools are understandably teaching children to the test and

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preparing for that. Level 5 has a very wide range of performance. Now,

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a child who has just scraped level 5 after a lot of tuition and coaching

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to get through it is in a very different place from a child who is

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at the top level of level 5 and therefore one of the highest

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achievers. The fact they have got a level 5 doesn't automatically mean

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that they are going to be getting As and A*s at GCSE. Most schools assess

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children on entry, they use standardised tests and other key

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things. The thing is to identify the brightest children when they come

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through to secondary school and that we do everything we possibly can to

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stretch them and challenge them. These kids are leaving primary

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school in pretty good shape and you would expect them to do well in

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secondary school and they don't. Something is going badly wrong.

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don't all do badly at secondary school. This is the point. Many of

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those children, I think 84% of those children were getting A stars and

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Bs. You know, you have to look at the data properly. There's no point

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- Not on the subjects that the Russell Group of universities, our

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top universities want. Hang on here. This is a misinterpretation of data.

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Those Russell Group facilitating subjects are a number of subjects

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which the Government has highlighted and I don't have a problem with them

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highlighting those subjects, but there are other rigorous A-levels

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that those students will have done and that's not shown in the data.

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You may say that, hold on, you may say that, but the Russell Group are

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the top group of universities. We all want to see bright kids, more

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bright kids from poorer backgrounds getting to our top universities.

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course we do. Zblt Russell Group has set what it thinks you need to get

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to get into their universities. Let me say the point I was trying to

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make, if there are many students who go to Russell Group verse toys who

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do not have those -- universities, who do not have those subjects, but

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they have other subjects, such as philosophy. We cannot draw sweeping

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conclusions based on a performance indicator that has been invented

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recently and was not something that was there when the children came

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through and you know, we need to look at the data properly, otherwise

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we're making generalisations. We're talking about a failing system and

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we're not talking about the good practice. That report describes a

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lot of good practice as well. We need to build on that. You seem to

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be very defensive on this. Not at all. The bottom line is that a lot

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of kids who leave primary school with good results are not then doing

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well in secondary school and not getting into the Russell Group of

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universities. Answer me this: If these kids doing well on the level

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five, if they go to grammar school, 60% of them then get A or A star in

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English and maths. Why do two thirds of them not in the comprehensives?

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The children who go to grammar schools have been selected on

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different assessments. These level five kids, who are going to

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comprehensives are some of the brightest kids out of the primary

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schools. Yes, some of them are.They have gone to grammar schools 30 or

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40 years ago. Some of those children are but not all of them. Level five

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is not the admissions criteria for grammar schools. I understand that.

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The data is not being used properly. It's being misinterpreted, rather

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than saying what more can we do. I don't represent head teachers would

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want to dumb down the system and have people failing. We are

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absolutely resolute in our wish for those children to do their best.

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You're not doing very well, are you? I disagree. You have an opinion and

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you're not using the data correctly. % of non-selective secondary

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schools, 20% are places where no student achiefs two As and a B at

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A-level in key subjects. In those subjects. Yeah. Not in the other

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subjects. Now if those subjects are priority that the Government is now

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doing, then we will have to constrain people. I have to tell

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you, there are very well known politicians who don't have A-levels

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in those subjects. We need to have a look at the sorts of people...

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You have a look... Which politician doesn't have an A-level in English

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or maths? I don't know. You look at things like economics and so on.

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Look at what the Prime Minister has got. The Prime Minister has a first

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class degree. Yes, that's right. But they don't need to have those

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subjects in order to get into a top-class degree. It is part of the

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measure, but it's not the only measure. What you're saying is that

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the whole system is failing because of data that is very, very

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selective. The other point here is that Ofsted do not routinely inspect

:20:15.:20:19.

the most outstanding schools. This is a small sample and you need to

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look at the whole picture. What I'm not here to say there isn't more we

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could do. We should be doing more, but I'm certainly not prepared to

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accept evidence that is unreliable. Evidence is unreliable. That's

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nonsense. We visited 41 schools. These were average comprehensive

:20:38.:20:44.

schools which took a fair spread of ability. We also looked at the

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evidence from 2,000 subject inspections in something like 150

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school inspections. We looked not just at those 41 average

:20:55.:20:59.

comprehensive schools, but we looked at what was coming through in

:20:59.:21:03.

inspections of schools over the last year. So, the evidence is there. We

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really must, as a country, stop making excuses. We know that too

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many of our youngsters from the state system are not doing as well

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as they should. The universities say that. The Russell Group universities

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say that. We have to deal with this issue and not make excuses about it.

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I would expect head teachers up and down the land to have high

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expectations of their students coming to them. Ofsted says you're

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making excuses. We're not. We're saying let's look at the data

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properly. Let's look at exactly what we're hearing here and what the

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sample is and what questions were asked in the schools and let's talk

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about what we can do together rather than having this confrontational

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situation where all the time we're told we're failing to do this,

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failing to do, that when at the same time, more and more students are

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going to university and getting good first-class degrees, more than ever.

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They're not all from the, these comprehensives. More students all

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round are going, proportionate. A hugely disproportionate number of

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our kids who are going to the Russell group of universities are

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coming from the private and grammar schools. What this Ofsted report

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seems to suggest is the reason is we're failing the brighter kids when

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they enter secondary school. That's a simplistic conclusion. There are

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lots of other reasons why children from independent schools and from

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selective schools have very, very good chances to go, they're given a

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lot of help an tuition and so on. We should support the children in the

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non-selective schools to ensure that they have those opportunities that

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are afforded them in the privileged environments. , we've overrun

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because I wanted you both to have a good say. It's a very important

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subject. I thank you both. There were more protests in Turkey

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last night with riot police firing tear gas to disperse protesters. The

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country's governing party says it's prepared to hold a referendum on the

:23:05.:23:11.

issue which sparked the riots. It started as a dispute about a park

:23:11.:23:15.

but the way the police treated campaigners triggered rioting. The

:23:16.:23:20.

government says it's confident that the new "gesture of goodwill" would

:23:20.:23:25.

clear the area but warned those who remained but they would "face the

:23:25.:23:31.

police". Our correspondent Quentin Sommerville is in Istanbul. It looks

:23:31.:23:38.

like this mass use of police power has diminished, if not destroyed the

:23:38.:23:45.

protest, is that right? Well, if you look behind me, I'll step back and

:23:45.:23:51.

you can see, that's the square down there, and it's largely cleared of

:23:51.:23:54.

protesters much they've been pushed back into Gezi Park. They're

:23:54.:23:57.

remaining there and rejecting that offerer from the Prime Minister.

:23:57.:24:01.

They say it's a ploy. They don't accept. It within the last couple of

:24:01.:24:05.

hours he's said to them it's that or the redevelopment of the park. This

:24:05.:24:08.

is your final warning. But we're now into the stage where we've had in

:24:09.:24:13.

the last 36 hours, two ultimatums that he was going to clear the park

:24:13.:24:17.

of protesters. But they're not ready to accept that. It's still a relaxed

:24:17.:24:20.

atmosphere in the park at the moment, certainly during the day.

:24:20.:24:25.

But it's a very defiant atmosphere. Have seen terrible pictures of what

:24:25.:24:29.

the riot police have been prepared to do to the protesters. In the end,

:24:29.:24:34.

would I be right in think thinking that if they don't get out of that

:24:34.:24:42.

park, he will send in the riot police? I think that there's a very

:24:42.:24:47.

real likelihood of that. It's worth remember remembering, this is about

:24:47.:24:53.

much more than just that punch of trees behind me. It's about -- bunch

:24:53.:24:58.

of trees behind me. It's about a large minority who believe the

:24:58.:25:01.

government is too authoritarian, that it doesn't listen to them. The

:25:01.:25:06.

government has said we are listening to you, we've given you this

:25:06.:25:10.

opportunity. Istanbul can have a referendum over the future of the

:25:10.:25:17.

park. The protesters aren't buying that. Do you get a feeling there

:25:17.:25:21.

that you're at a kind of for good or ill, you are at a kind of turning

:25:21.:25:31.
:25:31.:25:33.

point in modern Turkey? I don't feel that, no. To be honest, it fields

:25:33.:25:37.

quite -- feels quite localised. Last week when the protests were at the

:25:37.:25:41.

fiercest, we travelled across the country. We went to the coast and

:25:42.:25:46.

there was an energy and it felt almost like a momentum. Coming back

:25:46.:25:50.

a week later, that seems to have dissipated.

:25:50.:26:00.
:26:00.:26:04.

on this story. We go straight to our very own Jo Coburn in Strasbourg.

:26:04.:26:08.

Andrew, the protests and unrest in Istanbul and other Turkish cities

:26:08.:26:12.

have caused concern for politicians here at the European Parliament.

:26:12.:26:17.

They debated the situation in Turkey earlier this week. They came up with

:26:17.:26:21.

a resolution calling for the Prime Minister's government to be more

:26:21.:26:25.

democratic and less heavy handed with the protesters. The question is

:26:25.:26:32.

will Turkey take any notice? To discuss that my two guests, a

:26:32.:26:39.

British conservative MEP and also a representative from Germany's SDP

:26:39.:26:44.

party and of Turkish heritage. Why should the Prime Minister listen to

:26:44.:26:48.

anything that's said here, Turkey's not part of the EU. That's a good

:26:48.:26:53.

question. I would say, there is a mixture of different things for the

:26:53.:27:00.

time being. For example, I guess the prime minister is very emotional. I

:27:00.:27:05.

would say surrounding him, all the advisor are hard liners, I would

:27:05.:27:13.

assume. So with a mixture of this, Mr Erdman with his emotional ilt, he

:27:13.:27:17.

is saying, European Union is not what they say is not valid for us. I

:27:17.:27:21.

think there's a mixture of all these things. Does Turkey still want to

:27:21.:27:26.

join the EU? Accession talks have been going on for years. Is there a

:27:26.:27:29.

feeling now that after years of frustration perhaps they're going

:27:29.:27:35.

off the idea? Official Officially they say yes. It's one of our first,

:27:35.:27:40.

important issues or things in the next time. But if you look to the

:27:40.:27:46.

poll toy, or to the politics, you can see there is, you know, Turkey

:27:46.:27:52.

has multiple options. In the last few years, they grew up with the

:27:52.:27:56.

economy and so from that perspective Turkey has multiple options and they

:27:56.:28:05.

are not ready to bow to the European Union. What's your response to

:28:05.:28:09.

what's been going on, the political unrest? Do you have sympathy with

:28:09.:28:15.

the protesters or the government? I'm concerned. I have sympathy with

:28:15.:28:19.

the protesters. They have a democratic right to protest and

:28:19.:28:23.

that's part of living in a democracy. You asked the question

:28:23.:28:29.

about Turkey joining the EU, Turkey has much to offer the EU -

:28:29.:28:35.

economically, it's a very, it's develop developing. Security, NATO,

:28:35.:28:38.

they are a good friend to the United Kingdom. They fight against

:28:38.:28:41.

terrorism. But there's been such hostility in the European Union

:28:41.:28:45.

about Turkey joining up. There are certain boxes that Turkey has to

:28:45.:28:52.

tick. Democracy and human rights are the top of the list. I work on the

:28:52.:28:56.

women's rights committee and I know the area women's rights in Turkey

:28:56.:29:00.

still needs to be addressed. For example, they have forced marriages.

:29:00.:29:04.

They have honour killings still. you think those are the real issues

:29:04.:29:08.

at stake here, that Turkey will never be able to join the EU unless

:29:08.:29:13.

it becomes less socially conservative? No, I don't think so.

:29:13.:29:19.

I think the young population in Turkey, for example, is totally

:29:19.:29:25.

oryen tented to the European Union. They are modern. They tried to get

:29:25.:29:30.

into the European Union but we all know that the visa regulation is not

:29:30.:29:36.

ready for that. I think that the prime minister, maybe he has another

:29:36.:29:44.

agenda. He sees he is a big star in the near east countries and northern

:29:44.:29:51.

African countries. So I think he is trying to go into both directions

:29:51.:29:55.

and finally, he will decide. Significant is this unrest? Our

:29:55.:29:59.

correspondent, we just spoke to, said actually he feels it's more

:29:59.:30:04.

localised. It's not a major turning point for Turkey. Do you agree?

:30:04.:30:11.

don't think so. I think that this is a mass protest. It starts with the

:30:11.:30:19.

Gezi Park, we all know. Now it's a protest against the way of

:30:19.:30:29.
:30:29.:30:29.

leadership. It's a political issue now. So I think that Mr Erdogan

:30:29.:30:32.

would be able to overcome the situation in order to give the hand

:30:32.:30:38.

to the protesters, like the last two days, he has some meetings with the

:30:38.:30:45.

protesters. I think, but we have to help them. We have to help the

:30:45.:30:49.

Turkish government with cooling down Turkish government with cooling down

:30:49.:30:55.

Turkish government with cooling down period. How does the EU help?

:30:55.:30:59.

How can the EU help? What's happened is, the Prime Minister is in a way a

:30:59.:31:05.

victim of his own success with his economic liberal reforms. He's a

:31:05.:31:12.

socialite Conservative by nature. It's almost a new class, middle

:31:12.:31:17.

class secular population, mainly in the cities, not in the rural areas,

:31:17.:31:22.

who use the Internet, Facebook, they are nor in touch with European

:31:22.:31:27.

ideals, and suddenly, he's cutting back now and is introducing things

:31:27.:31:35.

like a ban, or they tried to introduce a ban on red lipstick on

:31:35.:31:39.

the Airways, kissing in public, things that are done in normal

:31:39.:31:45.

European states. Yes no, will Turkey ever join the E Snitch There's a way

:31:45.:31:52.

to go, we'll see -- the EU? I think it's 100% that sometimes it will

:31:52.:31:55.

happen. Thank you to both of you and back to you, Australian drew, in

:31:55.:32:00.

London. -- Andrew in London.

:32:00.:32:06.

There are certain things you aassociationiate with Germany, good

:32:07.:32:11.

cars, enthusiastic supporters of the euro, or at least one of them

:32:11.:32:15.

stereotypes may no longer be true. German politicses in London this

:32:15.:32:20.

week are arguing that the euro should be abandoned. Professor Bernd

:32:20.:32:25.

Lucke is a former World Bank economicist, former member of Angela

:32:25.:32:29.

Merkel's ruling Christian Democrat party and the current leader of a

:32:29.:32:34.

new euro critical party Alternative for Germany. What would this mean

:32:34.:32:37.

for Germany, for the European economy and for us? We can ask him

:32:37.:32:41.

he's with us now. Welcome. Thank you very much.

:32:41.:32:47.

What is it you want? Do you want to abolish the euro or do you want to

:32:47.:32:56.

retrench the euro back into a smaller, more sustainable zone?

:32:56.:33:00.

The latter would be the least we'd like to do. Moving back to national

:33:00.:33:05.

current sills is an optionism depends on whether it would be

:33:05.:33:13.

passable, the bailing out. Our prime goal is actually to get rid of the

:33:14.:33:18.

certain European countries. Get rid of? Let them exit the euro and let

:33:18.:33:22.

them regain the national currency which also allows them to be

:33:22.:33:30.

competitive again. Would that not put Germany's economy at a

:33:30.:33:35.

disadvantage, because if you got rid of certain countries, their

:33:35.:33:41.

currency, if they went back to the Sasapa and the drachma, and the

:33:41.:33:45.

Lira, their currency would devalue, and the German euro, or what's left

:33:45.:33:51.

of it, would soar, all of your exports would be priced out of the

:33:51.:33:57.

market? That's not quite true. First, it would be fair if the

:33:57.:34:01.

certain European countries had their chance in European competition.

:34:01.:34:07.

Currently the German currency is just under valued and the currency

:34:07.:34:11.

of the European states is under valued. The port thing is that

:34:11.:34:15.

exports don't only depend on exchange rates, they also depend on

:34:15.:34:18.

demand and income and these countries are see seerry in a

:34:18.:34:22.

recession. German exports have dropped by 25%. Because people

:34:22.:34:27.

haven't got the money? Exactly, yes. If we boost their economies, German

:34:27.:34:31.

exports will actually Ben from it that. Let me welcome our Scottish

:34:31.:34:35.

viewers who're joining us on BBC Two. They've BP watching First

:34:35.:34:40.

Ministers questions in the Scottish Parliament. We are discussing this

:34:40.:34:46.

new Euro-sceptic party, can I call it that? Of course, yes -- they've

:34:46.:34:48.

been watching First Ministers questions in the Scottish

:34:48.:34:52.

Parliament. If Germany simply left the euro

:34:52.:34:56.

itself, that would be the end of the euro, wouldn't it? That would

:34:56.:35:00.

probably be the end of the euro and it's not what we recommend. We

:35:00.:35:03.

recommend a gradual dismantling, starting with the southern European

:35:03.:35:10.

countries. You will know that at the time when it was Mr Mitterrand in

:35:11.:35:15.

France and Chancellor Cole in Germany, that many people knew at

:35:15.:35:20.

the time that including all these countries, Italy, Greece, Spain,

:35:20.:35:25.

Portugal, that we are nowhere near the Maastricht criteria, many people

:35:25.:35:30.

now that it would probably end in tears the way it is at the moment.

:35:30.:35:36.

But Mr Cole and Mr Mitterrand were on a political thing, they wanted

:35:36.:35:41.

political union. Surely if you allow the eurozone to break up the way you

:35:41.:35:46.

are suggesting, it kind of holes the whole euro project below the water

:35:46.:35:50.

line? I mean, many economists have warned

:35:50.:35:57.

in #19ed 92 and 1999 not to establish a common currency -- 1992.

:35:57.:36:00.

They ignored it everywhere except in Britain, I suppose. So you were very

:36:00.:36:08.

wise. Plenty of people are keeping their heads a little lower now.

:36:08.:36:11.

far as the political dimension of the euro is concerned, that's

:36:11.:36:15.

exaggerated. The European Union's fared well in terms of which we did

:36:15.:36:22.

not have a common currency. It's very aren yabling to think about

:36:22.:36:26.

this and move back to a system which is more flexible. You have got a

:36:26.:36:30.

German soul mate now, Tam? I think it's very significant. It represents

:36:30.:36:34.

something I've felt for a very long time. Britain's not isolated in

:36:34.:36:38.

Europe. There are now many people in Europe, including the Professor

:36:38.:36:40.

here, saying very much the same things as the Conservative Party's

:36:40.:36:47.

been saying for many years about Europe, it's over bureaucratic and

:36:47.:36:50.

over centralised, it creates regulation that people would rather

:36:50.:36:53.

not stick to. This is the great opportunity that David Cameron's

:36:53.:36:56.

spotted, not just for Britain to have renegotiation, but for the

:36:56.:37:00.

whole of Europe to decide what is in our collective interests and to

:37:00.:37:05.

create a new Europe with less centralisation, less expense, less

:37:05.:37:10.

bureaucracy. The Single Currency is a key question for Germany. I eve no

:37:10.:37:14.

idea how this is going to be resolved. Actually, what the

:37:14.:37:18.

Chancellor in Germany is trying to do is to keep kicking the can along

:37:18.:37:22.

the road for a bit longer. That's probably the right thing at the

:37:22.:37:27.

moment, to create a bit of stability within Europe, whether we end with

:37:27.:37:32.

some countries falling out of the euro, I don't yet know.

:37:33.:37:37.

Professor, would it be rude of me to suggest you are going to do that

:37:37.:37:41.

well in the September Federal Elections? Whether we do well or

:37:41.:37:44.

not, this depends on how much money we can raise for our campaign which

:37:44.:37:50.

is actually our most severe problem currently. The established parties

:37:50.:37:56.

get millions of euros in state funds and the newly formed parties do not.

:37:56.:38:03.

You can tap him for a few euros. Professor Lucke thank you for being

:38:03.:38:06.

with us. Stephen Hester is to step down as

:38:06.:38:09.

Chief Executive of the Royal Bank of Scotland before the end of the year

:38:09.:38:12.

to pave the way for the preprivatisation of the bank. He

:38:12.:38:17.

said he's "content" with the board's decision. An interesting use of the

:38:17.:38:22.

word, but the news has provoked anger in the city and among

:38:22.:38:25.

commentators who say he's been forced out by the Treasury. Before I

:38:25.:38:28.

came on air, I looked to see that the stock in the bank was falling

:38:28.:38:31.

this morning. That may have changed since, but the markets didn't react

:38:31.:38:36.

well. Treasury Minister, Sajid see ya individual made a statement to

:38:36.:38:40.

the Commons this morning and explained the process that RBS is

:38:40.:38:43.

undergoing and answered questions on the Government's involvement in the

:38:43.:38:48.

decision of Mr Hester -- Sajid Javid. Royal Bank of Scotland is

:38:48.:38:53.

moving from the rescue phase to the next phase, a phase of focussing on

:38:53.:38:56.

becoming a UK bank that provides greater support to the British

:38:56.:39:00.

economy and is prepared for its return to the private sector. The

:39:00.:39:04.

Government has always been clear that we want to see RBS become a

:39:04.:39:09.

more focussed, retail and commercial bank focussed on supporting the

:39:09.:39:12.

British economy and with a much smaller international investment

:39:12.:39:17.

banking arm. Did Stephen Hester go voluntarily or

:39:17.:39:21.

was he pushed? What role did the Chancellor have in prompting his

:39:21.:39:24.

departure? When did the Chancellor set out to the chairman and the

:39:24.:39:30.

board his desire that Stephen Hester should go? And, is there now any

:39:30.:39:35.

role for UKFI, or have they been circumvented on the discussion of

:39:35.:39:39.

the Chief Executive role? Chancellor has not been directly

:39:39.:39:43.

involved in meeting with Stephen Hester. Prior to the announcement,

:39:43.:39:48.

he's not met with him prior to the announcement of his departure on

:39:48.:39:55.

this issue. This is a decision for RBS and its board. RBS and its board

:39:55.:40:01.

have made this decision jointly with Stephen Hester and come to a

:40:01.:40:07.

voluntary agreement. The chairman of RBS, Sir Philip Hampton, did ask to

:40:07.:40:12.

meet the Chancellor last week to inform the Chancellor of the board's

:40:12.:40:17.

decision. That's the official line, but it's

:40:17.:40:21.

clear as mud what really happened. Let's ask a man who knows, a good

:40:21.:40:25.

friend of this programme, Alastair Heath. What do you think's happened

:40:26.:40:29.

here? I think what's happened is, uncreasingly the Government's views

:40:29.:40:33.

on what should happen to RBS has differed from what Stephen Hester's

:40:33.:40:36.

views are and also the views of people who want to maximise the

:40:36.:40:39.

value of RBS's share price. The Government wants to reduce art

:40:40.:40:42.

officially the size of RBS's investment bank, probably because

:40:42.:40:46.

they don't like the idea of owning investment banks, they're obsessed

:40:46.:40:50.

with the idea that the bank needs to be domestically focus and retail

:40:50.:40:54.

focussed. If you genuinely want to maximise its value, that's probably

:40:54.:40:59.

not the strategy you should be pursuing. That's why the private

:40:59.:41:03.

sharehold shareholders are worried about political interference.

:41:03.:41:06.

are saying there's been a disagreement between the Chief

:41:06.:41:11.

Executive who had won vision for the future of the bank going forward and

:41:11.:41:17.

the aims of the Government finally firming up on what it wants to do

:41:17.:41:23.

with the bank, which was different from Mr Tess Hester? That's the most

:41:23.:41:25.

plausible explanation. The Government are saying Hester didn't

:41:25.:41:30.

want to be there too long, they are saying they needed someone else to

:41:30.:41:34.

deal with the privatisation process. It seems like the Government and him

:41:34.:41:38.

are no longer agreeing. They are no longer on the same wavelength. We

:41:38.:41:42.

know there is a consensus for privatising the bank in some form.

:41:42.:41:46.

But there are various ways of doing that and various time scales for

:41:46.:41:50.

doing it. Do we have a clear idea yet what Mr Osborne, the Chancellor,

:41:50.:41:54.

wants to do? I think he wants to first start off with Lloyds Banking

:41:54.:41:58.

Group, which is a much easier privatisation. We are a small part

:41:58.:42:03.

of that? The taxpayer opens a part of that and the bank is in a betser

:42:03.:42:06.

state, the an easier bank to deal with. The share price has risen

:42:06.:42:11.

quite well? Yes. Apart from that, look at RBS. I suspect the way they

:42:12.:42:15.

choose to from I vattise Lloyds may give us an idea of how they want to

:42:15.:42:22.

do Lloyds. He wants to do it before 2015? For political reasons, but it

:42:22.:42:30.

depends on how the bank is managed, is it being maximised to --

:42:30.:42:33.

privatised to maximise the share price? The way the Conservatives

:42:33.:42:38.

have got the previous one sold off chumps of BP when it was owned by a

:42:38.:42:41.

big chunk of the state and it was sold at a market rate, you went for

:42:41.:42:47.

the highest price, it was back in the private sector. Should it be a

:42:47.:42:51.

more British Gas Tell Sid operation in which you try to use state

:42:51.:42:55.

ownership of RBS to spread the ownership among ordinary British

:42:55.:43:00.

people? I absolutely think it should be like a Tell Sid-type operation.

:43:00.:43:06.

Thises a massive one-off opportunity to actual actually redefine

:43:06.:43:10.

capitalism and increase the amount of shares. It's a major opportunity.

:43:10.:43:16.

There are a number of good proposals, such as the one from

:43:16.:43:18.

Policy Worthington Cup exchange for example. It's a great opportunity.

:43:18.:43:23.

It's also on binding the public back to the City to try and show that the

:43:23.:43:28.

interest can be aligned again. agree with that. That's the right

:43:28.:43:32.

way forward. RBS is one of the biggest banks in Britain, the

:43:32.:43:36.

largest lender I think. It needs to be in a proper shape in the private

:43:36.:43:42.

sector, and if anything, this row, if that is what it is, just

:43:42.:43:48.

demonstrates what is a bad -- what a bad owner the Government is, much

:43:48.:43:52.

better to be in the private sector. Spread the ownership as widely as

:43:52.:43:56.

possible and if we can get people to become interested in owning shares

:43:56.:44:01.

again, then we'll all benefit, including the people who become

:44:01.:44:05.

buyers, because they'll understand that owning shares can be a route to

:44:05.:44:08.

long-term prosperity. Thank you very much for marking our

:44:08.:44:15.

card today. Our special guest Tam sprath collide, former leader of the

:44:15.:44:18.

House of Lords, what red tear peer of the realm, so he has plenty to

:44:19.:44:25.

say about Lord's reform. There were attempts at an overhaul

:44:25.:44:30.

of the other place, as they quaintly call it. The Upper House is still

:44:30.:44:34.

not ready for potential change. The constitutional reform committee are

:44:34.:44:37.

plugging away trying to bring consensus on how to bring the Lord's

:44:37.:44:41.

into the 21st century. Teach them how to deal with lobbyists as well,

:44:41.:44:47.

that would be an idea. The evidence-taking session was taking

:44:47.:44:57.
:44:57.:44:58.

part this morning. It was said earlier that there was a

:44:59.:45:03.

consensus that the House of Lords was too big. Is that consensus

:45:03.:45:07.

universal across the membership of the House or was it confined to

:45:07.:45:12.

people, the four people we have here who are regular attenders and

:45:12.:45:22.
:45:22.:45:23.

participants? I think the feeling is that we are too big. But where do

:45:23.:45:28.

you go from there in determining what the size should be. The only

:45:28.:45:32.

qualification I would make was the one I gave earlier that Lord hill

:45:32.:45:37.

our leader had interesting figures about the active participation.

:45:37.:45:41.

Again, I can't speak for Lord Hill. I think you should look at what he

:45:41.:45:49.

has said about this because it -- in effect he says it isn't total

:45:49.:45:53.

population, it's trying to find ways of making better use of the

:45:53.:45:57.

membership. Joining us now the Lib Dem peer and whip, Ben Stoneham.

:45:57.:46:03.

Welcome. Now Tam Strathclyde when you resigned as leader of the Lord's

:46:03.:46:08.

you admitted, that the quo ligs "had broken down in the Lord's". What's

:46:08.:46:12.

the current stated of the coalition in the Lord's. It's extremely good.

:46:12.:46:19.

I think you took that out of context. Never do that (! )There

:46:19.:46:22.

was substantial disagreement in the reform in the House of Lords, within

:46:22.:46:26.

the House of Lords and within the House of Commons. What I love about

:46:26.:46:30.

this debate and I've been involved in this debate for a long time, is

:46:30.:46:33.

we look to the Lord's to debate and discuss it, but actually, House of

:46:33.:46:37.

Lords reform is really about the House of Commons. They will never be

:46:37.:46:40.

-- there will never be change until the House of Commons agree on what

:46:40.:46:44.

to do. Last summer, the House of Commons voted in overwhelming

:46:44.:46:49.

numbers on a plan that I supported, Ben supported and many others, the

:46:49.:46:53.

Government supported, but when it came to actually deciding how to do

:46:53.:46:59.

it, the House of Commons decided on an historic fudge. It was ever thus.

:46:59.:47:07.

They did that in the days of Enoch Powell. The same old story.Did Tam

:47:07.:47:12.

Strathclyde find is so difficult to work with you? I think you're

:47:12.:47:16.

misrepresenting it. He spoke to me the following day and apologised. He

:47:16.:47:21.

said he was completely misquoted. They always say that. I think it's

:47:21.:47:28.

unfair to say that. The reality is I think Tam Strathclyde had been

:47:28.:47:32.

pressed by the discipline -- would be impressed by the discipline

:47:32.:47:34.

showed by the Liberal Democrats in the coalition. I think the

:47:34.:47:40.

relationships work pretty well. Inevitably there will be areas of

:47:40.:47:45.

disagreement. Have things got better since he's gone snoo I think they've

:47:45.:47:52.

just carried on. That's very diplomatic. I believe that. They've

:47:52.:47:57.

got better. He's difficult. That's unfair as well. This is co-ligs

:47:57.:48:02.

politics working extremely well. It's sickening. In 2010 relaunched

:48:02.:48:06.

into an experiment in Parliament and in the House of Lords about how to

:48:06.:48:10.

make coalition work. None of us had experience. Bits of it were messy.

:48:10.:48:15.

On some bills I think individual parties played their cards harder

:48:15.:48:20.

than I think some of us had imagined. But the underlying

:48:20.:48:23.

strength of the coalition is the Prime Minister, Deputy Prime

:48:23.:48:31.

Minister, the Chancellor and his number two get on extremely well.

:48:31.:48:34.

The essential purposes for creating the coalition still exist. We have

:48:34.:48:39.

local difficulties. Let me give you an example, on the vote on

:48:39.:48:43.

boundaries. Where I thought the Liberal Democrats got themselves

:48:43.:48:47.

into a ridiculous position. Ratted on you. Not only that, they promoted

:48:47.:48:53.

a system which they themselves had said was unfair. The reality was the

:48:53.:48:55.

Tory backbenchers in the Commons were foolish. They should have

:48:55.:48:59.

continued on the House of Lords reform. This is something we could

:48:59.:49:05.

have an argument on. I was going to say is that I think Tam Strathclyde

:49:05.:49:10.

is a classic person who has spent most of his life sustaining the

:49:10.:49:14.

coalition and the Conservative Party. He's skilled at running

:49:14.:49:18.

coalition. What about the coalition in the Lib Dems? All political

:49:18.:49:25.

parties are coalition. I'm a social Democrat. OK. It's all well for you

:49:25.:49:31.

to be so cosy here. But we watch this from the outside. The failure

:49:31.:49:36.

to reform the Lords, you're just this huge dumping ground for the

:49:36.:49:39.

establishment these days. There's 800 of you. The coalition will add

:49:39.:49:44.

another 50. I mean, it's a joke. It's very difficult to reform. There

:49:44.:49:49.

are lots of vested interest. Stop adding to them. If you don't, you

:49:49.:49:56.

change the age profile. The average age is already about 93. Joot

:49:56.:50:02.

Liberal Democrats would say should reform the House of Lords.

:50:02.:50:09.

How is it that the wore's only superpower of 300 million poem --

:50:09.:50:14.

world's only superpower of 300 million people, its upper house has

:50:14.:50:18.

100 members and this little island off the coast of France has an upper

:50:18.:50:23.

House with 800 plus. It's too big. The House of Commons is too big as

:50:23.:50:27.

well. We tried to reduce that as well. They wouldn't let you do that.

:50:27.:50:31.

They certainly would not, which was a pity You have to reform the House

:50:31.:50:38.

of Lords at the same time. There There was a deal done which said

:50:38.:50:43.

that the House of Commons should reduce to 600 and We Will Rock You

:50:43.:50:46.

reform to the House of Lords. thought if this lot gave you the

:50:46.:50:55.

referendum on AV you would give them boundary changes. The fact is that

:50:56.:51:00.

the gravy train continues. You have a career in politics, it comes to an

:51:00.:51:05.

end, oh, no, we'll stick you into the House of Lords, �300 a day, nice

:51:05.:51:09.

title, gets you reservations in restaurants and we're off to the

:51:09.:51:13.

races. I'm sure you get reservations too. But the serious point...

:51:13.:51:17.

McDonald's! The difficulty for reformers has always been that the

:51:17.:51:21.

House of Lords actually does the job it's asked to do remarkably well,

:51:21.:51:27.

for very little cost. It analyses, scrutinises, revises legislation. It

:51:28.:51:32.

does the job that a second chamber should do. It just doesn't need 800

:51:32.:51:36.

of you. I agree. On that amazing consensus, we move

:51:36.:51:40.

on. Thank you for being with us. Now imagine being sat, if that's the

:51:40.:51:44.

correct English, in a car with Margaret Thatcher, after she stepped

:51:44.:51:49.

out of Downing Street for the last time. Or hearing ministers make

:51:49.:51:52.

crucial decisions as you're driving them to meet heads of state or rock

:51:52.:51:55.

stars, if you're Tony Blair. Probably not something you'll find

:51:55.:51:59.

in the job description to join the Government car service, but they are

:51:59.:52:02.

witnesses to some unique and intimate moments of history. For the

:52:02.:52:07.

latest in our series on the Westminster village, Giles has taken

:52:07.:52:17.
:52:17.:52:24.

to the road with former Government They are privy to secrets, but have

:52:24.:52:29.

no official role. They drive ministers but not policy. Sometimes

:52:29.:52:33.

they share a trust and relationship with people at the top that Cabinet

:52:33.:52:37.

colleagues don't get close to, Government drivers. Thart political

:52:37.:52:42.

equivalent of what the butter saw. You build up a rapport between you.

:52:42.:52:47.

Over the years, of course, but initially are you getting to know

:52:47.:52:55.

one another. Once you get to know a minister, of course, then you become

:52:55.:52:59.

privy to everything that's going on in the car. Most of them do gel with

:52:59.:53:03.

their ministers because if they don't, it's best they come off and

:53:03.:53:07.

another driver goes on there. Sometimes you do get a clash of

:53:07.:53:13.

personalities. Did you ever have any? There was only one minister

:53:13.:53:19.

ever in my career that I couldn't get along with too well. That was

:53:19.:53:23.

earnest Marples. Was Transport Secretary in the early 60s. Here he

:53:23.:53:27.

is talking about drink driving. People drink and then they have too

:53:27.:53:31.

much and it's the end of the year and they drive home. I'm all for

:53:31.:53:36.

drinking. I'm in the a scrooge. I like my drinking, I had a sherry

:53:36.:53:42.

today. Denis wasn't a fan. I drove him for about six months or so, in

:53:42.:53:50.

the end, I did a swap. I think it was in both our interests.

:53:50.:53:56.

Diplomatically put! That's right. I wound up with a wonderful man, Enoch

:53:56.:54:00.

Powell. It's long been thought that Government drivers' network was a

:54:00.:54:04.

crucial sounding board for ministers. Every driver has a story

:54:04.:54:11.

to tell. A lot of them confide in ministers, between each other. It's

:54:11.:54:17.

a wonderful network there in fact, when we get back to the garage

:54:17.:54:22.

telling stories. Ghast drivers network, what does that say about my

:54:22.:54:27.

policy and where I'm going? Very much so. And we used to feed them

:54:27.:54:31.

little things that possibly, if it wasn't too sensitive of course, we'd

:54:31.:54:37.

let our ministers know. Always. On one occasion in 1976, Denis knew

:54:37.:54:44.

something before his minister Harold Hever. I'd known, funnily enough

:54:44.:54:48.

through some colleagues in work, I knew that Harold Wilson was going to

:54:48.:54:55.

resign the next day. When they came out of kobt they'd been informed. "

:54:55.:55:02.

Oh, yes I heard that yesterday." It all went dead in the car. He said, "

:55:02.:55:07.

You knew yesterday and you never told me? He was quite annoyed.

:55:07.:55:11.

drove Mrs Thatcher on and off for years and finally ended as her

:55:11.:55:14.

official Prime Ministerial driver. The strangest journey he had with

:55:14.:55:20.

her was her last in that role. was the most amazing journey. We got

:55:20.:55:24.

in the car and for once, there wasn't a word spoken in that car

:55:24.:55:27.

from the time we left Downing Street until we actually came out of

:55:27.:55:33.

Buckingham Palace. It was very poignant. In today's money-saving

:55:33.:55:37.

climate ministers tend not to have their own driver. A bonus possibly

:55:37.:55:41.

to the Treasury, but perhaps politics and history are poorer as a

:55:41.:55:51.
:55:51.:55:51.

result. Now, did you have a Government car

:55:51.:55:55.

or a driver when you were a minister? I did in the old days, in

:55:55.:56:00.

the 1980s and 90s. But all that stopped under the new austerity of

:56:00.:56:04.

2010. I have to say, it was one of those perks that was absolutely

:56:04.:56:08.

fantastic. You got to know your drivers. You were on very good terms

:56:08.:56:11.

with them. They were extremely helpful and it was a relief to see

:56:11.:56:16.

your driver there when you needed to go somewhere. It did change. I think

:56:16.:56:21.

it was probably right that it changed. Did you have a pool of

:56:21.:56:27.

cars? You did. You need to get ministers from A to B, using public

:56:27.:56:31.

transport where that's zrierable. But they need -- desirable. But they

:56:31.:56:36.

need to be in cars and get to where they need to be effectively. It's

:56:36.:56:42.

not such a good situation from the minister's point of view, but from

:56:42.:56:45.

the taxpayers' point of view it's fair enough. The driver ever tell

:56:45.:56:50.

you things? Very much so. The gossip was extraordinary. They always had a

:56:50.:56:55.

little tale to tell. They were very discreet about where they got their

:56:55.:57:00.

information from, a bit like people in your great profession. But they

:57:00.:57:06.

did know stuff. They didn't brag about what the former minister

:57:06.:57:11.

they'd had in the car before, so there was also a discretion there.

:57:11.:57:15.

They were very keen, usually, to tell you what it was. You felt you

:57:15.:57:20.

could have confidential discussions with another minister in the back of

:57:20.:57:26.

car? Very much so. I never doubted the security of a driver. On one

:57:27.:57:29.

occasion I was dealing with something extremely sensitive. After

:57:29.:57:34.

I said to the driver, " Did you hear any of that? . He said he never

:57:34.:57:38.

listened to anything. He just switched off and talked about

:57:38.:57:42.

something different. Probably because it's so boring. Right, now

:57:42.:57:48.

just before we go. We have to get the answer to quuries. Why is the

:57:48.:57:53.

Speaker's wife Sally Bercow in the headlines again? A, she's locked her

:57:53.:58:00.

husband out of the flat? Selling furniture on I bay and inviting

:58:00.:58:04.

buyers to pick it up. Varietying Nigel Farage for sea or putting an

:58:04.:58:09.

innocent face on her census form. They're all credible. That's the

:58:09.:58:16.

clever nature of this quiz! I think she locked him out. If only! She may

:58:16.:58:23.

have done. That we don't know. She's selling furniture on eBay. It's not

:58:23.:58:31.

the official furniture, it is her own furniture, innocent face. That's

:58:31.:58:35.

all for today. Thanks to our guests. The One O'clock News is starting

:58:35.:58:38.

over on BBC One now. I'll be back tonight at 11.35pm with John

:58:38.:58:40.

Simpson, Fiona Millar, John Prescott, Michael Portillo, Miranda

:58:40.:58:42.

Green, and making her first appearance with us will be

:58:42.:58:45.

Andrew Neil and Jo Coburn have the latest political news from London and Strasbourg and are joined by Conservative peer Lord Strathclyde, former leader of the House of Lords.


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