:00:00. > :00:00.engaging in a civilised dialogue on immigration. I do not agree, I do
:00:00. > :00:00.not think it is possible for Conservatives to go back on
:00:07. > :00:10.modernisation. I don't think those Conservatives to go back on
:00:11. > :00:18.people committed to it have retreated. Let the welcome our
:00:19. > :00:21.viewers from Scotland. We've been joined by viewers in Scotland who
:00:22. > :00:28.have been watching First Minister's Questions from Holyrood. Not only is
:00:29. > :00:33.it over, that none of these issues are part of the modernisation
:00:34. > :00:40.agenda, partly the reason is it failed. It failed to get an overall
:00:41. > :00:43.Tory majority. Your modernisation agenda was essentially about
:00:44. > :00:49.appealing to the chattering classes within three square miles of here,
:00:50. > :00:54.and came up with nothing for striving, working class and lower
:00:55. > :01:00.middle-class voters. I do not think the argument was perfect. I do not
:01:01. > :01:04.agree. First of all, the Conservative party did succeed in
:01:05. > :01:09.forming a government in circumstances where its previous
:01:10. > :01:13.election results were badly hit. The swing to the Conservative party was
:01:14. > :01:20.massive. But it did poorly in Scotland and the North West. And not
:01:21. > :01:26.well enough with ethnic minorities. Among the kind of people who elected
:01:27. > :01:33.Margaret Thatcher and Tony Blair. I am self-critical, there were things
:01:34. > :01:37.we argued correctly which were important, and other things which
:01:38. > :01:41.did not get the attention. It became important when the Conservative
:01:42. > :01:44.party was dealing with such a large deficit. What has posed a big
:01:45. > :01:53.challenge to the ideas we were developing was it did not -- it
:01:54. > :02:01.turned out a period of no growth, and cuts. You mentioned the minimum
:02:02. > :02:11.wage. As if that was part of the modernisation agenda. What is the
:02:12. > :02:25.equivalent of the modernising agenda this time, compared to vote blue, go
:02:26. > :02:30.green, big society? First of all, the big society issues raised by
:02:31. > :02:38.David Cameron, a broken society, that is not over. We have to return
:02:39. > :02:44.to that. Secondly, it does have to reflect the fact different economic
:02:45. > :02:51.times mean you have to deal with issues of the incomes of the low
:02:52. > :02:55.wage in a more competitive way. Which your modernisation agenda had
:02:56. > :03:02.nothing to stay in 2010. Are we agreed? I had better move on! I
:03:03. > :03:08.agree it wasn't complete. It was highly politically successful. If
:03:09. > :03:17.the conservatory had not done what it did, it would not have got close
:03:18. > :03:26.to winning power. Tell us briefly, it is dead agenda, to fight this
:03:27. > :03:31.next election. I do not agree. We must not retreat from social liberal
:03:32. > :03:37.issues. Secondly, it does have to make sure people feel, even on
:03:38. > :03:44.issues like welfare, it is being fair, as well as being tough. And it
:03:45. > :03:48.has got to find ways to appeal to people on low incomes and showed as
:03:49. > :03:59.the country recovers, it will have the interests of everyone. Those are
:04:00. > :04:04.tough, new challenges. We will see. Now, the NHS. It's been likened to a
:04:05. > :04:05.national religion, and many joined Hands Off Our Hospital campaigns to
:04:06. > :04:19.save local services from closure. I am at Saint Thomas 's Hospital,
:04:20. > :04:25.Parliament is across the River Thames. Let us find out what people
:04:26. > :04:29.think about the politics of the NHS. There are a lot of things to educate
:04:30. > :04:35.people. Staying of drink and smoking. The accident and emergency
:04:36. > :04:41.locally was full of people at new year with injuries from drink. Which
:04:42. > :04:47.is wasting a lot of money. The friend I am visiting, she is 21,
:04:48. > :04:53.unexpectedly she caught meningitis. They have treated her for the last
:04:54. > :04:57.six months for free. She has been an inpatient for ages. To think how
:04:58. > :05:03.much that is costing? I dread to think. We complain about tax. When
:05:04. > :05:11.something like that happens, if it wasn't covered... Someone has
:05:12. > :05:16.recommended the idea of an NHS tax, specifically for the NHS, would that
:05:17. > :05:20.work? It is good the way it is. You never know when you will need it. I
:05:21. > :05:24.have been helping all my life but any time and could need an operation
:05:25. > :05:31.or procedure that costs thousands of pounds. I think it is OK the way it
:05:32. > :05:37.is. It does get larger and larger. And we have an ageing population. As
:05:38. > :05:40.health care services get better. That increases the total amount of
:05:41. > :05:49.people who need to be taken care of. Yes, it is a big, black hole. You
:05:50. > :05:52.sound it up perfectly. But then you are a medical student.
:05:53. > :05:57.The government should sort out the NHS. What if it costs more money and
:05:58. > :06:10.there is no end to it costing more money? I don't know, I can't help
:06:11. > :06:12.you there. I don't blame him! Danny Finkelstein recently proposed a
:06:13. > :06:15.complete re-think in our approach to NHS spending. And we're joined by
:06:16. > :06:18.Vidhya Alakeson, from the Resolution Foundation, to discuss his medicine
:06:19. > :06:24.for the health service. Danny, what do you think should
:06:25. > :06:27.happen? It is more I think people do not appreciate how rapidly it is
:06:28. > :06:32.increasing as a proportion of national income. It is a big
:06:33. > :06:41.decision, do we want to, in 50 years, be spending ?1 in every ?5 on
:06:42. > :06:49.health care? What I want to do is to link what we spend on the NHS with
:06:50. > :06:53.taxation. An NHS tax? If you appeal to someone we are going to spend a
:06:54. > :06:59.greater proportion of income on health. There are good arguments for
:07:00. > :07:05.that. You would have to suggest an increase to pay for it. People would
:07:06. > :07:10.no longer feel the NHS should keep on spending without anybody having a
:07:11. > :07:18.grip on how much it was costing. On my tax return, I would see so much
:07:19. > :07:26.money on income tax, and on the NHS tax. You could turn national
:07:27. > :07:33.insurance tax, as an example, into specifically an NHS tax. A bit of it
:07:34. > :07:40.does go to the NHS. What you make of that? I question to -- the extent to
:07:41. > :07:45.which a hypothecated tax would change the state of debate and
:07:46. > :07:50.fundamentally change what people expect from the NHS. As every
:07:51. > :07:54.country gets richer and spends more on health care, where do we stop
:07:55. > :08:00.spending on other aspects, if we want to spend more on health care?
:08:01. > :08:08.It is what the opposition wants. We should expect to spend more on
:08:09. > :08:17.health care. Isn't that the problem, wouldn't people say, just take more
:08:18. > :08:21.of that money from my tax? We were spending more on an army at the
:08:22. > :08:27.start of the programme, now it is health. The conversation was, should
:08:28. > :08:36.we be spending more on the army? I am in favour on spending more on
:08:37. > :08:42.everything. Are you? You are not, really. It depends who is spending
:08:43. > :08:50.it. I am certainly in favour of spending more on defence, and health
:08:51. > :08:56.care. I think we are spending too much on the welfare on certain
:08:57. > :09:04.aspects. Let me come back. It seems to be right, as you say, as we get
:09:05. > :09:09.wealthier, when the health service was set up, I was part of the
:09:10. > :09:15.first-generation looked after by the NHS, at our health spending would
:09:16. > :09:20.fall, it was projected. But the costs of technology and someone is
:09:21. > :09:25.rising. If that is the one area in public spending which will rise,
:09:26. > :09:29.doesn't it mean on the left and right you have to look at government
:09:30. > :09:37.pulling out of other areas? That is one option. You could grow the tax
:09:38. > :09:44.base by keeping more people in work, so we have to get more of the
:09:45. > :09:49.ageing population in work for longer. Would you increase taxes?
:09:50. > :09:55.That is a bigger conversation than just about the NHS. At the moment,
:09:56. > :10:05.there any conversation is what can be cut? But also, where can we raise
:10:06. > :10:09.tax revenue? There is potentially a revenue raising agenda in terms of
:10:10. > :10:17.funding an NHS. We will suddenly have to pay more for the NHS. One
:10:18. > :10:28.puzzle would be a hypothecated tax. In other areas, you can do more. We
:10:29. > :10:34.want the best of everything is what I meant. The NHS is no different. We
:10:35. > :10:39.cannot do that without regard to how much it costs. It is increasing
:10:40. > :10:43.rapidly as a proportion of public spending. We haven't got the deficit
:10:44. > :10:47.down because the proportion of money spent on the NHS is rising.
:10:48. > :10:55.Therefore we haven't got the deficit down as quickly. We need to be
:10:56. > :11:05.realistic. Where would you get the money from? For a start, new money
:11:06. > :11:10.to the NHS doesn't necessarily lead to better care. There is a huge
:11:11. > :11:15.amount of money we need to spend better. Less in hospitals and more
:11:16. > :11:19.on the community. Ring-fencing the NHS and cutting social care to an
:11:20. > :11:23.extreme, is that a sensible way forward?
:11:24. > :11:27.Last month, George Osborne announced the Government's intention to
:11:28. > :11:30.abolish the cap on student numbers. The Government wants an extra 60,000
:11:31. > :11:35.students in higher education at an eventual cost to the taxpayer of ?2
:11:36. > :11:39.billion a year. So we have already spent another ?2 billion. The move
:11:40. > :11:43.will, in part, be funded by selling off the student loan book. But do
:11:44. > :11:53.the numbers add up? We can talk now to the blogger and writer Andrew
:11:54. > :11:58.McGettigan. What is wrong with the government's idea to sell off the
:11:59. > :12:03.existing student loan book and use it to finance more university
:12:04. > :12:06.places? There are a number of problems with the Autumn
:12:07. > :12:13.statement's presentation of figures, but ultimately student loan figures
:12:14. > :12:17.lose money. You send them out into the world, and you get it back over
:12:18. > :12:22.30 years, but how much do you estimate you lose on that loan? Back
:12:23. > :12:27.in the 2010, rents of spending review, we thought we'd only lose
:12:28. > :12:33.30p in every pound -- comprehensive spending review. But now we expect
:12:34. > :12:35.to lose 40p in every pound. You have to find that funding therefore from
:12:36. > :12:40.somewhere else. Selling alone that loses money, and you might not get
:12:41. > :12:43.what they are worth when you sell them to the provider, especially if
:12:44. > :12:48.you've you have to compensate the purchase with future subsidies going
:12:49. > :12:53.the other way because they cannot change the terms, that means you end
:12:54. > :12:56.up going over the cliff. You have to put some money in from somewhere
:12:57. > :13:03.else. That is the fundamental question about sustainability. But
:13:04. > :13:07.if you sell the loan, securing it, whoever buys the loan book, surely
:13:08. > :13:11.it's their responsibility to get the loans. The government has the money.
:13:12. > :13:17.It won't happen in this case because they are collected through HM RC, so
:13:18. > :13:21.that is where the primary collection occurs and that's where it will
:13:22. > :13:27.continue to come from. The current management process, is it up to
:13:28. > :13:33.scratch to deal with that sale? I suspect you think not. The National
:13:34. > :13:37.Audit Office thinks not. It said the current setup was not fit for
:13:38. > :13:40.purpose and it needs to remodel the repayment collection, so if you
:13:41. > :13:43.enter a contract with the private sector, where you have a target on
:13:44. > :13:47.collection performance we might see money going the other way because
:13:48. > :13:52.the systems in place are not fit to meet the targets. Thank you for
:13:53. > :13:55.joining us and outlining that. We are joined by David Willetts, the
:13:56. > :14:04.University Minister, and John Denham. Welcome to you both. What do
:14:05. > :14:07.you say to Andrew? It's right to have more people going to
:14:08. > :14:10.university. We don't have a target but it's great to have the
:14:11. > :14:16.opportunity. It's good for them and the economy and we can finance that
:14:17. > :14:20.by bringing forward the proceeds of the sale of the student loan book.
:14:21. > :14:24.The policy is right within its own terms. It's simple. Young people
:14:25. > :14:27.want to go to university and everybody who has that qualification
:14:28. > :14:31.has the ability and aptitude to do it should have the opportunity. We
:14:32. > :14:34.are unusual for a western country where there are tens of thousands
:14:35. > :14:38.each year who want to go to university and we slam the door in
:14:39. > :14:41.their face. Most countries don't do that. George's ambition, quite
:14:42. > :14:47.rightly, is that people have the aptitude and ability should be doing
:14:48. > :14:52.it. He said that when he looked at the Autumn statement measures, but
:14:53. > :14:57.one that did the most for the long-term performance of the British
:14:58. > :15:02.economy was giving more people the chance of getting a university
:15:03. > :15:08.degree. But is it true that 40% of the loan book will never be repaid?
:15:09. > :15:14.That is the current estimate, and it changes every time there is a new
:15:15. > :15:19.estimate. It usually goes up. It has been going up the last few years,
:15:20. > :15:23.but why is simple. We said you pay back more if you are earning more
:15:24. > :15:27.than ?21,000 per year, so as earnings have underperformed since
:15:28. > :15:32.the forecast, every time there is a new set of earnings data, which
:15:33. > :15:38.shows what we assumed they would be, it effectively makes the ?21,000
:15:39. > :15:42.threshold more generous. It was generous when we started and it is
:15:43. > :15:49.more so now. That is a deliberate policy. If you admit, as we stand at
:15:50. > :15:54.the moment, before the higher loans have really begun to work through,
:15:55. > :16:00.that 40% of the loans you will never get back, why don't you just cut the
:16:01. > :16:04.student fees by 40%, which would be less of a deterrent for people to go
:16:05. > :16:11.and try to make sure that you collect the remaining 60%? The good
:16:12. > :16:16.news is that fees are not a deterrent. Nobody pays up front. We
:16:17. > :16:20.have had record numbers of applications, and better than that,
:16:21. > :16:24.record applications from people from low income backgrounds, so they
:16:25. > :16:30.understand the system. John, what is your reaction? Let's take the
:16:31. > :16:34.non-repayment of fees. If you have a child going to university paying
:16:35. > :16:37.?9,000 per year, there are effectively paying ?6,000 for the
:16:38. > :16:42.education and ?3000 per fees that will never be paid. If you did not
:16:43. > :16:45.spend so much on debt cancellation, you could put it into higher
:16:46. > :16:50.education and the fees could come down. We now see that the course the
:16:51. > :16:54.government has taken, outside the ideological idea of having high
:16:55. > :16:58.fees, is wrecking family finances and is very bad for public
:16:59. > :17:03.investment. If we shifted every penny we could into teaching we
:17:04. > :17:05.could bring the fees down to about ?10,000 for the average three-year
:17:06. > :17:12.degree instead of ?25,000 at the moment. What is your response? It's
:17:13. > :17:16.not wrecking family finances because families are not paying for it. We
:17:17. > :17:20.cannot predict who will be earning what in later life, but we say if
:17:21. > :17:25.you earn more than ?21,000, you pay back. If you are less well paid, you
:17:26. > :17:28.don't pay back. It's a gradual scheme that means nobody need worry.
:17:29. > :17:34.You only pay back through income tax. You said to me in a
:17:35. > :17:38.Parliamentary reply that 50% of people never paid the loans off in
:17:39. > :17:43.full. So you get 40% of the money not paid back, and 50% of people do
:17:44. > :17:51.not pay back in full. So that means that these people, 9% of everything
:17:52. > :17:54.they earn over ?21,000, they will pay for 30 years and they still
:17:55. > :17:58.won't have cleared what they earn. That makes it a terribly bad deal
:17:59. > :18:08.for them and the taxpayer and the economy. What is saying is they are
:18:09. > :18:12.paying a 29% rate of income tax. But if people are earning a lot, they
:18:13. > :18:19.should pay for their education. If you shifted it away from a high fee
:18:20. > :18:29.policy, nobody would be paying the 29% rate of income tax. Ineffectual
:18:30. > :18:33.writing of 100%. If someone is earning a lot of money, they should
:18:34. > :18:37.pay that. All you have to do is reduce the rate of debt
:18:38. > :18:42.cancellation, spend that on fees, on teaching people and the fees will
:18:43. > :18:45.come down. More people will have loans that they can pay off, they
:18:46. > :18:50.will borrow less in total and they will be paying less in total. That
:18:51. > :18:58.is what we could do. Is it right to take away the cap? Should you leave
:18:59. > :19:02.that universities? Ideally is you want people to go to higher
:19:03. > :19:06.education, but the financing system is like raising a mortgage to
:19:07. > :19:11.financial annual holidays. Sooner or later you hit the buffers. You have
:19:12. > :19:16.to have real money to do it with. By the way, who is going to buy the
:19:17. > :19:25.loan book? We are expecting significant interest from within the
:19:26. > :19:31.city. Financial institutions? It will be a knock-down price, that is
:19:32. > :19:41.the trick. I just wondered who would buy it. Probably The Royal Bank of
:19:42. > :19:46.Scotland. If it's cheap enough. The night we see the first ever
:19:47. > :19:57.Westminster correspondence dinner. Tickets are like gold dust. But
:19:58. > :20:00.apparently just 50 pairs of tickets have been allocated to members of
:20:01. > :20:04.the Westminster press pack. The Prime Minister's soiree is set to be
:20:05. > :20:08.a rather less glamorous affair than that held by our friends across the
:20:09. > :20:19.pond. Let's see how it goes down in DC. Thank you. How do you like my
:20:20. > :20:26.new entrance music? My next 100 days will be so successful I'll be able
:20:27. > :20:32.to complete it in 72 days. And on the 73rd day, I will rest. The first
:20:33. > :20:41.black president. That's unless you screw up. And then it's been a big,
:20:42. > :20:44.what's up with the half white guy? I'm continuing to spread our agenda
:20:45. > :20:53.globally and around the world, as well as internationally. Barack
:20:54. > :20:57.Obama, he's already a lame duck, so why wait? Picking the right actor to
:20:58. > :21:03.play him was the challenge. As it turns out, the answer was right in
:21:04. > :21:10.front of us all. Daniel Day Lewis. Were you nervous about playing him?
:21:11. > :21:15.Yes, I was. Look, look. Let me be clear about this. You wouldn't
:21:16. > :21:22.believe how long it takes to put these ears. I want to talk about
:21:23. > :21:32.some serious issues. OK, here it comes. Nuclear prior inflation --
:21:33. > :21:41.nuclear proliferation. Nuclear proliferation. Nuclear
:21:42. > :21:48.proliferation. You can see it is a huge production in America. It takes
:21:49. > :21:51.days and days beforehand, about 1800 people go, massive parties around it
:21:52. > :21:56.as well. Not going to be quite the same in London, I think. Two people
:21:57. > :22:00.who definitely won't be attending are Michael White, of the Guardian,
:22:01. > :22:04.and Paul Staines, aka Guido Fawkes. I don't think they could get the
:22:05. > :22:09.tickets. Why are we doing this? It's a revival of an old thing, a bit of
:22:10. > :22:15.a White House thing, I used to go there, in enormous basements under
:22:16. > :22:18.the Hilton hotel. A big loving, everybody scratches each other's
:22:19. > :22:23.back. That is not the British way. It is more the French way, dare I
:22:24. > :22:29.say it. It's a people, the biggest room they can get in Westminster
:22:30. > :22:36.security problem -- it's 170 people. Why am I not going? Only 50 tickets
:22:37. > :22:40.for couples, and I've it all before. Let the young people enjoy
:22:41. > :22:45.themselves. Do you wish you were there? You have to pay me to go to
:22:46. > :22:49.some of these events. A good thing if you take your wife, she has
:22:50. > :22:53.missed you all these evenings, with your mistress if your French, and
:22:54. > :22:59.you get some brownie points from her for all the things you've done. What
:23:00. > :23:07.a lovely thing to say. He is softening. I think he's selling out.
:23:08. > :23:11.I gate-crashed the Downing Street Christmas party, the kids get to see
:23:12. > :23:14.Santa, some guy called George Osborne and the wife gets a new
:23:15. > :23:21.hairdo and enjoys immensely and it gets off my back. He goes to all the
:23:22. > :23:24.parties now. No harm in it. In America it is built around the
:23:25. > :23:27.president, and we don't have one here. There has been an argument
:23:28. > :23:30.that the leader of the opposition will not go because he does not get
:23:31. > :23:35.to speak, only the Prime Minister would. They have all got egos, these
:23:36. > :23:40.chaps, otherwise they wouldn't ball over the -- volunteer for the job.
:23:41. > :23:47.He is both Mr Thatcher and Mr Reagan, that is why Francois Holland
:23:48. > :23:51.got away with it, his estate. It's a different game. Although he might
:23:52. > :23:57.want to contradict me, we are less deferential here. Is the Prime
:23:58. > :24:02.Minister sweating over this question on getting the jokes right? They are
:24:03. > :24:07.quite risky, some of the joke. You saw Barack Obama doing his Daniel
:24:08. > :24:10.Day Lewis. Just imagine Cameron or Ed Miliband doing that and being
:24:11. > :24:16.completely slated for it, because we don't have the same reaction here.
:24:17. > :24:19.It is quite risky, I think. Last time I heard him speak at one of
:24:20. > :24:22.these events, it was like the monthly lobby lunch at Westminster,
:24:23. > :24:26.and he made a joke about his European speech and said it was like
:24:27. > :24:31.Tantric sex, the more you waited, the better the speech would be. And
:24:32. > :24:36.then the speech was an absolute disaster. He should have stuck to
:24:37. > :24:43.the Tantric sex. Will you gate-crashed? I don't think so. I
:24:44. > :24:53.would be writing about all the parties I went to if I did that. It
:24:54. > :24:58.happens to us all. What an amazing break out of lack of hostility, so
:24:59. > :25:02.we say thanks to all of our guests. I am back tonight for This Week with
:25:03. > :25:05.David Ginola, Ross Kemp, Jane Moore, Diane Abbott, Michael Portillo and
:25:06. > :25:13.Miranda Green at 11:35pm on BBC One. And I will be back here tomorrow as
:25:14. > :25:15.well, if I wake up in time. Is anyone else working yet? Goodbye.