03/06/2014 Daily Politics

Scrap Help To Buy, increase council tax, spend more money.

The EU tells Britain how it should be running its economy -

David Cameron needs allies like Angela Merkel in Europe.

Should he do deals with her political rivals in Brussels?

Fees have gone up - now so have complaints from students.

Is ?9,000 a year for the privilege of studying

Vince Cable's friend's been plotting against Nick Clegg.

Today Vince and Nick are going to the pub - will there be a political

And with us for the whole programme today is John

Micklethwait, the editor-in-chief of the Economist magazine.

Let's start with the economy, because the latest figures from the

Nationwide suggest that house prices have risen by 11% over the last year

Well, it's definitely heated up extremely in London. It's boiling in

London. The problem is, the rest of the country is not moving as fast

and the Government do want to keep some element of life in the rest of

it and particularly Mark Carney - you talk to him and he is stuck in

this very difficult balancing act. At the moment I think he's probably

still pretty firmly behind the idea that the economy needs more growth

so he's unlikely to come in very hard in the short term. There is the

question you have raised interest rates because people are sitting on

large and high amounts of mortgage debt. The balancing act is going to

reach a tipping point. When do you think that will be? I think probably

sometime next year. That would feel about right. The problem is what you

do to be strained London in the meantime. A sort of things people

are talking about - and these are horrible words like Matt Crow

credentials. These are where you don't change the interest rates but

you change the amount that banks are allowed to lend, so you say 60%,

rather than 70 or 80 present. It's that sort of thing where I can

imagine Mark Carney coming in first. We're already hearing today from

people at Nationwide saying that activity, in terms of mortgage

applications being accepted, is starting to cool. So is it true to

say that some of the policies being put in place, some of the tightening

in terms of lending, is having an effect? Mortgages are all about

sentiment. So you, by merely debating it, are helping change it a

bit because people are hearing about higher interest rates possibly being

on the way and that makes a difference to how much you think

you'll end up paying and how much we're going to end up going in terms

of the housing market. But if you speak to somebody in the Midlands or

Liverpool or Manchester or Yorkshire, they will say they're

nowhere near the point of recovery, looking at the pre-crash levels. Is

it fair to do anything that might hold back some sort of recovery in

house prices in those parts of England? I was in the Midlands last

weekend and it isn't the same there. In the centre of London, it's going

well but the difficulty is trying to do both at the same time. Imagine

trying to do something like trying to limit the amount of money

available in the south-east while also playing about with mortgage

rules for foreigners and finally, of course, there is the fact that even

London, people are beginning to say "this is a lot of money to pay for

not much space". Do you think that is starting to bottom out now? Do

you think even foreign investors, who are accused of buying up real

estate, to use that American phrase, expensive postcodes and leaving them

empty, decide they won't pay more. I think there is an element of that

and the whole thing is cyclical. If I am a rich foreigner, I'd buy

property in London in part because I think other rich foreigners will do.

property in London in part because I If you are Chinese or somebody from

you are buying this is as a nest you are buying this is as a nest

egg. You like London because it is a liquid asset. You can sell it, you

think, liquid asset. You can sell it, you

want to come in... If you look at the prices

want to come in... If you look at against, say, Burlington - and there

are all sorts of reasons to against, say, Burlington - and there

foreigners you could meet against, say, Burlington - and there

interesting. That debate will rumble on.

or D - our guest of the day John Micklethwait?

They're anti-euro, want a leaner Brussels

had seven MEPs elected last week and want to sit with

David Cameron's Conservatives in the European Parliament.

Trouble is that David Cameron needs to keep

German Chancellor Angela Merkel on side if he's going achieve anything

in his renegotiation - and this new German Eurosceptic party is Angela

Merkel's sworn political enemy. that we want to put reforms on the

EU. We want to strengthen that we want to put reforms on the

European real estate policy and to bring it to one point, we are

heading for a European Union as a federation of

heading for a European Union as a sovereign democracies, and we oppose

strongly the idea of having a federal state, a European Union as a

federal state. I think this is the main point we're making and this is

our main political goal. This is what the Alternative for and this

will be our responsibility, to stress this issue. So perfect

partners for the British Conservative party? I guess so, yes.

We are highly compatible with the British Conservatives, as they want

to put reforms on the European Union also, and I would call ourselves the

natural allies of the Tory party and for the ECR group, who is

representing these ideas of re-formation of the EU within the

parliament. But do you accept you are the sworn enemy of the

Chancellor Angela Merkel? Well, I think at the moment, we're

opposing, on one very central point, and this is what we want to have a

deep reform of, the European Union and the European institutions. We

don't want to have the European Union as a federal state and this is

what is pushed forward from Angela Merkel and from all the other German

parties, also, so this means that we have got a very important point but

we are opposing each other, that's true. John Micklethwait, this would

be ideal, wouldn't it, for the Conservative party, to be in the

same group? It would be wonderful except that everyone in Europe knows

the single person who decides everything in Europe, or has the

greatest negative power, is Angela Merkel. I think she has greater

power than any person has had in Europe for a very long time and it

would mildly annoy her - to put it mildly - if... Do you think, then,

that David Cameron won't entertain the idea of getting in bed with the

Alternative for Germany party? I think he will entertain the idea

because, as we heard, there is such a huge array of similar objectives.

That could almost have been a Conservative speaking, which is a

terrible thing to say about anyone, but that would have sounded very

similar. There is this basic barrier that if he wants anything to happen

in Europe, he's got to deal with Angela Merkel. Right, and that's the

realistic part of this whole political discussion. As far as

David Cameron and the Conservative party is concerned, Beatrix, Angela

Merkel is far more important than you. Well, if you look to the

European Parliament and you want to strengthen a constructive way of

reforms, even within the parliament, we need a strong group who support

this idea, so that means we need a strong... It would be good to have a

strong ECR and I think we would be good best to do so and I think,

finally, it's going to be the members of the European Parliament

who are voting us into the group and then it would be far more likely

that we have a constructive discussion going on about the

re-formation of the system and I think it would be a good sign to the

people also that the European Parliament is taking a responsible

position within this discussion. I think it would be a brilliant idea

to have German members express these points from the floor of Brussels

and Strasbourg. What do you think about David Cameron's plan for the

in-out referendum on Britain's relationship with the EU? We are

also very much supporting the idea of the self-determination of the

people so I think it's always a good idea to ask the people themselves

what they want. Even in Germany, we want to have these questions put to

the people because the parliament is not able, from our constitution, to

decide about giving up our sovereignty to whomever, or to the

European Union or other institutions. This is not what the

parliament has been voted for. They are not allowed to pass away our

sovereignty so it's always a very good point to ask the people to

participate in the political process. You've been described as a

German Eurosceptic party. What do you think of UKIP? Well, I think in

general, the ideas they are having are in the same direction. They want

to get out of the EU banned from the German taxpayers' point of view,

that isn't good for us, but I think it is good to ask the people and

this is what UKIP is heading for also, have a referendum on this

idea. If Britain leave the European Union, that would be sad. That would

not be our wish. But if the people decide likewise, that's the way it

is. It will step in democracy and that's always good. Jacob Rees-Mogg,

the Conservative MP, has battled through the traffic and made it in

the end. We've just been hearing from the Alternative for Germany

party, One Direction setting out, really, a Conservative agenda in

terms of reform in Europe. Are you going to join forces? I think there

is a difference between what goes on in the European Parliament and what

goes on inside it. In the European Parliament, the Conservatives cannot

be within the European people's party, and outright Federalist party

which believes the EU is a fantastic success. That is Angela Merkel's CDU

party. The Alternative fur Deutschland is a much more

attractive partner for the Conservatives in the context of the

European Parliament and it is therefore sensible for David Cameron

to maintain very friendly relations with Angela Merkel, which is crucial

to his getting his weight in the EU, to the extent that Britain ever gets

her way, but it's also sensible in the context of the alliances you

need within the European Parliament, for the Conservative group to align

with them because it is as close to us as you get in German politics to

our view of Europe. But you can't afford to alienate Angela Merkel in

any way. By making friends with this lady in Berlin, the Alternative fur

Deutschland party, you are going to do exactly that. I don't think

that's right. I don't pick we have any perpetual allies. We have the

British interest, which we must work towards. Angela Merkel was very

upset when we left her party but is now David Cameron's best friend in

Europe. Is she his best friend in Europe? She has a much higher

respect for him than she did then. The thing that is definitely true is

that she would be equally cross - I think more so, particularly when she

is trying to deliver a lot of things for Britain - if they did join that

group. Mrs Merkel supported Mr Sarkozy for the presidency of

France, then she didn't, now she has to get on with Francois Hollande.

That's how international politics works. That is a job of

international leaders to get on with each other to achieve their own

national interests. He has to achieve a lot in his big those years

because your Parliamentary colleagues are putting a lot of

pressure on him to come back with something tangible head of the 2015

election. He needs Angela Merkel to deliver that. The strongest point to

get a good renegotiation is to say that if we don't go all we want, we

will leave. That is our absolute winner negotiating card, not be here

today, gone tomorrow support of Mrs Merkel. Angela Merkel has said she

backs him for the Commission President. We know what both

Beatrix's party and the Conservatives think about him. They

don't want him. The whole thing is a farce. You have him who does not

want this job and Mrs Merkel does not want him for the job. There is

an element whereby the Germans are hoping that some kind of blocking

coalition sort of emerges and I would, in the end, if you asked me

at the weekend, I would have bet that someone who was at least more

friendly to the British point of view might end up as the Commission

President. Alright. Before we let you go. Who do you want to see as

Commission President? I think we have got new member states from

Central and Eastern Europe. They have many talents to implement the

new spirit of Europe. OK. It is pretty clear we will not support

Juncker. Maybe we will come up with a President from Eastern Europe.

Richard Zilic would be a new face. Juncker is a representation of the

old Europe. Alright. He would be a new face. We should think about

something like that. OK. Thank you. Now, you'd be forgiven for thinking

wranglings over who will be its next President may have stopped the

European Commission from getting on with their day-to-day work, but have

no fear - they've found the time to offer Britain some economic

pointers. Every year the Commission offers

member states advice on how to ensure long-term growth - and

they've got some tips for David Cameron

and George Osborne. The European Union's executive

body has called on the UK to They say the UK should raise taxes

on higher value properties and build more houses to "alleviate

distortions in the housing market". And they recommend adjusting

the Help to Buy scheme and revaluing council tax bands - which

would put bills up for some people. Commission President Jose Manuel

Barroso said he recognised the advice might be

"politically unpopular" but member states "must play their part

in seeing these reforms through". The Treasury say they will listen

to the Commission with interest. But,

others have been less diplomatic. Conservative MP Dominic Raab said

the Chancellor should treat the Commission's advice as "

spam when it arrives in his inbox". So, is the Commission right to offer

Britain advice on the economy? We can speak now to

our political correspondent, Is this usually the way with the

Commission to offer this sort of advice to nation states? It is. It

is an annual process. It does coincide David Cameron lashing out

at what he called "bossy Brussels". This morning it has been framed in

some papers as an unwanted intrusion. This is an annual

process. It is non-binding guidance and they are far less interested in

what is going on in Britain than they are in other countries. France,

a huge concern here in Europe. Its sluggish growth, high unemployment

and the Commission says it needs dramatic structural economic reform

urgently. Italy needs to embark on an accelerated programme of

privatisation, so big stuff is being delivered to those capitals. In

terms of Britain, the Commission shares the concerns of the Governor

of the Bank of England and lots of politicians that it is getting very

hot in London and the South East. It does recommend things like a

restriction to the second phase of Help to Buy, more houses needs to be

built. It gets into the contentious area of council tax banding, which

has not been looked at since 1991. Alright. Thank you. Do you welcome

the advice, Jacob Rees-Mogg? I think the response is it will heal thy

self. It doesn't seem to be very intelligent of the European

Commission... We had the great advantage that we had a loose

monetary policy in return. Fiscal tightness and monetary tightness has

been a disaster for the eurozone. They should have been more humble in

their approach. They should not start telling HMG what they need to

start to do. Are you saying our economy is fixed and we can be smug

about it? It is a good deal better than what is going on in continental

Europe. We have our own currency and that has allowed us to have a

suitable monetary policy to go hand in hand with the fiscal tightness

that we had. And that has left us in a much stronger position than

France, or Italy, or Spain, or Greece. Monetary policy in the

European Union is still set for Germany. Is it bad advice that they

are giving you to stop the housing market, which John said is

overheating in London, that could lead to the sort of conditions that

resulted in the recession that started in 2008? Is that such bad

advice? It is two bits of advice. One is to raise taxes, which is

rotten advice. Increasing taxes on capital assets is bad advice because

there is no liquidity to pay the tax. The other bit is motherhood and

apple pie. Wouldn't it be nice to have an extremely stable housing

market? Of course it would. If you stabilise the housing market by

increasing interest rates, what affect do you have on businesses and

on marginal mortgage borrowers? It is no good saying it would be nice

if you did easy things. But the specific advice on raising taxation

is bad advice. Is Jacob Rees-Mogg being oversensitive? A little. The

fact is - it is a difficult thing for the Tories with the European

Commission. If you look at what most of us - we also oppose being part of

the euro. We want a much bigger single market. The only people who

are likely to get that delivered is the Commission. We are stuck in this

position that we - there is some stuff which the Commission is doing.

All the advice they are giving now - I agree, they haven't always given

perfect advice. But most of the advice they are giving is on the

good side. Right. Let's say you are being a bit oversensitive. If you

listen to the Governor of the Bank of England, he's broadly said many

of the same things that have come from the Commission. Is it your

problem with Europe and its institutions saying these things

rather than what they are saying? You have to be careful about the

message and the effect the message has. We have to report back in a

year's time. The European Commission will visit the UK three times to see

whether we are following their recommendations or not. So, it is

right to be a bit sensitive that this is an ability of the Commission

to interfere in something that is central to national sovereignty and

where their advice has not worked in other countries. It is only advice.

It is only advice. It is not the same as - in fact, Osborne has said

- I don't think there is a lot George Osborne would disagree with.

What you really want is within the eurozone, you want them to have a

much stronger role. Alright. That would be a better Europe. Briefly?

Euro needs to revert to national currencies. Would you put the advice

in "spam"? That is a brilliant recommendation. Thank you.

Now, last week Vince Cable's friend, Lord Oakeshott, was at the centre

of a botched plot to remove Nick Clegg as Lib Dem leader.

This morning Nick Clegg was trying to show there were no hard feelings

Is this all kiss and make up? Jo, I'm not to be found at pubs at

midday on Tuesday! I'm here because of those Liberal Democrats who

staged this pub press event for us to see how well Vince Cable and Nick

Clegg are now getting on. They tried to resolve their differences over

this pint of London Pride! The two of them sat down inside the pub, sat

rather sheepishly together like a couple on a first date and tried to

make small-talk while we were peering in the window to see what

was going on. Notionally, they were here to flag up a new scheme for a

Code of Conduct for publicans who get into difficulties with their

breweries. This was like ye olde Tony Blair and Gordon Brown

ice-cream moment, a press stunt to flag up how well they were getting

on. Along they came, they sat down, Nick Clegg bought Vince Cable a

London Pride. He had a pint of Archers Mild. I'm told Vince Cable

did finish his pint and Nick Clegg didn't finish his. They sat in there

for 45 minutes wondering how they were going to get out without having

to confront the press scrum. The traffic was so bad they had a Walk

of Shame of 50 yards before they could get into a car. Out they came

with their Special Branch, surrounded by cameras, we were

bombarding them with questions about were they best pals, when was the

last time they went to a pub - they said nothing. They looked a bit

embarrassed, smiled, got into the car and headed off. I'm surprised

they didn't say anything(!) At least they didn't spill your pint! Are you

convinced that there is a proper rapprochement? Well, I would think

Nick Clegg will be just looking over his shoulder at Vince Cable for a

long time to come. Although we have had the protestations of them

believing Vince Cable, that he had nothing to do with it. There has to

be a suspicion. Paddy Ashdown, the man who threatened to cut off Lord

Oakeshott's delicate parts, when he was interviewed at the weekend he

warned about how you have to be careful who your Yargos are. I like

that characterisation. Despite the disastrous election results for the

Liberal Democrats, will the party stick with Nick Clegg? Well, we are

told that there is a growing number of local parties who are preparing

to hold emergency meetings to consider the future of Nick Clegg.

When you talk to those around Nick Clegg they say that is just because

the Liberal Democrats like to discuss everything. When you talk to

more critical elements, they say that is because there is a

groundswell of deep unease about where Nick Clegg is leading his

party and a growing fear that they are heading to the buffers at

high-speed at the next election. What we don't know is whether there

will be enough parties to reach a fairly high threshold - you have to

get 75 local parties demanding an emergency conference to trigger that

whole leadership contest. It is a high bar that has to be reached. So

far, there have only been a few dozen parties coming up with the

idea of holding an emergency meeting. Thank you.

Are established Western economies being overtaken by the fast-growing

emerging economic powerhouses in Asia and elsewhere in the world?

Our Guest of the Day - John Micklethwait -

has just written a book asking just that question - and whether we need

to rethink the nature of the Western nation state to compete.

One of the countries cited by John as a competitive threat is China.

Let's speak to the BBC's China editor, Carrie Gracie,

Welcome to the programme. The growth of the Chinese economy has slowed a

bit. Are there concerns about the way the economy is growing? There

are. China has an asset bubble. It is worried about how to deal with

that. It is trying to bring growth in this year at 7.5%. That is a

growth rate that many would envy. That still represents a difficult

compromise between keeping growth meaningful and not having too many

people out of work which presents of course a political threat. If they

get too many people on the breadline. Economically, they have

their response to the global financial crisis, was to put in a

big stimulus. They have, as a result of that, got a problem with the

property bubble. They have got lots of non-performing investment. They

have got lots of ghost cities. Oversized savings ratio and a

problem with consumption and they are trying to rebalance that. As the

President himself says, economic reform is entering a deep water

terrain and the difficulty is tackling vested interests in the

state-owned enterprises. democracy can sometimes be an

impediment to growth, is that why, in your view, China has been able to

grow so successfully despite the concerns you set out there? That is

a very large question and there are many different answers to it. I

would say that the current situation in China, the politics of China,

where we are just about to mark the 25th anniversary of the Tiananmen

Square democracy protests and the crackdown on those protests, and

since then China has had a politics where it may not speak its name. You

have politics where the Chinese government says it wants the rule of

law but is locking up lawyers. You can't have a functioning 21st

economy without effective law but increasingly, the problem is that

the party is controlling the economy and the law itself. It is conflicted

and paradoxical state on that and a number of other issues. It says it

wants to deal with corruption but locks of those who try to campaign

on par-4 whistle-blowers. The question of what kind of politics

can't be answered simply. Joining John now is the Economist Will

Hutton. Welcome to the programme. In your view, what is the reason for

the West's decline? Should we try to mimic what is going on in China?

Certainly not, in the sense of ruling pushing democracy. What the

book is about is not really the economy but about government. Our

argument is that if you went back to 1600, you would have bet on China

being the future. They have the most advanced government in the world

with 3000 civil servants in the city. That was given anywhere in

Europe. Ever since then, the West has had a series of revolutions in

government, to do with security and liberalism and the welfare state,

and each time we jump forward. What is interesting about what is

happening in China now is that having caught up economically, they

are now trying to look for ways to catch up politically and make their

government work better. Some of that is authoritarian but looking at

places like Sweden, not a particularly authoritarian Place,

London, not particularly authoritarian, and Singapore,

looking for new ways to try to catch up because their view is that they

used to be the best at government, we got much better and now they are

in a contest. From our point of view, the danger is not that China

is particularly great but much more that we're the equivalent of the

Cyclopedia Britannica, sitting there worrying about other reference

books, and what is going to eat our lunch is Wikipedia. You mentioned

how bad the Chinese authoritarian thing is but would you rather be a

poor person in China or in India? Will Hutton, which would you rather

have been? I want to talk about bloated government. That is what

many Conservatives and I think you also point to as holding that

growth. It is an extraordinary prison to look at both now and in

the last 250 years. -- prism. If I had to explain why things have gone

up in the West, I would not let the government. I would argue that the

reason is that we had the European argument and we had things that

would best marshal the fruits of technology. I don't think the reason

why we're in trouble at the minute is because of bloated government. I

think it's because we miss organise institutions of capitalism. I think

corporations without owners who have become pay owners for top executives

who don't invest in R and innovation, not thinking about what

the structures are that support innovation and investment, turning a

blind eye to any quality and the dealer Tories affect that has on

growth, have been what we should be worrying about. Bloated government

is not brilliant and obviously, as he says in his book with his

colleague, responsive government is better than the alternative to put

that top of your list is a category error. You've made a category

error. It isn't about bloated government. I would argue that it

sits at the bottom at the moment. You look at the European elections

we just had and what is going to happen in America in the midterms,

people are streaming to the polls and they have two feelings. One is

that they're furious with their governments but the other is that

they expect nothing to change and the lesson of our book is to look at

history and government can change fairly dramatically when it wants

to. That is something it can do again. One of the reasons why people

don't believe it's worthwhile voting is because they don't think there is

going to be change. The reason they don't think there is going to be

changes because the discourse is entirely about if vision is,

privatisation, deregulation, good housekeeping, austerity, not about

fairness etc. I think democracy has been denuded because the only

paradigms in which the argument takes place is the one you occupy

and the one you occupied for my money is making a category error. I

think the idea that fairness is not part of the political debate is

rubbish. You look at the race in America between Obama and Romney and

fairness was possibly the biggest single issue. It's just coming back.

It's a sensation because it is so unusual. There are many more books

about fairness and inequality. You are the last-gasp of the old. In

terms of admiring other economies, you can't deny the growth rate in a

country like China. Under Chairman Mao, the growth rate from 1949 to

1976 in China was 4.6%. It's very hard in China to get the growth rate

much under 5%. I don't take the view of looking open-mouthed at China. I

think the fact that it isn't a rule of Law Society... There are things

like patents and property rights, being able to do banking where you

can get your money back, the scope of corruption... I agree with all

that. You cannot see it through just the prism of the growth

that. You cannot see it through just Singapore is more democratic.

that. You cannot see it through just in Singapore, you

litigiousness. China's problem is inequality.

litigiousness. China's problem is wealth of the top 50 people in the

national People's Congress is $50 billion. They are trying to compete

at government and from their point of view, this was the thing they

think they were really good at. The thing about places

think they were really good at. The that they've managed to combine all

those things while having much better services. The

those things while having much to ask is, you look at Singapore and

those things while having much there is some stuff about Asian

values but fundamentally, it does deliver twice as good schools,

values but fundamentally, it does as good hospitals, twice as good

welfare for half the money. Last point.

responsive government. I championed this throughout my

re-engineering that one would have re-engineering that one would have

to do, I'm completely with you. But I won't do it because I want

government to do stuff, not just with schools. I want the government

to engage with the underlying structures of our companies, our

to engage with the underlying financial system, the

to engage with the underlying innovate, not just the problems of

the public realm. I think the way to revived tomography is that way.

If you are a student watching this in England or Wales,

you may want to ask yourself, are you getting value for money for

Because it seems an increasing number of you feel you aren't.

The BBC has compiled responses from 120 universities across the UK

and has found that more than 20,000 students complained about

And the total number of academic appeals and complaints

rose 10% in the two years following the rise in fees, despite the

So are the universities getting worse or have the students simply

had enough of poor standards now they are paying for it?

He runs the higher education consumer website Student Hut.

Damn, were you surprised by the numbers? I was a little bit

surprised and shocked, yes. -- Dan, were you surprised. The fact that

students now pay ?9,000 year means they are going to be in increasing

levels of debt which they will be paying off over years. I can see why

people are taking that decision seriously and expecting more from

their education. In some ways, that is hardly a surprise. They are going

to want value for money but they clearly don't think they are getting

it. That's right. We did a survey of our users and we got over 3400

responses and we were quite surprised by some of the findings,

in terms of the top complaints of the students. We found that nearly

20% of students actually had the complaint that teaching standards

were poor at a university. This is a big investment of money and time and

that clearly isn't good enough and needs to be improved, in my

opinion. Other complaints we had were that 29% of students surveys

felt they needed more contact hours and 30% of students felt there

wasn't enough emphasis on gaining real world experience. Obviously

they're looking ahead to the jobs market when they leave university

with their degrees. Is this a case, do you think, standards getting

worse or just because students are now paying those fees, they feel

they have a right to complain? I think people are taking the decision

more seriously than ever before and rightly so. I advise prospective

students and parents to take that decision more seriously. First of

all, should I go to university? How will it benefit me? It isn't for

everybody. People need to take the decision of the course they choose

very seriously, rather than just floating into university. There are

a number of ways of looking into the cause you can choose. Universities

provide information on a number of -- the number of contact hours and

how you will be assessed but another great factor is the fat that

students can see what previous students have said in comments

online. Thank you very much. The universities minister David Willetts

joins us now. Were you shocked and surprised by

the numbers of students complaining, with 20% of the

students in the survey we talked about complaining that teaching was

when they are playing up to ?9,000 a year. They are not paying up front.

But students are more and more demanding and quite rightly so. The

fact is, in the old system, universities were competing

intensely on research quality and not paying attention to the quality

of the teaching experience for students. They have to raise their

game and now students can say that with ?9,000 of resource behind them,

what are they getting? But isn't that the problem? The market isn't

working, is it, because if everybody, or certainly a large

percentage of good universities are charging top dollar, ?9,000 a year,

as you say funded by the taxpayer at the moment, and some of them are

offering below par teaching, there is nowhere else to go, is there?

When we look at the trends, what is happening - slowly, but happening -

is that the amount of hours of teaching is going up. You've got

evidence to show that, have you? The number of classes in small groups is

going up and universities are saying there is a massive cultural change

going on and they are now focusing on the quality of teaching

experience. But there are large numbers of students who have not

historically have the quality of teaching they are inclined to expect

but I think students are now far more demanding than ever before and

quite rightly so. But at the moment, sitting here now, would you say that

all those universities charging ?9,000 a year are value for money? I

think going to university is, for many people, a fantastic experience

and very worthwhile but I do think universities need to raise their

game and improve the quality of the teaching experience. But is it right

that the taxpayer is having to foot this bill, certainly temporarily, if

they're not now offering value for money because you are one in 150

people sitting in a big lecture hall with a teacher that isn't making the

mark. You aren't sitting in a one in three tutorial. What happens, and

when I talk to the student unions, this is what they talk about now, is

that they say, there is this resource going in and how many hours

of teaching are we getting? My view is that the argument about the level

of these is one of the things that empowers students and enables them

to expect more. Increasingly, as our requirements on universities to

produce information on all these crucial benchmarks but Boorman is

becomes available on websites and all kinds of advertising the

websites like the one you've been talking to, students will be able to

choose the university that offers them the best quality teaching

experience. Students can compete and grow if they have more students who

want to go to them. I come back to the market. They can't charge more

at the moment and the others are still charging the top whack. It is

part of a great sorting out. It is going back to the argument with Will

Hutton and me and my book. You look at America, exactly the same thing

is happening. Students are complaining and saying, "We are not

getting value for money." That's correct. People need to really

carefully look at exactly how good their universities are. The other

thing is, in the end, it looks evermore likely that bad

universities will be replaced by things on the internet and the

really valuable bit of the universities, the tuition bit, will

go towards individuals. Are tuition fees working? They are generally

working. They are giving people some idea of a value attached to this. It

is wrong fundamentally, if you don't go to university, you are more

likely to end up poorer. It is bad that people, from that end, end up

subsidising people like all us three who went to university. John is

right. If graduates end up in well-paid jobs, they should pay

back. The competition between universities is not simply on the

level of fees. A student who said, "I'm going to..." That is what they

are looking at. There is a big difference to putting the money on

the table before you start and paying it back. Competition is

between the universities as to which university the student chooses and

the way we are changing the system - it is in the spirit of John's

excellent book - it is to put more pressure... I can see all this came

about! Now, we have got, now that they can choose, universities are

competing on quality. As the students don't pay the money

upfront, students that say, "I'm going to save money and go to

university." That isn't how the system works. They can say, "We want

a high quality experience." And the next generation students will be

able to choose the universities that offer them best quality. If you get

so many complaints, if there are so many students unhappy, will you put

pressure on those institutions who come up with the most criticised by

students for not high enough standards? There is an independent

body. They ultimately receive the complaints. They publish the

information about the breakdown of complaints, the type of complaints.

There is no sanction? They can. Behind this, there is the power of

law. Ultimately, the fees are a contract to deliver a service, so

the OIA has real clout and if a university lets a student down by

poor quality teaching, the OIA can ask the university to change its

practices. You heard it here. John has an interesting job proposition

for you. I spent the weekend with a wide variety of Europeans and

British Tories and when asked who should be the next British

Commissioner for Europe, there was support for you. Something to think

about when you leave the studio. Thank you very much for joining us.

Has the death of the dead tree press been exaggerated?

With the arrival of free news on the internet, why would you pay

Well, some of us still are as Adam's been finding out.

On the outside, a normal newsagent. Inside, one of the biggest

selections of papers and magazines you will find. More than 3,000 of

them. So, a good place to ponder the issues facing print which all seem

to involve the internet. Lately, the big news has been about this big

paper, The Venerable New York Times. According to an internal document,

it doesn't look so venerable on the web. The report found that only 30%

of online users ever read the home page, while the newsroom was

obsessed with what was on page one of the newspaper. Incompatible. They

also found that sometimes people read New York Times content more

when it was on other people's websites. An article about the death

of Nelson Mandela which appeared on the Huffington Post. Then there's

staff. The report was filled with killer quotes from journalists who

left the paper and digital journalists who turned down job at

the paper because they thought it was a bit rubbish. Here, newspapers

are still working out how to prosper online and off. The Times has an

absolute paywal - you pay to read everything on line. No one is sure

what will work best. A scary time to launch a new title, eh? Not for this

woman. It is so posh it makes Horse and Hound look like Heat magazine.

Social media is important. The online version of Town and Country

is important. We do have a website, a digital version. We have a Twitter

account. All of that is important. It is part of a conversation, it is

not the only bit of the conversation. There is something

authentic and you can hold this. It means something. It is not

disposable. The team also produces Harpers bazaar. Maybe things aren't

so bleak after all. There is a place for excellence, there is a place for

quality. And the market appears to be bearing that out. I think it all

adds up to if your newspaper or magazine is good, you might be OK in

the modern world. But it's a bewildering time to be a journalist.

Anyway, I'm off to read about the inner life of Lazy Rose! -- Lady

Rose! John, the Economist is one of the few news publications where your

circulation has gone up, how have you managed that? We have tried to

find people who will pay for it. You heard that there. The debate - he is

right - this is the biggest debate, you look at the New York Times memo,

it made substantial doubts about whether the New York Times bundle,

which is what they try and pay for, can keep going. So many people go to

websites and it applies to us as well, they come through social

feeds, so they don't go to your home page, they don't go to our channel

pages, they come through Facebook, through Twitter. Yes. What is

interesting is the lady at the end, with the glossy Town and Country,

there are some bits of the advertising market which are still

holding up. No one model is right, is it? It is fair to say that people

predicted the end of daily newspapers - and their circulation

has gone down in some cases. The Economist is different. It is not a

daily. And we are talking from quite a small base to start with. So, you

could say you only had up to go? No, you could say that our base is

larger than all the quality newspapers in Britain put together.

Worldwide. Well, compared - worldwide, we do have a bigger

circulation, 1.6 million is not a small number. The reason though is

that most people are pushing towards roughly the same area. The web

arrived, everyone went free and a lot of us realised that was a

mistake and particularly with the arrival of apps, of iPads, the

Kindles, a tablet, so many people are reading what we have on either

phones, or tablets, and that is the new problem. That is particularly

what's happening hitting magazines, particularly what is happening with

newspapers. The main time when people are reading the New York

Times was on a smartphone. You need to come up with new products to

adjust to that. This, at least, what is happening, the good news - and

the New York Times is an example of this so far - is that people have

found a way to make people pay for things on those gadgets in a way

they haven't on the web. Right. The web, people still want things for

free. When you get an app, you tend to be much happier about paying.

Let's leave it there. Now, MPs and Lords are preparing to

battle it out tonight in a tug-of-war and, no, that's not

a metaphor. They'll be raising money for

charity, and Giles is on the Green It has to be said, there are a

number of events that the Lords and MPs tussle over. There's the dog

competition, there is also the pancake race, which the Lords won.

The tug-of-war is a feature. I hate myself for taking part in several of

them. Usually, I ended up damaged! I'm not going to take part this year

because I have put my back out. I am here with - we have the Lords - the

anchorman, Lord Kennedy, you are very much part of the team. How many

times? Four times now. You are the anchorman for the men's MPs? Not

wearing the T-shirt at the moment. Couldn't get it in the suitcase! The

ladies' tug-of-war team, they do put in all the effort. They have not

been that successful? No, I understand the McMillan Ladies have

been practising for weeks and my team have done no preparation at

all. I suspect this is probably why our track record... All trains lead

to Newark! This is probably why we don't have a glorious record. It is

not a glorious record. A little bit of technique. This is the grudge

match. It really is. Who is going to win this year? It was 1-1 at one

stage last year. The Commons always beats the Lords in the end. It was

2-1 last year. We won the rowing this year. We are going for the

tug-of-war. I think you need to pull it out and show us. It is not just

about pulling. There is technique. Let's have a pre-grudge match here.

Go for it! They are supposed to get as low to the ground as possible.

That is very cruel. Not showing a great deal of technique, but they do

this every year raising a lot of money, which is why you are happy to

do this. The effort is all in his face! We shall try and show that for

you this year. It's the Queen's Speech tomorrow. We will try and get

you some pictures and show you them on Thursday. I bet you are sad you

are missing out. I am. Never mind. There saulz next year. -- there is

always next year. There's just time before we go to

find out the answer to our quiz. The question was

which person is the odd one out? a) George Osborne, b) Ed Balls, c)

Princess Beatrix of the Netherlands, I think it is Ed Balls, for which I

have to thank the Guardian. We all went to the Bilderberg Conference in

Copenhagen. He didn't have a ticket and was unable to get in.

The answer is that they all went to the secretive Bilderberg Conference

last weekend, but Shadow Chancellor Ed Balls was the only one to be

refused entry because he'd forgotten his pass.

Here he is having his "senior moment".

But, clearly, the security didn't know who our very own

Shadow Chancellor Ed Balls was - despite a passport being offered.

And as with us all, Ed, if you don't have the right ID

He did manage to get in later, I am told.

What was it like? It is interesting. Journalists ask me why do you go to

these off-the-record things. It is a chance to talk to politicians, to

business people. You go there and you don't talk about it! Beyond

that, I can't say much. They debate things in the same way as any

conference. What about the mix of people? The mix of people is from

Europe and from America. So it tends to be people from - there's a degree

of business people and politicians. You had both. It is a place - they

probably won't like me for saying this, it is a place where you can

see George Osborne and Ed Balls having a drink quite normally. That

is not a bad thing. There is a revelation! They are normal!

Thangss. -- thanks. Thanks to our guests - especially

John for being our Guest of the Day. The One O'Clock News is

starting over on BBC One now.