03/06/2014 Daily Politics


03/06/2014

Jo Coburn is joined by John Micklethwait, editor of the Economist, to discuss the big stories of the day.


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Transcript


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

:00:36.:00:42.

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

:00:43.:00:45.

David Cameron needs allies like Angela Merkel in Europe.

:00:46.:00:50.

Should he do deals with her political rivals in Brussels?

:00:51.:00:55.

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

:00:56.:00:59.

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

:01:00.:01:01.

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

:01:02.:01:10.

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

:01:11.:01:14.

And with us for the whole programme today is John

:01:15.:01:27.

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

:01:28.:01:30.

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

:01:31.:01:35.

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

:01:36.:01:38.

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

:01:39.:01:53.

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

:01:54.:01:57.

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

:01:58.:02:01.

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

:02:02.:02:06.

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

:02:07.:02:10.

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

:02:11.:02:13.

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

:02:14.:02:18.

question you have raised interest rates because people are sitting on

:02:19.:02:23.

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

:02:24.:02:27.

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

:02:28.:02:31.

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

:02:32.:02:35.

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

:02:36.:02:40.

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

:02:41.:02:45.

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

:02:46.:02:48.

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

:02:49.:02:54.

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

:02:55.:02:59.

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

:03:00.:03:04.

people at Nationwide saying that activity, in terms of mortgage

:03:05.:03:08.

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

:03:09.:03:14.

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

:03:15.:03:17.

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

:03:18.:03:23.

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

:03:24.:03:29.

bit because people are hearing about higher interest rates possibly being

:03:30.:03:32.

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

:03:33.:03:35.

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

:03:36.:03:40.

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

:03:41.:03:44.

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

:03:45.:03:48.

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

:03:49.:03:53.

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

:03:54.:03:56.

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

:03:57.:04:01.

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

:04:02.:04:05.

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

:04:06.:04:10.

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

:04:11.:04:15.

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

:04:16.:04:17.

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

:04:18.:04:24.

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

:04:25.:04:29.

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

:04:30.:04:35.

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

:04:36.:04:39.

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

:04:40.:04:43.

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

:04:44.:04:47.

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

:04:48.:04:51.

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

:04:52.:04:56.

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

:04:57.:04:58.

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

:04:59.:05:02.

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

:05:03.:05:05.

think, liquid asset. You can sell it, you

:05:06.:05:14.

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

:05:15.:05:15.

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

:05:16.:05:19.

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

:05:20.:05:24.

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

:05:25.:05:36.

interesting. That debate will rumble on.

:05:37.:05:38.

or D - our guest of the day John Micklethwait?

:05:39.:06:04.

They're anti-euro, want a leaner Brussels

:06:05.:06:06.

had seven MEPs elected last week and want to sit with

:06:07.:06:14.

David Cameron's Conservatives in the European Parliament.

:06:15.:06:17.

Trouble is that David Cameron needs to keep

:06:18.:06:19.

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

:06:20.:06:23.

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

:06:24.:06:28.

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

:06:29.:06:55.

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

:06:56.:07:03.

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

:07:04.:07:10.

heading for a European Union as a federation of

:07:11.:07:13.

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

:07:14.:07:17.

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

:07:18.:07:22.

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

:07:23.:07:28.

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

:07:29.:07:34.

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

:07:35.:07:41.

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

:07:42.:07:52.

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

:07:53.:07:56.

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

:07:57.:08:07.

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

:08:08.:08:11.

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

:08:12.:08:15.

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

:08:16.:08:20.

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

:08:21.:08:25.

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

:08:26.:08:34.

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

:08:35.:08:37.

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

:08:38.:08:43.

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

:08:44.:08:50.

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

:08:51.:08:56.

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

:08:57.:09:01.

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

:09:02.:09:05.

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

:09:06.:09:08.

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

:09:09.:09:11.

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

:09:12.:09:16.

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

:09:17.:09:22.

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

:09:23.:09:26.

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

:09:27.:09:31.

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

:09:32.:09:34.

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

:09:35.:09:39.

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

:09:40.:09:42.

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

:09:43.:09:47.

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

:09:48.:09:50.

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

:09:51.:09:55.

realistic part of this whole political discussion. As far as

:09:56.:09:59.

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

:10:00.:10:02.

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

:10:03.:10:09.

European Parliament and you want to strengthen a constructive way of

:10:10.:10:14.

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

:10:15.:10:19.

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

:10:20.:10:26.

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

:10:27.:10:31.

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

:10:32.:10:35.

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

:10:36.:10:39.

that we have a constructive discussion going on about the

:10:40.:10:44.

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

:10:45.:10:49.

people also that the European Parliament is taking a responsible

:10:50.:10:53.

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

:10:54.:11:00.

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

:11:01.:11:04.

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

:11:05.:11:09.

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

:11:10.:11:14.

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

:11:15.:11:17.

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

:11:18.:11:24.

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

:11:25.:11:30.

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

:11:31.:11:38.

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

:11:39.:11:43.

European Union or other institutions. This is not what the

:11:44.:11:51.

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

:11:52.:11:54.

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

:11:55.:11:58.

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

:11:59.:12:03.

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

:12:04.:12:11.

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

:12:12.:12:19.

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

:12:20.:12:24.

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

:12:25.:12:27.

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

:12:28.:12:37.

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

:12:38.:12:43.

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

:12:44.:12:47.

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

:12:48.:12:55.

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

:12:56.:12:59.

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

:13:00.:13:03.

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

:13:04.:13:07.

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

:13:08.:13:12.

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

:13:13.:13:16.

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

:13:17.:13:20.

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

:13:21.:13:25.

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

:13:26.:13:30.

party. The Alternative fur Deutschland is a much more

:13:31.:13:35.

attractive partner for the Conservatives in the context of the

:13:36.:13:39.

European Parliament and it is therefore sensible for David Cameron

:13:40.:13:42.

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

:13:43.:13:46.

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

:13:47.:13:51.

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

:13:52.:13:54.

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

:13:55.:14:01.

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

:14:02.:14:07.

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

:14:08.:14:12.

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

:14:13.:14:15.

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

:14:16.:14:18.

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

:14:19.:14:23.

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

:14:24.:14:31.

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

:14:32.:14:34.

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

:14:35.:14:39.

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

:14:40.:14:44.

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

:14:45.:14:48.

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

:14:49.:14:54.

group. Mrs Merkel supported Mr Sarkozy for the presidency of

:14:55.:14:58.

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

:14:59.:15:01.

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

:15:02.:15:04.

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

:15:05.:15:07.

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

:15:08.:15:11.

because your Parliamentary colleagues are putting a lot of

:15:12.:15:13.

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

:15:14.:15:17.

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

:15:18.:15:22.

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

:15:23.:15:26.

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

:15:27.:15:30.

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

:15:31.:15:38.

backs him for the Commission President. We know what both

:15:39.:15:45.

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

:15:46.:15:51.

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

:15:52.:16:01.

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

:16:02.:16:07.

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

:16:08.:16:14.

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

:16:15.:16:19.

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

:16:20.:16:23.

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

:16:24.:16:26.

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

:16:27.:16:32.

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

:16:33.:16:38.

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

:16:39.:16:42.

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

:16:43.:16:56.

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

:16:57.:17:07.

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

:17:08.:17:19.

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

:17:20.:17:21.

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

:17:22.:17:26.

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

:17:27.:17:29.

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

:17:30.:17:32.

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

:17:33.:17:34.

pointers. Every year the Commission offers

:17:35.:17:37.

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

:17:38.:17:40.

they've got some tips for David Cameron

:17:41.:17:42.

and George Osborne. The European Union's executive

:17:43.:17:45.

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

:17:46.:17:47.

on higher value properties and build more houses to "alleviate

:17:48.:17:53.

distortions in the housing market". And they recommend adjusting

:17:54.:17:57.

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

:17:58.:17:59.

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

:18:00.:18:04.

Barroso said he recognised the advice might be

:18:05.:18:09.

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

:18:10.:18:12.

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

:18:13.:18:16.

to the Commission with interest. But,

:18:17.:18:20.

others have been less diplomatic. Conservative MP Dominic Raab said

:18:21.:18:22.

the Chancellor should treat the Commission's advice as "

:18:23.:18:25.

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

:18:26.:18:29.

Britain advice on the economy? We can speak now to

:18:30.:18:32.

our political correspondent, Is this usually the way with the

:18:33.:18:47.

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

:18:48.:18:53.

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

:18:54.:18:59.

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

:19:00.:19:04.

some papers as an unwanted intrusion. This is an annual

:19:05.:19:10.

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

:19:11.:19:13.

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

:19:14.:19:20.

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

:19:21.:19:25.

and the Commission says it needs dramatic structural economic reform

:19:26.:19:30.

urgently. Italy needs to embark on an accelerated programme of

:19:31.:19:33.

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

:19:34.:19:41.

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

:19:42.:19:45.

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

:19:46.:19:49.

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

:19:50.:19:54.

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

:19:55.:20:00.

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

:20:01.:20:06.

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

:20:07.:20:15.

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

:20:16.:20:32.

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

:20:33.:20:36.

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

:20:37.:20:41.

monetary policy in return. Fiscal tightness and monetary tightness has

:20:42.:20:49.

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

:20:50.:21:01.

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

:21:02.:21:06.

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

:21:07.:21:10.

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

:21:11.:21:16.

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

:21:17.:21:19.

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

:21:20.:21:24.

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

:21:25.:21:28.

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

:21:29.:21:33.

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

:21:34.:21:39.

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

:21:40.:21:43.

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

:21:44.:21:50.

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

:21:51.:21:56.

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

:21:57.:22:01.

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

:22:02.:22:05.

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

:22:06.:22:11.

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

:22:12.:22:15.

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

:22:16.:22:19.

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

:22:20.:22:25.

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

:22:26.:22:32.

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

:22:33.:22:36.

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

:22:37.:22:51.

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

:22:52.:22:55.

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

:22:56.:23:00.

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

:23:01.:23:04.

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

:23:05.:23:07.

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

:23:08.:23:12.

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

:23:13.:23:16.

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

:23:17.:23:32.

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

:23:33.:23:38.

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

:23:39.:23:41.

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

:23:42.:23:45.

problem with Europe and its institutions saying these things

:23:46.:23:48.

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

:23:49.:23:57.

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

:23:58.:24:02.

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

:24:03.:24:07.

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

:24:08.:24:11.

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

:24:12.:24:15.

to interfere in something that is central to national sovereignty and

:24:16.:24:19.

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

:24:20.:24:23.

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

:24:24.:24:30.

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

:24:31.:24:34.

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

:24:35.:24:40.

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

:24:41.:24:47.

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

:24:48.:24:52.

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

:24:53.:24:56.

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

:24:57.:24:58.

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

:24:59.:25:00.

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

:25:01.:25:03.

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

:25:04.:25:20.

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

:25:21.:25:24.

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

:25:25.:25:28.

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

:25:29.:25:33.

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

:25:34.:25:38.

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

:25:39.:25:42.

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

:25:43.:25:48.

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

:25:49.:25:52.

Code of Conduct for publicans who get into difficulties with their

:25:53.:25:58.

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

:25:59.:26:01.

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

:26:02.:26:06.

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

:26:07.:26:11.

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

:26:12.:26:15.

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

:26:16.:26:20.

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

:26:21.:26:24.

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

:26:25.:26:29.

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

:26:30.:26:34.

with their Special Branch, surrounded by cameras, we were

:26:35.:26:38.

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

:26:39.:26:42.

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

:26:43.:26:46.

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

:26:47.:26:52.

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

:26:53.:27:00.

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

:27:01.:27:05.

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

:27:06.:27:09.

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

:27:10.:27:17.

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

:27:18.:27:21.

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

:27:22.:27:26.

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

:27:27.:27:38.

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

:27:39.:27:48.

that characterisation. Despite the disastrous election results for the

:27:49.:27:51.

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

:27:52.:27:59.

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

:28:00.:28:04.

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

:28:05.:28:07.

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

:28:08.:28:13.

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

:28:14.:28:16.

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

:28:17.:28:19.

groundswell of deep unease about where Nick Clegg is leading his

:28:20.:28:23.

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

:28:24.:28:26.

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

:28:27.:28:30.

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

:28:31.:28:35.

get 75 local parties demanding an emergency conference to trigger that

:28:36.:28:40.

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

:28:41.:28:45.

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

:28:46.:28:47.

idea of holding an emergency meeting. Thank you.

:28:48.:28:51.

Are established Western economies being overtaken by the fast-growing

:28:52.:28:55.

emerging economic powerhouses in Asia and elsewhere in the world?

:28:56.:28:57.

Our Guest of the Day - John Micklethwait -

:28:58.:28:59.

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

:29:00.:29:02.

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

:29:03.:29:06.

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

:29:07.:29:09.

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

:29:10.:29:12.

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

:29:13.:29:21.

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

:29:22.:29:28.

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

:29:29.:29:32.

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

:29:33.:29:38.

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

:29:39.:29:44.

compromise between keeping growth meaningful and not having too many

:29:45.:29:47.

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

:29:48.:29:51.

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

:29:52.:29:59.

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

:30:00.:30:02.

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

:30:03.:30:06.

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

:30:07.:30:13.

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

:30:14.:30:16.

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

:30:17.:30:20.

President himself says, economic reform is entering a deep water

:30:21.:30:25.

terrain and the difficulty is tackling vested interests in the

:30:26.:30:27.

state-owned enterprises. democracy can sometimes be an

:30:28.:30:38.

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

:30:39.:30:42.

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

:30:43.:30:50.

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

:30:51.:30:55.

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

:30:56.:30:58.

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

:30:59.:31:05.

Square democracy protests and the crackdown on those protests, and

:31:06.:31:10.

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

:31:11.:31:15.

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

:31:16.:31:19.

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

:31:20.:31:24.

economy without effective law but increasingly, the problem is that

:31:25.:31:29.

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

:31:30.:31:35.

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

:31:36.:31:41.

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

:31:42.:31:44.

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

:31:45.:31:57.

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

:31:58.:32:00.

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

:32:01.:32:06.

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

:32:07.:32:10.

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

:32:11.:32:13.

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

:32:14.:32:18.

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

:32:19.:32:23.

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

:32:24.:32:29.

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

:32:30.:32:34.

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

:32:35.:32:38.

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

:32:39.:32:42.

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

:32:43.:32:45.

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

:32:46.:32:49.

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

:32:50.:32:53.

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

:32:54.:32:57.

places like Sweden, not a particularly authoritarian Place,

:32:58.:32:59.

London, not particularly authoritarian, and Singapore,

:33:00.:33:06.

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

:33:07.:33:09.

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

:33:10.:33:12.

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

:33:13.:33:16.

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

:33:17.:33:20.

Cyclopedia Britannica, sitting there worrying about other reference

:33:21.:33:29.

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

:33:30.:33:34.

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

:33:35.:33:39.

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

:33:40.:33:42.

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

:33:43.:33:48.

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

:33:49.:33:51.

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

:33:52.:33:58.

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

:33:59.:34:07.

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

:34:08.:34:17.

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

:34:18.:34:22.

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

:34:23.:34:27.

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

:34:28.:34:31.

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

:34:32.:34:38.

corporations without owners who have become pay owners for top executives

:34:39.:34:41.

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

:34:42.:34:45.

the structures are that support innovation and investment, turning a

:34:46.:34:51.

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

:34:52.:34:54.

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

:34:55.:35:00.

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

:35:01.:35:03.

colleague, responsive government is better than the alternative to put

:35:04.:35:07.

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

:35:08.:35:10.

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

:35:11.:35:19.

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

:35:20.:35:21.

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

:35:22.:35:25.

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

:35:26.:35:29.

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

:35:30.:35:32.

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

:35:33.:35:37.

history and government can change fairly dramatically when it wants

:35:38.:35:40.

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

:35:41.:35:45.

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

:35:46.:35:49.

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

:35:50.:35:52.

changes because the discourse is entirely about if vision is,

:35:53.:35:56.

privatisation, deregulation, good housekeeping, austerity, not about

:35:57.:36:07.

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

:36:08.:36:10.

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

:36:11.:36:14.

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

:36:15.:36:19.

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

:36:20.:36:23.

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

:36:24.:36:26.

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

:36:27.:36:34.

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

:36:35.:36:42.

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

:36:43.:36:47.

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

:36:48.:36:52.

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

:36:53.:37:00.

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

:37:01.:37:07.

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

:37:08.:37:11.

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

:37:12.:37:15.

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

:37:16.:37:18.

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

:37:19.:37:26.

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

:37:27.:37:33.

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

:37:34.:37:46.

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

:37:47.:37:50.

litigiousness. China's problem is inequality.

:37:51.:38:03.

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

:38:04.:38:05.

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

:38:06.:38:13.

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

:38:14.:38:17.

think they were really good at. The thing about places

:38:18.:38:19.

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

:38:20.:38:21.

those things while having much better services. The

:38:22.:38:25.

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

:38:26.:38:28.

those things while having much there is some stuff about Asian

:38:29.:38:30.

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

:38:31.:38:33.

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

:38:34.:38:38.

welfare for half the money. Last point.

:38:39.:38:45.

responsive government. I championed this throughout my

:38:46.:38:51.

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

:38:52.:38:55.

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

:38:56.:38:58.

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

:38:59.:39:03.

to engage with the underlying structures of our companies, our

:39:04.:39:06.

to engage with the underlying financial system, the

:39:07.:39:08.

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

:39:09.:39:14.

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

:39:15.:39:24.

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

:39:25.:39:25.

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

:39:26.:39:30.

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

:39:31.:39:34.

The BBC has compiled responses from 120 universities across the UK

:39:35.:39:37.

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

:39:38.:39:40.

And the total number of academic appeals and complaints

:39:41.:39:44.

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

:39:45.:39:47.

So are the universities getting worse or have the students simply

:39:48.:39:52.

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

:39:53.:39:55.

He runs the higher education consumer website Student Hut.

:39:56.:40:05.

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

:40:06.:40:12.

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

:40:13.:40:17.

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

:40:18.:40:20.

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

:40:21.:40:25.

people are taking that decision seriously and expecting more from

:40:26.:40:29.

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

:40:30.:40:33.

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

:40:34.:40:38.

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

:40:39.:40:43.

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

:40:44.:40:46.

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

:40:47.:40:52.

20% of students actually had the complaint that teaching standards

:40:53.:40:57.

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

:40:58.:41:00.

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

:41:01.:41:04.

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

:41:05.:41:08.

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

:41:09.:41:12.

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

:41:13.:41:16.

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

:41:17.:41:21.

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

:41:22.:41:24.

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

:41:25.:41:28.

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

:41:29.:41:32.

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

:41:33.:41:36.

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

:41:37.:41:43.

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

:41:44.:41:46.

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

:41:47.:41:50.

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

:41:51.:41:54.

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

:41:55.:42:00.

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

:42:01.:42:04.

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

:42:05.:42:07.

students can see what previous students have said in comments

:42:08.:42:15.

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

:42:16.:42:19.

joins us now. Were you shocked and surprised by

:42:20.:42:21.

the numbers of students complaining, with 20% of the

:42:22.:42:28.

students in the survey we talked about complaining that teaching was

:42:29.:42:31.

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

:42:32.:42:36.

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

:42:37.:42:41.

fact is, in the old system, universities were competing

:42:42.:42:45.

intensely on research quality and not paying attention to the quality

:42:46.:42:48.

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

:42:49.:42:53.

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

:42:54.:42:59.

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

:43:00.:43:03.

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

:43:04.:43:07.

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

:43:08.:43:12.

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

:43:13.:43:16.

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

:43:17.:43:21.

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

:43:22.:43:24.

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

:43:25.:43:29.

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

:43:30.:43:33.

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

:43:34.:43:36.

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

:43:37.:43:40.

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

:43:41.:43:42.

historically have the quality of teaching they are inclined to expect

:43:43.:43:49.

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

:43:50.:43:53.

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

:43:54.:43:56.

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

:43:57.:44:02.

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

:44:03.:44:07.

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

:44:08.:44:10.

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

:44:11.:44:15.

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

:44:16.:44:20.

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

:44:21.:44:28.

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

:44:29.:44:32.

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

:44:33.:44:38.

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

:44:39.:44:42.

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

:44:43.:44:47.

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

:44:48.:44:50.

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

:44:51.:44:56.

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

:44:57.:44:58.

produce information on all these crucial benchmarks but Boorman is

:44:59.:45:02.

becomes available on websites and all kinds of advertising the

:45:03.:45:05.

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

:45:06.:45:09.

choose the university that offers them the best quality teaching

:45:10.:45:15.

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

:45:16.:45:22.

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

:45:23.:45:30.

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

:45:31.:45:36.

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

:45:37.:45:42.

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

:45:43.:45:45.

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

:45:46.:45:50.

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

:45:51.:45:54.

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

:45:55.:45:59.

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

:46:00.:46:02.

universities will be replaced by things on the internet and the

:46:03.:46:06.

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

:46:07.:46:10.

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

:46:11.:46:14.

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

:46:15.:46:19.

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

:46:20.:46:24.

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

:46:25.:46:29.

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

:46:30.:46:34.

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

:46:35.:46:38.

back. The competition between universities is not simply on the

:46:39.:46:41.

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

:46:42.:46:46.

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

:46:47.:46:48.

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

:46:49.:46:52.

between the universities as to which university the student chooses and

:46:53.:46:55.

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

:46:56.:47:02.

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

:47:03.:47:08.

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

:47:09.:47:11.

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

:47:12.:47:15.

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

:47:16.:47:19.

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

:47:20.:47:24.

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

:47:25.:47:28.

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

:47:29.:47:34.

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

:47:35.:47:39.

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

:47:40.:47:43.

students for not high enough standards? There is an independent

:47:44.:47:48.

body. They ultimately receive the complaints. They publish the

:47:49.:47:51.

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

:47:52.:47:56.

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

:47:57.:48:00.

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

:48:01.:48:05.

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

:48:06.:48:12.

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

:48:13.:48:18.

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

:48:19.:48:22.

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

:48:23.:48:26.

British Tories and when asked who should be the next British

:48:27.:48:29.

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

:48:30.:48:33.

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

:48:34.:48:37.

Has the death of the dead tree press been exaggerated?

:48:38.:48:39.

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

:48:40.:48:42.

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

:48:43.:48:48.

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

:48:49.:48:54.

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

:48:55.:49:00.

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

:49:01.:49:03.

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

:49:04.:49:11.

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

:49:12.:49:15.

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

:49:16.:49:21.

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

:49:22.:49:25.

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

:49:26.:49:29.

also found that sometimes people read New York Times content more

:49:30.:49:34.

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

:49:35.:49:40.

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

:49:41.:49:45.

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

:49:46.:49:49.

left the paper and digital journalists who turned down job at

:49:50.:49:52.

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

:49:53.:49:57.

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

:49:58.:50:09.

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

:50:10.:50:16.

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

:50:17.:50:28.

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

:50:29.:50:34.

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

:50:35.:50:39.

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

:50:40.:50:42.

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

:50:43.:50:46.

not the only bit of the conversation. There is something

:50:47.:50:52.

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

:50:53.:51:02.

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

:51:03.:51:06.

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

:51:07.:51:11.

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

:51:12.:51:15.

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

:51:16.:51:20.

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

:51:21.:51:24.

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

:51:25.:51:33.

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

:51:34.:51:36.

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

:51:37.:51:42.

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

:51:43.:51:48.

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

:51:49.:51:51.

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

:51:52.:51:55.

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

:51:56.:51:59.

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

:52:00.:52:02.

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

:52:03.:52:07.

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

:52:08.:52:13.

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

:52:14.:52:16.

there are some bits of the advertising market which are still

:52:17.:52:20.

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

:52:21.:52:25.

predicted the end of daily newspapers - and their circulation

:52:26.:52:33.

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

:52:34.:52:37.

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

:52:38.:52:43.

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

:52:44.:52:46.

larger than all the quality newspapers in Britain put together.

:52:47.:52:50.

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

:52:51.:52:54.

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

:52:55.:52:59.

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

:53:00.:53:04.

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

:53:05.:53:08.

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

:53:09.:53:13.

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

:53:14.:53:18.

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

:53:19.:53:22.

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

:53:23.:53:26.

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

:53:27.:53:29.

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

:53:30.:53:33.

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

:53:34.:53:37.

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

:53:38.:53:41.

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

:53:42.:53:45.

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

:53:46.:53:49.

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

:53:50.:53:51.

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

:53:52.:53:55.

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

:53:56.:53:57.

a metaphor. They'll be raising money for

:53:58.:54:00.

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

:54:01.:54:10.

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

:54:11.:54:17.

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

:54:18.:54:21.

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

:54:22.:54:25.

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

:54:26.:54:29.

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

:54:30.:54:36.

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

:54:37.:54:43.

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

:54:44.:54:50.

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

:54:51.:54:56.

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

:54:57.:55:04.

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

:55:05.:55:11.

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

:55:12.:55:15.

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

:55:16.:55:21.

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

:55:22.:55:26.

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

:55:27.:55:30.

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

:55:31.:55:36.

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

:55:37.:55:41.

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

:55:42.:55:47.

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

:55:48.:55:52.

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

:55:53.:55:56.

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

:55:57.:56:03.

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

:56:04.:56:09.

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

:56:10.:56:17.

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

:56:18.:56:24.

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

:56:25.:56:27.

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

:56:28.:56:31.

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

:56:32.:56:34.

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

:56:35.:56:39.

find out the answer to our quiz. The question was

:56:40.:56:41.

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

:56:42.:56:43.

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

:56:44.:56:59.

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

:57:00.:57:02.

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

:57:03.:57:09.

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

:57:10.:57:11.

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

:57:12.:57:15.

refused entry because he'd forgotten his pass.

:57:16.:57:20.

Here he is having his "senior moment".

:57:21.:57:25.

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

:57:26.:57:39.

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

:57:40.:57:44.

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

:57:45.:57:47.

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

:57:48.:57:54.

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

:57:55.:58:01.

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

:58:02.:58:04.

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

:58:05.:58:08.

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

:58:09.:58:12.

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

:58:13.:58:19.

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

:58:20.:58:23.

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

:58:24.:58:26.

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

:58:27.:58:30.

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

:58:31.:58:36.

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

:58:37.:58:37.

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

:58:38.:58:43.

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

:58:44.:58:48.

starting over on BBC One now.

:58:49.:58:53.

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