08/09/2016 Daily Politics


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Graham Brady Glitter. Graham Brady Glitter.


Hello and welcome to The Daily Politics.


Theresa May confirms she'd like to end the ban on new grammar


schools in England - but can selection by ability really


MPs and peers are being told they should move out of parliament


for six years, so it can undergo a ?4 billion makeover -


is it a price worth paying to preserve this


Parliament's pooches battle it out to be crowned Westminster Dog


of the Year - who will be top dog this year?


He and his party were rejected by voters at last years general


He and his party were rejected by voters at last year's general


election - will Ed "Glitter" Balls have more appeal


in the Strictly Ballroom - because he's been allowed


to escape from his dancing partner Katya's grasp.


With us for the next hour is Ed "Glitter" Balls.


Show was one of your moves, quickly? We will have more of that later!


Last night, Theresa May started her push for more


grammar schools in England, after a civil servant


was photographed outside Downing Street with papers proposing


Talking to Conservative MPs, the Prime Minister said


she would not "turn the clock back", but she insisted that there


is already selection in the system based on the ability of parents


afford the house prices close to good schools.


The options are expected to be laid out in a Department for Education


green paper next week, and Theresa May insisted last night


the policy would create a "21st century education system"


Among the options being considered is setting up new grammar schools


in areas where there is demand for them.


Existing grammar schools, such as those in Kent


and Greater Manchester, could be expanded.


And free schools could be allowed to introduce selection as part


But the Prime Minister may face a rocky road if she wants


to get her plans passed in Parliament, with opposition


to grammar schools amongst her own MPs, and both Labour


and the Liberal Democrats condemned such a move last night.


And opponents in the House of Lords will be less inclined to let it


pass, as increasing selection in education was not part


of the last Conservative election manifesto.


Well, earlier, the Education Secretary, Justine Greening,


was called to answer an urgent question on grammar


schools in the Commons - here's what she had to say.


There will be no return to the simplistic, binary choice of the


past, where schools separate children into winners and losers,


successes or failures. We want to build on our success since 2010 and


to create a truly 21st century schools system. But we want a system


which can cater for the talent and abilities of every single child. To


achieve that, we need a truly diverse range of schools and


specialisms. This policy will not help social mobility, Mr Speaker. It


will entrench inequality and disadvantage. It will be the lucky


few who can afford the tuition, who will get ahead, and the


disadvantaged who will be left behind. A policy for the few at the


expense of the many. And we're joined now by the Chairman


of the 1922 Committee of Conservative MPs,


Graham Brady, who is a strong Ed Balls is a former Labour


Education Secretary. What did to reason may tell you and your


colleagues last night? I never two on what happens in those meetings.


You go ahead. I think I can confirm that reports have been quite


accurate. Essentially, what she said is that there are lots of different


types of schools now, we have a diverse schools sector, which I


strongly support and have always been behind. But it seems very odd


that if somebody comes to government with a proposal for a new school


which is select, even though we know that can work and it is very popular


in communities, it is currently illegal to allow it. So, dropping


that ban I think is really the key to opening up an even more diverse


sector, and it will raise standards and it will improve social


modernity. We will test that in a moment. Of what does an element of


selection actually mean? If we are not going back to the binary choice,


as Justine Greening said, with grammar schools and successes and


failures, what is an element of selection? The crucial thing is that


back in the 1960s, what went wrong was not the grammar schools, it was


the secondary moderns. Typically they were not very good schools. So


you would like to go back to that binary system, actually? In


Manchester, we have a completely selective system. But it is not


binary and it is certainly not a choice between success and failure.


All of the schools in my constituency are outstanding


schools. The high schools as well as the grammar schools. So what is the


element of selection? It would be either allowing some completely


selective schools, or allowing some partial selection. Right, so there


would be some holy selective schools? I do not really understand


what it means, partial selection, but it seems to me that you would


make a certain number of places available for selection, let's say


30%, and then there would be pupils getting tutored to get into those,


and the rest would be in a catchment area, where people would buy


themselves into that catchment area. In what way will that help


disadvantaged people? You have already heard the news today, it is


A2 billion pounds industry, tutoring people through secondary education.


So something clearly is not going right. Something can be done better.


There are some very good country hands of schools and areas. There


are also things which can be delivered by selective schools. Why


would you want to emulate that, if you're criticising the idea that in


secondary education, people are being tutored? No, I'm saying,


tutoring people throughout their secondary education. That is about


standards not being good enough in those schools. But do you accept


that is what would happen? If you had a new school where partial


selection was in place, let's say in an area where there is a social


amount of social deprivation, you would have 30% of places for which


there would be unbelievably stiff competition, and everyone would be


tutored, and it would only be those who could afford the expensive


tuition? What happens in many companies in areas, you've got


selection by house price. All the places are open to the catchment


area... In selected areas, people can pass the exam and get into the


school. Now, there is too much tutoring, far more than when I went


to grammar school. But if we had more grammar schools, then the


competition for those places would be less intense, and there will be


less call for that kind of tutoring. Do you agree with this? I don't full


stop there are mistakes in politics which you find out about afterwards,


and mistakes which you see happening as they are happening. Theresa May


is making a big mistake here. Graham Brady has consistently supported


this policy and he has been ignored by past Conservative education


secretaries and prime ministers, going back to Margaret Thatcher.


Because it is both bad education policy and bad politics and. But


they are good schools, aren't they? The issue is, what happens to the


children of working class kids, and middle-class children, and get told


at 11, you are second-best. What we know from the evidence, because I


was Education Secretary, is that grammar schools tend to be


disproportionately for more affluent children, but the kids who go to the


secondary modern school underperform in those schools relative to other


country hands of schools in other parts of the country, cause they


have been told at 11 they are second-best. There are some


brilliant secondary modern schools, fabulously lead, in challenging


circumstances, because they've been told their children are going to


underperform. Telling kids at 11, they're second-best, does not work


for the majority of kids and parents in your constituency who are told


they are second-best. First of all, that is not true. If you look at the


high schools in traffic, they get better results than ordinary


comprehensive schools in more affluent areas. Kids who go to


secondary modern schools underperform military to those who


don't. There are a great number of secondary modern schools who bought


perform other schools. . I agree with that. There will be opposition


on your own side as well, and there always has been, which is why you


have struggled to get this back on the agenda. How are you going to


deal with it? We have got Sir Michael Wilshaw, chief Inspector of


Schools, who basically said, the notion that people will benefit from


the return of grammar schools is, too! And nonsense and is clearly


refuted by the London experience. He's talking about the state system


in London which does rather well compared to the rest of the country.


We also had the former leader of the Liberal Democrats, Nick Clegg,


saying that you are forcing your prejudices on people. What do you


say to that? Quite the reserve. The important thing but it is not forced


prejudice, it is not telling people what they must do. What we have had


for 18 years is a law which says, even if a community wants a grammar


school, it is not allowed to have it. Be opinion poll evidence


suggests 75% of people in this country want more grammar schools.


Last year I think it was ComRes which did poll and said that the


supporters of every major political party would like more grammar


schools. The majority of Labour Party members included. Which was


interesting, and that was a statistic used earlier this week but


I think it was 45%, actually, not a majority but still a high number.


The point is, if people want them, and if they are in areas where there


are not any other good schools, or maybe only one other, why shouldn't


parents be given a choice? Why not let them decide? What you have to


decide is, what is going to be the best for the most able children and


for all children? Of course it's the case that if you start out thinking


your child is going to get to the grammar school, and you think that


may advantage them, fingers crossed, let's hope that will be great. The


problem is, if it does not work out that way. There is a really good


column by Simon Jenkins in the Guardian. A Conservative


commentator, who said, there is a really good reason why Margaret


Thatcher, who was probably somebody that Graham Brady revered, did not


expand grammar schools. She knew in the end, middle-class parents who


start out thinking it is a good idea before the 11 plus discover that it


is a bad idea when their kids are told they're second-best at 11. They


are some children who do really well at seven, some who really come on


when they are 13 or 14. Why should they have three years being told


they are second-best. How is that good education? Nobody will tell


them they're second-best, absolutely not. If they go to one of the high


schools in my constituency... Outside of your constituency...


There is a case... Good for you. We should try to learn from that,


surely. We certainly should not ban what works in one constituency. I


have experience in Kent and in Gloucestershire, also selective


areas, where you have some brilliantly led secondary modern


schools, doing really good things in very challenging circumstances, but


the reality was, they did not manage to deliver the results that were


being delivered, as Jo was saying, by the best country hands if in


areas like Hackney and Tower Hamlets, because they are tied to


expectations, and what happens to teaching as a consequence? It is


something for which these kids never recover. But it is not being


imposed, is it? That's the difference. The ban was imposed,


which is what Graham Brady is objecting. This is not imposing a


system, this is allowing more choice, and more choice in areas


where they do need more schools. The difficulty would be in areas of


social deprivation, and it's always difficult to tailor a system to be


perfect, but do you not think it would be a good idea to even look at


the option Enyeama parent and I'm living in an area where things


expand, or where it is introduced for the first time, and I don't want


my child to be told, your second class at 11 if you fail the test.


Where is my choice? If there are other good schools in the area,


presumably greying is saying that the competition would improve all of


the schools. The problem is, the statistics do not bear out what you


say just if you look at the figures from the Institute for Fiscal


Studies, about how many children there are at current grammar schools


who are on free school meals... 3%, 7% in Sutton, 9% in boxing. That's a


very perilous proportion. Disproportion in more affluent


areas. If we spread them all, certainly if we get them into more


deprived areas, those statistics will change. But do you accept, that


is a failure? They have not actually allowed social mobility to any great


extent, if you are looking at those percentages? I think they still do.


I do not want to get hung up just on free school meals figures. If you


look at average earnings, there are a lot of people doing really well


and getting great opportunities through selective systems. One thing


Ed is missing is that everywhere there is a selection at the moment,


it is hugely ocular. People can get rid of it if they don't like it.


Everywhere it exists, people love it and can see it working. And the


other thing is, there is already selection. We pull our already


tutoring their children, even if they are going through the state


system. Or buying expensive properties to be in a catchment


area. -- people are already tutoring. . I think you have to be


careful and not to take a London centric view. In a large part of the


country, people go to the local school and the majority of children


go to the local school and they will not do that any more if you


introduce selection. There's different ways in which you can


solve this house price issue, other than going back to the nineteen


fifties. There is one approach which is very unpopular, to do it through


a lottery. The other way is to do branded admission, where you make


sure that you have a mix of children, school by school, which in


the area where we live, in Hackney, works very well, and makes sure that


you have truly, hence of schools. Of course in the end it comes down to


great teaching and leadership, and you need to have setting to make


sure that kids are taught at the right level of ability. But we


should not go back to a world where we tell kids at 11 they're


second-class. So, MPs and Peers should be kicked


out of the Palace of Westminster for 6 years whilst vital work takes


place to restore the building. That's the recommendation


from a committee of MPs and Peers who have spent months


considering what to do about the crumbling building -


the home to Parliament - but also a Unesco


world heritage site. The full proposals are due to be


made public in the next hour - but our reporter Mark Lobel has


details of the proposed move. Beautiful outside, but not


so inside, parts of the Palace of Westminster are dangerous to work


in, and in desperate need of repair. The roof's leaking, the stonework


is rotting, in effect. We need to do a great deal more


in terms of fire The Victorians left us


lots of pictures and drawings of statues and all the rest of it,


but really good plans so that we know where the voids


are, we don't have. But all the facilities,


whether it's electricity, IT, comms, sewage, fresh water,


high-pressure steam, central heating - all of that -


have just been laid And I don't think I'm giving away


any secrets if I say that there are lots of wires -


nobody's quite sure where they go. To allow for extensive renovations,


a parliamentary committee is recommending all MPs and peers


should vacate Parliament for at least six years


in the early 2020s. 650 MPs would all pack


their bags from the House of Commons and move 350 yards


across the road to Whitehall. The temporary Commons would be based


here at Richmond House. At the moment, this


is the headquarters At the back of this building


is a courtyard which could be used as a temporary chamber for debates,


statements and Prime This also benefits from being


on the Parliamentary Estate, which makes it safer,


and it's also within walking At the same time, all members


of the House of Lords would also be rehoused,


down the road to the QEII Conference Right now, this is a commercial


conference venue, with an abundance But as it's owned by the Government,


it wouldn't be difficult to turn this into a second chamber,


to scrutinise laws and The PM's spokeswoman says she'll


respond in due course. It's then up to members of both


Houses of Parliament to scrutinise It's not just about the convenience


of MPs or their lordships. It's important that this


World Heritage Site, this mother of parliaments,


is properly refurbished What we've got to look


at is the scope of the programme - make sure that that is really well


worked out from the beginning and there aren't any


hidden surprises. We've got to watch that we keep it


on time and on schedule - otherwise we will see


these costs escalate. And I would take with a pinch


of salt that 3.9 billion I don't think the detailed work has


yet been done to prove what it's So, after years of studies, now,


a concrete proposal that could lead to MPs and lords vacating Parliament


for the first time since it was evacuated


during the Second World War. And we're joined now


by Labour MP and member of the Treasury Select Committee,


John Mann. Welcome. Is it worth the ?4 billion


price tag? It has got to be refurbished. I can see a lot of


money being wasted. Huge opportunities being wasted to


recreate exactly what is there. The shooting Gallery, the bathrooms


downstairs nobody uses, as if nothing has changed in 200 years,


rather than actually modernise the place and perhaps modernise it so


much that we do not need all of those peers coming back. That would


be another discussion on in terms of the number of peers, but you would


favour the idea of moving out for the six-year period while they


refurbished, even if it is not in a style you would like a then come


back in? We could fit into Westminster. It might be better. The


consultants reports, they are plucking figures around -- out of


the air, rounded up to the nearest billion. They are saying there are


dangerous levels of asbestos. I'm sure there are. It needs sorting


out. There will need to be Cindy camping at some stage. But building


a new parliament? -- there will need to be some revamping at some stage.


What about the other buildings around the country? Such as? The


Welbeck estate. Nothing to do with your constituency, of course. I'm


prepared to go to places like Manchester, the Scottish Parliament,


Edinburgh, we could move them along for a little bit.


CHUCKLES Have you spoken to the SNP about


that? What do you think? I think it's got to be done. It needs to be


done in a cost-effective way. Change is always difficult. Parliament is


actually about the speeches and the questions answered or not answered.


Whatever happens, very quickly it will become Parliament again in this


temporary period. It would be convenient to the BBC if it went...


One change we could try, and I'm thinking of a prominent TV programme


that could be hosted in the Royal Gallery. We could get some cameras,


spectators, a bit of dancing. We will be coming to Strictly...


Opening up Parliament is... Parliament is open. No, no, it is a


mess, it is antiquated in the way the space is used. A lot of wasted


space... If it was modernised within the current building you would be


supportive of that? Yes, but we need to modernise things like the hours,


which are important. The structure, the way the building is used, if all


we do is repair the historic building as it is it is a hugely


wasted opportunity for our democracy. Does there need to be a


complete change inside to make it work in the modern age? Take the


Scottish Parliament, which was designed from scratch, it ended up


being more antagonistic than the Westminster Parliament. The banging


of the desks, and all of that. And people complained from the beginning


about there not being enough space. All of that. In reality, it is


difficult to redesign a Parliament. John is probably right, there are


some bits in there which are very outdated which don't need to be


updated like the shooting Gallery. Although people in the shooting club


might think it is unfair... Some of the characters inside of the 19th


century. There could be a crash. As opposed to MPs?


CHUCKLES In terms of moving out, would you be


able to run things? You say people would get used to it. But would it


be possible when they are so entrenched in the slightly


antiquated building which is the houses of Parliament? I think the


convention of the speaker in the chair, and the fact people speak


through the speaker rather than to each other is really important. I


think that is more important than the design of the building and all


of those things. You could have a completely different physical


setting. Quickly it would be like Parliament today. Do you think it


would be people moving out in 2022? I think it will happen. But I


suspect it will be done badly and in ten years' time there will be


regrets about how we could actually change a lot more. Without costing


more. Probably saving money. Make it more modern in how it works, but


keep the beauty of the architecture. And that optimistic note, thank you.


-- on that. Now - our guest of the day Ed Balls


is obviously a twinkle toes on the dance floor -


but he did have a career before That all came to an ungraceful


end in May last year In his book, "Speaking Out",


he considers his and Labour's defeat - and how the party


might regain power. We'll be discussing that


in a moment, but first a reminder of Ed's


glittering political career. # The root of all


evil to a lot of men # I'll take the money,


you can have the chick # When you kick the bucket,


it's just too bad # Life's too short,


don't make it sad # Cos you sure don't


know when you got to go # You can work and


work and have no fun # You'll find out


you're the crazy one # But there's one thing


you can always do # Cos you sure don't


know when you got to go # Cos you sure don't know


when you got to go...# I'm sure the Labour Party


will emerge in the coming weeks # Cos you sure don't know


when you got to go!# And Iain Martin joins us


in the studio with the journalist Welcome. First, Ed Balls, did Labour


lose in 2015 because they were not radical enough, or perhaps they were


not trusted enough on the economy? In the end I think what happened was


that people saw the opinion polls being very close. They were worried


that the SNP would hold the balance of power. And there was lots of


speculation about how Ed Miliband and the SNP were deciding the


Budget. There were lots of voters in my constituency and around the


country who may have voted Liberal Democrat in 2010, thought about


voting Ukip, then switched back to the Conservatives because they were


fearful about a Labour government and the economy. So they were not


trusted on the economy? The idea they were voting Conservative


because they wanted Labour to be more left wing is nonsense. That is


obviously for the birds, Paul Mason, the idea Labour wasn't radical


enough is why they didn't win. Ed's because interesting. It was about


the centre-left, essentially. The last minute clip of Lib Dem voters


could be people solidifying around the Conservatives over Scotland is


one thing. But there has been a long-term decline of Labour vote.


Splitting to the right with Ukip, splitting to the left arguably with


the Green party. Any Labour leader, whether it is Owen Smith, Jeremy


Corbyn, or some future person, has to have a narrative. Observing as a


journalist, covering it for ITN, it was the absence of a narrative. Any


narrative is better for Labour. Are you saying they did not have any


narrative at all? Well, they had a narrative... What was it, austerity


might? Ed thought he would win elections through policy. And what I


have been saying is that you win them by having a story to tell. --


austerity light. A story to tell them about how their macrolides get


better. Anybody who comes to labour with a story to tell, or to bring


the fragments together, the Green party, the Ukip voters, the


Conservative switches, that puts a camp of Labour back in power. You


failed, in a way, to counter the Tories argument, that you had


crashed the car and maxed out on the credit card, you admit that? The


financial crisis was substantial. We debated for a long time how to deal


with the economic argument... And you couldn't agree, could you? Ed


and I agreed that matching the plans of the Conservatives would be


ridiculous. But I also felt that to go out and do a big spend by


borrowing with a deficit wasn't going to work. At the beginning of


the election campaign, saying that our sums did not add up were not


registering. But the SNP fear was powerful. It exposed cars and


leadership and the economy and on vision. -- it exposed us. You cannot


win unless you persuade people who might vote Conservative to switch to


Labour. Where I disagree with Jeremy Corbyn and with Paul is that Paul


thinks he can put together a rainbow coalition on the left and with the


Green party. You have got to reach into the centre ground. You cannot


simply be satisfied that you have got a cheering mob of your


supporters at a public meeting and think that translate into votes in


the ballot box. You have got to get into the centre ground. Is that what


you are doing? Let's not call the Labour members a mob. I agree, the


left alone... Well, Labour can never win other than being an alliance.


The big problem with Scotland. That set that aside. Let's talk about


England and Wales. I support Jeremy Corbyn. -- and that's set that


aside. You support his style of politics and his policies, as well?


Yes. But this is not central left any more. It is about what is the


heartland of labour. Under new Labour, what began to happen, it was


clear in 2015, the heartland is the urban voter. The swing vote is the


working class voter, which we could no longer take for granted. The only


thing you can offer them is economic radicalism. Well, it is left, isn't


it? When you talk about the things you are talking about, you disagreed


with the decisions that were made by Ed Miliband and Ed Balls at the


time. No, actually. You would have liked to have seen more money spent.


Believe it or not, the Corbyn movement is a coalition of people


who radically disagreed with him, and people who just disagreed with


him. Actually, that is kind of odd because I have never booked voted


Tory. You did face a choice going into the 2015 election, and that was


how you framed the austerity debate. Budget made it fairly clear that you


could have gone into that election basically saying, no further


austerity. And I think you almost did. But you are caged it as a kind


of responsibility thing, fearing what happened in 2008, rightly,


because... In the end, people would not trust us. Your words were, there


is a hard left utopian fantasy, devoid of connection to the reality


of people's lives, and we need to make decisions on tax, budgets,


immigration and welfare. Will that win an election only what is amazing


about being in the Labour Party at the moment, and I I hope you agree


with this, Ed Balls, is that the influx of people we are having are


exactly those people who we need to tell the story too. We are seeing


mums on estates becoming activists in the Labour movement, which is an


amazing thing. We could not fill a small hole in the 1980s. Now we are


seeing tens, hundreds. But what about the wider electorate in an


election? Well, they can be the ambassadors on the doorstep. Your


book is full of examples about how bombarding working-class people with


messages did not work. Above all, they can be listeners. I want to


hear what they want us to do. But you just called them of? I do not


mean mob in the sense of a political mob. Mob is the wrong word, I


apologise for that. Do you think Jeremy Corbyn can win the next


general election? Dury Colbon won the leadership election. He has


brought in new members. If that translates into strength in the


opinion polls, I will be the first to say I was wrong. Unfortunately


that is not happening. In the end, to leave Nato may be popular at a


public meeting but it is absolutely not whether centre-left voter is.


I'm afraid they are just not going to vote for that. You did not win


the... That was the suggestion. You did not win the election, either,


did you? You're Ed Miliband's brand of politics did not win come either,


so maybe this will work? If you take immigration, for example, talking


about Morley and Leeds, one thing I said in the book was that


globalisation brought big changes, which the left has found hard to


deal with, what is the unexpected, huge movement of Labour. My view is


that you cannot win in Morley unless you say, we are not going to shop


the borders, we are going to manage and control this. Jeremy said before


the referendum, we cannot have, it has got to be unlimited. That is not


the way the voters of Morley will think. I actually agree with that,


if you look at social media, I was supporting you on that. Do you think


Jeremy Corbyn is doing a good job as leader? He has had a lot to deal


with. Whose fault is that? Owen Smith stood, other people stood


down. That is their right. What they have to bear in mind is, maybe not


whole of the tanking in the polls. The tanking in the sand that is


real. It is now happening. Some of that has to be down to the disunity.


Some of it has to be down to Corbyn, he is the leader. But I would say


that politics is sequential. There will be a vote. I understand that


the polls are saying, it will be Corbyn. He is likely to win, as long


as it is a democratic vote. After that, let's take it sequentially,


like we did with Ed Miliband. Should there be selection of MPs who will


not back him? I am into trade-offs at the moment. I think the shadow


cabinet insists on being elected. That is what used to happen? Then we


on the left can come forward without measures. But what I hope happens...


Including compulsory reselection? Yes. But what I hope happens is that


in the future, whoever wins, Corbyn or Smith, let's unite behind him and


fight the Tories. Because you admit the polls are disastrous at the


moment? Actually, there is a weird thing, the YouGov poll shows the


Labour lead not bad among C-D photos. Do you think


Labour could form the next government? I do, yes. . If there


are elections to the Shadow Cabinet, and the moderates, let's call them


that, are in need, and the first thing they say is, as can I do not


have confidence in the leadership of Jeremy Corbyn? Every MP goes through


a reselection process in their constituency anyway. I went through


it twice when I was an MP. If a party wants to get rid of an MP,


they can do that under the rules already. You have to ask this


question - is the MP there simply to be the representative of the


members, or do they have a responsibility to win voters across


the constituency? Of course the members are also voters, but there's


a small minority of voters in the constituency. What worries me is, I


fear that are available moment is becoming a party around Jeremy


Corbyn which thinks that having strength in opposition is


sufficient. I don't think that in the end is good enough. We need an


opposition which wants to be in government. The reason why many of


the MPs are so worried is because they do not think at the moment


that's even what axemen is trying to achieve. Paul will have to persuade


us that Jeremy actually wants to be Prime Minister. I'm not sure he


really wants it. Or even that that is the aim of the project at the


moment. Big Bang was the dramatic moment


thirty years ago in 1986 when the City of London embraced


a new type of global finance. Like it or loathe it,


the City now contributes almost 12% But what's next as -


in the wake of Brexit - the square mile looks


to a new, digital future? The journalist Iain Martin has


written a book charting the history of the City and how it


will face new challenges. In 1571, Queen Elizabeth I came


here to this spot in the heart of the City of London to open


the Royal Exchange. It was a new hub for trading


and for deals to be done. It was a place in which fortunes


would be made and lost. And out of it grew the modern City


of London, with banking, Since then, the Royal Exchange has


been burned down, rebuilt, and reinvented several times -


much like the rest And the wider Square Mile has


grown to become a global This autumn is the 30th anniversary


of one of the biggest explosions, or revolutions,


in the City's history. Big Bang, in 1986, when Margaret


Thatcher turned the stock In came more Americans, yuppies,


Porsches, red braces, up went bonuses, salaries,


London house prices, Down, say critics, went


standards and ethics. Now, 30 years later,


the City finds itself on the verge It finds that it must reinvent


itself once again. But the truth is that London


and the rest of us are about to be hit by something much,


much bigger than Brexit. Here at Silicon roundabout,


just a stone's throw from the City of London,


a revolution is sweeping It means new forms of trading,


new digital currencies, new competition, new ways


of doing business. Will the City be able


to survive what's coming? Its history suggests


it usually does. Not only does it enjoy a unique


combination of advantages - time zone, law, language,


history and experience - today, a new generation of coders,


bankers, and financial tech wizards are remaking


this extraordinary place. Iain Martin joins us


here in the studio and Paul Mason and former City Minister Ed Balls


are still with us. Iain Martin, what does Theresa May


need to do to secure the City's interest in Brexit negotiations? The


principal problem will be passport in, which is the arrangement by


which big tanks here, foreign banks, can trade within the European Union.


But I think even more important than that is clearance and settlement,


which is basically what London does. It is the capital of the euro. That


means that 70% of Forex trading and all sorts of other over-the-counter


derivatives, all sorts of fancy stuff, gets done to London, although


the UK is not in the euro. So there is a very difficult set of


negotiations coming up. But I don't think we should get too hung up on


that, which is part of the point I was trying to make in the book and


in the film, which is dad in something bigger is coming, which is


a digital revolution in finance. If we just look at the City as it is


now, in terms of how crucial it is to the economy, financial services


and the industry around it has to be protected, doesn't it? It has to be


protect it often from itself from its own culture. Had this


excoriating report from the government's social mobility


commission last week about people in brown shoes being refused top jobs


in the City, despite their first-class degrees. It has to be


regulated. And I think to keep it in its global pre-eminent position, not


just within the Eurozone but globally, it has to move both with


these times of digital change, but it also has to understand that the


model of the last 30 years, in which it was pre-eminent, will probably


change. Finance has to find a new role in the wider economy. How is it


going to do that, when you think about how much it contributes to the


GDP and how prominent, the reason it is so prominent, financial services,


because we do not do anything else quite as well, it does not make us


quite as much money? We make excellent things, in factories,


manufacturer, we don't just make financial services. But it has


absolutely got to be nurtured. One of the red lines for John McDonnell


is passporting. That is above free movement, which surprisingly for a


lot of Labour people, has no red line. We have got to keep a global


finance industry in London. If you turn it upside down the other way,


it would be an act of vandalism for them to destroy London, attempt to


destroy London and try and switch it to Frankfurt, which certainly does


not have the capability. There is no way in which France with its


neighbour laws would become the capital... They will try. Of course


they will try. But the great lesson from London's financial history is


that the key is always openness, and openness to outside influence, to


immigration, to new ideas. And the one time in the City's history where


it has come close to serious decline and collapse, which was the


beginning of the First World War, right up to the 1960s, it was shot


from the outside world by exchange controls. That liberation which in


big bang tells us that openness is what matters. So not regulation. But


for a lot of people, a lot of our viewers, they will say the banks


were the ones who caused the financial crash. Well, they were the


ones, they caused all the hardship of recession and the cuts which then


came, and it was a financial crisis not of voters' making. That's true.


And that was your fault, felt a lot of voters, because it was


deregulatory, banks were allowed to do what they liked and they had not


been monitored. Well, it started in America and the sub-prime market. I


think it is absolutely true that some of our biggest banks became


very exposed to very risky lending, and did so in a way which was


concealed, and it happened in northern rock as well. The reality


was... The reality was that the Governor of the Bank of England and


the head of the Financial Services Authority and the heads of all of


those banks, me, the City Minister and my counterparts all around the


world, all of us failed to see that growing crisis. Inflation was low,


we thought things were stable, and then when it was revealed, no but he


knew exactly what was happening underneath. It was terrible. I say


in my book, while you look around the world for risks, you've got to


keep your eye on what's happening right in front of your nose. Nobody


knew what was happening in NatWest RBS, it was terrible. And I know


there were people who say they warned about it, but they say that a


lot of it was done by Labour to pay for public services, which needed


that money? Yes, via taxation and things like


that. But you don't want to strangle the golden goose. It did that


itself. The period you mentioned, World War I until the 70s happened


because, first of all, financial markets collapsed in the late 1920s.


A new economic model came along which suppressed global finance. I


want to do financial eyes the world. And this country. That does not mean


that there is no industry we just end speculative finance as much as


we can. -- I want to definancialise. But it became too big. Because of


cheap money policies, lent too much, and became too leveraged. And right


back to 1720, they're always crashes in the history of the city and in


the world of global finance. Don't presume it will not happen again.


How damaging will it be for the city if the UK leads the single market


altogether? -- leaves. Terrible. Gloom is overdone. Interviewed a lot


of people from the city for this which predicted gloom and absolute


disaster. -- I interviewed. But the city is full of clever, inventive


people. After the referendum a few told me that they were thinking


there might be opportunity. They might change their Mac reminds. And


the old viewers on fixed regulatory block, which ran out at brussels. --


their mines. They thought they might not be able to keep up with what is


happening in digital development. It is about to be blown apart in a big


way. London is well placed to benefit from it. -- Brussels. Jeremy


Corbyn seemed to be fairly sanguine about the idea about not being part


of the single market at all. Should the city try to be part of it?


Absolutely. So it would be damaging? Yes. Jeremy Corbyn's position was


that we need access. The problem with saying we will be in the EEA,


Labour is no longer in control. You can have access at any level, can't


you? But, membership, it is complete membership. Access, anybody can have


access if you are prepared to pay. Tariff free access is different. You


have to be a member. We don't know because Theresa May will not tell


anybody what the terms of negotiation are. How can Labour


commit to staying within the EEA when they do not know the terms? You


are saying he is broadly in favour of staying in the single market, or


having access. Yes. Why is it terrible? Paul is right about


Theresa May. There is only so many times you can say Brexit before


people get frustrated. You will find we already are. We are going to


leave the EU, we are not on the single currency, but are we


withdrawing from economic co-operation with our neighbours and


going it alone, are we cutting ourselves off from the global


economy, are we trying to find a new way to be part of this system? The


city is one of our great strengths. Despite the mistakes of the


financial crisis. Over the next 20, 30, 40 years we needed to play a


more important role for us, not less. It is lawyers, accountants,


people investing ordinary pension fund -- pension funders' savings.


The strength has always been based on open, international, global


Britain. If we retreat from that it would be a tragedy. Thanks very


much. So much for politics,


because Ed's left that all behind now, for a new career


as a ballroom dancer. I have been waiting all day for


this. The juxtaposition. He made his debut on Strictly Come


Dancing on Saturday - The former Shadow


Chancellor, Ed Balls! # Well I know that the


boogaloo is out of sight # But the shingaling's


the thing tonight # But if that was you


and me now baby #. # Aaaaaaaaaah #.


you shake your tailfeather We should all be in glitter and


sequins. Joining us now,


another ex-politician, but whose dancing


pedigree is a little more Former Lib Dem Business


Secretary Vince Cable - here What did you think of his first


outing? Not bad. Well you pleasantly surprised? Yeah, he hasn't done it


before. My first positive review. Hold onto it. The suit wasn't right,


but the steps were OK. As you go through you will have to decide if


you are going to be a hapless type, John Ann Widdecombe... What advice


would you give me? -- John Sergeant, Ann Widdecombe. You do things well,


you play football, you like playing the piano. I learnt something from


doing it. Did you? We will show some pictures of you dancing. There was


one thing where I was terrible, my posture was bad. And I heard you


already knew how to dance. Yes. But my posture was terrible. Anton took


me aside and said if you want to improve you need to get this sorted.


You look very professional. I remember watching it at the time.


Look at those spins. Ed, you were talking earlier about the training.


What is it like? Totally exhausting. But not physically, it is actually


more mentally exhausting. I did seven hours yesterday. That is a


lot. You have to remember everything. And because of muscle


memory. If I messed up, she makes me, Katya and she makes me stop and


start again. I start from nothing. I am a novice. But on this show you


have to try and learn. I don't want to be dragged on the floor and doing


it as a joke. I want to get better. Let's all take to the dance floor


and do a ballroom hold. Vince, since you are an expert ballroom dancer,


and he does not know how to do ballroom, can you? I can't. The BBC


are stopping me. I signed a contract. People more powerful than


you and me will stop me. What is a good ballroom hold, Vince, then? It


is a good stance. It is stretching. Stretch from the bottom. Yes. My


teacher tells me you have to imagine somebody is pulling your head up.


You are leaning back, you need to keep straight. Hand? Up. And a tiny


bit out. It is getting there. More angled. And this? They did not say


this was in my contract. Get in. I am! You have to get more physical.


I'm so used to looking at the camera. How do we look? Much


improved. Thanks very much. There is not enough room in the studio to go


anywhere. That is the closest I will get Strictly. That was rather


exciting. Do you think things would be a good teacher? He would be


great. The thing about the strings. Your posture is naturally better


than a lot of people. There you go, you can do that for the rest of the


day. Katya Will be delighted. Problem is, as I start moving, I get


hunched up. I look like a rugby player. I asked my children about


it, and they said I looked like a camp rugby player.


CHUCKLES Thank you for my lesson. The cheque


is in the post. Now - from top dog


on the dance floor - Yes, it's the Westminster Dog


of the Year show and Ellie's been out to watch MPs and peers


parading their canine friends. It is time for politicians to prove


how in touch they are with normal people and normal dogs. A time for


me to use terrible puns about man's best friend, it is the Westminster


dog of the year. Let me pause you. I need to ask no leading questions.


This is our family working cocker spaniel. She will be five in a


couple of weeks. This is her first trip to London. She is bemused by


the pigeons who move very slowly and all of the smell 's London office.


This is the owner, she was bred in eastern Europe and she was smuggled


here. It is important to raise the issue of poppy smuggling. We have


had him for eight months. He is pretty much part of the family. He


cants loudly. He comes from Scotland, we are not used the heat.


-- pants loudly. Sit, now wait. There we go. They are like the Green


party. Yes, joint leadership. This one is Clinton and this one is


Kennedy. Paw. MPs always say they are worried about the paw. I think


we should give a free rescued greyhound to every pensioner. Think


you have seen enough of the ruff and tumble this year, this race just got


pawsitively furocious, get it? Of course we do. And we are now


joined by Clinton and Kennedy. I like the political names. What are


they? They are labradoodles. Named after the presidents. But they could


be Jackie and Hillary Clinton, as well. They are sisters, aren't they?


They are. How do you win? You have to enter. Answers questions. They


have been inspected. The judges have seen them. We did some embarrassing


obstacles, as well. It is a public vote. And were outsiders. And the


Labour side it is nice to win something. Cherish it. And this is


what you won? Yes, and it even gets engraved. I'm very happy. As my four


children will be extremely delighted. They are going to be so


proud. To be on the winning side. They would have liked to have come


along. They would have engaged. But they will be over the moon. They are


a big part of family life. Was it fun? A lot of fun. It has mainly


been won by Conservative MPs, so there was a competitive edge. We


needed to wrestle it back. Labradoodle? Never heard of them.


They are very popular. Well done, Clinton, well done, Kennedy, enjoy


the win. Do the move, you need to keep


practising before Saturday. That's it. Keep dancing. Goodbye.


in a brand-new BBC Two quiz show, Debatable,


where a team of celebrities put their debating skills to the test


to try to win their contestants pots of cash.


Will they help, or will they hinder? That's Debatable.


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