30/11/2011 Newsnight


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They are frustrated and disappointed and not going to take


it any more. Public sector workers close schools and operating


theatres today to protest at reforms to their pensions. Even


people who wanted to work couldn't get there, disruption, the unions


said, was unfortunate, but necessary. We are all getting


poorer, can we afford to pay them what they demand. A lot of people


in the private sector really don't see any need for what we are doing.


You try to justify your situation with their's, it is proving very


difficult. The General Secretary of the main union involved, and the


minister responsible are both here. Today, more evidence, as if we


needed any more, that it's going to be years before incomes recover to


the level they were at even nine years ago.


As the experts run the numbers on yesterday's announcements, it is


clear the poor could suffer heavily, and the pain could last a decade.


We are committed to resolving contentious and difficult issues


through dialogue. What was the LSE thinking of taking money from


Muammar Gaddafi's son, we speak to his examiner.


There were teachers, council officials, health workers and even


a light dusting of weather forecasters out on strike about


their pensions today. The gaze of the media settled on demonstrations,


television loves a bit of shouting. Facts are another story, it is


claimed that two million people were on strike, it is also claimed


that only one in three civil servants went out. The Prime


Minister called the protests a damp squib.


According to the TUC, this was the biggest day of industrial action in


a generation. According to the Prime Minister: It looks like


something of a damp squib. At the start of the march in


central London, there was competition between the unions to


get the most placards into the marchers hands. Get rite of that.


Even the police were giving stuff out. Usefully the police have


handed out these leaflets so everyone can know what to expected.


We will look at what officers will be wearing, you can expect to see


officers in yellow jackets and traditional police hats, check!


There was no such discernable dress code for the marchers. There was a


smattering of performance art radical. But mostly, staff went


casual, for whom this was no fun day out, but a regretable and


necessary protest. If you are going to get a pension based on average


earnings over the years, in the 1970s I used to take home �20 a


week, if that was put into an average pension, it is nothing, it


is an insult. That part of it would be index-linked, it is still better


than most people in the private sector can ever hope to get?


wouldn't say so. You wouldn't? That is what the statistics say, isn't


it? I wouldn't say so. I would say society needs to look at stopping


rich people choosing whether they pay tax, and that those people who


make communities function pay the tax to keep the communities


functioning. The destination of this march was Westminster.


Although the demonstration itself was still about two hours away, the


controversy was swifter. Arriving in time for Prime Minister's


Questions. Why does the Prime Minister think so many decent, hard


working public sector workers, many of whom have never been on strike


before, feel the Government simply isn't listening. The reason people


are going on strike is because they object to the reforms that we are


making to public sector pensions. But I believe those reforms are


absolutely essential, and as the former Labour pensions secretary,


Lord Hutton said, and he said this, "It is hard to imagine a better


deal than this". He is privately delighted the unions have walked


into his trap. That is the reality, he's been spoiling for this fight.


Today, he now backs the strikes, why? Because he's irresponsible,


left-wing and weak. The Prime Minister has dismissed


today's action as something of a damp squib. However, the politics


of this isn't quite fully formed. That is why the parties are having


to rather gingerly find their way around it. The big question is this,


where does the average voter put themselves today? Are they, even if


they are not here in person, marching alongside these public


sector workers, angry at what they think is a deal that has been


imposed on them. Or are they at home, looking at their own finances,


feeling the pinch of these austere times, feeling these people have it


easy. In the battle of public opinion, affordability and fairness


are two key measures. This graph from the Hutton Report into pension,


show seen before most of the changes made, the cost of public


sector pensions as a proportion of GDP is coming down and will


continue to do so well into the future. Affordability, then, is not


the most compelling argument. cost of public service pensions is


forecast, by the Government, to decline as a share of national


income going forwards. We can afford that, if we want to. But a


far smarter question, is it the best use of our money, or should we


be making less generous promises to public sector workers, freeing up


resources to spend elsewhere, lower taxes or higher spending elsewhere,


you make the choice. Was it a mistake to introduce the question


of affordability as being one of the factors here in this debate.


Afterall, you will be aware of the graph, the graph that everyone


keeps showing us of declining proportion of GDP going to public


sector pensions in the future? that graph is one where they have


already factored in the reforms that the Government have made. What


Lord Hutton is saying...Some them, only the change to the


inflation uprating, the other changes aren't in that graph?


graph that Lord Hutton produced, after we had already announced


changes that affected the contribution rates, that is one of


the biggest reforms we are making, they are baked into that graph.


Lord Hutton has said the deal we are putting forward is necessary,


right and generous. Affordability, sustainability, the different sides


of the same coin. So, that's it, we have reached the


end of the march. Big Ben is over there, the question is, what


happens now, where does this wave of public sector anger go next?


With us now is the cabinet office minister, Francis Maude. Do you


understand why so many people are angry? I understand that they are


concerned about what their pensions are going to look like, and what


they are going to be. We're steadily explaining that actually


the cost of public sector pensions has risen by a third, by �10


billion in the last ten years, and actually, the costs has fallen on


the general taxpayer. People are living much longer, so we need to


expect people, generally, to work longer. These people already have a


pay freeze, they learned yesterday if they get a pay rise at the end


of that freeze it will be 1%, they have learned also that 700,000


posts in their fields are going to disappear. You can't be surprised


if they come to the conclusion that there is an agenda going on here


that is not about the public finances? The agenda is completely


about having, on pensions, about having sustainable and good public


sector pensions for the future. But they have to be sustainable and on


a basis that is fair to public sector workers and fair to the tax-


payers whose taxes support these pensions. Since there is a


proportion of GDP, the burden of these pensions is falling. It is


clearly not just about money, it is about politics too isn't it?


burden is falling, because of the reforms. There were a number of our


reforms which were already factored into that graph. And there were


other reforms which were projected under the last Government, and


hadn't been implemented, and the detail hadn't been worked out and


put in. The Institute of Fiscal studies says it is all affordable?


Anything is affordable if you are willing to sacrifice other things.


The office of budget responsibility projected that without reform the


cost to the taxpayer would be an additional several thousand pounds


individually. You want to take this money and spent it on something


else, to penalise them? We are not penalising them. For those wanting


reforms, we need to know what will we cut �7 billion from. At the end


of these reforms, public sector workers on lower and middle incomes


will be able to retire on a pension at least as good, in many cases


they expect, many will be expected to work longer. Because they are


long to live longer. They will be asked to pay more towards it, so


there is a fairer balance to what they put towards their pensions and


the employer, the taxpayer puts towards them. Is there a question


of 3.2%, is that negotiable at all for you? We said that there f there


are ways the unions can put forward delivering those pension schemes


delivering those savings, we are willing to listen. I have to tell


you, no suggestions have been put forward.


The baseline for everything that you are saying, both in this and


yesterday, is that we have all got to accept that life is going to get


a lot worse, isn't it? Life will be tough. We inherited a massive


budget deficit. The office of budget responsibility concluded in


its analysis that the size of the boom was greater than we envisaged,


and the deep depth of the crash, of the bust, was greater. Actually the


consequences of that, we will have to live with and we will have to


work our way through. I want at the end of this, there could be really


good public sector pensions, for decent public servants, who make


their lives devoted to this important calling of public service.


Wouldn't you also say one of the consequences has been for you to


abandon some of the principles you laid out at the time you were


elected. For example, the idea that work must always pay. When you look


at what you did to Working Tax Credits yesterday, and what you did


to benefits, one of them being frozen and benefits rising by 5.2%.


Don't you conclude that you have abandoned that principle? I don't


accept that for a second. What I'm concerned with here today is with


the reforms to public sector pensions. Just to focus on this.


be clear about this, you wanted the job seekers allowance to go up by


5.2%? If you want to talk about the Autumn Statement, that is fine, I'm


here to talk about this industrial relations dispute, and the case for


public sector pensions reform. you want the jobseeker's allowance


to go up by that much? I'm here to talk about the strikes today and


the case for reform of public sector pensions. It is worth making


the point that there are negotiations going on a daily basis


here. You said your final offer was on November 2nd, this whole thing


is in the context of your attitude to work. I ask you again, did you


want the jobseeker's allowance to go up by 5.2%? I'm not getting into


all of that. The fact is...That what the Lib Dems got out of the


Autumn Statement, wasn't it? have had a tough set of decisions


to make in the Autumn Statement. As a Government we work together very


closely this is a Government that has come together, two parties


coming together, to work in the national interest, to clear up the


mess left by the last Government. Actually, putting all of this


together, in a way that has delivered a credible plan for


reducing the deficit, which gives us the lowest interest rates. We


were able to actually have a lower interest rates, even than Germany,


that takes quite a lot of determination and loadership and a


long-term view of what's -- leadingship and a long-term view of


what's going to work. We will go back to negotiate public sector


pensions. I thought you made your final offer? There are discussions


all the time. It wasn't the final offer? There were negotiations with


the civil ser service. I hope you will ask Mark Serwotka when he


comes on, why he wasn't on those discussions yesterday. Bear with us,


and we will come to that. Reform of public sector pensions necessary,


the Government says, because of the dismal state of the country's


finances. Between a fifth-and-a- quarter of people with a job work


for the state. Although in some warts of the -- parts of the


country it is a higher proportion. Many of those who work in the


private sector and contribute to the taxes that fund private sector


workers' pensions say they don't know they are born. We have been


finding out who is really better off, public or private. A show of


strength on the streets of Birmingham. Several thousand


workers from the public sector foregoing a day's wages, in the


hope of, as they see it, protecting years of their pension. Meet


Theresa Footes, husband Tom and daughter Kyra. She's a primary


school teacher aged 36, because of the increase in the pension age,


she will retire on �12,000 on the age of 68, she had been expecting


�18,000. I paid into the pension, I knew what I was getting out of it.


Now it is taken away from us. Now it is not Martin McGuinness what we


pay in, pay more and work longer. As her husband acknowledges, that


argument -- Now it doesn't matter what you pay in, pay more and work


longer. Her house acknowledges that argument is difficult to accept.


is difficult because of the situation people find themselves in,


you try to justify your situation with their's, it is really very


difficult. At this cash and carry in the city centre, strike day


means more people shopping but fewer to serve them. About a fifth


of staff are parents who have stayed home because schools have


closed. For a worker in the private sector, it can be hard to feel much


sympathy for those on strike. Sumeet Chadha is marketing manager,


a-year-older than Teresa, his salary is about the same as her's.


He has made no pension provision, eventhough he could have paid into


a company scheme. I do feel that most people are to blame for their


own situations. I can understand the people going on strike, on the


one side of things, and the other side I can understand why the


Government is doing this. Should that have been in place in the firs


understand stand, were there too many -- first instance, were there


too many benefits paid out? There is a deficit, to get the economy


back on track something needs to be done. The other big benefit is


wages, do public sector workers get a better deal there. It is


difficult to measure. But the Institute for Fiscal Studies has


had a go. Above the horizontal line is where public sector wages


exceeded those in the private sector. Women have consistently


done better. Throughout the 1990s, for both sexes, the public sector


gap narrowed. Men with private sector jobs were made more than


those in the public sector. The difference has grown again,


accelerating dramatically in the time of the financial crisis, that


cut private sector wages more than the public sector. The IFS thinks


that won't last. In recent years public sector pay has moved ahead


of private sector pay. Not by design, it is just private sector


pay growth has been subdued in the recession. There is two years of


pay squeeze with another two years coming. By 2014/15, comparing a


like-for-like basis, this would be sufficient to erode away the public


sector premium for men that we currently believe exists. They have


put on quite a display today, and a pretty noisy one at that, once all


the shouting has faded away. The question for the future is whether


the unions will be able to capitalise on that, and expand


support on voters, many not benefiting from the pensions they


would like to protect for the future, or whether this disruption


will alienate precisely the people whose support they so desperately


need. The Government wants to cut the bill to the taxpayer, but if


public sector workers won't make the higher contributions ministers


expect, and join the millions in the private sector who don't save


at all for their old age, then the next generation may be facing a


much bigger bill. Mark Serwotka, the General


Secretary of the Public and Commercial Services Nuion, is with


us now. And Francis Maude is still here. Let me speak to you for a few


minutes first. Are you embarrassed that so many of your members


protesting today have better conditions and pensions to look


forward to than many people in the private sector? I'm not embarrassed


about that at all. It makes me determined to make the case that


there should be fair pensions for all, and the problems in the


private sector won't be solved by slashing the hard-earned public


sector pensions of which people were promised for decades. Where do


you think all the tax income will come from? As you have just seen in


your report, the cost of public sector pensions, as a proportion of


GDP is falling. We have made the changes, five years ago, that


modernised the scheme, took account of people working longer. And the


result of that is they fall from 1.9% to 1.4% of GDP. You don't deny


people are living longer, you presumably accept there is a need


for change occasionally? There was a need for change five years ago,


we did a deal with the then Labour Government. We were told it would


last for 50 years. I don't accept the premise that because everybody


supposedly lives longer we have to work lot longer. Many people will


never live to 68 and see the pension that many of them have


worked so hard for. I don't buy into the notion that in the sixth


biggest economy in the world that if you live longer you work until


you drop. If the case was so transparent, why did so much of the


Civil Service come out on strike today -- fail to come out on strike


today? It was somewhere between a quarter and a third of the Civil


Service, the majority were working. He has had a good go, let me make


the point. The Government's behaviour has been extraordinary?


We are not talking about that, I'm asking you why so many people


failed to come out today? saying two million people were on


strike. Nonsense. 90% of the PCS members. They weren't u know


perfectly well it is not true. will be able to analyse that in the


future. It is the latest example of a Government who is either


deliberately misleading people or doesn't understand what the issues


are. Anybody who left parliament. Check the methodology. Did you get


people to count how many people weren't at work today? It is


146,000, I have it down to the last number. You claim it is 146,246,


even if everyone was at work, the idea they could get that figure


within five hours is laughable. We know this is paysically an attempt


to try and see. The Civil Service doesn't work that fast? They are


not there. Senior Civil Service members on


strike. Are you accusing the minister of making it up?


accusing the minister of misleading and potentially lying to people


about a number of questions. That is a serious accusation to make.


will back it up. Mr Maude says what he knows to be untrue, that people


will get better pensions if they are lower or middle incomes, proved


to be put to him earlier. Mr Maude also said. Let me say what I said.


Just hear what he said. Quickly put him right? You are putting up an


aunt Sally to knock it down. I have said explicitly that people on


lower and middle incomes will retire on a pension which is as


good, and in many cases better, than what they currently expect to


retire on. They may work longer and they will pay more towards it.


your researchers go on the pensions calculator, it shows that is


nonsense. It is also nonsense. are not comparing like with like.


It is your calculator. It is nonsense that the Hutton graph


assumed the reforms, do your homework, three major reforms, it


dopbl factored one. The national saud dit office accept the changes


a few years ago cut the contributions by 14%. We have an


extraordinary case of minutes tears hurling insults like school boys,


making up fantasy figures and refusing to talk about the issues.


Not a pen of the money. Why don't they enter discussions, the other


union leaders were there and engaging in a serious way with the


issues which matter to your members, you weren't there. You haven't


negotiated. Let me finish. haven't answered the question yet,


why didn't you go? They weren't negotiations. You chose not to go,


how do you know? My General Secretary goes, and all they are is


exchanges of information between officials. Nonsense, utter nonsense.


Let me finish, the negotiations are with Government officials, what


they have said to us is, that is our final offer, as you correctly


put, now we want our officials to talk to you about how to share out


the pain. We are saying we're not interested in sharing out the pain.


You need to make concessions on the big question of forcing people to


work longer, forcing them to pay more money in. Not a penny of which


goes into any pension fund, it all goes to George Osborne's coffers.


You want them then to get tens of thousands left. It is daylight


robbery, that is why you will not debate the issues, there is smoke


screens all over the place. If it is so wrong to move to CPI rating,


why is in the own pension scheme for your own staff members, you


have moved from RPI uprate to go CPI. You have increased your


pension contributions for your own staff, not the modest 3.2%, but 10%,


why? Moralise, come down to union headquarters, we haven't increased


the contributions, we don't have any. We are consulting and


negotiating with our staff union about changes to a scheme, which


has had a valuation. Unlike the Civil Service scheme which hasn't


had a valuation. It is only because you are making those changes. J


where we are trying to see if the scheme can be stablised and giving


people fairly generous pay offers, you are giving us a cut over four


years, and asking public sector workers to pay more and it all goes


to George Osborne. Not to George Osborne personally, that is absurd.


To his coffers in the Treasury. Is it into pensions. I want to give


Francis Maude a very quick opportunity to respond to this


accusation that you lied? It is not a new one from Mark. What I would


just say is come, put your pride aside, come to the negotiating


table, engage as all the other union General Secretarys engaging,


come and talk, you may find there might be something to the benefit


of union members. If you wear your blinkers and refuse to engage you


are letting down your members. up Lionel Barber's offer, get your


ministers into negotiations with us tomorrow, we will all about there.


We are not talking to official about difficultying up the pain.


You must negotiate about stop -- difficult -- divvying up the pain.


J Get off your high horse and come. You get off your high horse when


you have millions in the bank and low paid workers suffer.


All this discussion takes place in the murky gloom cast by yesterday's


resitation of the awful mess we are in by the economy.


Now the words to describe Britain is the lost decade. Comparisons


with Japan in the 1990s, the only straw to be grasped at, and an


imaginary one, is the decade might have begun a few years ago, then it


may not be a decade at all. It could be much longer. Our economics


editor, Paul Mason, takes a mosh bid interest in this sort of thing.


-- morbid interest in these sorts of things. Good news today?


thing happening on the global front is the equivalent of the doctor


walking into the waiting room and saying hey, everybody, it is great


we have a whole new supply of vaccine against but Bonnic plague,


and the patients go why do we need it? The central banks today have


come out and pumped a lot of dollars into the global system. The


reason is, that the European banking system is short of dollars,


this is like filling up the ATMs in case there is a run on the banks.


It is a big gesture, it sent the markets wild for a few hours,


really, the reason they have done it is because we are entering a


period of sisters now and the European Summit on the 9th of


December. They want to make sure no accidents take place. Going back to


yesterday's news, which was really, really bad. Does it look like a


lost decade? The Institute of Fiscal studies, which tries to rake


through the figures and find out what they really mean, has been


delivering its verdict today. We have some of the graphs to show you.


This is one. I don't know what year you were born in. I was born in


1960. This graph here shows the shape of debt in our lifetime. The


changing shape of public spending over the years. As you can see, in


the last 10-15 years, we have this Labour period when it generally


rose every year. If you look at the general historical trend it has


been patchy. Now, what the IFS has said, is look, we are going into


seven years where it always falls. If you compare it to the historic


trend, we have never had a period like it. This is by way of


explanation to the rancour we are now hearing. We are going into a


period of toughness. Here is another graph. This is departmental


spending, it looks a bit like a mountain, since 1998, it is


generally gone up as a pro-portion of GDP. Now it is set to generally


go down. Back to below where it was in the late 1990s. It is a big sea


change in almost every figure we look at.


How does this relate to what it feels lick? You can feel the


rancour there. Let's look at one thing. We are talking here about


much of yesterday being dominated by public sector workers. The


Institute for Fiscal Studies has done calculation on how badly it


will affect general workers standard of living. What we see, a


7.5% in real incomes for households. Between 2009 and next year. That is


why it feels so bad pltd. -- so bad. That is why it is feeling rancour


ous on the streets. When will it come back? It comes back in 20 26.


We have an adviser to George Osborne, and the Professor of


political economy at the University of Warwick, and written several buy


oing fees of John Ke ynes. Does it feel like a lost decade to you?


does, if you look behind all the clatter and clamour of the last few


days, and as you have just had, the real story is this time it is


really different. You and I have lived through a lot of booms and


busts, Barber, Lawson and the rest. They have been like hangovers from


a wild party, people have taken the pay, and life has continued as


usual. I think what has crystalised this week is it will not be like


that. We will lose through this a large chunk of our national income,


and people's earnings and standard of living will not shift over two


years. Have you ever seen anything like this? It is compared to the


great depression of 1929-1932. It is not as deep, but lasting a bit


longer. I think there is a great chance there will be a lost decade,


a miserable decade. It is sometimes called the new realisim, it need


not be. It is a consequence of policy. You mean to say we need not


have a lost decade. The solution is keepbsian? It is. I believe -


Keynesian. It is, I believe you need to build up not cut down. If


you cut down you will not cure your deficit, and the income of the


economy, the economy will shrink. The country is bankrupt? No it is


not. When you have lots of, that is talking in money terms, that is


just money. If you have a lot of long-term resources that are idle,


20% of capacity isn't being used, how can you talk about being


bankrupt. Are you looking forward to a lost decade? Based on the


numbers, the decade starred five years ago. We have the biggest boom


and bust in history. I'm with two clever economists here. In the real


world, I think the idea that we have a problem based on borrowing,


and the solution is to have more borrowing to get the borrowing down,


and in the process sacrificing interest rates, as of yesterday


lower than Germans, doesn't stack up. You don't believe that will


last? It has lasts for over a year now. This is the Government line.


It isn't. If you look at what has happened to interest rates, Britain


has been a safe haven, rates have come down, that is worth �10


billion, a pretty big fiscal stimulus to mortgage holders across


the country. You save on interest rates by having interest rates very


interest rate interests, �28 billion from the Chancellor. If, in


order to get that, you are reducing your revenues by �50 billion, you


have a negative number. That is the consequence of cutting down. Other


economists do disagree with you on this point, Sir. Economists never


agree on anything. The collective noun should be disagreement. We


have a debt problem, we need to grow our way out of it. Yesterday


the business leaders welcomed what was said, against very little


fiscal head room. I don't think in my constituency this feels like a


lost decade, but a difficult deck taid. I wonder if it is not just a


decade, are we not getting to the point of reckoning, which is the


consequence of decade of post-war spend anything this country.


not going to intrude on the economics argument, except to say


we have lost a big chunk of our national wealth, already.


That means, when we come out the other side of this, even if we grow


strongly from now on, Britain will be another country, a different


place. What sort of place will it be? We will have a smaller economy,


and a smaller rather more select Comic Relief welfare state. I'm not


advocating this as policy, this is the facts of life. We will have a


smaller international footprint, no more Afghanistans, no more Iraqs,


no more aircraft carriers or fancy planes to fly off them. We will


have to own up, as a still pretty wealthy, middle-ranking country,


with a lotless in terms of pretensions. You don't still think


we will sit at the top table? a delve fulfiling prophesy, of


course we will have a smaller economy if we declare a quarters of


the population is redundant. By definition we have a smaller


economy. What is happening at the moment is their skills and spirit


is simply being rusted away by them not being employed. I agree


entirely with you when you said you need growth. I'm glad you said that.


You have to grow your way out of debt, not cut your way out of debt.


Is there an argument for quality of growth. You mentioned skills, a


very important point. One of the things I see as a governor of two


schools in my constituency, is a complete sea change in the way


people think of basic qualifications, no more gaming the


league tables that only a civil servant in Whitehall reads. Let's


make sure every child gets at least a C in GCSE mathematics. We have


let a generation down by not doing that.


A slightly separate point. Can I ask your economist friend here. How


much do you think of the pretence being maintained of our position in


the world, is if based on an illusion for the last 20 years.


With respect the two are absolutely linked. Stature in the world, it


was Admiral Mike mull lan, the head of the American Armed Forces, who


said the biggest threat to our security and position in the world


is the state of our economy. The two are linked. If our economy was


based, as it was, I think, on, if you like, a rather fraudulent


belief had a -- that the financial sector would produce vast amounts


of tax revenue forever and ever. It is now clear it is not going to. We


have to make that adjustment and adjust our view of ourself in the


world as well. The figures are against you. I was very struck by


the graph we had of a huge boom in spending, from 2002 on wards that


was fuelled by borrowing. The Government spent more than it took


in taxes every year, whether we agree to do that going forward, and


an expectation of continuing financial services taxation. These


are choices to make. For me, the choices are about getting back to


an economy that is built on private sector growth. Where Government is


on the side of businesses rather than meaningless regulation in


their way, giving our young people the best skills they could get, and


building infrastructure, creaking in this country. These are all


things the Government is saying is critical choices we want to make


with limited monetary head room. We could be in a better position after


the last five years, and a more sustainable position. First of all,


the deficit was extremely small in the years of the Labour Government


Not oh aye what's that then cording to the IFS, they called it a drift,


every year from 2005. A very small drift, and people confuse the issue


by talking about structural deficits. I don't think you will


want to have a big discussion on what is a structural deficit.


come another night with a lot of time. You need a lot of time and it


is all based on dubious figures of one kind and another. The gap


between what you take in taxes and you spend. In the real world people


understand what that is. Robert seeps to think, I don't think we


should be in total thrall to the bond markets. But he seems to think


we can have Keynesianism in one country, that we can do what we


like in terms of borrowing and spending. And our interest rates


will stay at Germany levels. think both Ed Balls and George


Osborne have a point. Oh dear. I think we have to be realistic,


you can't ignore what used to be known as the zur Rick, now spread


more evenly throughout the world. Two quick points, firgs of all --


first of all, our success rates were not entirely an illusion, and


depended on fictional money. They were unsustainable. They were


unsustainable because they weren't sustained. Everything's


unsustainable that collapses in retrospect. That doesn't mean it


wasn't sustainable at the time. have the highest level of public


and private debt all through that period. The argument that we have


low interest rates because everyone has enormous confidence in the


Government's fiscal policy. We have very low interest rates, partly


because people don't know where else to put their money, partly


because the Bank of England has been printing money. Thank you very


much. One of Britain's most prestigious


universities, took something of a pasting today. It learned what an


independent inquiry had to say about its decision to take money


from Colonel Gaddafi's son, only weeks after giving him a doctorate.


The London School of Economics boasts of 16 Nobel Prize winners,


there was no danger of the Libyan dictator's son joining them. There


was some uncertainty whether he was entitled to his PhD.


1234 The Gaddafi Foundation devotes itself to humanitarian work,


especially in the social, economic, and culturally, and the human


rights field. The human rights field under


Gaddafi. Saif is committed to resolving


contentious international and domestic issues, through dialogue,


debate and peaceful negotiations. Dialogue and negotiations, under


Saif and his family. I have come to know Saif as someone who looks to


democracy, civil society, and deep liberal values. The Professor was a


big fan of Saif Gaddafi, he was his mentor and securing the �1.5


million donation. This all makes him as the Pearsonification and


naivity of the LSE. There was a chapter of failures in the report


identified. Saying the LSE allowing links between it and Libya to


become overwhelming, affecting judgments across the board.


Although three departments refused to teach him on the grounds he


wasn't up to it. The fourth, philosophy, accepted him, they


wanted to believe Saif Gaddafi was a good guy, representing hope. He


was charm itself, addressing an LSE audience last year, his tongue


Albanian chic over his father's ways. In theory, Libya is the most


democratic place in the world. APPLAUSE


Because, in theory, in theory. And then months later, back in


Tripoli, there was Saif, on TV, threatening rivers of blood if the


protests didn't stop. It is not as though they weren't warned. Lord


Woolf wolf noted that a Professor here spoke of the risky gamble of


tying the LSE's reputation so close to Saif Gaddafi. What he turned out


not to be a reform at all. It came to pass, Lord Woolf wolf says the


London School of Economics goes under known name, the Libyan School


of Economics. For students at the LSE, the Gaddafi affair can be


regarded as an object lesson in ethics and economics, a course they


may have not signed up to, but are learning fast. At the student


newspaper, they see money as the root of the problem. The LSE has


the reputation as an institute that drives for money. This was another


project to desperately to up what we have. The young Gaddafi was no


genius, he duped his supervisors by using the works of others. Another


suggested Saif purchased his degree. The �1.5 million was pledged weeks


after his PhD. The leadership denies the claims. There was no


evidence in the report that we sold a doctorate. We deny that


completely. I'm sure you are aware from the report, that, in fact, we


reduced to take any money, while he was a student, that is a very, very


strict policy. He was, in some senses, the LSE's star student, and


now Saif Gaddafi stands indicted for war crimes. They must wish they


kept the doors locked. With us is Lord Desai, one of Saif Gaddafi's


PhD examiners at the LSE? Was he a talented student? Yes. At that


what? Talented as an LSE student. Did you know his essays had been


written by somebody else? Not that, I wasn't involved in t I was only


involved with his PhD, I examined his PhD. Which also was written by


someone else, wasn't it? I went through the oral examination, for


two-and-a-half hours, with myself and fellow examiner, from


Southampton. And he did all right, we were able to question him, and


he answered the questions, then we asked him to do more work, because


we were not happy with the thesis as it was, and it was submitted.


Are you sure he wrote the bit he submitted to you? You can't be


subjected to that rigorous, oral examination, on top of what you


have written. What do you think about the fact that while he was


rewriting it, he was actually asked for a large dop lol of cash for the


LSE? -- dollop of cash for the LSE? I was not aware of it until I read


the report. We were, as an exampler, I was absolutely following the


rules. -- examiner I was following the rules. In your judgment he was


entitled to the PhD? He was entitled or I wouldn't have signed


the form. There is no shadow of doubt in your mind that he might


have been admitted to the LSE because he was the son of a filthy


rich dictator? Originally there was a debate he shouldn't be admitted


because he was the son of a filthy rich David Kelly Tateor, I would


suggest if you admit someone you don't look at who their mother or


father is. This is enormously damaging for the LSE? It is a huge


damage to the brand. As the report shows, it was, when confronted with


power and money, we let our standards go. Why doesn't the LSE


withdraw his PhD, at least? It is not up to the LSE to withdraw a PhD


after it is given, because just the LSE didn't do due diligence on


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