21/02/2012 Newsnight


21/02/2012

With Jeremy Paxman. Is the row over shelf stacking for benefits really just snobbery? We unpick the Greek bail out deal. And John Lanchester's new book.


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Transcript


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The Government scheme to get young people into work is in trouble, one

:00:07.:00:11.

after another, companies expecting to take part in the scheme have

:00:11.:00:14.

pulled back, in the face of protests that work experience

:00:14.:00:18.

amounts to slave labour. Is doing this kind of thing,

:00:18.:00:24.

without proper pay, a way into regular work, or just the state

:00:24.:00:27.

subsidising private enterprise. Would you do it if you were on

:00:27.:00:33.

benefits? We will ask these three. The Greek Prime Minister pulls off

:00:33.:00:38.

his bailout, but could a minority of banks and hedge funds still kill

:00:38.:00:42.

it by refusing to co-operate, we will talk to their chief negotiator.

:00:43.:00:46.

It is not inconceivable if too many go in that direction, the system

:00:47.:00:50.

breaks down, we will not have a successful conclusion to this deal,

:00:50.:00:55.

and then where will they be? This nursery is run for profit,

:00:55.:00:59.

what is wrong with the idea of letting businesses run state

:00:59.:01:04.

schools on the same basis? And it is probably the most international

:01:04.:01:09.

city on earth, but do Londoners share anything beyond their streets.

:01:09.:01:13.

Author, John Lanchester, is here to talk about his big new novel,

:01:13.:01:23.
:01:23.:01:23.

Capital. Last week they were delighted to be

:01:23.:01:27.

part of a Government scheme which earned them money for taking on

:01:27.:01:33.

young people on work experience, today, Tesco hurriedly changed its

:01:33.:01:37.

position, from now on a young person taken on will be offered a

:01:37.:01:40.

wage. By tonight numerous retailers had joined the retreat. The

:01:41.:01:44.

Government scheme to get young people into a job is still alive,

:01:44.:01:49.

but it is very battered. Those who oppose the device as sweated labour,

:01:49.:01:58.

are said a cabinet minister today, job snobs. We report.

:01:59.:02:04.

The bright lights of a bustling high street offer much, but not the

:02:04.:02:08.

one thing Ben Perkins is looking for. He has had just one paid job

:02:08.:02:14.

since he grad waited last year -- graduated last year. Christmas work

:02:14.:02:18.

with HMV. He felt undermined when job seekers on the Government work

:02:18.:02:23.

programme got taken on. And then as I found out, they said, this work

:02:23.:02:27.

programme is happening, people are coming in who are unemployed, on

:02:27.:02:33.

job seekers, come to do work, three people, like, that doesn't chime

:02:33.:02:36.

with work experience which is the whole idea of this kind of

:02:36.:02:39.

programme. The row began when Tesco placed an

:02:39.:02:44.

ad for a night worker, and they would be paid their job see,

:02:44.:02:49.

allowance, just �53 a week. The job was mistakenly described as

:02:49.:02:53.

permanent, in fact it was part of the voluntary work experience

:02:53.:02:57.

scheme. Plays.S of up to eight weeks, in return for benefits and

:02:57.:03:00.

expenses. The outcry over the ad proves there

:03:00.:03:06.

is such a thing as bad publicity afterall. Last week Tesco defended

:03:06.:03:11.

the scheme, now they are offering to abandon it. In future people on

:03:12.:03:16.

work plays.S can actually get paid for them, with the offer of a

:03:16.:03:24.

guaranteed job if all goes well. Tesco are calling their about turn

:03:24.:03:29.

a major confidence boost for young people wanting permanent work. The

:03:29.:03:33.

Government is putting a brave face on things. I'm pleased when a

:03:33.:03:43.
:03:43.:03:50.

company expands what they do. If they do the work plays. Properly,

:03:50.:03:58.

they will have experience. We get a better offer than we had before.

:03:58.:04:02.

That is good news for unemployed young people. But there was no

:04:02.:04:06.

escaping the sound of gears going into reverse, as more high street

:04:06.:04:15.

names decide they too, like Waterstones and TK Maxx, will pull

:04:15.:04:20.

out of the placements, Matalan has paused the programme, in the face

:04:20.:04:24.

of what it calls, negative speculation, and Argos wants to

:04:24.:04:27.

make sure no-one is disadvantaged working on the programme.

:04:27.:04:31.

Sainsbury's has already opted out, but today it admitted it has had to

:04:31.:04:36.

remind local branches of that fact, after some of them signed up free

:04:36.:04:41.

recruits. This was after they had been approached by Jobcentre plus.

:04:41.:04:44.

Meanwhile, other private sector providers are to be the subject of

:04:44.:04:48.

an official complaint to the September for Work and Pensions, by

:04:48.:04:53.

Oxfam. The charity firmly declined to take part in the work programme,

:04:53.:04:58.

concerned that those who refused to join, or failed to complete a

:04:58.:05:02.

placement, would lose benefits. someone refuses to participate or

:05:02.:05:07.

needs to leave the scheme, their benefits can be stopped a minimum

:05:07.:05:14.

of 13 weeks and potentially 26 weeks. This cessation of benefits

:05:14.:05:19.

isn't compatible with Oxfam trying to overcome poverty. You had an

:05:19.:05:24.

opportunity to help young people get work and you turned it down?

:05:24.:05:27.

Absolutely not, it was nothing we could have accepted with the

:05:27.:05:31.

cessation of benefits and putting people into destitution for a

:05:31.:05:36.

minimum of 13 weeks, we Coventry consider that. With 700 --

:05:36.:05:41.

couldn't consider that. With 700 stores, Oxfam has been unable to

:05:41.:05:47.

prevent forced volunteering by the providers in the scheme. We would

:05:47.:05:53.

like to ask providers to stop contacting our shops about schemes

:05:53.:05:56.

with sanctions to benefits. You have a great voice. The Deputy

:05:56.:06:00.

Prime Minister was at pains today to show the coalition is tackling

:06:00.:06:05.

youth unemployment. Firms will be paid to take on 16 and 17-year-olds.

:06:05.:06:09.

But more people are saying the emphasis of the work programme

:06:09.:06:17.

should be on jobs that pay. The riots that ripped through Haringey

:06:17.:06:21.

last summer, gave added urgency to the council's jobs fund, which will

:06:21.:06:29.

be launched this spring. It is sped spending �2 -- spending �2 million,

:06:29.:06:33.

directly subsidising people to create jobs. Young people need

:06:33.:06:35.

high-quality, long-term sustained experience. That is why we have

:06:36.:06:38.

been working with local and national employers based in the

:06:38.:06:43.

borough, to make sure we can put in place the year-long schemes.

:06:43.:06:47.

has moved back to his parents in Lincolnshire, and back on to

:06:47.:06:51.

benefits, he's volunteering at a radio station, to use his media

:06:51.:06:55.

degrees, but fears a double bind, as a jobseeker he may lose out to

:06:55.:07:01.

those doing unpaid work experience. He may be compelled to take up an

:07:01.:07:08.

official placement himself. With us now is the Conservative MP,

:07:08.:07:12.

Harriett Baldwin, on the Work and Pensions select commit year, and

:07:12.:07:14.

three people who have all experience of unemployment and

:07:14.:07:23.

Government work schemes. Do you understand why some people

:07:23.:07:29.

find these schemes offensive? have to understand where we came

:07:29.:07:33.

from. In terms of the inheritance with a lot of young people out of

:07:33.:07:36.

work. The situation used to be that if you were a young person, and you

:07:36.:07:41.

were offered work experience, you had to come off benefits, I

:07:41.:07:44.

actually think that is profoundly unfair and against social mobility,

:07:44.:07:48.

because, in fact, a lot of prosperous parents can afford for

:07:48.:07:53.

their parents to do work experience and lose those benefits. Where as

:07:53.:07:57.

those who rely on the benefits needed to keep them when they got

:07:57.:08:01.

the work experience. Do you understand my question that some

:08:01.:08:04.

people find this offensive? understand. Do you understand why

:08:04.:08:07.

people find it offensive? It is offensive that it has been

:08:07.:08:10.

portrayed by a lot of people as being something that doesn't help

:08:10.:08:14.

young people. You know, Jeremy, in an organisation like the BBC that

:08:14.:08:20.

employs a lot of people on work experience. We have contradictory

:08:20.:08:24.

experienced here, helps some and not others, but my question is, do

:08:24.:08:30.

you understand why some people find it offensive that somebody can be

:08:30.:08:36.

taken on, not be paid in a job that might at least be paid minimum wage,

:08:37.:08:42.

and be paid by the state, and the employer is able to use unpaid

:08:42.:08:47.

labour? Does the BBC offer work experience places for students.

:08:47.:08:51.

doesn't bother you? It is widely used for short work placements.

:08:51.:08:53.

These are very short work placements.

:08:53.:08:57.

OK, all of you three have had experience of these schemes, of one

:08:58.:09:04.

kind or another, it worked in your case, didn't it? Yes. Tell us what

:09:04.:09:07.

happened? My experience of volunteering was, it is not

:09:07.:09:10.

necessarily the scheme that is going out now, I wasn't forced into

:09:10.:09:16.

it, I actually went out and applied for a scheme called V-Talent, I was

:09:16.:09:20.

working for a year within youth services, that was something I was

:09:20.:09:23.

passionate about. Throughout that course I was guided, I was helped,

:09:23.:09:27.

I was given qualifications, I was given certificates, I was helped at

:09:27.:09:33.

the end of it on getting a job. What was it about being on a course

:09:33.:09:37.

like that, in that sort of environment, that changed things

:09:37.:09:40.

for you? I think because it was something that I was passionate

:09:40.:09:43.

about, and because it was voluntary, I think if you are forced into it,

:09:43.:09:47.

I think it will be negative, I think it will have knock-on effects.

:09:47.:09:52.

I think it will give you a negative view on the work environment itself.

:09:52.:09:57.

I think if you're not passionate about work, why would you do it.

:09:57.:10:01.

There should be more things voluntary for them to. Have you had

:10:01.:10:05.

experience of one of these schemes? I have, it was a complete waste of

:10:05.:10:12.

my time. Four weeks, well, if you get on to phase 2 job seeking,

:10:12.:10:16.

which is the point where you are put into these schemes, then you

:10:16.:10:22.

have four weeks, absolutely mandatory, you have no choice,

:10:22.:10:26.

...Doesn't That get you into the habit, with the greatest of respect,

:10:26.:10:32.

of getting out of bed and going to a place of work? With the greatest

:10:32.:10:35.

of respect, I had eight years previous experience to this of

:10:35.:10:42.

getting up and going to a job. shouldn't get mixed up Work Fair

:10:42.:10:46.

and short periods of work experience for young people.

:10:46.:10:52.

talking about both schemes, I did the short scheme and now on the 26

:10:52.:10:58.

weeks one, both were ineptly handled. In what sense? Firstly

:10:58.:11:05.

they are, anyone who is involved in it gets dragged off to do things

:11:05.:11:14.

that, by force, basically. Secondly, they are administered badly.

:11:14.:11:18.

think we're confusing two things here, the work experience that was

:11:18.:11:21.

getting all the media attention today, is for young people who are

:11:21.:11:28.

given short periods of experience, so that they can have something on

:11:28.:11:31.

their CV to show to employers. are a young person, have you done

:11:31.:11:35.

any of these schemes? Actually the work programme is a re-established

:11:35.:11:40.

programme, it was run by a company called Caller UK previously, I was

:11:40.:11:44.

on the flexible new deal, and I signed to the programme. In about

:11:44.:11:50.

nine months of the programme, the company got liquid dated because

:11:50.:11:54.

they failed mis-- liquidated, because they failed miserably to

:11:54.:11:57.

get people employed. When you look at the current figures,

:11:57.:12:02.

statistically now, it was 2.3 million to 6.3 million. Let's talk

:12:02.:12:07.

about your experience, the argument, I think, if I paraphrase it

:12:07.:12:11.

correctly, is that at the very least, although the precise

:12:11.:12:15.

employment may be not exactly what you want, it at least gets you into

:12:15.:12:23.

the habit of going to work, and, re-establish ago work habit?

:12:23.:12:29.

didn't get me into the habit of going to work. It demote vaited me,

:12:29.:12:35.

it took away my e-- demote vaited me, it took away me equal

:12:35.:12:40.

opportunity of rights, you don't have the freedom to choose

:12:40.:12:43.

something that would practically work. What was getting the media

:12:44.:12:48.

attention today, was a voluntary scheme for young people to get work

:12:48.:12:53.

experience. We are hearing about historical experiences of work

:12:53.:12:56.

experience under the last Government, it wasn't working well

:12:56.:13:02.

and was complicated. The new thing is a black box approach. If you

:13:02.:13:04.

penalise someone who agrees to start the programme, by saying if

:13:04.:13:08.

you don't carry on turning up in an efficient and satisfactory manner,

:13:08.:13:13.

you will lose your benefits, that is coercion, isn't it? I think you

:13:13.:13:17.

have to have turned down several jobs before that starts to happen

:13:17.:13:22.

to you. That is not true. That is not true. I have sat in, with

:13:22.:13:25.

people on the four-week scheme, I have seen people thrown off

:13:25.:13:35.
:13:35.:13:39.

placements. One for speaking too loud, and they had not been to

:13:39.:13:43.

several interviews. These were all young people on the young people's

:13:43.:13:46.

scheme. There was two separate young people's scheme that we

:13:46.:13:50.

encountered. One of them was volumity, the work programme ones

:13:50.:13:55.

that -- voluntary, the work programme ones that were there were

:13:55.:13:58.

not voluntary, they were all mandatory, you had to turn up and

:13:58.:14:02.

take part. It was part of the suppliers' contract with the

:14:02.:14:06.

Department of Work and pension, that the person they sent to them

:14:06.:14:11.

will be there for a four-week period, and will have a four-week

:14:11.:14:21.
:14:21.:14:24.

work placement. This is different from what we were talking about

:14:24.:14:32.

with young people. It is a four- week work period, it is not

:14:32.:14:36.

voluntary, anyone who says it is voluntary is lying. We looked at

:14:36.:14:41.

the rules earlier and it clearly says it is voluntary?

:14:41.:14:43.

Department of Work and Pensions sends you to a supplier, the

:14:43.:14:46.

supplier has in the contract that they will send you for a mandatory,

:14:46.:14:50.

not a voluntary, mandatory work placement. I think, to be fair, I

:14:50.:14:53.

think we are confusing two different things here, we are

:14:53.:14:56.

talking about the work programme that was put out to new contracts,

:14:56.:15:02.

starting in June, the early indications on that are that about

:15:02.:15:06.

28-30% of people are put into jobs, compared to about 1.2% at this

:15:06.:15:11.

stage for the flexible new deal. would like to ask you, why you

:15:11.:15:14.

think it is that it is an outrage that Governments and departments

:15:15.:15:20.

acting on behalf of the taxpayer, who afterall has to fund benefits,

:15:20.:15:24.

shouldn't expect people to do as they are asked and get a job?

:15:24.:15:29.

I believe it is a complex situation, and what they are doing is to use

:15:29.:15:33.

the lower percentage of the population who are unemployed, as a

:15:33.:15:38.

scapegoat, because you still have these bankers getting big lump sums.

:15:38.:15:41.

Bankers are irrelevant? It is relevant because, they are the ones

:15:41.:15:45.

you should be penalising for this, not us. We didn't cause the

:15:45.:15:51.

recession in the first place. So why should we be forced and imposed

:15:51.:15:56.

a system to force somebody to do something voluntary, for 30 hours a

:15:56.:16:00.

week, for four weeks consecutively, without a proper wage. I think it

:16:00.:16:04.

is great that these employers are offering work experience to young

:16:04.:16:08.

people. They are not, they are now saying, one after another, one big

:16:08.:16:14.

recoginsable name after another, is saying, this is too embarrassing

:16:14.:16:18.

for us to continue our connection with the scheme? That is very sad,

:16:18.:16:23.

because it will mean, from now on it will be people who can afford to

:16:23.:16:27.

subsidise their children to do work experience, it will hamper social

:16:27.:16:32.

mobility in this country. So you assert, but if these companies

:16:32.:16:39.

consider it to be an embarrassment to them, some sort of besmirching

:16:39.:16:43.

of their name, it is failing? sad that a lot of people waving the

:16:43.:16:50.

copies of the Socialist Worker have put paid to these companies

:16:50.:16:53.

offering workers peerence to young people. It is important to get it

:16:53.:16:56.

on your -- experience to young people. It is important to get it

:16:56.:17:01.

on your CV early on in life. It is hard to know whether to laugh or

:17:01.:17:05.

cry if you are a Greek, the other countries cobbled together an

:17:05.:17:11.

agreement which will make sure the Greek Government get a shed load of

:17:11.:17:16.

cash and the people will have to work for the foreseeable future.

:17:16.:17:21.

How can Greece, which couldn't pay existing debts, will pay off an

:17:21.:17:28.

additional 130 billion euros. A problem for another day.

:17:28.:17:33.

They talked for 14 hours, which in itself highlighted the gulf between

:17:33.:17:37.

what creditor countries such as Germany and Finland wanted, and

:17:37.:17:42.

what the embattled Greeks wanted. In the end the 16 other eurozone

:17:42.:17:46.

Governments agreed to lend 130 billion your yr roars and pay it

:17:46.:17:51.

out in tranches over the next two years. Greeks wouldn't have to pay

:17:51.:17:56.

back loans to banks worth 100 billion euros. In order to get it,

:17:56.:18:00.

Greece has promised a programme of austerity, unseen in a western

:18:00.:18:03.

democracy in a generation. Including mass privatisation of

:18:03.:18:08.

ports, airports and some public utilities, on top of widespread job

:18:08.:18:13.

and wage cuts. The lenders, who will oversee that, the IMF, the

:18:14.:18:19.

European Central Bank and the EU, known as the troika, hailed this

:18:19.:18:24.

morning's hard earned deal. Today's deal is a key remaining building

:18:24.:18:29.

block of our comprehensive crisis, and with this agreement we have a

:18:29.:18:35.

real chance to turn the corner and move from stablisation to boosting

:18:35.:18:39.

sustainable growth and job creation. But the agreement depends crucially

:18:39.:18:43.

on a number of key, and some might say, optimistic assumptions.

:18:43.:18:48.

Firstly, that the cocktail of austerity, fresh loans and bank

:18:48.:18:52.

haircuts, will bring Greek national debt, as a percentage of its annual

:18:52.:18:58.

income, down from its current level of 160%, to an equally high 120%,

:18:58.:19:03.

by the end of the decade. That assumes a fair wind at its back. A

:19:03.:19:07.

leaked internal EU document says it is more likely that debt will be

:19:07.:19:12.

129% by 2020, and worse, if Greece's run of bad luck continues,

:19:12.:19:16.

the leaked debt sustainability report says that it may end up

:19:16.:19:21.

owing exactly as much in eight years as it does today. Or 1.6-

:19:21.:19:26.

times GDP. The bailout deal also assumes that

:19:26.:19:30.

the private sector will grow enough to make up the shortfall from a

:19:30.:19:33.

dramatically shrinking Government sector. That is a big ask, given

:19:33.:19:36.

the massive capital flight that Greece has endured over the past

:19:36.:19:40.

two years. We really don't know what might happen in eight years

:19:40.:19:44.

time. It is very hard to project. Even the projections made in 2010

:19:44.:19:48.

at the time of the first loan are very far from the reality we now

:19:48.:19:51.

see. I would have thought it is quite difficult, particularly when

:19:51.:19:55.

tax receipts are falling, VAT and other tax receipts are falling

:19:55.:19:59.

quite sharply, it is very difficult to know that austerity would

:19:59.:20:03.

deliver much of an improvement at all. The Greek Finance Minister,

:20:03.:20:07.

Evangelos Venizelos, says today's deal means his country avoids a

:20:07.:20:10.

nightmare scenario. It is true, they do get the bailout, and they

:20:10.:20:14.

stay within the warm embrace of the eurozone. But with unemployment at

:20:14.:20:18.

21%, GDP shrinking rapidly, and private wealth abandoning the

:20:18.:20:22.

country, it is hard to think of any other description for the current

:20:22.:20:25.

situation other than a nightmare scenario, that is before you drill

:20:25.:20:33.

into the detail of today's deal. Like will the Greek populus accept

:20:33.:20:37.

on the ground what their leaders have Bartered in Belgium. With

:20:37.:20:40.

elections planned for late April, opinion polls suggest a big lurch

:20:41.:20:45.

to the extreme parties. Who may want to tear up today's deal.

:20:45.:20:51.

This second bailout also assumes that Greece's creditor banks accept

:20:51.:20:55.

write-downs in the face value of their bonds of 53.5%. Something

:20:55.:20:59.

that they themselves ruled out only last autumn. I think for Greece the

:20:59.:21:03.

50% nominal reduction is, in my view, at the border line of what

:21:03.:21:12.

could be reasonably viewed as voluntary. Any further dereduction

:21:12.:21:17.

in -- reduction in value and losses would be put at non-voluntary.

:21:17.:21:21.

begs the important question, how many of Greece's lenders will sign

:21:21.:21:25.

up for the proposed haircut, which is looking like an all over blade

:21:25.:21:28.

one. Greece said at least two- thirds of the creditors have to

:21:28.:21:34.

sign up for the debt write-off to work. If they don't reach that

:21:34.:21:37.

threshold, it might be Greece's banks, rather than the political

:21:37.:21:40.

elite that will pull the plug on Greece.

:21:40.:21:44.

To find out, earlier I spoke to the man at the forefront of the Greek

:21:44.:21:48.

debt talks, the managing director of the Institute for International

:21:48.:21:52.

Finance, Aaron Delahunty. I asked him, how much -- Charles Dallara, I

:21:52.:22:01.

asked him how much of the 200 billion cuts in Greece he

:22:01.:22:07.

represented? We represent under half of that, just under 100

:22:07.:22:09.

billion euros. We have communication with an investor base

:22:10.:22:14.

much larger. Our formal representation is just under 100

:22:14.:22:17.

billion euros. Is this deal dependant on a certain level of

:22:17.:22:23.

participation? Certainly it is. We have not judged, nor has the Greek

:22:23.:22:29.

Government set a particular minimum threshold, but certainly I think we

:22:29.:22:32.

all realise, that for this economic programme to work, and for the

:22:32.:22:36.

cloud of debt burden to be sufficiently cleared off the Greek

:22:36.:22:40.

horizon. That we will need very high participation in this deal, we

:22:40.:22:45.

will work to achieve that. But you have no guarantee you will get a

:22:45.:22:48.

very high level of participation, do you? No, no guarantee at all.

:22:48.:22:52.

You do the best you can in designing these deals. We respect

:22:52.:22:57.

the right that each investor, including the members of our own

:22:57.:23:01.

steering committee, who have endorsed the basic perameters of

:23:01.:23:06.

this deal, has the right to look at the documentation and value wait

:23:06.:23:10.

the costs of the deal, and make their own judgment. We feel

:23:10.:23:14.

confident once investors have sorted dlu the documentation, and

:23:14.:23:18.

looked at the -- through the documentation and looked at the

:23:18.:23:21.

perameters and benefits, that a large number of investors will come

:23:21.:23:26.

in. What proportion of their loans will investors lose? They will lose

:23:26.:23:32.

just over 50% of the nominal value of their current claims, in terms

:23:32.:23:37.

of the net present value, the economic value of the loans, they

:23:37.:23:41.

will lose north of the value of 70%. There is substantial loss embedded

:23:41.:23:45.

in this deal, there is no use trying to hide that. It was

:23:45.:23:51.

necessary, if we were to deal effectively, and determinately,

:23:51.:23:56.

with the scale of debt burden, which Greece is simply unable to

:23:56.:24:02.

cope with. By your own admission, you only represent about half of

:24:02.:24:06.

the total debt exposure here. What is to stop someone like a hedge

:24:06.:24:12.

fund or someone, who has bought Greek debt, trying to trigger the

:24:12.:24:15.

insurance involved in a Credit Default Swap? There is nothing that

:24:15.:24:21.

I'm aware of, Jeremy, that will definitively stop someone who wants

:24:21.:24:27.

toe stake such action. There is no iron -- to take such action. There

:24:27.:24:32.

is no iron-clad guarantee as we discussed earlier, that individual

:24:32.:24:36.

investors might not contemplate counter-productive activity here.

:24:36.:24:41.

They have the right, the legal rights, the market judgments to

:24:41.:24:45.

make, but we are convinced that when you look at the total picture

:24:45.:24:51.

here, that the overwhelming bulk of investors will consider this a

:24:51.:24:54.

favourable transaction, which benefits not only the narrow

:24:54.:25:00.

contours of the balance sheet, but the broader conure tours of the

:25:00.:25:06.

market place, which is -- contour of the market place. If the

:25:06.:25:12.

insurance system worked, they could recoup 100% of the money they lent

:25:12.:25:15.

the Greeks, instead of something like 30%? It is not inconceivable,

:25:16.:25:19.

if too many go in that direction, though, the system breaks down, we

:25:19.:25:24.

will not have a successful conclusion of this deal. And then

:25:24.:25:29.

where will they be. Judgment calls have to be made here. I'm

:25:29.:25:33.

encouraged that the overwhelming bulk of investors we have been in

:25:33.:25:38.

communication with, not just those we formally represent, but those

:25:38.:25:42.

outside the formal umbrella of our Steering committee and investment

:25:42.:25:45.

committee, with whom we have been discussing the broad strategy, see

:25:45.:25:49.

the broader benefits of this. We will have to wait and see, of

:25:49.:25:53.

course, it will be up to the Greeks working with their agents to go out

:25:53.:25:57.

and mobilise support, but once we see the formal, final details of

:25:57.:26:01.

the offer, we are also going to give support to this deal as best

:26:01.:26:05.

we can. But Mr Dallara, of course European

:26:05.:26:09.

Governments believe in saving the euro, it is the only game in town.

:26:09.:26:14.

It is a political project. You are acting and talking as if these

:26:14.:26:21.

financial institutions are some sort of charity? No, I just think -

:26:21.:26:25.

- No, I just think that most of the CEOs that we work with, it is a

:26:25.:26:29.

wide range of financial institutions. It includes state-

:26:29.:26:33.

owned insurance firms, it includes prove detention insurance firms,

:26:33.:26:37.

banks, hedge funds, Asset Management firms, not just head

:26:37.:26:42.

quartered in Europe, but the US and elsewhere. The bulk of the CEOs

:26:42.:26:46.

have a broud perspective of what is in the interest of -- broad

:26:46.:26:49.

perspective and what is in the interest of their balance sheet and

:26:49.:26:54.

investor base. That is why they do not consider it an issue of charity,

:26:54.:27:02.

but an issue of looking at long- term cost and benefits.

:27:02.:27:06.

The Education Secretary claimed today that the Government was

:27:06.:27:10.

Marching towards the sound of gunfire, there speaks a scrappy

:27:10.:27:14.

little Scot and reformed journalist. But the readiness to have a fight

:27:14.:27:17.

with the educational establishment is yet to lead to the wholesale

:27:17.:27:20.

reform of the schools system in England, which we were promised

:27:20.:27:24.

when the Tories asked for our votes. The favourite wheeze of Free

:27:24.:27:30.

Schools, set up independent of local authority control, has so far

:27:30.:27:35.

yielded a grand total of 79 such establishments. Tomorrow the

:27:35.:27:39.

organisation called David Cameron's favourite think-tank, will suggest

:27:39.:27:45.

they could make more programme if the Government wasn't so allergic

:27:45.:27:49.

to get -- progress, if the Government wasn't so allergic to

:27:49.:27:52.

letting private companies get involved. Shrove Tuesday in central

:27:52.:27:55.

London, not an unusual nursery, it is funded through a mix of public

:27:55.:28:00.

and private money, and profits can be made. They are, in is over half

:28:00.:28:03.

of our nurseries. These kids will grow up and go to schools less

:28:03.:28:10.

unusual. Fully funded by the state, and unlike at nursery level, there

:28:10.:28:14.

is no chance of companies that might make a profit getting

:28:14.:28:19.

involved. Why do we left profits in caring for our tiniests, but not

:28:19.:28:22.

further up. That is the question think-tank exchange is asking, they

:28:22.:28:27.

think the Government's flagship policy, setting up Free Schools

:28:27.:28:32.

outside state col could learn from this. This is the right thing to.

:28:32.:28:37.

Do we urgently need more state schools in Britain, the Government

:28:37.:28:40.

doesn't have money to spend, bringing in private money could

:28:41.:28:47.

bring in expertise. Advocated point to Sweden, there, they say there is

:28:47.:28:51.

a massive rise in children attending Free Schools, because

:28:51.:28:57.

they were run by profit-making sectors. We could do this, we know

:28:57.:29:01.

we could, because we have been doing it successfully, parents have

:29:01.:29:09.

bought into it. The Cameron Government is in a hurry to deliver

:29:09.:29:12.

policies before the next election. Free Schools are not working as

:29:13.:29:16.

they would like. Many senior advisers think they should go the

:29:16.:29:21.

whole way, bring in profit-making companies to Free Schools and allow

:29:21.:29:24.

the policy to flourish. The politics of putting children's

:29:24.:29:29.

learning in the hand of profit- making companies has a fraught his

:29:29.:29:36.

treatment some in the Government pushed it but Lib Dems ruled it out.

:29:36.:29:42.

It is probably dead. Here is why. In one poll in the National Union

:29:42.:29:45.

of Teachers, an organisation against Free Schools. Parents were

:29:45.:29:55.
:29:55.:30:04.

Policy Exchange think they have come up with a compromise. We don't

:30:04.:30:08.

have to choose between a traditional for-profit model, we

:30:08.:30:12.

could have something in the middle, schools owned and run by the

:30:12.:30:15.

teachers who work in them. We have a situation where a third of

:30:15.:30:18.

children in some parts of the country are missing out on their

:30:18.:30:23.

preferred school, as the number of children needing school places go

:30:23.:30:27.

up in places like London increase, we will have a schools' places

:30:27.:30:30.

crisis, unless we have new money from somewhere to bring into the

:30:30.:30:34.

state sector to increase the numbers of places. Critics say it

:30:34.:30:38.

is about ideology rather than basic education needs. There are clearly

:30:38.:30:42.

issues in the school system that need reform and we need improvement.

:30:42.:30:46.

But bringing in the private sector is not necessarily the way to do it.

:30:46.:30:50.

We have plenty of robust national evidence which shows the best way

:30:50.:30:53.

to improve schools is improve the quality of teaching, bring in

:30:53.:30:57.

effective school leadership, provide clear accountability to

:30:57.:31:02.

parent, there are plenty of ways of doing it which don't involve the

:31:02.:31:10.

private sector. The The balance of evidence shows in Sweden that Free

:31:10.:31:14.

Schools bring up standards, and in the US for-profit schools increase

:31:14.:31:23.

standards. The support for Free Schools coming your way is not high.

:31:23.:31:26.

The Conservatives believe by 2015 they may have as many as 500 Free

:31:26.:31:30.

Schools, without the need for help. In their darker moments, when

:31:30.:31:35.

Tories worry about their legacy, they reach for palatable ways to

:31:35.:31:40.

implement their own agenda. As policy makers come up with things

:31:40.:31:44.

to sell to the Liberal Democrats. With us now is Graham Stuart, chair

:31:44.:31:48.

of the Commons Education Select Committee, and Mary Bousted,

:31:48.:31:53.

general secretary of the general teachers union, the ATL. What can

:31:53.:32:00.

the private sector do that the state can't? Two things Policy

:32:00.:32:04.

Exchange identified, additional capital and a shortage of places,

:32:04.:32:11.

and we want parental support we have to have surplus of places, and

:32:11.:32:14.

additional expertise and innovation from the private sector. Those are

:32:14.:32:18.

the two key benefit that is could come from allowing the profit

:32:18.:32:21.

sector into education. Given that money is short, school places are

:32:21.:32:25.

going to get short, it is an obvious solution, isn't it? Not at

:32:25.:32:30.

all, the problem with the profit motive is schools could be set up

:32:30.:32:33.

where they are not needed. In that case they will fail? Children are

:32:33.:32:38.

not cans of beans, you don't want them in schools that fail, you want

:32:38.:32:42.

regulation of quality. They will only fail because there are not

:32:42.:32:46.

enough children? If there are no enough children, you don't have the

:32:46.:32:50.

staff, or the curriculum. So it is a commercial misjudgment, not the

:32:50.:32:54.

state's problem? It is the children's problem and the state's

:32:54.:32:59.

money paying for schools to fail. Profit is for profit, schools

:32:59.:33:04.

should be more pupils. Your objection is ideolgical? No based

:33:04.:33:07.

on research evidence. There is no evidence whatsoever, that report

:33:07.:33:10.

was wrong from the director of Policy Exchange, there is no

:33:10.:33:13.

evidence that for-profit schools raise standards, they haven't done

:33:13.:33:16.

so in America, they certainly haven't done so in Sweden. What do

:33:16.:33:22.

you make that have? I think Mary's perhaps wrong on that issue, the

:33:22.:33:27.

evidence is mixed. I think is the best you could say. The for-profit

:33:27.:33:30.

sector it is not obvious that standards have been raised in

:33:30.:33:35.

America and Sweden, we have probably got the largest sector of

:33:35.:33:39.

for-profit schools there. They are not leading he Lee lights globally,

:33:39.:33:44.

in terms of he had -- leading lights globally in terms of

:33:44.:33:47.

education. If we look at the best countries in the world for their

:33:47.:33:51.

education system, what you don't find in Korea or Singapore or

:33:51.:33:56.

Finland is a big for-profit sector. On the other hand, if we can bring

:33:56.:34:02.

in extra capital and do what Policy Exchange says, we can have a social

:34:02.:34:05.

enterprise model, pilot it and see if the extra money and expertise

:34:06.:34:08.

can raise standards, that is surely what it should be about. It

:34:08.:34:15.

shouldn't be a right, left, ideolgical bat, between luddite

:34:15.:34:20.

unions on the one side. Luddite unions, here we go again, it is odd

:34:20.:34:25.

that if it is such an attractive model your own party hasn't

:34:25.:34:29.

embraced it in Government? It is a coalition Government. Left to your

:34:29.:34:33.

own devices you think they would? think there are many in the

:34:33.:34:36.

Government who would be sympathetic to it. As I say, the evidence is

:34:36.:34:39.

mixed, and Policy Exchange is suggesting a social enterprise

:34:39.:34:43.

model where half the profits are retained by shareholders and the

:34:43.:34:47.

other half reinvested in the schools. If the private sector

:34:47.:34:50.

concentrates on schools serving the poorest, and must underprivileged

:34:51.:34:55.

areas of the country, and they can bring improvement to those children

:34:55.:35:00.

who need it most, surely, even people like Mary, who have a knee-

:35:00.:35:04.

jeark opposition to anything to do with the private sector, could set

:35:04.:35:07.

that asite, put the children first, instead of her own members'

:35:07.:35:11.

interests for once. You have said yourself that there is no evidence

:35:11.:35:14.

it would put the children first. Let's be clear there are real

:35:15.:35:19.

dangers. Let's do pilots like Policy Exchange suggest. There are

:35:19.:35:24.

real problems. Even the pilots are dangerous. Look in America with the

:35:24.:35:27.

charter schools, $400 million for charter schools, what have they

:35:27.:35:34.

found out, school management companies raking off between 5-18%

:35:34.:35:39.

of the school's income. Lack of resources, kids being taught in

:35:39.:35:45.

huts, kids not having books, children being charged $600 to

:35:45.:35:50.

gratd wait. What they found in flour -- grat wait. What they found

:35:50.:35:55.

in Florida is no real control. that was the true picture in Sweden

:35:55.:35:58.

and America there would be wholesale desire to get rid of for-

:35:58.:36:02.

profit. If you go to Sweden, historically socialist Sweden, is

:36:02.:36:07.

there anybody in the political landscape who think you should get

:36:07.:36:10.

rid of the for-profits, I don't think you are painting a fair

:36:10.:36:15.

picture, let's have pilots, stop opposing all change just because it

:36:15.:36:19.

proves for-profit. They don't think they should get rid of Free Schools

:36:19.:36:23.

in Sweden, but they issued a report and investigation into how Free

:36:23.:36:27.

Schools and the management company of Free Schools in Sweden are

:36:28.:36:31.

cutting corners in order to make profit. He said we are finding they

:36:31.:36:36.

don't have libraries, or school nurses, they don't have a rigorous

:36:36.:36:39.

curriculum, they are letting the kids do what they want. Strange

:36:39.:36:44.

they don't want to get rid of them. They want to regulate them better.

:36:44.:36:48.

That is a different argument, we should pilot it, try to get the

:36:48.:36:51.

framework right, we have to incentivise the right behaviour, if

:36:51.:36:54.

we can target it at the children who are most often being let down

:36:54.:36:58.

by the system now, it is surely something, across the divide, we

:36:58.:37:03.

should all be able to join together on and see piloted. We will do that,

:37:04.:37:08.

if you do something for us, stop local authorities being denied the

:37:08.:37:12.

opportunity to run a school. They can't even bid to run a school.

:37:12.:37:16.

Even if it is a parents-preferred choice, that good local authorities,

:37:16.:37:20.

are not allowed to set up and run schools. There is no place planing,

:37:20.:37:24.

these Free Schools, largely secondary schools, where we have an

:37:24.:37:28.

explosion of Primary School places needed, there is no place planning,

:37:28.:37:32.

there is no sensible way of managing and organising place

:37:32.:37:36.

planing in the system at the moment. It is at tomorrowised, it is

:37:36.:37:40.

fragmented, and the result will be, never mind the profit motive for

:37:40.:37:43.

whatever else, children won't have school places, that is because

:37:43.:37:47.

there is no way they can be controlled. You uniquely -- neatly

:37:47.:37:53.

changed the subject to place planning. I have no thoits on that.

:37:53.:37:57.

The man who is tired of London is tired of life, there is no London

:37:58.:38:04.

all that life can afford. The old place has changed a bit since Dr

:38:04.:38:08.

Johnson's testimonial, it has changed astonishingly, where it is

:38:08.:38:12.

unrecoginsable in some places over the last few years. What is it that

:38:12.:38:16.

making Londoners Londoners, they are as likely toe come from Poland

:38:16.:38:20.

and Ecuador as Ealing. It seems more plugged into the rest of the

:38:20.:38:26.

world than the rest of the country. The gap between rich and poor yawns.

:38:26.:38:32.

A big fat London novel is how John Lanchester describes Capital, the

:38:32.:38:38.

saga of the residents of Pepys Road, an ordinary street in south London.

:38:38.:38:43.

The housing boom, that British obsession has made its residents

:38:43.:38:48.

rich, because all of the houses in the road, as if by magic, were now

:38:48.:38:52.

worth millions of pounds. The new residents, including a banker

:38:52.:38:56.

waiting anxiously whether his bonus will top �1 million, it is not

:38:56.:39:01.

strictly, to him, a bonus, but a vital necessity. But the novel

:39:01.:39:07.

opens on the eve of the financial crisis. Enthusiastic reviewers have

:39:07.:39:14.

seen the book as a post-crash state-of-the-nation novel, in which

:39:14.:39:19.

Asian shopkeepers rub shoulders with Zimbabwean traffic wardens,

:39:19.:39:25.

and Polish builders lust after Hungarian nannies. The last

:39:25.:39:30.

locally-born resident dies mid-way through, while they are artist

:39:30.:39:34.

grandson, basks in the attention of a trivial middle-class. What do

:39:34.:39:40.

these people have in common, do they share anything beyond

:39:41.:39:45.

capital's rather grubby air. The author of Capital, John Lanchester,

:39:45.:39:49.

is with us now. From your novel we are not all in this together, are

:39:49.:39:54.

we? I don't think we are, no. most striking characteristic of

:39:54.:39:59.

Londoners portrayed in your novel is how at tomorrowised it is?

:39:59.:40:09.
:40:09.:40:09.

is my own view of London -- atomised it is. That is my own view

:40:09.:40:14.

of London. I always think about when politicians talk about

:40:14.:40:18.

community, people live in parallel solitude, they don't know the

:40:18.:40:22.

people around them and they are on these parallel tracks that barely

:40:22.:40:27.

brush up against each other. centres on one road, built for

:40:27.:40:32.

people of relatively modest means, and because of the London profit

:40:32.:40:37.

boom they have all got wealthy, there is the banker, Polish

:40:37.:40:43.

builders, the Hungarian nannies, the Zimbabwean traffic warden, they

:40:43.:40:48.

all lead very independent lives, do you get any sense of what it is

:40:48.:40:58.
:40:58.:40:59.

draws people to London. I once spent an afternoon in the pub, I

:40:59.:41:02.

was locked out of the house, and there was a misunderstanding about

:41:02.:41:07.

the keys. I got chatting to a Polish woman working as a nanny,

:41:07.:41:11.

although she was a qualified teacher, she had a doctorate. She

:41:11.:41:15.

talked about her reasons for being in London and reeled off these

:41:15.:41:18.

things, and the expression became whist. And said there is also the

:41:19.:41:22.

London dream. There was a striking sense, once people would have

:41:22.:41:25.

talked like that about America. Now there is a sense that the UK in

:41:25.:41:29.

general, London in particular is a place where people come to make

:41:29.:41:31.

their fortunes. It seems, I don't know whether it

:41:31.:41:34.

seems like this to you, it seems a city that is not really plugged

:41:34.:41:40.

into the rest of Britain so much, as plugged into the world? I worry

:41:40.:41:46.

about that aspect, the Manhattenisation of London. In the

:41:46.:41:52.

way that Manhatten is the financial centre and is much more ethnically

:41:52.:41:56.

diverse and regarded as a special case by the rest of the US. London

:41:56.:42:02.

could go in that direction t might almost be an island floating of the

:42:02.:42:12.

rest of the UK. Does it matter? might as inequality grows, not just

:42:12.:42:19.

the 0.1%, but the 0.01% of those, with the wealth and privilege there

:42:19.:42:22.

and the rest of the country struggling. I get a slight whiff of

:42:22.:42:28.

that already. There are parts of the UK you go to and it feels like

:42:28.:42:32.

1976. If we move apart from each other, that does matter.

:42:32.:42:37.

There is in your portrait of this straight, there is no such thing as

:42:37.:42:40.

what used to be called the host community, is there? No, I think

:42:41.:42:46.

that's a thing you notice in London too. That a lot, it is like those

:42:46.:42:50.

things when you used to see diagrams of the neutron bomb

:42:50.:42:53.

radiating out, and leaving buildings intact, but killing all

:42:53.:42:57.

the people. Money has done that to London, the people who used to live

:42:57.:43:02.

in centre now live further out, the people who used to live in the

:43:02.:43:06.

periphery have largely dispersed, it has changed the pexure of London

:43:06.:43:13.

life. It has -- texture of London life. And in a factual way changed

:43:13.:43:17.

the people who live here. What about changed moral codes? That is

:43:17.:43:21.

an issue, one of the things that can happen in the modern world, if

:43:21.:43:24.

you never go anywhere or do anything and stay in the same place

:43:24.:43:28.

all your life, you still look out of the window and don't recognise

:43:28.:43:32.

where you are. That can happen, the sleepiest, most rural parts of the

:43:32.:43:36.

country, people have that experience. I think a big part of

:43:36.:43:39.

it is that sense that the stories we tell each other, and the values

:43:39.:43:44.

we have, are no longer shared. mention that the opportunity that

:43:44.:43:50.

London seems in the minds of many people to offer to realise a dream,

:43:50.:43:55.

it also offers sanctuary, doesn't it? That's true. I pine for a

:43:55.:44:01.

simple letter day when we speak straight forwardly about refugees -

:44:01.:44:05.

simpler day when we talk about refugees, and people noi talk about

:44:05.:44:10.

asylum seekers and it is a contested -- now talk about asylum

:44:10.:44:14.

seekers and it is a contested issue. It is about the places people want

:44:15.:44:19.

to get away from and to, and the second catagory is a better thing

:44:19.:44:26.

to be. Do you feel optimistic about the future about this

:44:26.:44:30.

increatesingly heterogeneous, -- increasingly hettro genius

:44:30.:44:37.

straining at the seems city. I was born in hoing Kong and brought up

:44:37.:44:45.

in Germany, I'm from where else, the hettro genius -- hettro genius

:44:45.:44:49.

is a strength. It will be a difficult few years for everyone in

:44:49.:44:53.

the UK, but there is so much energy, talent, enterprise and appetite

:44:53.:45:03.
:45:03.:45:05.

here, I'm optimistic. That's all from Tuesday night tonight, nothing

:45:05.:45:10.

so exciting as the political career of the former Prime Minister of

:45:10.:45:14.

Belgium, Herman Van Rompuy, his time has President of the European

:45:14.:45:19.

Union's council has been such a glittering success it is to be

:45:19.:45:22.

extended for another couple of years, it seems no-one else wants

:45:22.:45:30.

the job. What a man. # As I walk along the street

:45:30.:45:34.

# With my naiyo in this case and frittes

:45:34.:45:41.

# You can tell I'm as happy as can # It is a shame about the weather

:45:41.:45:46.

# But we all live in harmony # It is great to be a Belgian

:45:46.:45:54.

# I'm not English, French or Dutch # I'm not Polish, Italian ordainish

:45:54.:46:04.
:46:04.:46:07.

# I'm a Belgian, so thank you very Wettest conditions in western

:46:07.:46:14.

Scotland and the Cumbrian fells during the day.

:46:14.:46:20.

Surface water flooding, easing off across the North West later, patchy

:46:20.:46:27.

mainly light drizzle, gusty winds possible. In East Anglia dry, but a

:46:27.:46:31.

cooler day to come compared with today. Temperatures only around 9-

:46:31.:46:36.

10, strengthening winds. After a reasonably dry start to the south

:46:36.:46:42.

west, here the rain will develop widely, heaviest to be across

:46:42.:46:46.

Snowdonia. In the Northern Ireland rain to be heavy all morning, light

:46:46.:46:52.

in the afternoon. 12-13 possible in the westerly winds. Scotland 12-14

:46:52.:46:56.

is likely. Damp across western areas, not as wet as the morning,

:46:56.:47:01.

the north-east dryer and brighter. Changes into Thursday, not as wet

:47:01.:47:04.

across parts of North West England, Scotland and Northern Ireland, but

:47:04.:47:08.

the western coast jal hills damp and drizzley, same too across

:47:08.:47:11.

England and Wales, Thursday set to be dry, brighter and that is going

:47:11.:47:16.

to have a huge impact. Even with the outbreaks of rain across the

:47:16.:47:19.

With Jeremy Paxman. Is the row over shelf stacking for benefits really just snobbery? We unpick the Greek bail out deal. And John Lanchester's new book.