14/03/2012 Newsnight


14/03/2012

The UK is put on negative watch by a top ratings agency - the shadow chancellor responds. And the head of Ofsted on school literacy. With Emily Maitlis.


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Britain's put on negative watch by a leading ratings agency. With

:00:09.:00:12.

unemployment up, years of austerity ahead, and a budget round the

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corner, what is the adrenaline jab the country needs. FITCH, the

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ratings agency, is worried about the shocks we can't predict, and

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the growth we can't seem able to generate.

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So can the do anything to get big business to spend some of the

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billions they are sitting on. We will hear from the Shadow

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Chancellor, Ed Balls. Are too many children failing to

:00:35.:00:39.

reach literacy standards, are the standards too lax. The new head of

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the schools inspectorate, Ofsted, is here in the studio.

:00:42.:00:52.

The uprising in Syria has been going in for a year, we ask is the

:00:52.:00:55.

opposition too fractured. David, we are chuffed to bits you

:00:55.:00:58.

are here. Cameron and Obama cosy up in the

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White House. Are the Tories more pally with the American right.

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Why one banker has given Goldman Sachs the blues.

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(plays the blues) Good evening, in the last two hours

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the ratings agency, FITCH, has announced it has revised the UK's

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economic outlook to negative. They point to the risk and uncertainty

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to the possibility of reducing risk and debt by the middlele of the

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decade, and the eurozone crisis which it says could intensify. The

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UK could find itself losing the coveted triple-A rating. We will

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speak to Ed Balls in a moment. Paul Mason is here, what does it mean?

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We still have our triple-A rating, that means British debt is among

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the safest in the world. Peg put on negative watch by a second of the

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three being -- being put on a negative watch by a second of the

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three big agencies, the other one last was -- was last month. FITCH

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is concerned about three things. The first is the eurozone crisis,

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what they are seeing is that the eurozone credit crunch has narrowed

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the shock absorption of the UK economy. If anything more bad

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happens we may have to hike borrowing. That is problem number

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one. The second is the pressures on the Government to try to rein in on

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the austerity. FITCH says there is a danger the Government will cut

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less fast, or raise, maybe even cut om taxes, under pressure. Given the

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-- some taxes, under pressure. Given the Government is clear it is

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not going to do. That read between the lines of what FITCH is really

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worried about over the next few years the coalition fails, and

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replaced by another Government committed to a slower pace of

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austerity. The final thing they are worried about and that is what

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Vince Cable is worried about, where is the growth coming. They are

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worried when the Government statisticians look again later this

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year at the UK economy, we might find we have shrunk even more than

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we thought. If we have, it is a whole bigger hill to climb. These

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guys are paid to put fine detail on to risk analysis, they just

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slightly notched up the risk of lending to the UK.

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A week today the budget will be on the table, as we have been hearing,

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there in Westminster and over the phone from Washington, they are

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still arguing about what should be done. One of the big curiosities in

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our economy is what can be done to get big business spending. We have

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been told there is no money, that is not true. The corporate City is

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spending on several hundred billion pounds, that doesn't get out to the

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real economy. Why not? And how can that change?

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This is bank, and here are people in suits doing bank-a-like things,

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like lending people money, or not lending people money. But are

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things about to change? This doesn't look like a bank, and

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it doesn't look like a hole in the wall, but why, in future, couldn't

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it be a bank, that is the question one of the Prime Minister's own

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advisers asked me recently. They point today Travis Perkin, every

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day lending plilding equipment to builders up and down the country.

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If you are lending other things why not lend money, lasering the

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economy in the bits that needed it. As the Government presses ahead

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with public spending, they are expecting the private sector to

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meet half way with investment, driving the economic recovery. It

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is not really happening. corporates are sitting on around

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about �730 billion in cash. That is very high by historic standards.

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The reason they have the cash is they have been very good at cutting

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cost, building profits through the downturn. The future for all the

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corporates is one certain, we live in a volatile world. I don't think

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it is by any means certain these corporates will want to run down

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cash in a big way. It may be high cash balances are here to stay.

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There are, of course, policies in play to get money into the real

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economy. The Government will soon announce how it will underwrite

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loans from banks to small business, credit easing. This week will also

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bring a report on non-bank financing. But the sluice gates to

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the �730 billion will probably remain shut.

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One new Tory MP, working closely with the leadership on this, says

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they know they need to do more? debate has so far focused on the

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fiscal measures who will we tax, and where will we spend money. This

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is an area that is not non-fiscal, it doesn't relate to tax and spend.

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But getting money into the real economy is really going to oil the

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recovery. So this should be a big part of it. What Governments should

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be doing is trying to accelerate this process, because if companies

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invest, that is how we get jobs and that is how we get growth.

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The problem for the Chancellor is so acute, solutions might have to

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include ideas that were once ruled out of bounds for Conservatives.

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The most important thing is confidence, a credible strategy for

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how we will grow the industries, the businesses of tomorrow. I think

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that does mean that all of us, Conservatives who believe in

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industry, need to embrace it and set out a Conservative industrial

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policy for the next generation, backing the industries of tomorrow,

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the sectors of tomorrow, so we have a sustainable recovery. There is

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attention within the coalition on exactly how to rebuild confidence

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in the economy. The current strategy rests on getting banks and

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other actors to start lending again, but there are some Lib Dems who

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think this is not enough, you need a more muscular approach, set up

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your own state bank and take control. In his letter to the Prime

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Minister, leaked recently, Business Secretary, Vince Cable, called for

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the Royal Bank of Scotland to be turned into a state infrastructure

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bank, able to get money flowing direct to industry, great and small.

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But RBS becoming a state bank is a no-no for Conservatives, for the

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Liberal Democrats the idea has its attractions. One possible solution,

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and I think we will see whether or not it is a solution by the success

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or otherwise of the Green Investment Bank, is the possibility

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of some sort of state infrastructure bank. We have RBS

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that we own 86% of already, maybe that would be the vehicle for

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creating a state infrastructure bank. But I think we need to see

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how successful the Green Investment Bank to see whether or not it will

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make a positive difference. Whatever the mechanism, they need

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to get a move on. Forecast by the Government's own office of budget

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responsibility, insists companies will get stuck in, a 10% increase

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this year, that is double the rate we have seen before, so possibly

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wishful thinking. I think the Government needs to see corporate

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spend. We know that the Government, which has been a big engine of

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growth in this economy, before the recession, is not going to be

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present. So we are going to have to see more activity from the

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corporate sector. The challenge for Government is to create the

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conditions in which corporates think they can make good money by

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spending those cash balances. This is a builders' merchants,

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these are builders. Oh, and there's a dummy. How odd! But then again,

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this could be a bank soon. Ahead of the budget what we have focused on

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so far ahead of the debate is tax and spend. But it will be as much

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about getting companies to relax and lend. The increased threat from

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a downgrade from another ratings agency this evening, makes the dash

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for growth even more urgent. I spoke to the Shadow Chancellor,

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just before we came on air. The credit ratings agency, FITCH, has

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warned the UK is on a negative outlook, your response to that?

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credit ratings agencies are a weather vane, they tell you the way

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things are moving. There is a growing worry our economy is not

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growing, unemployment is rising, and our borrowing is not coming

:09:06.:09:10.

down, as George Osborne planned. I said to George Osborne always,

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don't set your policy by the credit ratings agency, they are a weather

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vane and they say the weather is going in a difficult direction for

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the economy. FITCH is not saying spend more, they are saying not

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reducing debt quickly enough, your policy would make that even worse?

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FITCH were the people who said four years ago, sub-prime mortgages,

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keep them on triple-A. So they are wrong, then? The credit ratings

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aegsz have consistently got the financial crisis wrong, they said

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Lehman Brothers was a safe bet. My point to George Osborne was you

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should never make your policy by the credit ratings agency.

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George Osborne shouldn't really worry about it, broadly, it is not

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a worry? If it wasn't for the fact that George Osborne set this as his

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test. Go back a year-and-a-half ago, he said he would have stronger

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growth, unemployment down, borrowing down, all that has

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disappeared, because the economy has flatlined, unemployment is

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rising. The only thing he has been saying for the last six months is

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he can't change course because he will lose the support of the credit

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ratings agencies, even now, this is the second ratings agency in a

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month-and-a-half who have moved things to negative. George Osborne

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made the wrong call to let the ratings agencies dictate the policy.

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It is the wrong policy, too far, and too fast and it is not working.

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A week away from the budget, and the Chancellor is looking at

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convoluted schemes to sort things out. Does it take you back to the

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good old days of Brown and Balls? Is unemployment going to come down

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and growth happen. If the economy isn't growing you can't say keep

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going. The clever tricks policies, do you think we have all done a bit

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of that? The thing about George Osborne at the moment is he wants

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you to focus on the tricks policy, the 100-year bond. Like Gordon

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Brown did? The thing was. You say no, but, yes he did? Every

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Chancellor now and then has gimmicks, the question is, are the

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fundamentals going in the right or wrong direction. George's problem

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is the economy is not growing. He's doing nothing about it. He's saying

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steady as she goes, he wants to say he can't change course whatever,

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the problem is, it is deeply complacent in this situation. I

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want the budget to be fair, but I want a budget for growth and jobs,

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without that we can't get the deficit down. Let's lock at

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policies, the 50p rate, -- look at policies, the 50p rate, much talked

:11:47.:11:52.

about, if that goes, would you reintroduce it? I would be

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surprised if David Cameron allows this to happen. We have had

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speculation in the last few weeks from the Liberal Democrats saying

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we will let you get rid of the 50p rate, if you replace it with a

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mansion tax. That is not a worry, it will stay? I think it will stay

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next week. Who could possibly think, when fuel bills are going up, when

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child benefit is being cut, when Working Tax Credits are cut, who

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thinks the priority is not people on �30,000, but only people above

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�150,000. You think they have that policy right? I would be amazed if

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they take it away. George Osborne clearly wants to, that would be so

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out-of-touch. If took it away you would -- if he took it away, you

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would reinstate it? I have said no tax rate is set in stone, but is it

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a priority to get rid of the 50p rate, no. You said it would be

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absurd to get rid of it, logically you would reinstate it if they did?

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If there was a general election right now, our manifesto would not

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say get rid of the 50p rate. off the fence for a minute, mansion

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tax, you said you support the mansion tax, would you introduce it

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and it become a Labour policy? mansion tax needs careful thought

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and done properly it can't be done in a way for fish low income widows

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with lots of wealth -- for low income widows with lots of wealth.

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I will say I will make it work. don't want to make it your idea?

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was originally a Vince Cable idea, originally something David Miliband

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supported in the leadership election. I support it too.

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child benefit, you are actually supporting a lot of new tax for

:13:32.:13:42.
:13:42.:13:42.

rich people, you would still retain for rich people? Some things we

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would do is bring back the bow bank tax for youth jobs. Don't cut

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pension tax relief for the highest income earners, use that to

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reinstate the tax credit cuts. Use stamp duty avoidance to stop the

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terrible cut in Working Tax Credit. Child benefit, you would keep that

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for everyone, even the rich? believe in universal child benefit,

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I always have. Ed Balls thank you. In today's unemployment figures we

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learned 1.15 million young people are out of work. Do they have the

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skills they need. The new Chief Inspector of Schools, Sir Michael

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Wilshaw, will warn tomorrow that too many primary school pupils in

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England leave without being able to read properly. We are falling

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behind international competitors, he will pledge to raise the bar,

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and warn teachers they have to get specialist training in teaching

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phonics, a system of sounding out letter combinations. We were given

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an exclusive preview. Hammer, hammer, shake, shake, shake.

:14:44.:14:49.

One essential skill, not in the job advert for Her Majesty's Chief

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Inspector of Schools is, the ability to sit for long periods on

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a tiny classroom chair. Sir Michael Wilshaw, who took the job in

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January, has clearly mastered this, now he wants to revolutionise the

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teaching of English. This lesson is teaching synthetic

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phonics, virtually all primary schools teach children to read like

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this now. Sir Michael is a big fan. This teacher would have been

:15:19.:15:23.

trained in the use of phonics, that is putting letters and sounds

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together and merging that in what is called a systemic and synthetic

:15:28.:15:33.

way. But the kids seem to think it is fun? It is fun. But not all

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English teaching is going so well. In his short time as Chief

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Inspector, Sir Michael has started something of a debate within the

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teaching profession about whether existing standards are actually

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high enough. Consider this, out of all the children who get the

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satisfactory grade aged 11 in literacy, half of them don't go on

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to get five good GCSEs. So what is going on?

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Sir Michael's report is called Moving English Forward, it is very

:16:09.:16:19.
:16:19.:16:19.

Apology for the loss of subtitles for 45 seconds

:16:19.:17:05.

In the lest learning was hampered The school Sir Michael is advising

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today is St Mary's Roman Catholic Primary School in Battersea south

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London. It was judged satisfactory in its last Ofsted inspection, but

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as we know, Sir Michael does not regard that as good enough. Since

:17:16.:17:24.

then it has been working hard to improve health by a good school

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nearby, with which is now shares a head. To encourage reading it has a

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library with books donated by Selfridges. They can come with

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reading volunteers which we have. The class teachers can use the

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library to support the curriculum in the work they are doing, it is

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fantastic, lovely. For Sir Michael instilling a love of reading for

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its own sake is vital if we are to address the problem with literacy.

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Do you enjoy reading? Yeah. reading at home, do you read at

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home? Every night. Michael Wilshaw has long held the attention of

:17:59.:18:03.

politicians. He was head of one of the earliest and most successful of

:18:03.:18:08.

the Blair Government's new academy schools. Gordon Brown too visited,

:18:08.:18:15.

but he was less keen than his predecessor of setting schools free

:18:15.:18:19.

from local authority control. Now, under David Cameron, the academy

:18:19.:18:23.

programme is accelerating, with the addition of free schools set up by

:18:23.:18:28.

parents or other groups, this puts more power in the hands of Ofsted.

:18:28.:18:31.

Michael Wilshaw was seen as so critical to this new schools

:18:31.:18:35.

revolution, that the rumour was he was really picked for the job of

:18:35.:18:38.

Chief Inspector from a shortlist of one.

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There is a rumour that you were not really given a lot of choice about

:18:41.:18:47.

taking this job or not? No, I'm a believer in free will, I took on

:18:47.:18:51.

this job because I want to replicate what I did with the

:18:51.:18:54.

school I was leading across the country, and I want to see children

:18:55.:18:58.

doing well across the different phases.

:18:58.:19:02.

Another school day comes to an end, critics say there is a tension at

:19:02.:19:06.

the heart of the Government's education reform, on the one hand,

:19:06.:19:10.

schools are supposedly being set free from central control, yet on

:19:10.:19:13.

the other, there is a powerful Chief Inspector telling them how to

:19:13.:19:21.

achieve success. Sir Michael Wilshaw is here, and we

:19:21.:19:25.

will speak to Mary Bousted from the Association of Teachers and

:19:25.:19:28.

lectures, in a secretary. Are literacy standards for pupils in

:19:28.:19:33.

England too low? Standards in literacy and reading went up over a

:19:33.:19:38.

ten-year period between 1995 and 2005. But since then, standards

:19:38.:19:42.

have stalled. What we are seeing is that other nations are doing much

:19:42.:19:47.

better than us. We have fall in what is the interNational League

:19:47.:19:51.

stables from 7th to 23rd. Other countries, as I have said. So our

:19:51.:19:56.

standards should be higher? That that, in effect, means, is

:19:56.:20:00.

something like one in five children in primary schools, at the age of

:20:00.:20:04.

11, are leaving Primary School without the national average. What

:20:04.:20:08.

that really means is that they can't access the curriculum, in

:20:08.:20:10.

secondary school. They find it difficult to pass examinations,

:20:10.:20:14.

they find it difficult to proceed to the next stage of their

:20:14.:20:17.

education and training, and of course, they find it difficult to

:20:17.:20:22.

get jobs. Let's get to the root of that, what are teachers doing, that

:20:22.:20:26.

make standards so low? We have to make sure that phonics teaching,

:20:26.:20:31.

you saw in the clip how important phonics is, is taught well. To do

:20:31.:20:35.

that properly, we need to make sure the trainers, the training

:20:35.:20:38.

providers, the universities that train teachers teach it well.

:20:38.:20:42.

percentage of teachers are not doing that now? In talking to quite

:20:42.:20:46.

a few teachers in the primary sector, they will say they have

:20:46.:20:49.

been inadequately trained in the training institutions, and that

:20:49.:20:53.

they need a lot more professional development in the teaching of

:20:53.:20:56.

phonics, which is not an easy thing to do, in their primary schools. We

:20:56.:21:03.

have to make sure that the training provideers train teachers, and the

:21:03.:21:07.

teaching of phonics, also schools and leaders in schools car yie on

:21:07.:21:10.

the professional development in the -- carry on that professional

:21:10.:21:13.

development in the schools. There is this tension, you talk about

:21:13.:21:19.

setting them free, but the rhetoric you are using now is about needing

:21:19.:21:23.

to keep them to the guidelines of what you want to happen. If they

:21:23.:21:29.

want to teach X, Y and Z, are they allowed to do that? Came from an

:21:29.:21:31.

academy background, an autonomous institution, I believe very firmly

:21:31.:21:36.

that is what works, giving power, resources and freedom to people on

:21:36.:21:38.

the ground, the head teachers and teachers in the school to make a

:21:39.:21:42.

difference is the right approach. There is an irony now that you have

:21:42.:21:46.

become this chief? But, it is a big but, but we have to make sure this

:21:46.:21:50.

freedom works and standards are rising and people working in those

:21:50.:21:54.

free institutions are held to account. What would you promise

:21:54.:21:59.

then. You are now going to be in this place, for five years, you are

:21:59.:22:03.

replacing LEAs, essentially, with a different kind of bureaucracy,

:22:03.:22:08.

people have got to be able to measure your success, right?

:22:08.:22:12.

Remember there are only 1500 academys and a few more free

:22:12.:22:17.

schools, the great majority of provision isn't in academys yet,

:22:17.:22:21.

they will be increasing over the next few years. We have to make

:22:22.:22:25.

sure accountability matches freedom. In answer to your question, what do

:22:25.:22:28.

I expect, I expect better results from primary school children at the

:22:28.:22:37.

ages of seven, a vital age, and 11 as well. What with would that mean

:22:37.:22:43.

better results? At the moment 70% have between A-C in their grades?

:22:43.:22:48.

Many leave without the national average. If one in four did?

:22:48.:22:51.

they hit the national average that is no guarantee either of success

:22:52.:22:55.

at GCSE. One of the things I will be urging the Government to do is

:22:55.:23:00.

look at standards at the age of 11 to see if that level 4, which is

:23:00.:23:06.

the national average, is sufficient as a predictor for success five

:23:07.:23:10.

years later. But it should go higher? As soon as possible. When

:23:10.:23:14.

would we start looking for a change now? As soon as we put the

:23:14.:23:18.

necessary changes in. Thanks very much.

:23:18.:23:22.

To you Mary Bousted, literacy standards are too low, and your

:23:22.:23:27.

teachers have accepted that? don't think Sir Michael's read his

:23:27.:23:30.

own report very well. The report says, for example, about phonics

:23:30.:23:36.

that in most schools, all schools teach phonics, and the strengths in

:23:36.:23:41.

teaching phonics far outweigh the weaknesses, that is what his own

:23:41.:23:46.

inspectors have written in the report produced today. In key stage

:23:46.:23:52.

one 80% reached the standard, standards have plateaued at key

:23:52.:23:55.

stage II, that is entirely predictable in the testing regime

:23:55.:24:01.

we have got. In key age IV. Is that about the way they are tested?

:24:01.:24:07.

is, in the report it says that, national tests, and an preparation

:24:07.:24:12.

for national tests nar rogue the English curriculum. It may be one

:24:12.:24:17.

of the major causes that children at Primary School with an

:24:17.:24:20.

overemphasis on test items can't access the National curriculum.

:24:20.:24:26.

know you don't want to debate directly? I'm happy. He has said

:24:26.:24:31.

literacy standards are too low, you would agree with that? I would say

:24:31.:24:36.

there are always improvements to be made. There are real problems

:24:36.:24:38.

outlined in the report, the difference in standards between

:24:38.:24:42.

boys and girls, the fact that the standards of writing are lower than

:24:42.:24:45.

reading, although writing is a harder skill. I would also say that

:24:46.:24:50.

in this report it details some myths about English teaching, which

:24:50.:24:56.

your correspondent brought out. It says, for example, that lessons are

:24:56.:25:00.

too pacey and action-packed, there is a focus on lesson activities

:25:00.:25:05.

rather than outcomes, and teachers are writing far too detailed lesson

:25:05.:25:08.

plans. All those activities are not what teachers have to do, they are

:25:08.:25:11.

a direct result of Government interference. Do you see this as a

:25:11.:25:15.

chance for teachers to have more freedom, or do you think Ofsted

:25:15.:25:19.

will be more domineering? I think you have the answer very clearly.

:25:19.:25:25.

Ofsted has got a very clear agenda, it is not an agenda around teacher

:25:25.:25:29.

empowerment. It is interesting Sir Michael talking about initial

:25:29.:25:32.

teaching training providers and phonics, his own inspectorate come

:25:32.:25:36.

in and give these providers very good results for the teaching of

:25:36.:25:40.

phonics. What we have to do, and the question you asked Sir Michael

:25:40.:25:44.

is absolutely right. How is it you say you set schools free, and then

:25:44.:25:48.

you all have to teach like this. In your report it said the report is

:25:48.:25:51.

very critical, I have read it very carefully, actually it is very

:25:51.:25:55.

balanced and said there is an awful lot of very good work being done in

:25:55.:25:58.

terms of literacy and reading in schools.

:25:58.:26:02.

Two points to you, just to come back. One, your words don't match

:26:02.:26:06.

what your report says, and two, that you are not really for teacher

:26:07.:26:10.

empowerment at all, you are poacher turned game keeper? Of course I'm

:26:10.:26:14.

for teachers, teachers make the difference. That is at the heart of

:26:14.:26:17.

the academy programme, it is the heart of the changes that are being

:26:17.:26:20.

made by the Government. We want to give more power, more resources to

:26:20.:26:24.

teachers on the ground to make the difference. But we need children to

:26:24.:26:28.

be able to read so that they can access the curriculum, they can

:26:28.:26:35.

read and write extensively, both in Primary School and secondary school,

:26:35.:26:39.

we are falling behind our inter-- primary school and secondary school,

:26:39.:26:43.

we are falling behind our international competitors, if we

:26:43.:26:46.

are going to grow economically and with a cohesive society, we need

:26:46.:26:53.

all children to read and write well. Tomorrow Michael Wilshaw will face

:26:53.:26:57.

the much trickier task of being interviewed by the BBC's School

:26:57.:27:02.

Report, you can catch them there. One year ago tomorrow marks the

:27:02.:27:05.

official beginning of the Syrian uprising, a war where the violence

:27:05.:27:09.

is rising and solutions are shrinking. In Washington President

:27:09.:27:14.

Obama and David Cameron made clear any direct intervention remains off

:27:14.:27:20.

the agenda and restated the need for a diplomatic conclusion. All

:27:20.:27:27.

this in the allegations of a widespread attack on the population.

:27:27.:27:36.

First, we ask why the regime is proving so resistant.

:27:36.:27:44.

A year on, the images of anger and grief in Syria have barely changed.

:27:44.:27:49.

Today in Idlib, there were funerals for those killed in a Government

:27:49.:27:53.

assault. While according to unverified YouTube footage, troops

:27:53.:27:59.

were again gathering outside Deraa. The same town where the longest of

:27:59.:28:04.

the Arab uprisings took off in ernest, 12 months and perhaps

:28:04.:28:08.

10,000 deaths ago. The spark was a demonstration

:28:08.:28:13.

demanding the release of young people arrested for scribbling

:28:13.:28:18.

anti-regime graffiti. Soon they were burying fellow

:28:18.:28:24.

protestors, shot by Government troops.

:28:24.:28:28.

It was the first taste of the state-sponsored brutality that

:28:28.:28:37.

would target even children. This is evidence of how 15-year-old Tamra

:28:37.:28:42.

from Deraa was tortured in detention, his arm broken, teeth

:28:42.:28:48.

knocked out, before his dead body was finally returned to his parents.

:28:48.:28:53.

TRANSLATION: He had two drill holes in his hand, and a fracture. His

:28:53.:28:58.

pelvis had five bullets, a total of 11 bullets, not including the drill

:28:58.:29:02.

holes. When I brought him home to his mother, she couldn't have

:29:02.:29:06.

identified him, were it not for a childhood injury.

:29:07.:29:11.

Deaths like this have fuelled the uprising. As thousands have turned

:29:11.:29:15.

out to demand, not just freedom, but justice, and increasingly

:29:15.:29:24.

vengence. From Deraa the uprising sproud to

:29:24.:29:33.

Douma, and other towns, including Homs. Last summer troops besieged

:29:33.:29:40.

Jisr ash-Shugur, skilled scores in Hama, and attacked other cities.

:29:40.:29:45.

Fighters were in Damascus and Douma, they were driven out of there, and

:29:45.:29:48.

Homs, scene of the worst violence in the last few weeks. A year on,

:29:49.:29:53.

how come President Assad is still in power. The rebellion has spread,

:29:53.:29:59.

showing remarkable resilience and bravery. It is acquiring arms from

:29:59.:30:03.

defecting soldiers, much of the Arab world, as well as the west

:30:03.:30:07.

backs it politically, and sanctionss have helped half the

:30:07.:30:11.

value of the Syrian currency. But it is not enough. Because the

:30:11.:30:17.

regime, as far as we can see, remains united and ruthless, while

:30:17.:30:21.

its enemies, the opposition leaders, and their foreign backers, are

:30:21.:30:26.

often divided or uncertain. Most protestors I met recently in

:30:27.:30:32.

Syria were desperate for any form of foreign assistance.

:30:32.:30:38.

Arms supplies, a no-fly zone, a protected humanitarian corridor.

:30:38.:30:44.

But with the outside world unwilling to intervene, they are

:30:44.:30:48.

hopelessly outgunned by Government forces. And President Assad has

:30:48.:30:52.

played on the country's religious divide. Christians form a large

:30:52.:30:56.

minority in largely Sunni Muslim Syria, as do the all Wight

:30:56.:31:01.

community the President belongs to t -- all law Wight community the

:31:01.:31:07.

President loings to. And some -- belongs to, and some believe they

:31:07.:31:15.

would be targeted. You heard shouts calling for the deaths of the

:31:15.:31:19.

Alawites and the Christians, forcing them outside the country

:31:19.:31:24.

into Beirut. You had some shouts against the Jews, for example.

:31:24.:31:33.

Someone in Deraa actual accused them of spreading infidelly --

:31:33.:31:38.

infidelity and other things. Here life look normal, it is hard to

:31:38.:31:41.

know if people fear the opposition or the regime. For whatever reason,

:31:41.:31:44.

most still aren't joining the revolution.

:31:44.:31:48.

The central Government is pretty much coherent, it is pretty much

:31:48.:31:52.

intact, they are still doing everything that any state would do.

:31:53.:31:59.

A lot of Syrians believe this level of violence is temporary. That the

:31:59.:32:02.

Government will go out of this and the whole country will go out of

:32:02.:32:12.

this. Even though they will be bruised, but intact. President

:32:12.:32:18.

Assad thinks the violence is temporary, e-mails downloaded from

:32:18.:32:24.

his account, shows a leader un touch -- out-of-touch with the

:32:24.:32:27.

crisis with his luxury lifestyle. Meanwhile the parents of the

:32:28.:32:31.

murdered schoolboy, live in two rented rooms in the Jordanian

:32:31.:32:38.

desert, God is with them, they tell me, as for the world, they believe

:32:38.:32:43.

is against Syria. I'm joined by two Syrian opposition

:32:43.:32:48.

activists who come from rather different aspectives, one holding

:32:48.:32:53.

dual Syrian and British nationality, and spent much time in Homs, and a

:32:53.:32:57.

member of the opposition group building the Syrian state.

:32:57.:33:01.

Welcome to you both. Danny, do you want the outside world to be arming

:33:01.:33:05.

the opposition now? Of course, that is the only way for us to defend

:33:05.:33:09.

ourselves. You can see, I'm seeing what is going on in my home town.

:33:09.:33:13.

We have only two areas which aren't protected by the Free Syrian Army.

:33:13.:33:17.

The army, the Assad forces actually went in there, stabbed the

:33:17.:33:21.

civilians, raped the women and killed the children. These are two

:33:21.:33:24.

areas that aren't protected by the Free Syrian Army, all the other

:33:24.:33:28.

areas are protected. Where should those arms come from, you have

:33:28.:33:34.

taken moves to ask for them? These arms should be coming from outside,

:33:34.:33:41.

from Europe, America, the US, UN, Turkey, Lebanon. I'm not a

:33:41.:33:48.

politician, or a journalist, I'm a guy from Syria living there since

:33:49.:33:53.

the revolution. You meet Joe Liberman? They said they wouldn't

:33:53.:33:57.

give us arms but there will be an intervention soon. This is all talk,

:33:57.:34:01.

we have been hearing that for eight months, we have seen no action

:34:01.:34:06.

whatsoever. At some point, you have got to say this has been going on a

:34:06.:34:10.

year. Whatever arguments you were mooting about not arming the

:34:11.:34:15.

opposition, has got to reach a turning point, hasn't it? Actually

:34:15.:34:21.

not. To the contrary, because since arming the opposition started, the

:34:21.:34:25.

death toll increased dramatically, it is particularly the area where

:34:25.:34:28.

the Free Syrian Army was based crushed by the regime is where we

:34:28.:34:34.

have seen significant death tolls. It is where the area where the Free

:34:34.:34:37.

Syrian Army claims to be protecting civilians, where it failed to

:34:37.:34:41.

protect them. It withdrew from the areas and left the civilians to be

:34:41.:34:45.

massacred by the regime. I understand why Danny and people

:34:45.:34:48.

like him carry arms to protect themselves. I didn't carry arms. I

:34:48.:34:52.

would like to answer this quickly. If anyone is going to say we don't

:34:52.:34:57.

want arms in Syria, let them live in Syria for two months, let them

:34:57.:35:01.

see families die and women rape and let them say that. If we can't

:35:01.:35:08.

protect ourselves from the army, how will we stop the army stabbing,

:35:08.:35:11.

kidnapping women, and kidnapping and raping children, without an

:35:11.:35:16.

army to protect them. We have two areas in Homs not protected by the

:35:16.:35:20.

Free Syrian Army, they went in there and raped women, ten-year-old

:35:20.:35:25.

girls, cutting them to pieces. have family there. My parents live

:35:25.:35:30.

in Homs not protected by the Free Syrian Army, they are still safe,

:35:30.:35:35.

relatively, nobody is safe. The military is strong, we are

:35:35.:35:39.

concerned about people like you, we want you to live to build the

:35:39.:35:43.

country. We don't want the young people to die in front of such a

:35:43.:35:47.

brutal regime. We need them. This is a battle for democracy, the road

:35:47.:35:51.

to democracy doesn't go through arming. Don't you worry about that,

:35:51.:35:55.

the point is you are on the cusp, or you have already entered civil

:35:55.:35:59.

war in some place, don't you worry you will lose even more members of

:35:59.:36:02.

your family through that? You do not understand something, we are

:36:02.:36:05.

already losing members of our families. We are being picked up,

:36:05.:36:08.

we are being tortured by the army. The women are being raped and

:36:08.:36:12.

kidnapped from the street. How are we going to protect ourselves. This

:36:12.:36:16.

area I was sitting in was protected by the free Syrian arm year, they

:36:16.:36:20.

were bombarding the whole area. Isn't -- army, they were bombarding

:36:20.:36:25.

the whole area. Isn't that better than them coming in and torturing

:36:25.:36:31.

us, I would rather be shot by a gun than tortured. Most of the members

:36:31.:36:35.

of my group are all inside Syria, they are against the army. The

:36:35.:36:40.

majority of Syrians are against the army, they know. I'm sorry about

:36:40.:36:46.

that, no. They know the regime and how brutal it is, they know how it

:36:46.:36:50.

is to confront them with arms. They are concerned about their safety.

:36:50.:36:53.

Syria has all that it takes to enter full scale civil war.

:36:54.:36:58.

extraordinary thing is s you can debate the question of arms, but

:36:58.:37:02.

the regime does not look unstable, it does not look divided, the

:37:02.:37:08.

opposition, does? The regime is divided. The divisions in the

:37:08.:37:13.

opposition are not weakening, or making the regime stronger, we

:37:13.:37:16.

shouldn't overestimate the opposition, there is no opposition

:37:16.:37:20.

in Syria, we don't have institutions like here, they are

:37:20.:37:25.

only famous writers and university professors, people openly citsiegs

:37:25.:37:30.

the regimes. We shouldn't -- criticising the regimes. If the

:37:30.:37:33.

international community come to international consensus for one

:37:33.:37:37.

political solution for Syria, the Syrian opposition will unite around

:37:37.:37:42.

it. Russia is starting to change its rhetoric do you think? Russia

:37:42.:37:45.

won't change their opinion. There is one more thing to put on the

:37:45.:37:48.

stable. Anyone who says we do not want intervention or arms in Syria,

:37:48.:37:51.

go and live there for one whole month, see the massacres in front

:37:51.:37:56.

of your eyes, pick up pieces of bodies from the street, then say

:37:56.:37:59.

that. See women being raped by 12 men a day and then say we don't

:37:59.:38:03.

want arms. We are being killed and massacred there, nobody is doing

:38:03.:38:08.

anything about it, where is the humanity in the world. It is the

:38:08.:38:12.

regime killing in Damascus and areas not controlled by the Free

:38:12.:38:15.

Syrian Army. The regime is still brutal this is not the way to

:38:15.:38:19.

confront it. I have the sound out from inside, everyone wants arms,

:38:19.:38:26.

that is what they want inside. A basketball game, with photo

:38:26.:38:32.

opportunities galore, a rose garden in full bloom, and a much heralds

:38:32.:38:37.

trip on Air Force One, a privilege for a foreign leader. The anglo-

:38:37.:38:42.

American relationship has never looked so "special" but cosy. Not a

:38:42.:38:46.

single meeting has been organised between David Cameron and the

:38:46.:38:49.

Republican candidates, one of whom may end up leading the free world

:38:49.:38:53.

in eight months time. Was this a clever official, or a refusal to

:38:53.:38:57.

get mixed up in a sometimes ugly race at the moment, or an oversight

:38:57.:39:01.

that could have serious reprecussions down the line. We in

:39:01.:39:05.

Britain think you are a wonderful President. Gone are the days of

:39:05.:39:10.

Thatcher and Regan, and the inacceptable ties between

:39:10.:39:14.

Conservatives and rup Republicans. The sight of a story -- Republicans,

:39:14.:39:18.

the sight of a Tory Prime Minister standing side-by-side with a

:39:18.:39:23.

Democratic president is hard low a new one.

:39:23.:39:27.

What of taking in a basketball game with his Democratic counterpart in

:39:27.:39:32.

a swing state in a presidential election year. Last night's vit --

:39:32.:39:37.

visit to Ohio hardly amounted to David Cameron riding Democratic

:39:37.:39:42.

donkey right out. He feels most at home with a party America considers

:39:42.:39:47.

to be its left, this was fuel for their fire what if the Republican

:39:47.:39:51.

elephant? That is not in the room. Couldn't even get five minutes in

:39:52.:39:56.

his diary. The message from last night's big winner, Rick Santorum,

:39:56.:40:03.

was pretty clear. The best chance of winning the election is to

:40:03.:40:07.

nominate a conservative to go up against Barack Obama and take him

:40:07.:40:12.

on, on any issues. Why have the British and American right fallen

:40:12.:40:18.

owl of love, if the Republicans -- fallen out of love. If the

:40:18.:40:21.

Republicans return to the White House, what for the Prime Minister

:40:21.:40:28.

who may need to be reminded that an elephant never forgets. My guests

:40:28.:40:33.

join me now. Why would he ruin the party, the relationship never

:40:33.:40:37.

looked closer, they are pretty statesman-like. David Cameron has

:40:37.:40:41.

had a good visit and good time in Washington. He has been very well

:40:41.:40:48.

received. The special relationship remains strong. I do think this was

:40:48.:40:51.

a lost opportunity for the Prime Minister, he could have met with

:40:51.:40:55.

senior Conservative officials, the Republicans run the House of

:40:55.:40:59.

Representatives on Capitol Hill, he could have met leading Republican

:41:00.:41:04.

figures to talk about exchanges ideas on cutting debts, reducing

:41:04.:41:09.

Government spending, advancing a pro-growth agenda. The rather chumy

:41:09.:41:13.

relationship developed with Barack Obama will be viewed with disdain

:41:13.:41:16.

by many Conservatives here on Washington. Let's not forget Barack

:41:16.:41:20.

Obama is in deep trouble in the polls. Some polls suggested the

:41:20.:41:23.

Republicans will win the presidential election in November.

:41:23.:41:27.

This is a presidency in very deep trouble on the economic front, and

:41:27.:41:31.

it is rather short-sighted, I think, of the Prime Minister's advisers,

:41:32.:41:40.

not to set up any meetings with Conservatives in Washington. Don't

:41:40.:41:44.

you think it is a bit short-sighted for David Cameron, we have

:41:44.:41:51.

basketball in a swing date, he's in danger of looking like a prop?

:41:51.:41:55.

have no doubt on election day he will be rooting for Barack Obama,

:41:55.:41:58.

this is a man he wants to do business with for the next five

:41:58.:42:05.

years, he wanted him to win last time and this time. There has never

:42:05.:42:08.

been more distance between the British Conservatives and American

:42:08.:42:11.

Conservatives. I don't think David Cameron think he has anything to

:42:11.:42:15.

learn from what most Tories view as a political freak show in America.

:42:15.:42:19.

This is very different from the Cameroon-style politics. They have

:42:19.:42:22.

policies on cutting tax, but they are not policies the British

:42:22.:42:25.

Government is very interested in. When you look at somebody like Rick

:42:25.:42:28.

Santorum, it is hard to know where David Cameron would start, isn't

:42:29.:42:34.

it? I think there is a lot of common ground, actually, between

:42:34.:42:39.

the broader Conservative movement in Britain and America.

:42:39.:42:43.

marriage? It is not a gay marriage issue. There is a lot of social

:42:43.:42:47.

divide on matters. If you look at economic questions, cutting

:42:47.:42:51.

spending and economic debt. They don't want Government? There is a

:42:51.:42:55.

great deal of common ground there. I think it is rather foolish,

:42:55.:43:03.

actually, of the Cameron advisory set to actually decline meetings

:43:03.:43:08.

with American Conservatives. This is a very short-sighted approach,

:43:08.:43:13.

they will regret that in the long run if there is a change of power

:43:13.:43:16.

in Washington. Even now the dirty secret is there are a lot of

:43:17.:43:20.

Conservative policies they probably share? Yes, of course, if there is

:43:20.:43:23.

a change of Government David Cameron will swallow hard and do

:43:23.:43:28.

his best to get along with his new friend Mitt Romney. But Presidents

:43:28.:43:31.

and prime ministers have always managed to bridge these problems

:43:32.:43:35.

when they emerge. When the Republicans have their convention I

:43:35.:43:39.

would be surprised if there is any senior Conservative there.

:43:39.:43:45.

would we put ourselves in a position of losing the special

:43:45.:43:49.

relationship if it happens? Regan and Thatcher weren't close before

:43:49.:43:54.

he became Prime Minister, it is just the way these politics work.

:43:54.:44:00.

David Cameron wants to see people in America, he wants entrepeneurs,

:44:00.:44:02.

west coast Silicon Valley figures, not the Conservatives, certainly.

:44:02.:44:06.

This is the middle of a Conservative battle right now. If

:44:06.:44:09.

you see one candidate you have to see them all, you risk getting

:44:09.:44:13.

drawn into that. Why do that, when you could get your picture taken

:44:13.:44:18.

with the guy. Nothing really matters in opposition, it only

:44:18.:44:22.

matters when you are talking to the leader himself? I think it does

:44:22.:44:27.

matter. Because President Obama's viewed here domestically by

:44:27.:44:30.

Conservatives as a huge big Government disaster. This is a

:44:30.:44:34.

political warzone here, there is no middle ground, and I think for

:44:34.:44:38.

British Conservatives to be fawning over the most left-wing left in

:44:38.:44:43.

modern American history, is a huge mistake. That's going to generate,

:44:43.:44:47.

I think, a significant rift and divide between Conservatives on

:44:47.:44:50.

both sides of the Atlantic. It is not going to help Cameron in the

:44:50.:44:55.

long run at all. Does it worry you that there are elements of the

:44:55.:44:58.

Conservative Party that in love with the Obama, that can't be great

:44:58.:45:03.

for the right, can it? I think it is actually extremely short-sighted

:45:03.:45:09.

afterall. I don't know there has always been a rather strange

:45:09.:45:15.

Democrat tradition in the Conservative Party. The Cameroons

:45:16.:45:22.

have always been for Obama, I would doubt if a Conservative candidate

:45:22.:45:25.

in America has lost an moment's sleep over not meeting David

:45:25.:45:30.

Cameron. We will not do the papers tonight. Paul, there was one story

:45:30.:45:35.

in today's New York Times, we should say, caught your eye?

:45:35.:45:39.

bosses of Goldman Sachs in Manhatten must have woken up with a

:45:39.:45:42.

fit of the blues. In the New York Times they have one of those

:45:42.:45:48.

letters we all dream of writing to our boss, basically telling them to

:45:48.:45:53.

get lost. Greg Smith in London has accused the company of being toxic,

:45:53.:45:57.

ripping off its clients, calling the clients Muppets, of not

:45:57.:46:01.

reacting when the newspapers call them the vampire squib of Wall

:46:01.:46:09.

Street. In the markets people have been sanguine about this, people

:46:09.:46:14.

have said they know what Goldman sack are like, they trade with them.

:46:14.:46:20.

Others -- Goldman Sachs are like, they trade with emthis. Nobody

:46:20.:46:25.

surprise -- them. Nobody wants to sit around the table with them. So

:46:25.:46:31.

we have a blues song dedicated to everyone who works for Goldman here

:46:31.:46:37.

and across the world, dedicated for them. This is the Vampire Squib

:46:37.:46:44.

Blues. # Well I woke up this morning

:46:44.:46:52.

# I was told I was leaving today # And I woke this morning

:46:52.:46:57.

# And I was told I was leaving today

:46:57.:47:07.

# Well I told myself # Gonna finally have my say

:47:07.:47:15.

# That's the toxic culture # Toxic to the core down inside

:47:15.:47:22.

# It's the toxic culture # Toxic to the core inside

:47:22.:47:30.

# When I go out recruiting # It seems I have lost all my pride

:47:31.:47:34.

# Well you show your junk to the clients

:47:34.:47:40.

# And big big trades # You deal in bad products

:47:40.:47:45.

# That is how you make your money # I'm leaving that street

:47:45.:47:50.

# And coming home no more # Leave the vampire squibs

:47:50.:47:55.

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